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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

(MARK ONE)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934 FOR THE FISCAL YEAR ENDED JUNE 30, 2009

                                       or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________

                        COMMISSION FILE NUMBER: 333-140236

                              CONSORTEUM HOLDINGS, INC.
                          -----------------------------
               (Exact Name of Company as Specified in Its Charter)

                  Nevada
      -------------------------------                    -------------------
      (State or Other Jurisdiction of                     (I.R.S. Employer
      Incorporation or Organization)                     Identification No.)

          Suite 202, 2900 John Street, Markham, Ontario Canada L3R 5G3
          -------------------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

        Registrant's telephone number including area code: 1 (866) 824 8854
                                                           ----------------

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:

                         Common stock, $0.001 par value
                         ------------------------------
                                 Title of class

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. [_] Yes [x] No

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13or Section 15(d) of the Act. [_] Yes [X] No

Indicate by check mark whether the Company (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 Company was
required to file such reports), and (2) been subject to such filing requirements
for the past 90 days. [X] Yes [_] No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.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].

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer," and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

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

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act): [ ] Yes [X] No

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked prices of such common equity, as of
the last business day of the registrant's most recently completed second fiscal
quarter.

Computed by reference to the last sale price of the common equity on October 9,
2009 of $0.20, the aggregate market value of voting stock held by non-affiliates
is $5,962,415

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date. There were 56,239,750 shares of
the registrant's common stock outstanding as of October 2, 2009.

                           DOCUMENTS INCORPORATED BY REFERENCE

None.


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                                TABLE OF CONTENTS
                                     PART I

Item 1.   Business.........................................................    3

Item 1A.  Risk Factors.....................................................   12

Item 1B.  Unresolved Staff Comments........................................   17

Item 2.   Properties.......................................................   17

Item 3.   Legal Proceedings................................................   17

Item 4.   Submission of Matters to a Vote of Security Holders..............   17

                                     PART II

Item 5.   Market for Registrant's Common Equity, Related Stockholder
          Matters and Issuer Purchases of Equity Securities................   17

Item 6.   Selected Financial Data..........................................   18

Item 7.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations........................................   18

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.......   26

Item 8.   Financial Statements and Supplementary Data......................   26

Item 9.   Changes in and Disagreements With Accountants on Accounting
          and Financial Disclosure.........................................   27

Item 9A.  Controls and Procedures..........................................   27

Item 9A(T) Controls and Procedures.........................................   28

Item 9B   Other Information................................................   28

                                    PART III

Item 10.  Directors, Executive Officers and Corporate Governance...........   28

Item 11.  Executive Compensation...........................................   30

Item 12.  Security Ownership of Certain Beneficial Owners and Management
          and Related Stockholder Matters..................................   33

Item 13.  Certain Relationships and Related Transactions, and Director
          Independence.....................................................   34

Item 14.  Principal Accounting Fees and Services...........................   35

Item 15.  Exhibits, Financial Statement Schedules..........................   36

SIGNATURES.................................................................   37


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FORWARD LOOKING STATEMENTS.

Information in this Form 10-K contains "forward looking statements" within the
meaning of Rule 175 of the Securities Act of 1933, as amended, and Rule 3b-6 of
the Securities Exchange Act of 1934, as amended. When used in this Form 10-K,
the words "expects," "anticipates," "believes," "plans," "will" and similar
expressions are intended to identify forward-looking statements. These are
statements that relate to future periods and include, but are not limited to,
statements regarding adequacy of cash, expectations regarding net losses and
cash flow, statements regarding growth, need for future financing, dependence on
personnel and operating expenses.

Forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those projected. These
risks and uncertainties include, but are not limited to, those discussed below,
as well as risks related to the Company's ability to obtain future financing and
the risks set forth above under "Factors That May Affect Operating Results."
These forward-looking statements speak only as of the date hereof. The Company
expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained herein to
reflect any change in its expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is based.


Note 1:  All dollar amounts are in US Dollars.

ITEM 1. BUSINESS.

         In June 2009 the Company closed an exchange agreement with Consorteum,
Inc., a corporation organized under the laws of the Province of Ontario
("Consorteum"), pursuant to which Consorteum became a wholly-owned subsidiary of
the Company. As a result of the exchange, the Company became a holding company
and the Company's business is conducted through Consorteum, it subsidiary.
Accordingly, the business description below is that of Consorteum, the Company's
operating subsidiary.

                          BUSINESS OF CONSORTEUM, INC.

WHAT IS CONSORTEUM, INC.?

