---

UNITED STATESSECURITIES AND
EXCHANGE COMMISSIONWashington, D.C.
20549

FORM
10-Q

(Mark One)

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

For the quarterly period ended March
31, 2011

[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(D) OF THE EXCHANGE ACT

For the transition period
from __________ to __________

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(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 [   ]

---

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.

|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 ]

Indicate the number of shares outstanding of each of the
issuers classes of common stock. As of May 20, 2011 there were 99,959,962
shares, par value $.0001, of common stock.

---

MOUNT KNOWLEDGE HOLDINGS, INC.

FORM 10-Q March 31, 2011

INDEX

PART I-- FINANCIAL INFORMATION

|Item
      1. | Financial Statements                                                                        | 2 
|------------- | ------------------------------------------------------------------------------------------- | --
|Item 2.       | Managements Discussion and Analysis of Financial Condition
      and Results of Operations | 13
|Item
      3  | Quantitative and Qualitative Disclosures About Market Risk                                  | 22
|Item 4.       | Controls and Procedures                                                                     | 22

PART II-- OTHER INFORMATION

|Item
      1  | Legal
      Proceedings                                     | 23
|------------- | ----------------------------------------------------------- | --
|Item
      1A | Risk Factors                                                | 23
|Item
      2. | Unregistered Sales of Equity Securities and Use of Proceeds | 23
|Item
      3. | Defaults Upon Senior Securities                             | 24
|Item
      4. | Removed and Reserved                                        | 24
|Item
      5. | Other
      Information                                     | 24
|Item 6.       | Exhibits                                                    | 24
|              |                                                             |   
|SIGNATURE     | 24                                                         

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS

This Quarterly Report on Form 10-Q (this Report) contains
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as
amended (the Securities Act), and Section 21E of the Securities Exchange Act
of 1934, as amended (the Exchange Act). Forward-looking statements discuss
matters that are not historical facts. Because they discuss future events or
conditions, forward-looking statements may include words such as anticipate,
believe, estimate, intend, could, should, would, may, seek,
plan, might, will, expect, predict, project, forecast,
potential, continue negatives thereof or similar expressions.
Forward-looking statements speak only as of the date they are made, are based on
various underlying assumptions and current expectations about the future and are
not guarantees. Such statements involve known and unknown risks, uncertainties
and other factors that may cause our actual results, level of activity,
performance or achievement to be materially different from the results of
operations or plans expressed or implied by such forward-looking statements.

We cannot predict all of the risks and uncertainties.
Accordingly, such information should not be regarded as representations that the
results or conditions described in such statements or that our objectives and
plans will be achieved and we do not assume any responsibility for the accuracy
or completeness of any of these forward-looking statements. These
forward-looking statements are found at various places throughout this Report
and include information concerning possible or assumed future results of our
operations, including statements about potential acquisition or merger targets;
business strategies; future cash flows; financing plans; plans and objectives of
management; any other statements regarding future acquisitions, future cash
needs, future operations, business plans and future financial results, and any
other statements that are not historical facts.

These forward-looking statements represent our intentions,
plans, expectations, assumptions and beliefs about future events and are subject
to risks, uncertainties and other factors. Many of those factors are outside of
our control and could cause actual results to differ materially from the results
expressed or implied by those forward-looking statements. In light of these
risks, uncertainties and assumptions, the events described in the
forward-looking statements might not occur or might occur to a different extent
or at a different time than we have described. You are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date of this Report. All subsequent written and oral forward-looking statements
concerning other matters addressed in this Report and attributable to us or any
person acting on our behalf are expressly qualified in their entirety by the
cautionary statements contained or referred to in this Report.

Except to the extent required by law, we undertake no
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events, a change in events, conditions,
circumstances or assumptions underlying such statements, or otherwise.

---

PART I  FINANCIAL INFORMATION Item 1. Financial
Statements

MOUNT KNOWLEDGE HOLDINGS, INC.

CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2011(Stated in US dollars)(Unaudited)

2

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MOUNT KNOWLEDGE HOLDINGS, INC.CONSOLIDATED
BALANCE SHEETS(Stated in US dollars)

|                                                                                                                                                                                                                                                  |   | SUCCESSOR   |  |   | SUCCESSOR    | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ----------- |  | - | ------------ | 
|                                                                                                                                                                                                                                                  |   | COMPANY     |  |   | COMPANY      | 
|                                                                                                                                                                                                                                                  |   | MARCH 31,   |  |   | DECEMBER 31, | 
|                                                                                                                                                                                                                                                  |   | 2011        |  |   | 2010         | 
|                                                                                                                                                                                                                                                  |   | (Unaudited) |  |   |              | 
|ASSETS                                                                                                                                                                                                                                            |   |             |  |   |              | 
|Current Assets:                                                                                                                                                                                                                                   |   |             |  |   |              | 
|Cash and cash
    equivalents                                                                                                                                                                                                                     | $ | 170,302     |  | $ | 288,872      | 
|Accounts receivable                                                                                                                                                                                                                               |   | 198,044     |  |   | 199,287      | 
|Unbilled revenue                                                                                                                                                                                                                                  |   | 248,726     |  |   | 188,785      | 
|Other receivables                                                                                                                                                                                                                                 |   | 16,889      |  |   | 12,433       | 
|Corporate tax
    recoverable                                                                                                                                                                                                                     |   | 10,273      |  |   | 10,295       | 
|Prepaid expenses
    and other assets                                                                                                                                                                                                             |   | 2,741       |  |   | 2,747        | 
|Due from related
    parties                                                                                                                                                                                                                      |   | -           |  |   | 78,488       | 
|Total current assets                                                                                                                                                                                                                              |   | 646,975     |  |   | 780,907      | 
|                                                                                                                                                                                                                                                  |   |             |  |   |              | 
|Property and equipment, net                                                                                                                                                                                                                       |   | 39,752      |  |   | 37,019       | 
|Goodwill                                                                                                                                                                                                                                          |   | 375,292     |  |   | 375,292      | 
|Investment in
    non-consolidated subsidiary                                                                                                                                                                                                     |   | 490         |  |   | 490          | 
|Other assets                                                                                                                                                                                                                                      |   | 30,361      |  |   | 30,285       | 
|                                                                                                                                                                                                                                                  |   |             |  |   |              | 
|TOTAL ASSETS                                                                                                                                                                                                                                      | $ | 1,092,870   |  | $ | 1,223,993    | 
|                                                                                                                                                                                                                                                  |   |             |  |   |              | 
|LIABILITIES AND
    STOCKHOLDERS EQUITY (DEFICIT)                                                                                                                                                                                                |   |             |  |   |              | 
|Current Liabilities:                                                                                                                                                                                                                              |   |             |  |   |              | 
|Accounts payable
    and accrued liabilities                                                                                                                                                                                                      | $ | 181,773     |  | $ | 133,521      | 
|Deferred revenue                                                                                                                                                                                                                                  |   | 219,661     |  |   | 203,970      | 
|Tax payable                                                                                                                                                                                                                                       |   | 62,535      |  |   | 60,997       | 
|Other payable                                                                                                                                                                                                                                     |   | 102,336     |  |   | 108,321      | 
|Due to related
    parties                                                                                                                                                                                                                        |   | 92,162      |  |   | 25,537       | 
|Wages payable                                                                                                                                                                                                                                     |   | 141,287     |  |   | 78,468       | 
|Notes payable                                                                                                                                                                                                                                     |   | 195,590     |  |   | 935,130      | 
|Total current liabilities                                                                                                                                                                                                                         |   | 995,344     |  |   | 1,545,944    | 
|Total Liabilities                                                                                                                                                                                                                                 |   | 995,344     |  |   | 1,545,944    | 
|                                                                                                                                                                                                                                                  |   |             |  |   |              | 
|Stockholders Equity
    (Deficit):                                                                                                                                                                                                               |   |             |  |   |              | 
|Preferred stock, $0.0001 par value, 100,000,000 shares authorized,
    50,000,000 shares, designated as Series A convertible preferred stock,
    $0.0001 par value, 8,888,888 issued and outstanding at March 31, 2011 and
    December 31, 2010 |   | 889         |  |   | 889          | 
|Common stock, $0.0001 par value, 200,000,000 shares authorized, 99,959,962
    and 99,600,226 issued and outstanding at March 31, 2011 and December 31,
    2010, respectively                                                                    |   | 9,996       |  |   | 9,960        | 

