U.S.
SECURITIES AND EXCHANGE COMMISSION Washington, D.C.  20549  FORM
10-K  ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF1934  FOR THE
FISCAL YEAR ENDED DECEMBER 31, 2008  EMPYREAN
HOLDINGS, INC. ---------------------------- (Exact
name of registrant as specified in its charter)  Nevada
000-30118
88-0413417State or other jurisdiction of incorporation
Commission File Number
IRS Identification No.  11200 Westheimer Rd., Suite 900, Houston, TX 77042 ------------------------------------------- (Address
of principal executive offices) (Zip Code)  Registrants telephone number: (713) 243 8714    Securities registered
pursuant to Section 12(b) of the Act:  None  Securities registered
pursuant to Section 12(g) of the Act:  Title
of Class: Common
Stock  Title
of Class: Preferred  Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.     Yes [  ]  No
[X]  Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.  Yes [  ]  No
[X]  Indicate by check
mark whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 [  ] No [X]   1      Indicate by check
mark whether the registrant has submitted electronically and posted on its
corporate Website, 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 filed). Yes
 [  ]  No [X] (Not required by smaller reporting companies)  Indicate by check
mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
(§229.405 of this chapter) is not contained herein, and will not be contained,
to the best of registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  [X]  Large
accelerated filer
[ ]