         Consorteum, Inc. is a corporation organized under the laws of the
Province of Ontario on April 3, 2006. The corporate headquarters of Consorteum
and the Company are located at Suite 202, 2900 John Street, Markham, Ontario,
L3R 5G3. The telephone number is 1-866-824-8854 and the web site is
www.consorteum.com.

WHAT WE DO:

         Consorteum, Inc. is a systems integrator within the Financial Services,
Payment and Transaction Processing industries.

         Consorteum provides systems integration of electronic transaction
processing solutions to healthcare, public and private sector companies. Our
services provide customized, innovative technology solutions that create,
augment and enhance customers existing financial, payment and transactional
processing systems.

PAYMENT AND TRANSACTION PROCESSING INDUSTRY OVERVIEW

         Payment transaction processing (PTP) is the central component in a
banking payment system that is responsible for executing, routing and monitoring
payment transactions. Payment transactions in general involve payment orders in
various forms and formats. Transaction processing involves updating the
appropriate database records as soon as a transaction (order, payment, etc.)
occurs.

         Transaction processing systems update constantly. At any given moment,
someone may need an inventory balance, an account balance or the total current
value of a financial portfolio. Also called "online transaction processing"
(OLTP), the OLTP market is a demanding one, often requiring 24 x 7 operation and
the most reliable computers and networks. Together, payment transaction
processing and transaction processing is referred to as "Processing".

         The Processing industry in North America and across the globe is made
up of a number of organizations and infrastructures that process credit card,
debit card and healthcare transactions as well as authorize these transactions
for settlement of monies or information between two or more organizations.
`Processors', as they are traditionally known, have the capability of moving
transactions in a digitized format to multiple settlement destinations. They
traditionally contract to the banking industry (examples include Chase,
Paymentech and its affiliation with Chase Bank in the US and Scotiabank in
Canada; Moneris to BMO and RBC in Canada, HSBC and Barclays International).
Processors can either be small, privately owned companies or larger, publicly
traded companies, yet they are all `association members' of MasterCard or Visa,
which means they can supply merchant discount rates (MDR) to their clients.


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         In North America, there are three major Processors: Chase Paymentech,
First Data and Global Payments. These three Processors are quickly becoming
worldwide processors as they move into the European and Asian marketplaces via
acquisition and partnership. Processors in North America process in excess of 75
billion electronic payment transactions annually (6.25 billion per month, or
312,500,000 transactions every business day).

         There are also regional Processors in the North American market that
provide the same key services as the three major processors mentioned above.
Regional Processors have found ways of offering additional services that the
majors cannot market because of scale and time factors.

         The Processing industry worldwide does not typically possess all the
core competencies to provide and manage all the elements of an end-to-end,
turnkey solution. With the development and introduction of the new chip card EMV
(the acronym for Europay, Mastercard and VISA)standards and the increased
adoption of new card types such as prepaid credit cards, stored value cards and
loyalty cards, the Processors simply don't have the infrastructure or software
in place to process transactions originating from the use of the newer card
types. As a result, they look to others to supply the technologies needed to
process these types of transactions.

CARD INDUSTRY OVERVIEW

         The concept of using a card as a form of payment dates back to the late
1880's. The first card used in the United States was a fuel card in the 1920's
that evolved over the years from paper and metal, to plastic. Large merchants
issued the cards to their frequent customers and eventually started accepting
other merchants' cards. Currently, the payment card industry encompasses debit,
credit, stored value and prepaid cards. Our emphasis is on prepaid cards as
described below.

HOW IS OUR BUSINESS ORGANIZED?

         The majority of Consorteum's initiatives use the `Prepaid Card' as the
cornerstone. A Prepaid Card is similar to a traditional credit card except it is
pre-loaded with the cardholder's personal funds, which he can then use wherever
the payment card is accepted, including on the internet and abroad. There is
usually no credit involved since the only money available to spend is the money
the cardholder deposits to the card.

         The Prepaid Card industry allows its customers to gain the desired
convenience they may not otherwise be afforded where day to day banking needs
are concerned. As a system integrator, Consorteum has the ability to leverage
its relationships with multiple suppliers in order to address the specific
requirements of these day to day banking needs. Consorteum will initially target
six key markets and will develop and implement financial services, stored value
/ prepaid cards, payment, and transaction processing solutions for these key
areas:

                  1. The Unbanked/Underbanked

                  2. Check Cashing

                  3. Loyalty Programs

                  4. Payroll /Benefit

                  5. Health and Wellness Processing

                  6. Consumer Rebate Programs

1. THE UNBANKED/UNDERBANKED

         The unbanked/underbanked population includes individuals who receive
government benefits, benefits payments, payroll checks, and other types of
payments, but currently have minimal or no banking relationship.