|Additional paid-in capital                               |   | 4,352,536  |   |   | 4,265,625  |  
|-------------------------------------------------------- | - | ---------- | - | - | ---------- | -
|Accumulated other comprehensive income (loss)            |   | (8,115     | ) |   | (4,647     | )
|Retained deficit                                         |   | (4,997,012 | ) |   | (4,399,972 | )
|Non-controlling interest                                 |   | 739,232    |   |   | (193,806   | )
|Total Stockholders Equity (Deficit)                     |   | 97,526     |   |   | (321,951   | )
|                                                         |   |            |   |   |            |  
|TOTAL LIABILITIES AND
    STOCKHOLDERS EQUITY (DEFICIT) | $ | 1,092,870  |   | $ | 1,223,993  |  

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

3

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MOUNT KNOWLEDGE HOLDINGS, INC.CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME(Stated in US
dollars)(Unaudited)

|                                                                             |   | SUCCESSOR COMPANY |   |   | PREDECESSOR COMPANY |  
|---------------------------------------------------------------------------- | - | ----------------- | - | - | ------------------- | -
|                                                                             |   | THREE MONTHS      |   |   | THREE MONTHS        |  
|                                                                             |   | ENDED             |   |   | ENDED               |  
|                                                                             |   | MARCH 31, 2011    |   |   | MARCH 31, 2010      |  
|                                                                             |   |                   |   |   |                     |  
|Sales revenue                                                                | $ | 440,285           |   | $ | 328,928             |  
|Cost of goods sold                                                           |   | 240,826           |   |   | 171,064             |  
|Gross profit                                                                 |   | 199,459           |   |   | 157,864             |  
|                                                                             |   |                   |   |   |                     |  
|Operating expenses:                                                          |   |                   |   |   |                     |  
|Selling expenses                                                             |   | 2,719             |   |   | -                   |  
|General and
    administrative expenses                                      |   | 976,396           |   |   | 223,577             |  
|Total operating expenses                                                     |   | 979,115           |   |   | 223,577             |  
|Loss from operations                                                         |   | (779,656          | ) |   | (65,713             | )
|                                                                             |   |                   |   |   |                     |  
|Other income                                                                 |   | 4,889             |   |   | 27,017              |  
|Interest expense                                                             |   | (294              | ) |   | -                   |  
|                                                                             |   |                   |   |   |                     |  
|Net loss before
    non-controlling interest and income taxes                |   | (775,061          | ) |   | (38,696             | )
|Income taxes                                                                 |   | -                 |   |   | -                   |  
|                                                                             |   |                   |   |   |                     |  
|Net loss                                                                     | $ | (775,061          | ) | $ | (38,696             | )
|                                                                             |   |                   |   |   |                     |  
|Net loss attributable to
    the non-controlling interest                    | $ | 178,021           |   | $ | -                   |  
|                                                                             |   |                   |   |   |                     |  
|Net loss attributable to
    common shareholders                             | $ | (597,040          | ) | $ | (38,696             | )
|                                                                             |   |                   |   |   |                     |  
|Other Comprehensive Loss                                                     |   |                   |   |   |                     |  
|Net loss                                                                     | $ | (775,061          | ) | $ | (38,696             | )
|                                                                             |   |                   |   |   |                     |  
|Foreign currency
    translation adjustment                                  |   | (3,468            | ) |   | (429                | )
|                                                                             |   |                   |   |   |                     |  
|Total Comprehensive Loss                                                     | $ | (778,529          | ) | $ | (39,125             | )
|                                                                             |   |                   |   |   |                     |  
|Comprehensive loss
    attributable to the non-controlling interest          |   | 178,021           |   |   | -                   |  
|Comprehensive loss
    attributable to common shareholders                   |   | (600,508          | ) |   | (39,125             | )
|                                                                             |   |                   |   |   |                     |  
|Net loss per share -
    basic and diluted                                   | $ | (0.07             | ) |   | N/A                 |  
|Weighted average number
    of common shares outstanding  basic and diluted |   | 9,010,127         |   |   | N/A                 |  