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

Smaller
reporting company
[x]  Indicate
by check mark whether the registrant is a shell company Yes
 [  ]     No  [X]  As of December 31,
2008, there were 12,008,066* shares of common stock issued and outstanding.
 Of those, approx.2, 400,000 were held by non-affiliates of the Company.
 The aggregate market value of the voting and non-voting common equity held
by non-affiliates computed at $0.011 (the price at which the common stock traded
as of June 30, 2009) is $26,400.00.   Note: * Inclusive of 22,501
shares on hold and awaiting return by a third party.   DOCUMENTS INCORPORATED BY REFERENCE  None.    2        CAUTIONARY
STATEMENTS REGARDING FORWARD-LOOKING INFORMATION  Certain
statements in this annual report on Form 10-K contain or may contain
forward-looking statements that are subject to known and unknown risks,
uncertainties and other factors which may cause actual results, performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. These
forward-looking statements were based on various factors and were derived
utilizing numerous assumptions and other factors that could cause our actual
results to differ materially from those in the forward-looking statements. These
factors include, but are not limited to, our ability to consummate a merger or
business combination, economic, political and market conditions and
fluctuations, government and industry regulation, interest rate risk, U.S. and
global competition, and other factors. Most of these factors are difficult to
predict accurately and are generally beyond our control. You should consider the
areas of risk described in connection with any forward-looking statements that
may be made herein. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this report.
 Readers should carefully review this annual report in its entirety,
including but not limited to our financial statements and the notes thereto.
 Except for our ongoing obligations to disclose material information under
the Federal securities laws, we undertake no obligation to release publicly any
revisions to any forward-looking statements, to report events or to report the
occurrence of unanticipated events. For any forward-looking statements contained
in any document, we claim the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of
1995.    3       PART I. ITEM 1 BUSINESS  (a) Business
Development and Objectives  Empyrean Holdings,
Inc., a Nevada corporation (the "Company" or Empyrean), was originally
organized on April 30, 1998 as Fuji International, Inc.; the name was changed on
December 28, 1998 to Direction Technologies, Inc.  In March of 2001,
Direction Technologies, Inc. merged with Empyrean Communications, Inc., and the
name was changed to Empyrean Communications, Inc.  As approved at the
Special shareholders meeting held on January 5, 2005, the Companys name was
changed to Empyrean Holdings, Inc. effective January 25, 2005. The new name was
adopted to reflect the Companys revised business plan to develop and expand as
a holding company.  The mission is to
develop Empyrean through selective diversification and acquisitions into a
profitable multi-based holding company that will provide competitive return on
investments.  However, the delay in obtaining funding coupled with the
severe downturn in the economy resulted in major set backs in the development of
the companys wholly owned subsidiaries during the year.  Empyrean Staffing,
Inc. remained dormant and there does not appear that the Company will be able to
continue this business.  Minimal progress was
made with Empyrean Construction, Inc. despite having obtained General
Contractors licenses for the States of Nevada and California. Due to the
inability to obtain project financing and the steep decline in the availability
of work in the construction industry, the Company shut down all operations of
this subsidiary on October 24, 2008.  ,The Sacramento office was closed,
and there is presently no intention to restart this business  Since
the shutdown of Empyrean Construction, the Company has had no ongoing business
activity. During December 2008, an investment agreement was finalized with
Dutchess Private Equities Fund. Ltd. for the provision of an Equity Line of
Credit for $10,000,000. Dutchess has committed to purchase up to $10,000,000 of
the Companys common stock over the course of 36 months  However, the
company is obligated under the Registration Rights Agreement to file an S-1
registration with the SEC for sufficient shares of common stock, and the Company
will only be able to access this line of credit after the SEC declares the
registration statement effective.  A date for filing the registration
statement will not be set until and unless all past due periodic reports are
made current.  The company was removed from being listed on the OTC
Bulletin Board on December 22, 2008.  This
delay in the Companys ability to access the Dutchess Equity Line of Credit will
have a detrimental effect on the Companys development progress. Numerous
possibilities are being pursued to obtain alternative financing, but the
depressed economic situation has made this a very difficult task.  The corporate office
of the Company is located in an executive suite managed by a large national
company, Corporate Office Centers, at 11200 Westheimer Rd., Suite 900, Houston
Texas 77042.  4      Services for basic
office requirements are also provided by Corporate Office Centers. The Company
has a single full time officer located in this location  ITEM
1A.  RISK FACTORS  Not
required by smaller reporting companies.  ITEM
1B.  UNRESOLVED STAFF COMMENTS  None.   ITEM 2.
  PROPERTIES  (a) Ownership  In March 2008, one of
the three lots in Kewaskum, Wisconsin acquired in June 8, 2007, was sold for
$49,000 and this yielded net proceeds of $45,033.  In April 2008, another
one of the remaining two lots was sold for $45,000 and net proceeds of $41,903
was obtained.  The total net proceeds of $86,936 received for the sale of
these two lots were used as working capital.  After
these sales made during the year, the Company, through its wholly owned
subsidiary, Empyrean Properties, Inc., owns one remaining real property in Green
Bay, Wisconsin.  (b)
Office leases  The current lease agreement with Corporate Office Centers is
for two 160 square foot offices located at 11200 Westheimer Rd., Suite 900,
Houston Texas, 77042. The term of the lease is month to month and basic rental
is $1,580 per month. Extra costs averaging about $250 per month are incurred for
other office services and facilities.  The
term of the lease agreement with Corporate Office Centers for two 160 square
foot offices located at 11200 Westheimer Rd., Suite 900, Houston Texas, 77042
was revised to one year on April 1, 2008, and the basic rental increased to
$1,701.30 per month. Extra costs averaging about $250 per month are incurred for
other office services and facilities.  Due to
the need to reduce company expenses, this lease was modified to only one 160
square foot office for a basic rental of $805 per month on December 1, 2008, and
the term of the lease was extended to December 31, 2009.  ECIs
branch office at Las Vegas located at 3960 Howard Hughes Parkway, Suite 500, Las
Vegas, Nevada 89109 and leased on a month to month basis from Regus Business
Centers for $400 per month was terminated in August 2008.  The ECI
office at 817 14th Street, Suite 200, Sacramento, California 95814
that was leased from Sterling Pacific Real Estate for $1,873.50 per month was
terminated and the facilities shut down on October 24, 2008  ITEM 3.
  LEGAL PROCEEDINGS   5      1. The condominium