         Traditionally, banks have not focused on the unbanked/underbanked
customer base due to increased costs and risks. It is very expensive to service
customers via a branch teller, especially when that customer is carrying a zero
balance. Banks charge an average of $8 - $15 per month for a zero balance
checking account, an obvious deterrent for those who more often than not would
carry a zero balance. In addition, the unbanked/underbanked usually do not
qualify for credit cards and mortgages so banks have little opportunity to turn
them into profitable customers.

         Due to increased credit requirements and security measures at banks,
often the only alternative for the unbanked/underbanked is to use expensive
check cashing outlets whose fees average 2% - 5% to cash a single paycheck. Many
immigrant workers transfer funds each pay period to support relatives in foreign
countries via check cashing outlets or wire transfers. Fees can amount to $60
per transfer, another major obstacle for the unbanked.

         Two-thirds of existing check cashing customers (the 'underbanked') have
bank accounts but seek more convenient financial services. The remaining
customers (the 'unbanked') have been ignored by mainstream financial
institutions and seek alternatives to provide them with basic financial
services.

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         One potential market for our services in this area is the growing
Hispanic population in the United States. According to the July 1, 2008 U.S.
Census statistics, approximately 46.9 million people, which represents
approximately 15% of the total United States population of 307 million, are
Hispanic, making them the country's largest minority group. Approximately 73.7%
of full time, year round Hispanic workers earn less than $35,000 per year. This
is usually an indicator for consumers with little or no banking relationship who
may rely on alternative providers for their financial service needs.
Approximately sixty-seven percent of Hispanics in the U.S. are originally from
Mexico, with the second largest group (14.3%) originating from Central and South
America. In 2008, over $67.5 billion was transferred from the U.S. to Latin
America and the Caribbean, and that same year, $25.1 billion went to Mexico
alone.

2. CHECK CASHING

         There are an estimated 13,000 check-cashing outlets ("CCOs") in the
United States cashing more than $80 billion worth of checks annually. Some 80 to
90 percent of these are payroll checks with an average size of $500 to $600. The
balance is largely government benefits (social assistance, social security
etc.), income-tax refunds, expense checks, medical benefits checks, insurance
checks, and personal checks. CCOs do not require that a customer have a bank
account to cash a check.

         According to a 2007 Federal Reserve Board's Survey of Consumer
Finances, over 10% of families in the United States do not keep a checking
account. The survey also indicated that the majority of these consumers are
unbanked by choice. A disproportionate number of the unbanked are ethnic
minorities. These unbanked millions often must rely on alternative ways to carry
out basic financial transactions, such as cashing payroll checks and paying
bills. Currently, the average unbanked individual spends 10 percent of their net
income on alternative financial services.

         These check cashing services are provided primarily to lower and
middle-income working individuals who are typically blue and white-collar
workers involved in retail and service industries such as restaurants, hotels,
auto repair, landscaping, daycare and line manufacturing. Many of these
customers are also younger than the general population, regularly in need of
financial services after normal banking hours, or living from "paycheck to
paycheck".

         According to Financial Service Centers of America (FISCA), an industry
trade group representing CCOs and payday lenders, CCOs, through 13,000 locations
nationwide, conduct more than 350 million transactions each year, providing an
estimated $106 billion in various products and services to an estimated 30
million customers. These transactions include more than $58.3 billion in check
cashing transactions, $17.6 billion in money orders sold, $8.3 billion in wire
remittances, $13.2 billion in payday advances, and $5.4 billon in sales of
pre-paid stored-value cards.

3. LOYALTY PROGRAMS

         Loyalty programs are marketing programs designed to enhance brand
loyalty by cultivating an ongoing relationship between a marketer and his
customer. Successful loyalty programs encourage the consumer to buy frequently,
to increase the amount spent each time, and to concentrate all or most of their
related purchases on that brand. In addition, they provide access to valuable
demographic and purchasing information that can be leveraged to shape future
campaigns. In 2006, loyalty programs were a $10 billion industry overall with
over 1.3 billion members - four times the total United States population -
across 2250 separate loyalty programs.

         Most loyalty programs offer perks for membership in a club or program
and reward purchases. Rewards may be based on the dollar value of purchases made
or on the frequency of purchases. The most well known consumer loyalty programs
are airline frequent-flyer programs that offer discounts against future travel
called reward miles. Most large supermarket chains now have frequent-buyer clubs
that offer no coupon discounts as well as newsletters and affiliate discounts.