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

4

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MOUNT KNOWLEDGE HOLDINGS, INC.CONSOLIDATED
STATEMENTS OF CASH FLOWS(Stated in US dollars)(Unaudited)

|                                                                    |   | SUCCESSOR COMPANY |   |   | PREDECESSOR COMPANY |  
|------------------------------------------------------------------- | - | ----------------- | - | - | ------------------- | -
|                                                                    |   | THREE MONTHS      |   |   | THREE MONTHS        |  
|                                                                    |   | ENDED             |   |   | ENDED               |  
|                                                                    |   | MARCH 31, 2011    |   |   | MARCH 31, 2010      |  
|Cash Flows from
    Operating Activities:                           |   |                   |   |   |                     |  
|Net loss                                                            | $ | (775,061          | ) | $ | (38,696             | )
|Adjustments to reconcile
    net loss to net cash used in operating |   |                   |   |   |                     |  
|activities:                                                         |   |                   |   |   |                     |  
|Depreciation
    expense                                            |   | 3,442             |   |   | 602                 |  
|Shares issued for
    consulting service provided                   |   | 63,276            |   |   | -                   |  
|Share-based
    compensation                                        |   | 23,671            |   |   |                     |  
|Changes in operating assets
    and liabilities:                    |   |                   |   |   |                     |  
|Accounts receivable                                                 |   | 1,621             |   |   | 21,772              |  
|Unbilled revenue                                                    |   | (59, 331          | ) |   | (27,690             | )
|Other receivables                                                   |   | (4,410            | ) |   | 595                 |  
|Prepaid expenses and other assets                                   |   | (18               | ) |   | 86                  |  
|Accounts payable and accrued liabilities                            |   | 48,244            |   |   | (6,154              | )
|Deferred revenue                                                    |   | 15,262            |   |   | (52,794             | )
|Taxes payable                                                       |   | 1,366             |   |   | (7,289              | )
|Other payable                                                       |   | (26,287           | ) |   | 3,271               |  
|Wages payable                                                       |   | 62,515            |   |   | 6,734               |  
|Due to/from related party                                           |   | 77,504            |   |   | -                   |  
|Net cash used in operating
    activities                           |   | (568,206          | ) |   | (99,563             | )
|                                                                    |   |                   |   |   |                     |  
|Cash Flows from
    Investing Activities:                           |   |                   |   |   |                     |  
|Purchase of property and
    equipment                              |   | (6,093            | ) |   | (307                | )
|Advance/loans to related
    party                                  |   | -                 |   |   | 9,586               |  
|Net cash provided by (used
    in) investing activities             |   | (6,093            | ) |   | 9,279               |  
|                                                                    |   |                   |   |   |                     |  
|Cash Flows from
    Financing Activities:                           |   |                   |   |   |                     |  
|Proceeds from related
    parties                                   |   | 30,695            |   |   | (456                | )
|Repayment of note payable                                           |   | (20,186           | ) |   | -                   |  
|Proceeds from share
    issuances to non-controlling interests      |   | 391,705           |   |   | -                   |  
|Net cash provided by (used
    in) financing activities             |   | 402,214           |   |   | (456                | )
|                                                                    |   |                   |   |   |                     |  
|Effect of exchange rate
    changes on cash                         |   | 53,515            |   |   | (9,934              | )
|                                                                    |   |                   |   |   |                     |  
|Net Change in Cash and
    Cash Equivalents                         |   | (118,570          | ) |   | (100,674            | )
|                                                                    |   |                   |   |   |                     |  
|Cash and Cash
    Equivalents, at beginning of period               |   | 288,872           |   |   | 207,566             |  
|                                                                    |   |                   |   |   |                     |  
|Cash and Cash
    Equivalents, at end of period                     | $ | 170, 302          |   | $ | 106,892             |  
|                                                                    |   |                   |   |   |                     |  
|Supplemental Disclosure
    of Cash Flow Information:               |   |                   |   |   |                     |  
|Interest expense
    paid                                           | $ | -                 |   | $ | -                   |  
|Income taxes paid                                                   | $ | 6,686             |   | $ | -                   |  
|Noncash Investing and
    Financing Activities                      |   |                   |   |   |                     |  
|Conversion of note payable
    to equity                            | $ | 719,354           |   | $ | -                   |  

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

5

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MOUNT KNOWLEDGE HOLDINGS. INC.NOTES TO
CONSOLIDATED FINANCIAL STATEMENTSMARCH 31, 2011(Unaudited)

NOTE 1 - BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT
ACCOUNTING POLICIES

Organization

Mount Knowledge Holdings, Inc. (MKHD) (the Company or
Successor Company) was incorporated as Auror Capital Corp. under the laws of
the State 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 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. During December 2010, Company acquired
100% ownership interest in the intellectual property and the license agreement
was cancelled.

On October 19, 2010, the Company formed Mount Knowledge Asia
Ltd, a Hong Kong corporation (wholly owned by the Company) for the purposes of
facilitating the acquisition of Language Key Asia Ltd and to acquire other
Business-to- Business (B2B) and Business-to-Consumer (B2C) business interests
throughout Asia.

On December 16, 2010, the Company acquired 490,000 shares of
common stock of Mount Knowledge Technologies, Inc., an Ontario corporation
(f/k/a 1827281 Ontario Inc.) (MTK Tech) for a purchase price of $490,
representing 49% ownership interest in MTK Tech with the remaining 51% ownership
interest of MTK Tech owned and held by Ucandu Learning Centres Inc., an Ontario
corporation, controlled by a director of the Company. MTK Tech provides software
development services for the Company pursuant to an executed Services Agreement
dated December 1, 2010 with Mount Knowledge USA, Inc., a subsidiary of the
Company.

On December 31, 2010, the Company acquired, via Mount Knowledge
Asia, 100% ownership of Language Key Asia Ltd. (LKA or Predecessor Company),
a Hong Kong corporation formed in October 2010 as a holding company for
ownership interests in Business-to-Business operations in Asia.

LKA was established to centralize the administrative,
governance, management, and financing for the Language Key Group of companies
(LK Group), all of which are wholly-owned by LKA, which consists of Language
Key Corporate Training Solutions Ltd. (a Hong Kong corporation, and formerly The
Language Key China Ltd., established on August 21, 2002, LKCTS), The Language
Key Training Ltd. (a Hong Kong corporation established on March 21, 2003,
LKTR), and The Language Key China Ltd. (a Wholly Owned Foreign Enterprise
registered in Shanghai, China established on October 11, 2002, LKCH), and
Language Key Publishing Ltd. (established on January 11, 2011, LKPUB).

LKA was further established to enable the efficient acquisition
of the LK Group by Mount Knowledge Holdings Inc. a U.S publicly traded (OTCBB:
MKHD) corporation and to be the vehicle into which to receive equity capital
contributions from the Company. On December 31, 2010, the shareholders of LKA
executed a share exchange agreement with the Company and Mount Knowledge Asia
Ltd. (MKA), a wholly owned Hong Kong regional holding company established by
the Company on November 15, 2010, to hold the 100% ownership interest of LKA
after the acquisition.

6

---

The LK Group provides custom-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 Fortune 500 corporations.

Upon the completion of the Language Key Asia Acquisition, LKA became a wholly
owned subsidiary of Mount Knowledge Holdings, Inc. and the Successor Company no
longer qualified as a development stage enterprise as defined under SFAS No. 7
Accounting and Reporting by Development Stage Enterprises.