located at 12 Coral Way, Key West, FL, and owned by the Companys wholly owned
subsidiary, Tradewinds International Corp. (Tradewinds) was lost through
foreclosure action taken by the previous owner and mortgagee, Huck Finn LLC on
December 20, 2005.  The full amount of the debt owed on the property is a
debt of Tradewinds.  The debt was incurred by Tradewinds prior to the
acquisition of Tradewinds stock by the Company and that debt has never been
assumed by Empyrean Holdings.  Management believes that, although
Tradewinds has no assets with which to pay the debt, that debt is not an
obligation of Empyrean.  The Company recognized a loss of $139,000 on
abandoned real estate investment.  At the time of the completion of this
report, management believes that this property has yet to be resold by Huck Finn
LLC.  2. An ex-employee of
Empyrean Construction filed a complaint with the U.S. Department of Labor/OSHA
and a reply refuting all his allegations was submitted in March 2009.  The
Company disputes this claim and believes the claim lack merit.  A recent
notice received from the Labor Department stated that the case is ongoing, but
even an unfavorable outcome to the case is not expected to have a substantial
detrimental affect on the company.  3. The same
ex-employee also made a claim for unpaid wages to the US Department of Labor
(Wage and Hour Division). A full settlement was obtained for the case by
agreeing to pay him $15,604.00 in five (5) quarterly installments.  ITEM 4.
  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS  No
matters were submitted for a vote of security holders during the fourth quarter
of the fiscal year ended December 31, 2008.  PART II.  ITEM 5.  MARKET
FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDERS MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES  Since
the company was delisted from the OTC Bulletin Board it only trades on the Other
OTC or Pink Sheets under the symbol EMPY   The average high and
low prices of the Companys stock by quarters are given below:   1st Quarter
2nd Quarter
3rd Quarter
4th QuarterFor 2007High
0.07
0.05
0.04
0.03Low
0.06
0.04
0.03
0.02For 2008High
0.032
0.029
0.008
0.02Low
0.012
0.017
0.015
0.008   6      At the present time,
there are no funds available for the payment of dividends. The Company also does
not anticipate paying any dividends in the next twelve months.  Common Stock  The Articles of
Incorporation currently authorize the issuance of 1,000,000,000 shares of common
stock, with a par value of $0.001.  The holders of the Shares: (a) have
equal ratable rights to dividends from funds legally available therefore, when,
as, and if declared by the Board of Directors of the Company; (b) are entitled
to share ratably in all of the assets of the Company available for distribution
upon winding up of the affairs of the Company; (c) do not have preemptive
subscription or conversion rights and there are no redemption or sinking fund
applicable thereto; and (d) are entitled to one non-cumulative vote per share on
all matters on which shareholders may vote at all meetings of shareholders.
These securities do not have any of the following rights: (a) cumulative or
special voting rights; (b) preemptive rights to purchase in new issues of
Shares; (c) preference as to dividends or interest; (d) preference upon
liquidation; or (e) any other special rights or preferences.  In addition,
the Shares are not convertible into any other security.  There are no
restrictions on dividends under any loan other financing arrangements or
otherwise.  See a copy of the Articles of Incorporation, and an amendment
thereto, and Bylaws of the Company, attached as Exhibit 3.1, Exhibit 3.2, and
Exhibit 3.3, respectively, to this Form 10-SB/A.  As of December 31, 2008,
the Company had 12,008,066 shares (inclusive of 22,501 shares on hold and
awaiting return by a third party) of common stock outstanding.  Non-Cumulative
Voting.  The holders of shares
of Common Stock of the Company do not have cumulative voting rights, which means
that the holders of more than 50% of such outstanding Shares, voting for the
election of directors, can elect all of the directors to be elected, if they so
choose.  In such event, the holders of the remaining Shares will not be
able to elect any of the Company's directors.  Preferred Stock  The Preferred Stock
holders have the right to convert one (1) preferred share to four (4) common
shares at their discretion  The Companys
Articles of Incorporation, as amended, authorize 200,000,000 $.001 per share par
value of Preferred Stock.  As of December 31, 2008, the Company had issued
and outstanding 15,140,000 shares of Preferred Stock.  Share Purchase
Warrants  At December 31, 2008,
no share purchase warrants were outstanding.  Dividends.  The Company does not
currently intend to pay cash dividends.  The Company's proposed dividend
policy is to make distributions of its revenues to its stockholders when the
Company's Board of Directors deems such distributions appropriate.  Because
the Company does not intend to make cash distributions, potential shareholders
would need to sell their shares to realize a return on their investment.
 There can be no assurances of the projected values of the neither  7      shares, nor can there
be any guarantees of the success of the Company. A distribution of revenues will
be made only when, in the judgment of the Company's Board of Directors, it is in
the best interest of the Company's stockholders to do so.  The Board of
Directors will review, among other things, the investment quality and
marketability of the securities considered for distribution; the impact of a
distribution of securities on its customers, joint venture associates,
management contracts, other investors, financial institutions, and the Company's
internal management, plus the tax consequences and the market effects of an
initial or broader distribution of such securities.  Transfer Agent.  The Company continues
to retain the services of Pacific Stock Transfer Company, 500 E. Warm Springs
Road, Suite 240, Las Vegas, NV 89119, to act as transfer agent and
registrar.  Recent Sales of
Unregistered Securities None  ITEM 6.
 SELECTED FINANCIAL DATA  Not required by
smaller reporting companies.  ITEM 7.
 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.  The Company will
require significant working capital for the next 12 months. A revised Business
Plan is being prepared for the Company to raise funds through a private
placement or the sale of shares through public registration. Management believes
that its working capital requirements over the next 12 months will be
approximately $5,000,000 for general overhead and the development of new
business   8      ITEM 7A.
 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.  Not required by
smaller reporting companies.  ITEM 8.
 FINANCIAL STATEMENTS  CONTRARY TO THE RULES OF THE SEC, THE COMPANYS
FINANCIAL STATEMENTS INCLUDED IN THIS FILING HAVE NOT BEEN AUDITEDD BY AN
INDEPENDENT PUBLIC ACCOUNTANT IN ACCORDANCE WITH PROFESSIONAL STANDARDS FOR
CONDUCTING SUCH REVIEWS.  EMPYREAN
HOLDINGS, INC(A
Development Stage Company)CONSOLIDATED BALANCE SHEETDecember 31, 2008
December 31, 2007(Unaudited)
(Audited)CURRENT
ASSETSCash
3,403
$1,969Prepaid
expenses
4,843
7,500Account
Receivable
1,495
1,495Employee
Advance
9,500
-Contractor
License Bonds
10,006
-Deposits
1,175
1,175Real
Estate Held For Sale
97,000
202,000Total
current assets
127,421
$
        214,139Fixed
Assets, net of accumulated depreciation of $11,168 and $2,792
respectively
27,540
38,708TOTAL
ASSETS
$154,962
$252,847LIABILITIES AND STOCKHOLDERS' DEFICITCURRENT
LIABILITIESAccounts
payable - trade
130,924
$64,979Accrued
expenses