         Loyalty program marketing tactics can include regular communication
with customers such as reminder mailings, private credit cards, cross-sell and
up-sell offers, satisfaction and opinion surveys, and collection of information
for member databases. Loyalty programs may offer a discount on future purchases
based on frequency of purchase, without regard to the dollar value of the
purchase (these are also called frequent user programs). By offering
frequency-based incentives, the marketer hopes to capture and maintain market
share. Frequent user discount programs tend to increase spending because
consumers will deliberately inconvenience themselves or buy more often than they
need to earn the awards and status.

         Loyalty Programs often target the individual consumer and can be
customized to target specific industries or merchants. Programs can offer
rewards directly to consumers or business to business incentives to drive sales.


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4. PAYROLL /BENEFIT

         Debit and Credit is overtaking cash in transaction volume, generating
large volumes of transaction fees, allowing branded, prepaid Consumer Financial
Services such as payroll and benefits cards to be successful. It is estimated
that in 2006 there were 7 million payroll cards in circulation in the United
States. The number of United States payroll cards is expected to increase to
17.5 million in 2010. Research done by the Aite Group projects spending through
use of payroll cards will soar to $27.1 billion by 2009. Payroll and benefits
cards provide employees and benefits recipients (many of whom are `unbanked' or
`underbanked') with immediate access to their payroll or benefits payments.
Cardholders can use their card at an ATM (Automatic Teller Machine), pay for
purchases at the point-of-sale or pay bills online. Payroll and benefits cards
are welcome everywhere credit cards are accepted worldwide, including Internet
and mail order/telephone order (MOTO) merchants. Cardholders receive monthly
statements and can obtain account information online, at ATMs, or by calling a
toll-free number for customer service.

         Upon enrolment into the payroll or benefits program, the participant
will receive a personalized, re-loadable prepaid payroll or benefits card. Each
pay period, the participant's funds are automatically deposited into their
individual card account by their program administrator. Cardholders use their
cards to obtain cash and pay for purchases as they would with a traditional
credit card. Corporate employers can offer the payroll cards to any or all of
their employees.

         Unbanked consumers are the primary target audience, particularly
part-time and temporary employees and employees without checking accounts, those
who do not wish to use their checking accounts for direct deposit, and consumers
who receive recurring benefits payments. Convenience-minded employees, with or
without checking accounts, who elect to have a portion of their paycheck
deposited onto a payroll card for budgeting purposes are also targets.

5. HEALTH AND WELLNESS PROCESSING

         The growing Health and Wellness industry makes use of transaction
processing in a number of fundamental ways. Transactions are generated by
everything from documentation processing to information management, payment
processing, and health and wellness payments. In 2007 in the United States there
were almost a billion electronic media claims processed for Medicare alone.

         The use of cards as a payment receipt methodology in healthcare is
rapidly gaining acceptance due to its convenience and time saving benefits.
Health insurance claims, disability payments, and structured settlement claims
that are traditionally distributed by check can be replaced with a convenient
re-loadable card.

6. CONSUMER REBATE PROGRAMS

         Many consumer-focused companies provide cash back incentive programs to
entice consumers to purchase their brand of products. For example, Sony might
provide a $100 mail-in rebate when a consumer purchases a certain model of
television. When the consumer applies for the mail-in rebate, the request is
sent to a rebate processing company and a check is mailed to the recipient who
cashes the check and spends the funds at their discretion. Rebate programs can
be employed at the product level and/or at the store level, either locally or
nationally.

         Across North America there are several rebate processing companies
(Resolve, Continental Promotions Group, etc.). Together, these rebate processing
companies issue millions of consumer rebate checks per year. For example, in
2006, 250 million rebate checks totaling $5 billion were issued to United States
consumers.

         Many of the major retailers offering consumer mail-in rebate programs
are looking for alternatives to their current cumbersome processes to help
streamline these programs, making them less complicated and more user-focused.
The current costs, processes and administration requirements needed to manage a
typical mail-in rebate program can be significantly reduced by replacing mailed
out checks with a simple, `one time' use gift/rebate cards.


WHAT ARE OUR CURRENT PROJECTS?

         Consorteum currently has five key initiatives. All five programs are
expected to be partially deployed and underway during the fourth quarter of
2009, based on our current planning process. The following is a list of
Consorteum's third party contract and internal initiatives.

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MY GOLF REWARDS CANADA, INC.