On December 31, 2010, the Company acquired a 54.34% interest in Mount Knowledge
USA, Inc. (MTK USA) by issuing 11,166,690 shares of its common stock and
8,888,888 shares of its Series A Convertible Preferred Stock. As of March 31,
2011, the Company held a controlling ownership interest totaling 51% in MTK USA.

MTK USA markets, sells and distributes a proprietary real time self learning
system software application domestically and internationally to a variety of
customers, including individuals, schools, government agencies, and businesses.

The following chart sets forth the structure of Mount Knowledge Holdings, Inc.
and its subsidiaries as of March 31, 2011:



As of March 31, 2011, the corporate structure of the LK Group was as follows:



Basis of Presentation

On December 31, 2010, the Company changed its fiscal year end from October 31 to
December 31.

The unaudited interim financial statements as of and for the three months ended
March 31, 2011 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 first quarter financial
statements should be read in conjunction with the Companys financial statements
and notes thereto included in the Companys December 31, 2010 Form 10-K/A. 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
December 31, 2010 financial statements, have been omitted. The results of
operations for the three-month period ended March 31, 2011 are not necessarily
indicative of the results for the entire year ending December 31, 2011.

7

---

The accompanying consolidated financial statements have been
prepared in accordance with U.S, generally accepted accounting principles (US
GAAP). The Companys functional currency is US dollar. The LK Groups
functional currencies are the Chinese Renminbi (RMB¥) and Hong Kong dollar
(HKD$); however the accompanying financial statements have been translated and
presented in United States Dollars (USD$).

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:

Consolidation

The accompanying consolidated financial statements include the
accounts of the Company and its subsidiaries. Intercompany balances and
transactions have been eliminated in preparing the accompanying consolidated
financial statements.

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 reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting year. Because of the use of estimates inherent in the financial
reporting process, actual results may differ from the estimates.

Foreign Currency Translation

The exchange rates used for foreign currency translation were
as follows (USD$1 = RMB):

|Period Covered               | Balance Sheet Date Rates | Average Rates
|---------------------------- | ------------------------ | -------------
|                             |                          |              
|Year ended December 31, 2010 | 6.61201                  | 6.75950      
|Quarter ended March 31, 2011 | 6.57030                  | 6.58762      
|Quarter ended March 31, 2010 | 6.83620                  | 6.81896      

The exchange rates used for foreign currency translation were
as follows (USD$1 = HKD):

|Period Covered               | Balance Sheet Date Rates | Average Rates
|---------------------------- | ------------------------ | -------------
|                             |                          |              
|Year ended December 31, 2010 | 7.80000                  | 7.80000      
|Quarter ended March 31, 2011 | 7.80000                  | 7.80000      
|Quarter ended March 31, 2010 | 7.80000                  | 7.80000      

Reclassifications

Certain amounts in the consolidated financial statements for
the prior year have been reclassified to conform to the presentation of the
current period for the comparative purposes.

NOTE 2 - STOCKHOLDERS EQUITY (DEFICIT)

Authorized

As of March 31, 2011 and December 31, 2010, the Companys
authorized shares consisted of the following:

|a) | 100,000,000 preferred shares with 50,000,000 designated
      as Series A convertible, par value $0.0001
|-- | --------------------------------------------------------------------------------------------------------
|b) | 200,000,000 common shares, par value $0.0001                                                            

8

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Common Stock

During the three months ended March 31, 2011, the Company
issued a total of 241,380 shares of restricted common stock for services
rendered by a contractor to the Company pursuant to a consulting agreement
entered into on February 4, 2011. The fair value of the services received during
this period was calculated as the market price at the date of grant and the date
service is provided with a total value of $63,276.

On December 31, 2010, the Company agreed to issue to LKA and/or
its assigns at closing a total of 480,000 shares of the Common Stock of the
Company at a value of $0.0001 per share, subject to a 12 month sale restriction
from the date of issuance, for the purpose of providing certain employee stock
incentives (signing bonus) for key management personnel of LKA. The grant date
fair value was $96,000 and $23,671 of this amount (118,356 shares) was recorded
during the three months ended March 31, 2011. The fair value was determined
based on the quoted price of our stock on the grant date. The unvested portion
of this award, $72,329, will be recognized ratably over the requisite service
period or two to three years.

Common Stock Warrants

As of March 31, 2011 and December 31, 2010, there were
12,000,000 warrants with an exercise price of $0.15 per share outstanding and
12,000,000 warrants with an exercise price of $0.20 per share outstanding. No
warrants were issued or cancelled during the three months ended March 31, 2011.

Mount Knowledge USA, Inc.

During the three months ended March 31, 2011, the Company
issued 2,611,667 shares of the Common Stock of MTK USA at a value of $0.15 per
share to ten individual investors for cash proceeds of $391,705. MTK USA
converted $719,354 of note payable owed to Blue Fire Consulting Group into
4,795,694 common share of MTK USA (see NOTE 3). The shares issued were recorded
by the Company as an addition to non-controlling interest.

NOTE 3  NOTES PAYABLE

During 2010, the Company received loans totaling $869,354 from
third parties. On December 31, 2010, these advances were converted to notes
payable which are unsecured, bear interest at 5% per annum beginning December
31, 2010 and mature on December 31, 2011. In March 2011, $719,354 of these
advances was converted into 4,795,694 common shares of MTK USA with a total
remaining balance of $150,000 in Notes Payable.

On December 31, 2010, LKA executed a promissory note in the
principal amount of $65,776 in favor of Foxglove International Enterprises Ltd.
(Foxglove) in satisfaction of certain royalty payments owed by The Language
Key Training, Ltd. to Foxglove for fiscal years 2008 and 2009.

This Note bears no interest, and is to be repaid in 12 monthly
installments. As of December 31, 2010, no payments had been made against the
promissory note, however, subsequent to year-end, total payments of $20,186 were
made and as of this filing, the balance of the promissory note was $45,590.

NOTE 4 - RELATED PARTY TRANSACTIONS

Related party transactions were in the normal course of
operations and were measured at the exchange amount which is the amount of
consideration established and agreed to by the related parties.