210,000Note
Payable - related parties
242,405
157,238Total
current liabilities
583,329
222,217COMMITMENTS
AND CONTINGENCIES

-STOCKHOLDERS'
DEFICITPreferred
stock, $.001 par, 200,000,000 shares authorized, 15,140,000 shares issued
and outstanding
15,140
15,140Common
stock, $0.001 par value per share; 1,000,000,000 shares authorized;
12,008,066 shares issued and outstanding
12,008
10,258Additional
paid-in capital
1,815,734
1,791,234Accumulated
deficit during development stage
(2,271,249)
-1,786,002   9       Total
stockholders' deficit
-428,367
30,630TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
$154,962
$252,847  The
accompanying notes are an integral part of these consolidated financial
statements   10       EMPYREAN
HOLDING, INC(A
 Development Stage company)CONSOLIDATED
STATEMENTS OF INCOME & EXPENSESYears Ended
December 31, 2008 and 2007(Unaudited)Year ended
December 31
Inception
through December 31, 20082008
2007INCOMERental Income
-
-
6,714Construction Income
59,779
-
59,779Payroll Processing and
Other
-
16,564
16,564Sale of real estate
94,000
525,500
978,200Total
Income
153,779
542,064
1,061,257COST AND EXPENSESCost of
real estate sold
111,582
601,778
1,130,051General
and administrative
283,965
623,508
1,452,818Compensation
Expense
236,250

236,250Impairment
of Note receivable-related party
-
162,148
162,148Loss on
abandonment of property held for sale
-
-
154,354Total Costs and
Expenses
631,797
1,387,434
3,135,621OTHER INCOME
(EXPENSES)Interest
income (expense)
(7,229)
5,071
(80,283)Cost of
recapitalization
-
-
(115,479)Total other income
(expenses)
(7,229)
5,071
(195,762)NET LOSS
(485,247)
(840,299)
(2,270,126)Deemed dividend onpreferred
stock issuance
-
-
373,200Net loss attributable to
common shareholders
(485,247)
(840,299)
(2,640,008)TOTAL BASIC AND DILUTED NET
LOSS PER SHARE
(0.04)
(0.09)BASIC AND DILUTED WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING
10,900,532
9,871,217  The
accompanying notes are an integral part of these consolidated financial
statements   11





EMPYREAN HOLDINGS INCCONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
FROM INCEPTION TO DECEMBER 31, 2008Preferred

Common

APIC
Deficit Accumulated During the Development
Stage
TotalShares
Amount

Shares
AmountStock
issued for:-
25% stock dividend declared in July 2004


50,000,000
50,000

(50,000)

--reverse
acquisition



200,000,000
200,000

(200,000)

--reverse
split declared Jun 26, 2004



(245,000,000)
(245,000)

245,000

-Net
Loss







(75)
(75)Balances,
December 31, 2004
-
-

5,000,000
5,000

(5,000)
(75)
(75)Stock
issued for:-
25% stock dividend declared in July 2005


24,978,988
24,979

(24,979)

--reverse
acquisition
10,000,000
10,000

68,765,951
68,766

(76,228)

2,538-reverse
split declared Jun 26, 2005



(121,269,873)
(121,270)

121,270

--services



30,000,000
30,000

150,000

180,000Net
Loss







(614,703)
(614,703)Balances,
December 31, 2005
10,000,000
10,000

7,475,066
7,475

165,063
(614,778)
(432,240)Stock
Issued for:-
debt



150,000
150

303,615

303,765-Services



2,233,000
2,233

176,097

178,330-property
1,000,000
1,000




252,664

253,664Debt
forgiveness






518,335

518,335Net
Loss







(330,925)
(330,925)Balances,
December 31, 2006
11,000,000
$
  11,000

9,858,066
$
      9,858

$1,415,774
$
(945,703)
$
 490,929


12


Stock
issued for:-property
4,140,000
4,140




741,060

745,200-services



400,000
400

7,600

8,000Deemed
Dividend






(373,200)

(373,200)Net
Loss







(840,299)
(840,299)Balances,
December 31, 2007
15,140,000
15,140

10,258,066
10,258

1,791,234
(1,786,002)
30,630Stock
issued for:








--property








--services



1,750,000
1,750

24,500

26,250Deemed
Dividend








-Net
Loss







(485,247)
(485,247)Balances,
December 31, 2008
15,140,000
15,140

12,008,066
12,008

1,815,734
(2,271,249)
(428,367) The
accompanying notes are an integral part of these consolidated financial
statements


13


Empyrean
Holdings IncStatements of
Cash FlowsInceptionYear Ended
Year Ended
ThroughDecember 31,
2008
December 31,
2007
December 31,
2008Cash Flows From Operating
ActivitesNet income (loss)
(485,247)
(840,299)
(2,271,249)Adjustments to reconcile
net loss to cashprovided by
(used in) operating activitesDepreciation
and Amortization
11,168
2,792
35,192Stock
issued for services
24,278
8,000
275,278Stock
based compensation
-
-
120,000Cost of
recapitalization
-
-
115,479Bad
Debt
-
162,149
162,149Loss on sale of property
-
-
43,977Impairment loss on
property
-
-
11,500Loss on abandoned
investment property
-
-
154,354Changes in:AR
-
(1,495)
(1,495)OCA
(16,848)
(8,150)
(25,523)Land
Held for sale
105,000
184,500
289,500Accounts
payable and accrued expenses
275,945
49,067
450,394Net Cash (Used)Provided
by Operating Activities
(85,704)
(443,436)
(640,444)Cash Flows from Investing
ActivitiesPayment
received on note receivable
-
46,500
46,500Purchase
of fixed Assets
-
(41,500)
(41,500)Proceeds
from sale of real estate
-
-
330,023Issuance
of note receivable
-
(108,648)
(208,648)Net
Cash used in Investing Activities
-
(103,648)
$126,375Cash Flows from Financing
ActivitiesProceeds
from issuance of  Common stock
-
372,000
374,538Proceeds
from related party debt