         My Golf Rewards Canada Inc. is a newly formed joint venture company
incorporated in the Province of Ontario, to focus on customer retention through
loyalty initiatives built specifically to target the international golf
industry. To date Consorteum has provided $214,950 of initial financing and owns
a 49% stake in the joint venture. Part of the initial financing was used to
acquire a loyalty engine technology license from FideliSoft, Inc., a Montreal,
Quebec based loyalty and software provider. Under our license, the software also
can be used for loyalty programs in different consumer and business sectors.
Commencing October 31, 2009, Consorteum will pay Fidelisoft an annual licensing
fee of $85,980 in four equal payments of $21,495.

         My Golf Rewards membership cards are distributed to interested golfers
via participating golf courses. Golfers who apply for membership receive a My
Golf Rewards loyalty card. The reward funds on this card continue to re-populate
with ongoing use and redemption. The distinctive appeal of the card is that its
value is based on rewarding golfers for repeat spending. As such, members are
encouraged to use the card continually (rather than discard it after initial
use).

         As part of this initiative, ILS, our joint venture partner, provided
the design of the program and the technical support. ILS and Consorteum are
jointly responsible for ongoing development of new functionality enhancement.
ILS is responsible for all direct golf course sales, marketing, customer service
and terminal installations.

         As a participant in My Golf Rewards, Consorteum will oversee and have
final say over all operational aspects of the program. This includes providing
executive management of the company, project management, technology partner
management, support, and provisioning of the initial launch terminals, and
loyalty card purchasing.

         Phase 1 of the rollout will consist of two areas of focus: the first
will be concentrated on 20 (minimum) courses to build brand awareness. To help
with the adoption of the program, Consorteum will provide terminals
(approximately $450 per terminal, for 20 terminals, a cost of $9,000) and cards
(already purchased) to participating golf courses at no cost. Once the My Golf
Rewards program has established itself within the industry, Consorteum will
charge any new golf course an administration and set up fee to become part of
the program. To enable customers to receive points throughout the golf courses
facilities (pro shop, bar area, food and beverage cart) Consorteum anticipates
the average golf course will require two or three terminals per location.


         Consorteum will be required to finance the following as part of its
obligations to the joint venture: program manager, marketing collateral,
software license, POS terminals, hosted database servers, ongoing course
promotions team and technical support. We expect that program execution for
stage 1, (focused on September 2009 - March 2010) will have a budgeted cost of
$150,000. In addition we have a $100,000 annual licensing fee to Fidelisoft for
the loyalty platform.

         My Golf Rewards charges the golf course a transaction fee each time the
card is used. In addition My Golf Rewards charges a percentage fee of the total
dollar points issued each time and a percentage fee of the dollar redemption
amount.

MOBILE CHEQUE-IT

         Consorteum has signed a joint-venture agreement with 1510848 Ontario
Inc., an Ontario corporation, to provide check cashing services to the mobile
coffee truck industry. It is anticipated that the joint venture will be called
Mobile Money Exchange. 1510848 Ontario Inc. will be responsible for all sales
and marketing, driver sign up, administrative services, card management, client
application form collection and check cashing services. Consorteum will be
responsible for program management, deployment, technical support, application
development, day to day operations and maintaining the banking and card platform
relationships.

         Many mobile coffee drivers offer check-cashing services to enable
customers to pay off their weekly incurred tab. The average driver typically
processes approximately 40 checks a month (with the average check being $500).
Accordingly, many drivers carry a large amount of cash in their trucks to
facilitate this check-cashing service.

         The Mobile Money Exchange joint venture will enable approximately 1000
coffee truck vendors in Canada to provide real-time, remote check-cashing
services directly from any coffee truck. Each driver will be outfitted with a
wireless POS terminal (configured to load funds, in real time, on to a stored
value prepaid card). Customers will be charged a 3% service fee of the check
value ($500 average) for processing and loading funds onto their prepaid card.
Drivers will also be able to use the wireless POS terminal to take debit or
credit card payment directly.

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         The first phase on the deployment process will include up to five
trucks for the beta test to ensure all software and bank clearing of checks is
seamless. The initial beta truck drivers will use the web browser on their
cellular phone or dial in to the administrator to activate the remote load on
the prepaid MasterCard. The deployment will not require any funding for this
phase. This will be a short term solution as the drivers will require a more
functional and streamlined process to a wireless POS terminal (Phase 2).

         Phase 2 will require the enabling of up to 1000 mobile trucks with POS
terminals. The cost of these terminals will be approximately $500 per truck and
will be either leased or rented to the drivers. Drivers not wishing to promote
all services or rent a terminal will still be able to cash a check and load a
card though the web browser on their cell phone at no cost to the driver.
Expenses will be funded equally between Consorteum and 1510848 Ontario Inc., our
joint venture partner.