The related parties consist of the following:

| | (1) | The Language Key China Ltd. Guangzhou (LKGZ), branch
      office of LKAs China subsidiary that was incorporated in December 2010
      but whose accounting books were opened in January 2011
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                  
| | (2) | Mr. Jeff Tennenbaum, current CFO of LKA                                                                                                                                                          
| |     |                                                                                                                                                                                                  
| | (2) | Mr. Paul Murphy, current Vice President of LKA                                                                                                                                                   
| |     |                                                                                                                                                                                                  
| | (4) | Birch First Advisors, LLC, an affiliate and consultant to
      the Company.                                                                                                                     
| |     |                                                                                                                                                                                                  
| | (5) | Practical Business Advisors, LLC, a company controlled by
      Daniel A. Carr, the Companys President, CEO, Treasurer, and Director.                                                           

9

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Due from related parties consists of the following:

|                                      |   | Successor      |  |       | Successor         | 
|------------------------------------- | - | -------------- |  | ----- | ----------------- | 
|                                      |   | March 31, 2011 |  |       | December 31, 2010 | 
|                                      |   |                |  |       |                   | 
|The Language Key China Ltd. Guangzhou | $ | -              |  | $     | 36,915            | 
|Birch First Advisors, LLC             |   | -              |  |       | 41,573            | 
|                                      |   |                |  |       |                   | 
|Total Due From Related Parties        | $ | -              |  | **$** | 78,488            | 

Due to related party consists of the following:

|                                 |   | Successor      |  |   | Successor         | 
|-------------------------------- | - | -------------- |  | - | ----------------- | 
|                                 |   | March 31, 2011 |  |   | December 31, 2010 | 
|                                 |   |                |  |   |                   | 
|Mr. Jeff Tennenbaum              | $ | 15,000         |  | $ | 8,697             | 
|Mr. Paul Murphy                  |   | 30,695         |  |   | -                 | 
|Practical Business Advisors, LLC |   | 16,840         |  |   | 16,840            | 
|Birch First Advisors, LLC        |   | 29,627         |  |   | -                 | 
|                                 |   |                |  |   |                   | 
|Total Due To Related Parties     | $ | 92,162         |  | $ | 25,537            | 

As of March 31, 2011 and December 31, 2010, the Company had
outstanding amounts Due to Related Parties in the amounts of $92,162 and
$25,537, respectively. At March 31, 2011 and December 31, 2010, the Company also
had outstanding amounts Due from Related Parties in the amounts of $0 and
$78,488, respectively.

At December 30, 2010, the amounts due to LKA's shareholders
were waived by their mutual consent and recognized as non-operating income by
LKA for the period from January 1, 2010 through December 30, 2010.

Payable to Practical Business Advisors, LLC totaled $16,840 as
of March 31, 2011 and December 31, 2010. These represented payables for services
provided by an entity controlled by the Companys president.

At December 31, 2010, the amounts Due from Related Parties
included funds due from LKCHs Guangzhou branch, which, while it was
incorporated in December 2010, did not have opened bank accounts until January
2011. The amounts due from the Guangzhou branch are now eliminated in LKCH, and
therefore within LKAs consolidated financial statements.

Payable to Birch First Advisors, LLC totaled $29,627 as of
March 31, 2011. These represented payable for the management and advisory
services provided by an entity controlled by a shareholder of Mount Knowledge
USA, Inc. At December 31, 2010, the entity held prepaid expenses from the
Company in the amount of $41,573.

Payable to Jeff Tennenbaum, the CFO of LKA, were $15,000 and
$8,697 as of March 31, 2011 and December 31, 2010, respectively. The payable
represented the consulting service provided to the Company.

During the quarter ended March 31, 2011, Paul Murphy, LKA VP
for Business Development, extended a loan of $30,695 to LKCH, LKAs subsidiary
in Mainland China. The purpose of the loan was to provide working capital to
LKCH in advance of future capital contributions from LKCTS, its Hong Kong parent
company. This loan was repaid in full on May 13, 2011.

NOTE 5 - COMMITMENTS AND CONTINGENCIES

On December 31, 2010, the Company and MKA, its wholly-owned
subsidiary, entered into a subscription agreement with LKA for the purchase by
the Company of MKA of 10,000,000 shares of Ordinary B stock of LKA for an
aggregate purchase price of $1,000,000, which is due over 12 months. During the
quarter ended March 31, 2011, the Company has fulfilled $80,000 of its
$1,000,000 stock subscription in LKA. As of the date of this filing, the Company
has fulfilled $165,500 of its $1,000,000 stock subscription in LKA.

10

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NOTE 6  INCOME TAX

United States

The Company incorporated in United States, and is subject to
tax on income or capital gain under the current laws of the United States.

Taxation in the income statement represents the provision for
US profits tax for the period. US profits tax is calculated at 34% of the
estimated assessable profit for the tax period.

Hong Kong

Taxation in the income statement represents the provision for
Hong Kong profits tax for the period. Hong Kong profits tax is calculated at
16.5% of the estimated assessable profit for the period.

The People's Republic of China (PRC)

Beginning January 1, 2008, the new Enterprise Income Tax
(EIT) law has replaced the old laws for Domestic Enterprises (DES) and
Foreign Invested Enterprises (FIEs). The new standard EIT rate of 25% replaces
the 33% rate applicable to both DES and FIEs

The new EIT Law also imposes a withholding income tax of 10% on
dividends distributed by a foreign invested enterprise to its immediate holding
company outside of China, if such immediate holding company is considered as a
non-resident enterprise without any establishment or place within China or if
the received dividends have no connection with the establishment or place of
such immediate holding company within China, unless such immediate holding
companys jurisdiction of incorporation has a tax treaty with China that
provides for a different withholding arrangement. Such withholding income tax
was exempted under the previous income tax regulations.

LKAs subsidiary, The Language Key China Ltd., as an enterprise
established in Shanghai, PRC, was entitled to a preferential enterprise tax rate
of 18% prevailing in Pudong Economic Zone for all years before 2008, and the
following preferential rates started on January 1, 2008:

Year
    Tax Rate2008
    18%2009
    20%2010
    22%2011
    24%2012 and thereafter
    25%


A reconciliation between the income tax computed at the U.S.
statutory rate and the Company's provision for income tax in Hong Kong is as
follows:

|                                          |  | For three months ended March 31, | 
|----------------------------------------- |  | -------------------------------- | 
|                                          |  | Successor                        | 
|                                          |  | 2011                             | 
|U.S. statutory rate                       |  | 34.0%                            | 
|Foreign income not recognized in the U.S. |  | -34.0%                           | 
|Hong Kong Statutory rate                  |  | 16.5%                            | 
|Loss not subject to income tax            |  | -16.5%                           | 
|Effective tax rate                        |  | 0.0%                             | 

A reconciliation between the income tax computed at the U.S.
statutory rate and the Company's provision for income tax in the PRC is as
follows:

|                                                 |  | For three months ended March 31, | 
|------------------------------------------------ |  | -------------------------------- | 
|                                                 |  | Successor                        | 
|                                                 |  | 2011                             | 
|U.S. statutory rate                              |  | 34.0%                            | 
|Foreign income not recognized in the U.S.        |  | -34.0%                           | 
|PRC preferential enterprise income tax rate      |  | 25.0%                            | 
|Tax holiday and relief granted to the Subsidiary |  | -1.0%                            | 
|Loss not subject to income tax                   |  | -24.0%                           | 
|Effective tax rate                               |  | 0.0%                             | 

11

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NOTE 7  RECONCILIATION OF LOSS PER SHARE

Basic net loss per share is computed by dividing net loss by the
weighted-average number of shares outstanding during the period.