247,962
345,381Borrowings
on related party debt
128,036
-
128,036Principal
payments on related party debt
(40,898)
(107,000)
(330,483)Net cash Provided in
(Used)in Financing Activities
87,138
(107,000)
517,472Net Increase (Decrease)
in Cash
1,434
(654,084)
3,403Cash at Beginning of Year
1,969
35,443
-Cash at Year End
3,403
(618,641)
3,403  The
accompanying notes are an integral part of these consolidated financial
statements   14      EMPYREAN HOLDINGS,
INC. (A
Development Stage Company) NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS (unaudited)    NOTE 1 - BASIS OF
PRESENTATION Nature of business: Empyrean Holdings, Inc. (Empyrean) was
incorporated in Nevada on December 30, 2004.  Empyrean is a development
stage entity whose activities to date have included business planning, capital
raising activities and limited purchases and sales of real estate. The delay in obtaining funding exacerbatedby the severe downturn in the economy
resulted in little progress being made in the development of the companys
wholly owned subsidiaries during the year. Empyrean Staffing, Inc. remained
dormant and minimal progress was made with Empyrean Construction, Inc. despite
having obtained General Contractors licenses for the States of Nevada and
California. Due to the inability to obtain project financing and the severe
downturn in the construction industry a decision was taken to shut down all
operations of this subsidiary on October 24, 2008 . The Sacramento office was
closed and with little indication available on the time period necessary for a
substantial recovery in the construction industry, there is presently no
intention to restart this business. Use of Estimates.
 In preparing financial statements, management makes estimates and
assumptions that affect the reported amounts of assets and liabilities in the
balance sheet and revenue and expenses in the statements of income and expenses.
 Actual results could differ from those estimates.  Principles of
Consolidation:  The accompanying financial statements include the accounts
of Empyrean and its wholly owned subsidiaries, Tradewinds International
Corporation, Empyrean Properties, Inc., Empyrean Construction, Inc. and Empyrean
Staffing, Inc. All significant inter-company balances and transactions with
consolidated subsidiaries have been eliminated in consolidation.  Cash and Cash
Equivalents. For purposes of the statements of cash flow, Empyrean considers all
highly liquid investments purchased with an original maturity of three months or
less to be cash equivalents.  Property and
Equipment. Property and equipment is stated at cost, net of accumulated
depreciation.  Depreciation is computed using the straight-line method over
the estimated useful lives of the respective assets, which range from three to
seven years.  Revenue
Recognition: Revenue is recognized when persuasive evidence of an arrangement
exists, service has been rendered, the sales price is fixed or determinable, and
collectability is reasonably assured.  Income Taxes:
Empyrean recognizes deferred tax assets and liabilities based on differences
between the financial reporting and tax bases of assets and liabilities using
the enacted tax rates and laws that are expected to be in effect when the
differences are expected to be recovered. Empyrean provides a valuation
allowance for deferred tax assets for which it does not consider realization of
such assets to be more likely than not.    15      Share-Based
Compensation: Empyrean accounts for stock-based compensation issued to employees
and non-employees as required by SFAS No. 123 (R), "Accounting for Stock Based
Compensation." Under these provisions, Empyrean records expense over the related
service period based on the fair value of the awards at the date of grant.  Earnings Per
Share: The basic net loss per common share is computed by dividing the net loss
by the weighted average number of common shares outstanding. Diluted net loss
per common share is computed by dividing the net loss adjusted on an "as if
converted" basis, by the weighted average number of common shares outstanding
plus potential dilutive securities. For the years ended December 31, 2008 and
2007, there were no dilutive securities outstanding.  Recent
Accounting Pronouncements  In July 2006, the
FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes (FIN 48)  an interpretation of FASB Statement No. 109, Accounting for
Income Taxes (SFAS No. 109) (FIN 48).  FIN 48 clarifies the accounting
for uncertainty in income taxes recognized in accordance with SFAS No. 109 and
prescribes a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be
taken in a return. Guidance is also provided on de-recognition, classification,
interest and penalties, accounting in interim periods, disclosure and
transition. FIN 48 is effective for fiscal years beginning after December 15,
2006. Empyrean adopted the provisions of FIN 48 in 2007 and no material
uncertain tax positions were identified. Thus, the adoption of FIN 48 did not
have an impact on Empyreans financial statements.  In September
2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS No. 157).
SFAS No. 157 establishes a framework for measuring fair value under generally