         Consorteum's portion of deployment costs for this program is expected
to cost approximately $100,000 in the first year. We estimate we will require
one to two full time employees for supervision, accounting and periodic
technical developments internally. Due to the anticipated amount of checks
cashed and banking interaction, this program could be administratively heavy.
Consorteum is responsible for the development and integration of the prepaid
card reload applications into the POS terminal and provides the prepaid
MasterCard product and any additional value added services.

         1510848 Ontario Inc. is responsible for all sales, marketing and check
collection costs. Additionally they will be responsible to fund the inventory
for the Leased or Rented POS terminals for the drivers.

         All net revenues from the Mobile Money Exchange venture will be divided
equally between Consorteum and 1510848 Ontario Inc. It is anticipated this joint
venture will expand beyond Canada, into United States, European and
international markets throughout 2010-11.

         Under the joint venture agreement, Consorteum will receive revenues
from several sources from this initiative. First, we will receive 50% of the 3%
service fee charged to cash any check. Second, we will share equally in the
revenues from monthly fees charged to any cardholder for maintaining the prepaid
card account. Third, we will receive an override commission on any prepaid
cellular and long distance products sold.

AFFINITY MANAGEMENT LTD.

         Affinity Management provides national coalition buying programs across
a spectrum of industries including chemical and horticulture companies.
Consorteum has a contract in place with Affinity Management that allows them to
resell our services to their coalition members. Affinity has been approved to
resell our Prepaid Payroll Card and MDR programs and will share all revenues on
a 50/50 basis with Consorteum.

         Consorteum has provided to Affinity Management a payroll/incentive card
program and Merchant Discount Rate program for Affinity Management Ltd. to offer
to their clients in the United States and Canada. Since this is a reseller
agreement, Consorteum has no financial liability for this program and no cost
outlay.

         Consorteum will receive 50% of all ongoing net revenues from cardholder
fees charged on any payroll cards and 50% of all net revenues generated from the
MDR for credit and debit card processing.



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FIRST NATIONS FINANCIAL SERVICES (FN FINANCIAL SERVICES)

         Consorteum has entered into an exclusive contract with FN Financial to
provide for the deployment of a suite of financial services to First Nations
(FN) people and merchants. First Nations are Canada's indigenous population. We
will act as the systems integrator to deliver the necessary components that will
allow FN Financial to provide products and services to First Nation Bands. These
services may include but are not limited to, Point of Sale (POS), Merchant
Discount Rates (MDR), Automated Teller Machines (ATM), Stored Value, Payroll or
Benefit Cards and Insurance. Consorteum will contract to third parties the
provision of the hardware and software necessary to fulfill its obligations
under the terms of the FN Financial contract.

         The deployment will occur in stages. Initially, Consorteum will provide
MDR and POS hardware to an initial group of First Nation's bands across Canada
commencing in the fourth quarter of 2009. In the second phase, 15,000 FN
Benefits cards will be rolled out to the same select bands. FN Financial
estimates that by the end of 2011, up to 300,000 benefits cards may be required.
The FN Benefits card will be used to load government social assistance payments
for First Nations People across Canada. This process will replace the current
cumbersome manual check process.

         We estimate we will require two full time employees for the initial
contractual obligation to manage the third party providers, deployment, sales
and marketing support for the FN project. We estimate our first year costs
associated with this project will be approximately $250,000. These costs do not
include the purchase and installation of the hardware or the creation of the
requisite software. Under our agreement with FN, all these expenses will be paid
directly by FN to the third party providers.

         Consorteum will receive an ongoing revenue share based on its contract
with FN Financial from fees charged to the cardholder for usage. Within the
contract there is additional provision for revenue share from every future
product and service provided to FN Financial. The term of the contract between
FN Financial and Consorteum is for an initial period of four years and renewable
for two year intervals thereafter.

TRANS SCREEN GROUP

         Consorteum has established a new Joint Venture partnership with Chicago
based, Trans Screen Group. Under the terms of the joint venture, Trans Screen
will leverage Consorteum expertise to provide new financial services solutions
to a number of new emerging global markets.

         Through this newly established joint venture relationship, Trans Screen
Group and Consorteum will expand into new markets in India, Africa, Russia,
Latin America, Thailand and China. Services provided will include payroll cards,
loyalty programs, gift cards, Credit Card processing and other value added
services. Initial deployments are expected to commence in early to mid 2010.


OUR SALES AND MARKETING STRATEGY

         Consorteum has a two stage approach to sales and marketing, Direct
(Consorteum managed and run programs) and Indirect (third party client managed
and run programs).