Diluted net loss per share is computed by using the weighted-average number of
shares of common stock outstanding and, when dilutive, potential shares from
options and warrants to purchase common stock, using the treasury stock method.
Diluted loss per share for the three  months ended March 31, 2011 and
2010 excludes the impact of warrants issued as they were antidilutive.

NOTE 8 - SUBSEQUENT EVENTS

Execution of Institutional Financing Term Sheet

On May 16, 2011, the Company and Westor Capital Group, Inc., a licensed
broker-dealer, executed a term sheet whereby Westor would be the Placement Agent
for a capital raise up to $1.5 million for the Company, under certain "to be
defined" terms and conditions at closing. The proposed financing assumes a
registered offering (the "Offering") for the sale of securities in the form of
two year, 10% Convertible Notes (the "Convertible Notes") with additional
Warrant Shares exercisable over a three year period (the "Warrants"). The share
price and number shares to be issued to investors upon conversion of the
Convertible Notes, and subsequently, the share price and number shares
representing the Warrants, will be determined at closing and defined a filed
registration statement. If the Warrants are exercised, the Company would receive
additional financing from the transaction in an amount equal to or greater than
the original amount raised in the Offering. The Company and Westor anticipate
the closing of the Offering on or before the quarter ended June 30, 2011.

12

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

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

In this 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, the Company Successor Company and MKHD mean Mount Knowledge
Holdings, Inc., unless the context clearly requires otherwise.

General

The Company was incorporated as Auror Capital Corp. under the
laws of the State of Nevada on March 16, 2006.

The Company began as an exploration stage company engaged in
the acquisition and exploration of mineral properties. On July 27, 2009, the
Company changed its previous business plan to an educational software
development and sales company

We are now a global provider of innovative and proprietary
learning products and training solutions. As an educational platform company of
corporate training, language learning and technology development companies, the
Company currently has offices in 7 major cities in the United States, Canada,
Hong Kong and Mainland China.

The Company has developed a suite of market specific real-time
self learning software applications for both corporate and consumer markets
worldwide

The Companys technology stems from an interactive and visual
learning system referred to as Syntality integrated into a core application
known as the Knowledge Generator.

The Companys software learning tools and teaching
methodologies are currently being offered in China to the more than 300 million
students, from grade school to university, seeking to learn English, including
the vast number of people in the Chinese workplace increasing their English
fluency to achieve greater income earning potential.

We operate primarily through our wholly owned subsidiary,
Language Key Asia Ltd. (LKA or Predecessor Company) and the Language Key
Group of companies (LK Group) which includes Language Key Corporate Training
Solutions Ltd. (a Hong Kong corporation, and formerly The Language Key China
Ltd., established on August 21, 2002, LKCTS), The Language Key Training Ltd.
(a Hong Kong corporation established on March 21, 2003, LKTR), The Language
Key China Ltd. (a Wholly Owned Foreign Enterprise registered in Shanghai, China
established on October 11, 2002, LKCH), and Language Key Publishing Ltd. Each
of the LK Group companies is a direct, wholly owned subsidiary of LKA. We
acquired LKA on December 31, 2010 and, as a result, we are not longer considered
a development stage enterprise under SFAS No. 7 Accounting and Reporting by
Development Stage Enterprises.

The LK Group provides custom 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 Fortune 500
corporations.

We also operate through our majority owned subsidiary, Mount
Knowledge USA, Inc. (MTK USA), which markets, sells and distributes a
proprietary real time self learning system software application domestically and
internationally to a variety of customers, including individuals, schools,
government agencies, and businesses. As of March 31, 2011, the Company
holds a controlling ownership interest totaling 51% in MTK USA.

13

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We also hold a minority interest (49%) of Mount Knowledge
Technologies, Inc., an Ontario corporation (MTK Tech). The remaining 51%
interest of MTK Tech is owned by Ucandu Learning Centres Inc., an Ontario
corporation that is controlled by Erwin Sniedzins, the Chairman of our Board of
Directors. MTK Tech provides solely software development services to the Company
pursuant to a services agreement with MTK USA. No other services have been
received from, or agreements entered into with MTK Tech.

Corporate Structure

The Company is a platform company that exists for purpose of
acquiring and operating market-leading global educational corporate training,
language learning and technology development companies. The following sets forth
our corporate structure.

The following chart sets forth the structure of Mount Knowledge
Holdings, Inc. and its subsidiaries as of March 31, 2011:



As of March 31, 2011, the corporate structure of the LK Group
was as follows:



14

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Plan of Operations

Over the 12-month of 2011, we must raise capital and complete
certain milestones as described below:

Milestones

First Quarter - 2011

In the first quarter of 2011, we completed the integration of
the Companys newly acquired subsidiaries, Language Key Asia Ltd (LKA) and its
operational subsidiaries in Hong Kong and China and Mount Knowledge USA, Inc.
(MTK USA) in the US, acquired on December 31, 2010. As a result of the
integration, the Company now has operations in Novi, Michigan, Toronto, Canada,
Hong Kong, Beijing, Guangzhou, Shanghai and Shenzhen, China. Additionally, the
U.S. GAAP audited financial statements for MTK USA and LKA, individually, were
filed in the Current Report on Form 8-K/A dated March 25, 2011 and March 29,
2011, respectively, and consolidated financials were filed in the Current Report
on Form 10K/A dated April 15, 2011.

Furthermore, during the first quarter of 2011, MTK USA, a
Company controlled subsidiary, raised approximately $391,705 in equity and
converted approximately $719,354 in debt into equity in MTK USA, a Company
controlled subsidiary.

Second Quarter - 2011

In the second quarter of operations, our focus will be to,
complete additional administrative functions, obtain new financing to finance
committed growth capital and acquire certain existing marketing and sales
agreements in order to properly position the Company execute its business plan.
Following represents objectives for the next 90 days in 2011:

|1. | Accelerated Acquisition Strategy. As of January 2011,
      the Companys management implemented an accelerated acquisition strategy
      to acquire synergistic companies in the language learning and training
      business sector. The Company will first target the vast English learning
      China market and other Asian territories in 2011, with a long-term vision
      of expanding into other world markets in 2012. The estimated costs
      initially of research and due diligence of suitable acquisitions targets
      is $150,000. There can be no assurance that we will be able to
      successfully negotiate and consummation and such acquisition with any
      target that we identify.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|2. | Secondary Offering and/or Other Financings. We intend to
      raise between $2,500,000 and $5,000,000 within the second quarter of the
      2011 to finance our current operations and acquisition strategy and to
      complete our commitment to fund a total of $1,000,000 in additional growth
      capital to Language Key Asia (LKA) for 2011. To date, we have funded a
      total of approximately $165,500 to LKA against the funding commitment in
      addition to other advances or loans totaling approximately $250,000 in
      2010.                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Such future offerings or financings may take the form of equity or
      debt. Besides, the original amount of financing anticipated, the Company
      might seek additional funding as deemed necessary by our management. There
      can be no assurance that such financing will be available to us on terms
      that are acceptable or at all.                                                                                                                                                                                                                                                                                                                                                                  

Third and Fourth Quarters -
2011.