accepted accounting procedures and expands disclosures on fair value
measurements. This statement applies under previously established valuation
pronouncements and does not require the changing of any fair value measurements,
though it may cause some valuation procedures to change. Under SFAS No. 157,
fair value is established by the price that would be received to sell the item
or the amount to be paid to transfer the liability of the asset as opposed to
the price to be paid for the asset or received to transfer the liability.
Further, it defines fair value as a market specific valuation as opposed to an
entity specific valuation, though the statement does recognize that there may be
instances when the low amount of market activity for a particular item or
liability may challenge an entitys ability to establish a market amount. In the
instances that the item is restricted, this pronouncement states that the owner
of the asset or liability should take into consideration what affects the
restriction would have if viewed from the perspective of the buyer or assumer of
the liability. This statement is effective for all assets valued in financial
statements for fiscal years beginning after November 15, 2007. Empyrean is
currently evaluating the impact of SFAS No. 157 on its financial position and
result of operations.  In February 2007,
the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities (SFAS No. 159), which provides companies with an option
to report selected financial assets and liabilities at fair value. SFAS No. 159
also establishes presentation and disclosure requirements designed to facilitate
comparisons between companies that choose different measurement attributes for
similar types of assets and liabilities. SFAS No. 159 is effective as of the
beginning of an entitys first fiscal   16      year beginning
after November 15, 2007 with early adoption allowed. Empyrean has not yet
determined the impact, if any, that adopting this standard might have on its
financial statements.   NOTE 2 - GOING
CONCERN  As shown in the
accompanying financial statements, Empyrean has incurred recurring net losses of
$485,247 and $840,299 in 2008 and 2007, respectively, and an accumulated deficit
of $2,271,249 as of December 31, 2008. These conditions raise substantial doubt
about Empyrean's ability to continue as a going concern. Management is trying to
raise additional capital through sales of common stock as well as seeking
financing from third parties. The financial statements do not include any
adjustments that might be necessary if Empyrean is unable to continue as a going
concern.  NOTE 3
ABANDONMENT OF REAL ESTATE INVESTMENT PROPERTY  As previously
reported, the Key West condominium was lost through foreclosure action taken by
Huck Finn, LLC, the Note holder and mortgagee.  As of the date of these
financial statements, it is Empyreans understanding that the Key West Property
has been put on the market for several months by Huck Finn, LLC but not yet
sold. In connection with the Key West Property foreclosure, Empyrean has removed
both the Key West Property and Senior Secured Note (including related default
accruals) from its books and has recognized a loss on abandoned real estate
investment property of $139,095.  Recent appraisals
of the Key West Property indicate that it is valued between $468,900(in the case
of a forced or liquidation sale) and $521,000 (in the case of other than forced
or liquidation sale). It is therefore managements belief that, once sold, the
proceeds realized from the sale of the Key West Property should be sufficient to
settle the amount due under the foreclosure judgment. In the event that the
proceeds from the ultimate sale are not sufficient to cover the amount due under
the foreclosure judgment, Empyrean may be responsible for making up the
shortfall.  NOTE 4 - INCOME TAXES  Deferred
tax assets - NOLs $
772,225 Less:
valuation allowance (772,225) -------- Net
deferred taxes $
     - ========  Empyrean has net
operating loss carry-forwards of approximately $2,271,249 at December 31, 2008,
which begins expiring in 2025.    17      + NOTE 5  SALE OF
REAL ASSETS  In March 2008 one
of the three lots in Kewaskum, Wisconsin acquired in June 8, 2007 was sold for
$49,000 and this yielded net proceeds of $45,033.In April 2008 another one of
the remaining two lots was sold for $45,000 and net proceeds of $41,903 was
obtained. The total net proceeds of $86,936 obtained for the sale of these two
lots were used as working capital.  As the proceeds
received were less than the original carrying value of these assets, the company
incurred a loss equal to the excess book value of $17,582.   NOTE 6  PROPERTY
& EQUIPMENT  Property and
equipment are carried at cost and as of December 31, 2008, consists solely of
furniture and fixtures, computer equipment and software. Depreciation is
provided using the straight-line method for financial reporting purposes based
on estimated useful lives as shown in the table below. Accumulated depreciation
as of December 31, 2008 amounted to $11,168.   Life (Years)
Cost
Accumulated
Depreciation
Net Book ValueFurniture &
fixtures
7
14,000
2,500
11,500Computer
Equipments
3
17,500
7,290
10,210Computer Softwares
3
10,000
4,170
5,830Total