         Our methodology for deployment and/or initiation of a program is based
on the existence of a qualified business problem, an identified solution, and a
real client need. Consorteum evaluates the revenue potential, cost
effectiveness, and profitability before proceeding.

Direct:

         Once a defined opportunity has been identified, Consorteum will create
our own sales and marketing strategy. Depending on the program being launched
and availability of funding, the following areas could be included in the
marketing plan: publication media, web media, direct person-to-person
promotions, printed collateral, sponsored sporting events, retail store
promotions, email, direct mail, radio or TV. The combination of plans utilized
will depend upon our research concerning the most effective allocation
strategies, supplemented by our experiences based on programs actually launched
and developed.


                                       9

<PAGE>

Indirect:

         Our contracted clients are third party companies looking to resell our
products or services to their customers, or who have contracted Consorteum to
integrate a payment or transaction processing solution for them. A majority of
our third party clients are either referred to us from existing industry
partners or from our own direct sales efforts.

         We also have the ability to provide our third party clients with
industry focused sales and marketing advice. Although Consorteum does not
directly shape the marketing plans of our clients, we do provide marketing
expertise to help maximize their promotional efforts to increase adoption of
services.

OUR PRODUCTS

         We expect to create and distribute cards with a variety of functions
and features that will depend upon the program to which they are addressed. A
general description of various kinds of cards is set forth below; however, we do
not currently have initiatives supporting all these varieties in place. Our
ability to create different card types will depend upon a combination of client
interest and initiatives and available funding sources.

LOYALTY CARDS:
         The Loyalty card enables the identification between the consumer and
the loyalty provider. The card identifies the consumer accumulating points, or
enables the recipient to redeem points for pre-selected award. The card also
enables the loyalty/marketing provider to track the activity of their consumers
spending habits and redemption activity.

RE-LOADABLE PREPAID CARD:

         Re-loadable prepaid cards are designed for people looking for multiple
use functionality from their card. Many retailers offer re-loadable cards as a
convenient way for their repeat spend customers to pay for products and
services, while maintaining brand loyalty. Based on the specific program, these
types of cards can be re-loaded at selected retail locations, on-line or at the
bank.

PAYROLL CARDS:

         Each employee is issued his/her own stored value payroll card. The
employer posts funds electronically to the employee's personal card via standard
direct deposit processes or by flat file to a secured website interface. Once
funds are loaded, the employee has immediate access to his payroll funds no
matter where he may be.

         Employees can purchase goods and services at those locations that
accept any major credit cards (including online and phone purchases) or withdraw
cash at most ATMs. Stored value cards are safer than cash, reduce risk for
purchases made online or over the phone and provide peace of mind for people on
the go.

         Payroll cards are ideal for temporary workers, students, or those who
work remotely, as well as those who desire flexibility.

MERCHANT DISCOUNT RATES:

         Merchant Discount Rates are fees charged to a merchant in order to
accept payment from any of the major credit card companies. Consorteum has
established relationships with several large processors to purchase transaction
processing at a competitive rate and offer these services to our clients.

BENEFIT CARDS:

         Prepaid benefit cards have been developed in order that federal,
municipal, state and provincial governments can deposit social assistance
payments direct onto a prepaid card, instead of issuing millions of manual
checks to recipients.

         Healthcare Benefit cards are designed to be loaded with a monetary
value by Healthcare benefit suppliers which allow their clients to have control
of their own benefit expenses

REBATE CARDS:

         Rebate cards are similar to a non re-loadable gift card. The card is
issued to the recipient of the mail-in rebate instead of the traditional check
process or restricted retailer gift card. The rebate card enables the mail-in
recipient to use their rebate monies at any retail location, thus increasing
customer satisfaction.


                                      10

<PAGE>

GIFT CARD, NON RE-LOADABLE:

         Non re-loadable gift cards normally have a preset denomination value
and are designed as a one-time use, non-re-loadable card. These cards are
traditionally designed for use at specific retail chains, closed loop, or open
loop prepaid gift cards that can be used at any retail merchant that accepts
major credit cards.

         Transaction levels have consistently been higher in the last quarter of
the year due to increased use of our prepaid card programs during the holiday
season. Transaction levels are greater for our loyalty and reward programs
during the second and third quarter of the year.

HOW ARE WE PAID FOR OUR SERVICES?

         Each of our programs has a different method of collecting fees for the
service. The amount of fees we receive varies with each program and the specific
solution being offered. In some cases the transaction fee charged is set in the
markets in which we are doing business.