In the third and fourth quarters of 2011, we plan to expand our
objectives to include new product enhancements, the development of new
partnerships and distribution channels, and 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 as follows:

15

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|1. | Business Enterprise Applications (Corporations, Schools and Government Agencies). With the acquisition of LKA, we foresee the use of the our products and services 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 develop product-specific enhancements to our existing products and
services 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.                                                                                                                                                                                                                                                                                                                                                                                        
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2. | Product Enhancements, Membership Program and Technology Partners. Subject to the successful launch of our products and services in the US, Canada, China and Hong Kong, we plan to provide product enhancements consistent with perceived
customer requirements for other world markets. Most of these enhancements are believed by management to be in the form of updated graphics, to enhance the fluidity of the user experience and interface, and some market-specific content. In addition,
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. Furthermore, we will seek to identify and develop relationships with globally recognized technology providers and OEM’s to pursue the possibility
of bundling the Mount KnowledgeTM products and services 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 GeneratorTM product with its initial audience and market(s).
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|3. | New Business Development and Marketing (Additional Partnerships and Distribution Channels). We will also pursue our business development and marketing efforts in other territories of Asia, and in the North American and European
markets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

The milestones outlined above represent our objectives for the purpose of obtaining revenues from the marketing and sales of our products and services 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, as evident in the first quarter of 2011, we may find the need to modify any or all of the milestones listed in subsequent
yearly quarters, 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

To implement our plan of operations, including some or all of the above described milestones (objectives), we will need to raise capital in an amount between $2.5 and $5.0 million over the remaining 9 months of 2011 on terms and conditions
to be determined. Management intends to raise such capital through the issuance of equity securities. Management may elect to seek subsequent interim or “bridge” financing in the form of debt (corporate loans) as may be necessary.

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.

16

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We foresee the proceeds from capital raised to be allocated as
follows: (a) consolidation and integration; (b) growth capital; (c) acquisition
research and due diligence; (d) business enterprise applications; (e) product
enhancements, membership programs and technology partners; (f) new business
development and marketing; (g) legal, audit, SEC filings and compliance fees;
(h) financing costs; (i) working capital (general and administrative); (j)
reserve capital for costs of acquisition and market expansion.

Financial Condition, Liquidity and Capital Resources

As of March 31, 2011, we had $170,302 in cash, $198,044 in
accounts receivables, and $248,726 in unbilled revenue. We had revenues of
$440,285 during the three-month period ended March 31, 2011. 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 the Company will continue to generate
sales revenue comparable to 2010 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,
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 might be required to cease business operations. As a result,
investors in our common stock would lose all of their investment.

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 and grow the Company organically
or through subsequent acquisitions.

Results of Operations

Basis of Presentation

For management discussion and analysis purposes, the
operational data for the three months ended March 31, 2011, represents the
financial results of Mount Knowledge Holdings, Inc., (Successor Entity), and
for the three months ended March 31, 2010 represents the financial results of
Language Key Asia, Ltd. and Mount Knowledge USA, Inc., combined, the
(Predecessor Entity.)

17

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Three Months Ended March 31, 2011 and 2010

The following table represents sales of our products and
services for the three months ended March 31, 2011 and 2010:

|                   |   |                |  |   |                
|------------------ | - | -------------- |  | - | ---------------
|                   |   | **SUCCESSOR**  |  |   | **PREDECESSOR**
|                   |   | **COMPANY**    |  |   | **COMPANY**    
|                   |   | THREE MONTHS   |  |   | THREE MONTHS   
|                   |   | ENDED          |  |   | ENDED          
|                   |   | MARCH 31, 2011 |  |   | MARCH 31, 2010 
|                   |   |                |  |   |                
|Sales revenue      | $ | 440,285        |  | $ | 328,928        
|Cost of goods sold |   | 240,826        |  |   | 171,064        
|Gross profit       |   | 199,459        |  |   | 157,864        

Revenues

The Company generates revenue, through its wholly owned
subsidiary, LKA. Revenue for the three months ended March 31, 2011 was $440,285
compared to revenue for the three months ended March 31, 2010 of $328,928, an
increase of $111,357, or 34%. The increase is mainly due to corporate
initiatives and incentives offered to our employees during the third and fourth
quarters, resulting in higher sales in the first quarter of 2011 compared to
sales in the first quarter of 2010.

Cost of goods sold is primarily composed of the costs of the
Companys trainers as well as materials and transportation expenses associated
with delivering training courses. Cost of goods sold for the three months ended
March 31, 2011 was $240,826 compared to cost of goods sold for the three months
ended March 31, 2010 of $171,064, an increase of 41%. Gross margin is calculated
by deducting cost of goods sold from revenues and ranges from 40% to 50%,
depending on the nature of the specific courses sold and the contract terms
negotiated. Gross margin for the three months ended March 31, 2011 was 45.3%
compared to gross margin for the three months ended on March 31, 2010 of 48.0%,
a decrease of 2.7% .

The following table represents operating costs and expenses for
the three months ended March 31, 2011 and 2010:

|                                                          |   |                |   |   |                |  
|--------------------------------------------------------- | - | -------------- | - | - | -------------- | -
|                                                          |   | SUCCESSOR      |   |   | PREDECESSOR    |  
|                                                          |   | **COMPANY**    |   |   | COMPANY        |  
|                                                          |   | THREE MONTHS   |   |   | THREE MONTHS   |  
|                                                          |   | ENDED          |   |   | ENDED          |  
|                                                          |   | MARCH 31, 2011 |   |   | MARCH 31, 2010 |  
|                                                          |   |                |   |   |                |  
|Operating expenses:                                       |   |                |   |   |                |  
|Selling expenses                                          | $ | 2,719          |   | $ | -              |  
|General and administrative expenses                       |   | 976,396        |   |   | 223,577        |  
|Total operating expenses                                  |   | 979,115        |   |   | 223,577        |  
|Loss from operations                                      |   | (779,656       | ) |   | (65,713        | )
|                                                          |   |                |   |   |                |  
|Other income                                              |   | 4,889          |   |   | 27,017         |  
|Interest expense                                          |   | (294           | ) |   | -              |  
|                                                          |   |                |   |   |                |  
|Loss before
    non-controlling interest and income taxes |   | (775,061       | ) |   | (38,696        | )
|Income taxes                                              |   | -              |   |   | -              |  
|                                                          |   |                |   |   |                |  
|Net loss                                                  | $ | (775,061       | ) | $ | (38,696        | )