41,500
13,960
27,540   The cost of asset
additions and improvements that extend the useful lives of property and
equipment are capitalized. Routine maintenance and repair items are charged to
current operations.  NOTE:  Due to the severe
financial problems encountered it was not possible to keep up with lease
payments for Empyrean Constructions office at 817 14th Street, Suite
200, Sacramento, California 95814 that was leased from Sterling Pacific Real
Estate for $1,873 per month. When the business for this subsidiary was
terminated on October 24, 2008, and this office closed the above property and
equipment that were all in this office were handed over to the lessor that was
owed 6 months rental or $11,241. This arrangement was verbally agreed with the
lessor who has not invoiced Empyrean Construction for the unpaid rental.   NOTE 7  NOTES
RECEIVABLE AND PAYABLE - RELATED PARTY  The IMR, LLC Note
receivable of $161,648 was impaired at December 31, 2007 due to this company
filing for bankruptcy. For the year ended December 31, 2008 there has been no
contact of any kind from the bankruptcy court or the Trustee.  For the year
ended December 31, 2008 Empyreans Note payable due to IMR, LLC, which incurs
interest at 8% per annum, has increased to $146,728. The Note payable due to a
former real estate consultant who left the companys service in late 2005 has,
inclusive of 8% interest per annum ,increased to $52,038.   18       During 2008,
loans totaling $8,698 were made by an officer to the company.  These
advances incur interest at a rate of 8% per annum.  NOTE 8 -
COMPENSATION FOR OFFICERS  For 2008 no
remuneration in the form of consulting fees and/or allowances was paid. However,
1,750,000 shares of common stock were awarded to an officer on August 20, 2008
for consulting services rendered. These shares had a value, based upon the
market price at the date of issue, of $26,250 which was expensed during the
year.  NOTE 10 
RECLASSIFICATION  Certain amounts
from 2007 have been reclassified to agree with 2008 classifications  NOTE 11 
LEASES  The term of the
lease agreement with Corporate Office Centers for two 160 square foot offices
located at 11200 Westheimer Rd., Suite 900, Houston Texas, 77042 was revised to
one year on April 1, 2008 and the basic rental increased to $1,701.30 per month.
Extra costs averaging about $250 per month are incurred for other office
services and facilities.  Due to need to
reduce company expenses, this lease was modified to only one 160 square foot
office for a basic rental of $805 per month on December 1, 2008 and term of the
lease extended to June 30, 2009.  ECIs branch
office at Las Vegas located at 3960 Howard Hughes Parkway, Suite 500, Las Vegas,
Nevada 89109 and leased on a month to month basis from Regus Business Centers
for $400 per month was closed in August 2008 due to the severe downturn in
business for the construction industry.  NOTE 12-
SUBSEQUENT EVENTS  During July 2009
5,200,000 restricted common shares were sold through a Private Placement to an
investor. A warrant that expires on July 12, 2010  for the  purchase
of a further  5,200,000 shares were also issued to this investor.  As part of the
terms for finalizing an option and sale and purchase agreement with the owner of
real property in Santa Barbara, California, 5,000,000 restricted common shares
were issued. The company has the right to purchase these shares for $50,000 no
later than 6 months from the date of issue.   19            ITEM 9.
  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ONACCOUNTING AND
FINANCIAL DISCLOSURE  None.  ITEM 9A. CONTROLS
AND PROCEDURES  Evaluation of Our
Disclosure Controls  Under the supervision
and with the participation of our senior management, including our chief
executive officer and chief financial officer, we conducted an evaluation of the
effectiveness of the design and operation of our disclosure controls and
procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the Exchange Act), as of the end of the
period covered by this annual report (the Evaluation Date).  Based
on this evaluation, our chief executive officer and chief financial officer
concluded as of the Evaluation Date that our disclosure controls and procedures
were not effective such that the information relating to us, required to be
disclosed in our Securities and Exchange Commission (SEC) reports (i) is
recorded, processed, summarized and reported within the time periods specified
in SEC rules and forms, and (ii) is accumulated and communicated to our
management, including our chief executive officer and chief financial officer,
as appropriate to allow timely decisions regarding required disclosure.  Managements Report on Internal Control over Financial
Reporting  Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting. Our internal control over financial reporting
is designed to provide reasonable assurances regarding the reliability of
financial reporting and the preparation of our financial statements in
accordance with U.S. generally accepted accounting principles, or GAAP. Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree or compliance
with the policies or procedures may deteriorate.  With
the participation of our Chief Executive and Financial Officer, our management
conducted an evaluation of the effectiveness of our internal control over
financial reporting as of December 31, 2008, based on the framework in Internal
ControlIntegrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission ("COSO"). Based on our evaluation, management
concluded that we did not maintain effective internal control over financial
reporting as of December 31, 2009, based on the COSO framework criteria.  This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial
reporting.  Managements report was not subject to attestation by our
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit us to provide only managements report in
this annual report.  Limitations on Effectiveness of Controls and Procedures   20       Our
management, including our Chief Executive and Financial Officer, does not expect
that our disclosure controls and procedures or our internal controls will
prevent all errors and all fraud. A control system, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within the Company have been detected. These inherent limitations include,
but are not limited to, the realities that judgments in decision-making can be
faulty and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
control. The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions. Over time, controls may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.  Changes in Internal Control Over Financial Reporting  There have been no