18

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Operating costs and expenses

Selling, general, and administrative expenses for the quarter
ended March 31, 2011 were $979,115 compared to $223,577 for the quarter ended
March 31, 2010, an increase of 338%. This increase is due to both the impact of
corporate decisions made in the third and fourth quarters of 2010 for expansion
in 2011 and beyond, as well as additional costs incurred during the quarter
ended March 31, 2011. The increase in selling, general, and administrative
expenses was primarily attributable to audit fees, maintaining compliance as a
publicly reporting company, and the development of the ECO-Learning platform. In
addition, the increase in operating expenses in the first quarter of 2011
compared to the first quarter of 2010, reflects expenses related to initiatives
and changes at LKA that became effective after the first quarter of 2010.
Specifically, during the third and fourth quarters of 2010, LKA opened a new
office in Guangzhou, hired additional key staff in each of its offices,
increasing the salaries of key personnel, outsourced its monthly bookkeeping and
accounting functions, and invested in systems and personnel to develop the
content for ECO-Learning. The costs related to aforementioned are expected to be
ongoing as LKA builds out its infrastructure for growth. Also, during the
quarter ended March 31, 2011, LKA incurred costs related to the initial launch
of ECO learning, including technical, promotional, and legal. LKA expects to
incur future costs related to ECO as it builds the business unit going forward.

Liquidity and Capital Resources

Our main sources of liquidity and capital resources for fiscal
2011 will be cash on hand, internally generated cash flows from operations. As
of March 31, 2011, we had cash on hand of $170,302, $198,044 in accounts
receivables, and $248,726 in unbilled revenue and negative working capital as a
result of added operational expenses due to acquisition integration costs and
the development and release of a new product line.

Cash Flows

The following table summarizes the cash flows for the three
month periods ended March 31, 2011 and 2010:

|                                                          |   |                |   |   |                |  
|--------------------------------------------------------- | - | -------------- | - | - | -------------- | -
|                                                          |   | SUCCESSOR      |   |   | PREDECESSOR    |  
|                                                          |   | COMPANY        |   |   | COMPANY        |  
|                                                          |   | THREE MONTHS   |   |   | THREE MONTHS   |  
|                                                          |   | ENDED          |   |   | ENDED          |  
|                                                          |   | MARCH 31, 2011 |   |   | MARCH 31, 2010 |  
|Net cash  used in operating activities                    | $ | (568,206       | ) | $ | (99,563        | )
|Net cash provided by (used in) investing activities       |   | (6,093         | ) |   | 9,279          |  
|Net cash provided by (used in) financing
      activities |   | 402,214        |   |   | (456           | )
|Net decrease in cash                                      | $ | (118,570       | ) | $ | (100,674       | )

We anticipate that we will incur approximately $250,000 for
operating expenses. 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 $568,206
during the three month period ended March 31, 2011 and $99,563 during the three
month period ended March 31, 2010. Cash used in operating activities was funded
by cash from operating revenues and financing activities.

Cash From Investing
Activities

We used cash in investment activities in the amount of $6,093
during the three month period ended March 31, 2011 and generated $9,279 cash
from investing activities during the three month period ended March 31,
2010.

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Cash from Financing
Activities

We generated $402,214 cash from financing activities during the
three month period ended March 31, 2011 and used $456 during the three months
ended March 31, 2010.

For the period from January 1, 2009 through March 31, 2011, the
Company incurred net losses aggregating $854,339. 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 December 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.

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.

20

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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.

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; 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.

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.

21

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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 Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards (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 No. 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 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.

In January 2010, the FASB issued ASU No. 2010-6, Improving
Disclosures About Fair Value Measurements, that amends existing disclosure
requirements under ASC 820 by adding required disclosures about items
transferring into and out of levels 1 and 2 in the fair value hierarchy; adding
separate disclosures about purchase, sales, issuances, and settlements relative
to level 3 measurements; and clarifying, among other things, the existing fair
value disclosures about the level of disaggregation. This ASU is effective for
the first quarter of 2010, except for the requirement to provide level 3
activities of purchases, sales, issuances, and settlements on a gross basis,
which is effective beginning the first quarter of 2011. Since this standard
impacts disclosure requirements only, its adoption does not have a material
impact on the Companys consolidated results of operations or financial
condition.

Item 3. Quantitative and Qualitative Disclosures About
Market Risk.

Not Applicable.

Item 4. Controls and Procedures.

22

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Managements evaluation of disclosure controls and
procedures

| | a)   | Evaluation of Disclosure Controls.Our
      Chief Executive Officer and Chief Accounting Officer evaluated the
      effectiveness of our disclosure controls and procedures as of the end of
      our third fiscal quarter 2010 pursuant to Rule 13a-15(b) of the Securities
      and Exchange Act. Disclosure controls and procedures are controls and
      other procedures that are designed to ensure that information required to
      be disclosed by us in the reports that we file or submit under the
      Exchange Act is recorded, processed, summarized and reported within the
      time periods specified in the SECs rules and forms. Disclosure controls
      and procedures include, without limitation, controls and procedures
      designed to ensure that information required to be disclosed by us in the
      reports that we file under the Exchange Act is accumulated and
      communicated to our management, as appropriate to allow timely decisions
      regarding required disclosure. Based on his evaluation, our Chief
      Executive Officer and Chief Financial Officer concluded that our
      disclosure controls and procedures were not effective as of March 31, 2011
      due to the following:
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | 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 e                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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, as we are a smaller reporting company.

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

None.

23

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ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. (REMOVED AND RESERVED).

ITEM 5. OTHER INFORMATION

ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

|Exhibit |                                                                                                                           
|------- | --------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                               
|31.1    | Certifications pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002 (Rule13a- 14(a) or Rule
      15(d)-14(a)).
|32.1    | Certifications pursuant to 18 U.S.C. 1350 as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.     

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.
      Carr                                                                          | 
|----- | ------------------------------------------------------------------------------------------------- | 
|      | Daniel A. Carr                                                                                    | 
|      | President, Treasurer, Chief Executive
      Officer and Chief Financial Officer                  
|      | (Principal Executive Officer,
      Principal Accounting Officer and Principal Financial Officer)
|      |                                                                                                   | 
|Date: | May 20, 2011                                                                                      | 

24

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