changes in our internal control over financial reporting that occurred during
the quarter ended December 31, 2008, that have materially affected or are
reasonably likely to materially affect our internal control over financial
reporting.   ITEM 9B. OTHER
INFORMATION  None.     21      PART
III  ITEM 10.
 DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.  Directors and
Executive Officers  The names, ages, and
respective positions of the directors, officers, and significant employees of
the Company are set forth below.  Mr. Lee has held his positions since
March 2001 and there are no other person(s) who can be classified as a promoter
or controlling person of the Company.  Mr.Robert L. Lee,
Director, President and CEO, Secretary and Treasurer   Age 66  Mr. Lee obtained his
financial management experience from Price Waterhouse and Associates (UK) and
also studied consulting methods and systems with the International Society of
Organizational Development (US)  He was involved in the plantation industry
in Malaysia, Indonesia and Thailand for over 30 years. He served as Senior
Advisor and Director of the management company of one of the largest publicly
traded plantation groups before he migrated to the US.  He has been
registered as a consultant for finance and management of tropical tree crops
with the World Bank and has served as an independent consultant for business
development projects in the Ivory Coast, Senegal, the Bahamas, Belize, Mexico,
Panama and Pakistan.  Code of Ethics  The Company intends
to adopt a Code of Business Conduct and Ethics (Code) applicable to its
officers, directors, and employees, which includes the principal executive
officer and the principal financial officer The purpose of the Code will be to
provide legal and ethical standards to deter wrongdoing and to promote:  (a)
Honest and ethical conduct; (b)
Full, fair, accurate, timely and understandable disclosures (c)
Compliance with laws, rules, and regulations; (d)
Prompt internal reporting of violations of the Code; and (e)
Accountability for adherence to the Code.  ITEM 11.
 EXECUTIVE COMPENSATION.  For 2008, no
remuneration in the form of consulting fees and/or allowances was paid. However,
1,750,000 shares of common stock were awarded to an officer on August 20, 2008
for consulting services rendered. These shares had a value, based upon the
market price at the date of issue, of $17,500 which was expensed during the
year.  There are no annuity,
pension or retirement benefits proposed to be paid to officers, directors or
employees of the corporation in the event of retirement at normal retirement
date pursuant to any presently existing plan provided or contributed to by the
corporation or any of its subsidiaries.    22      ITEM 12.
 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS  The following table
sets forth, as of the date of this annual report, the total number of shares
owned beneficially by each of our directors, officers and key employees,
individually and as a group, and the present owners of 5% or more of our total
outstanding shares. The stockholders listed below have direct ownership of their
shares and possess sole voting and dispositive power with respect to the
shares.  Name and
Address
Number of
Percentage ofBeneficial
Ownership (2)
Shares
Ownership (1)Hesperia
Advisors Limitedc/o First
Independent Trust (Curacao) N.V. 7 Abraham de Veerstraat,P.O. Box 840,
Willemstad, Curacao, Netherlands Antilles
5,000,000
41.63 %Robert L.
Lee12400
Brookglade Circle, Unit 63,
3,214,000
26.77
%Houston, TX
77099William
Melchiori
1,235,336
10.29
%15205 Foxboro
Drive, Truckee,
CA 96161  (1) The
percent of class is based on 12,008,066 shares of common stock issued and
outstanding as of December 31, 2008.  (2) As
used herein, the term beneficial ownership with respect to a security is defined
by Rule 13d-3 under the Securities Exchange Act of 1934 as consisting of sole or
shared voting power (including the power to vote or direct the vote) and/or sole
or shared investment power (including the power to dispose or direct the
disposition of) with respect to the security through any contract, arrangement,
understanding, relationship or otherwise, including a right to acquire such
power(s) during the next 60 days.  Unless otherwise noted, beneficial
ownership consists of sole ownership, voting and investment rights.  Securities
Authorized for Issuance under Equity Compensation Plans  We have not adopted
any equity compensation plans since our inception.  ITEM 13.
 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
 INCLUDE LIST OF DIRECTORS, COMMITTEES ON WHICH THEY SERVE AND IF THEY ARE
INDEPENDENT DIRECTORS-   23       Other than as set
forth in Item 7, there are no relationships, transactions, or proposed
transactions to which the registrant was or is to be a party, in which any of
the named persons set forth in Item 404 of Regulation SB had or is to have a
direct or indirect material interest.  ITEM14.
 PRINCIPAL ACCOUNTANT FEES AND SERVICES.  1. Audit
Fees: Aggregate
fees billed for each of the last two (2) fiscal years for professional services
rendered by the principal accountant for the audit of the annual financial
statements and review of financial statements included on Form 10-QSB:  2007: $31,380 2008: $5,750  2. Audit-Related
Fees: Aggregate
fees billed in each of the last two (2) fiscal years for assurance and related
services by the principal accountant that are reasonably related to the
performance of the audit or review of the financial statements and are not
reported previously.  2007: $0 2008: $0  3. Tax
Fees: Aggregate
fees billed in each of the last two (2) fiscal years for professional services
rendered by the principal accountant for tax compliance, tax advice, and tax
planning.  2007: $0 2008: $0  4. All
Other Fees: Aggregate
fees billed in each of the last two (2) fiscal years for products and services
provided by the principal accountant, other than the services previously
reported.  2007: $0 2008: $0  5. Audit
Committee Pre-Approval Procedures.  The Board of Directors has not, to
date, appointed an Audit Committee.  PART IV ITEM 15.
 EXHIBITS  Exhibit No.
Document
Location3.1
Articles of
Incorporation
Incorporated by
Reference3.2
Bylaws
Incorporated by
Reference31.1 and 31.2
Certifications
per Rule 13a-14(a)/15d-14(a)
Included32.1 and 32.2
Certifications
per Section 1350
Included   24          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.  EMPYREAN HOLDINGS,
INC.  /s/ Robert L.
Lee_ Robert L. Lee,
President and CEO Date:  November
4,2009  Pursuant to the
requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.  /s/ Robert
L. LeeRobert L. Lee,
President and CEODate:
 November 4,2009    25