         In general, we receive a portion of the transaction and monthly fees
generated by the end user's card activity. In most cases we do not receive these
revenues directly from the cardholders, as we generally do not have the direct
relationship with them. We receive a percentage of the sums charged to the
cardholder by the issuing bank for the retention, maintenance, user fees and
other expenses associated with cardholder ownership. We receive our allocated
percentages of these collected fees each month from the issuing bank together
with a statement calculating our fees. Various kinds of fees associated by type
of card are described below; however, our participation in one or more of the
kinds of fees associated with each card, as well as the percentage of sharing of
revenues, will differ from client to client based upon our actual contract.

Card Programs: Most of the card programs are consumer based billing. This means
the cardholder pays service fees for different functions of the card. These fees
could include Monthly Service fees, ATM fees, Balance inquiry fees, POS fees and
others.

Loyalty Program: Fees for the loyalty programs are traditionally paid for by the
retailer promoting the service. These could include administration fees, per
transaction fees, reward issuing fees and reward redemption fees.

Merchant Discount Fees: The payment Processor charges the retail merchant a
percentage of the transaction value for processing a specific card payment
(VISA, MC, Debit). The processor pays Consorteum a percentage of net revenues
generated from the fee charged to the merchant. We have and will continue to
have card acceptance agreements with some banks under which fees are set.

WHAT REGULATIONS WILL OUR BUSINESS BE SUBJECT TO?

Due to the financial services focus of our business, Consorteum may be required
to directly or indirectly conform to banking and Processing industry
regulations. Our issuing bank and transaction Processing partners must comply
with all federal and state/provincial banking regulations (eg. FDIC's
"Regulation E" of the Electronic Funds Transfer Act) in addition to card
association (for example, Visa, MasterCard, American Express, Discover) rules
and regulations (for example, PCI Security Standards Council for payment account
data security). Consorteum, as part of doing business with these partners, may
have to comply with certain rules and regulations and/or ensure our other
business partners and clients properly collect, store, disseminate, and comply
with certain portions of these rules and regulations on our issuing bank and
Processing partners' behalf (for example, KYC "Know Your Customer"). Consorteum
currently has no financial or licensing obligation to meet these compliance
regulations. These regulations do change over time and vary from country to
country. The new post paid credit card regulations in the United States do not
have a direct impact on the company as they are consumer based protection
regulations. Consorteum does not currently issue post paid credit cards to
consumers (all our prepaid cards are issued by issuing bank partners and are not
part of the new interest percentage consumer regulation). As a result, we do not
need to change our current business model.

WHAT INTELLECTUAL PROPERTY DO WE OWN OR LICENSE?

         Currently, we do not own any intellectual property that is subject to
protection under U.S. or Canadian patent, trademark or copyright law. We have a
license to use certain programming in connection with the MyGolf Rewards
project.

         Presently we have not design our own software programs for processing
transactions. We do not believe that we will devote our efforts to creating any
form of programming or other intellectual property that can be the subject of a
patent application or other form of "strong" intellectual property protection.

                                      11

<PAGE>

         We seek to maintain certain intellectual property as trade secrets or
proprietary information. The secrecy of this information could be compromised by
third parties, or intentionally or accidentally disclosed to others by our
employees, which may cause us to lose any competitive advantage we enjoy from
maintaining these trade secrets. We will, however, require all employees to sign
non disclosure and confidentiality agreements and take other steps to protect
our corporate assets prudently.

WHO IS OUR COMPETITION?

         Competition for the various products and services that Consorteum
supplies to its clients are generally supplied by a number of different sources.
The major financial institutions around the globe could supply a partial or
complete array of products that will be in direct competition with Consorteum.
The large Processors such as Chase Paymentech, First Data and Global Payments
also supply parts of the Consorteum solutions but generally do not offer a
complete end-to-end solution. The individual card associations such as
MasterCard, Visa and Discover can offer card programs such as prepaid credit
cards and gift cards direct to their card users. There are also companies that
supply stored value card programs, such as Incomm and eFunds; and there are also
a number of loyalty and rewards program suppliers.

EMPLOYEES

         Consorteum currently operates with a total of six (6) contract
employees. These individuals are all full-time individuals and are all on
Management Services Agreements. These are the only employees of the company.

ITEM 1A   RISK FACTORS

         The following risk factors apply to the Company, its business, the
industry in which it operates and the common stock and market in which it
trades. They should be read carefully by anyone with an interest in our Company
who should consider the information together with the other material in this
Report. Some of the statements in "Risk Factors" are forward looking statements.

RISKS RELATED TO OUR BUSINESS OPERATIONS

THERE IS SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN
UNLESS WE RAISE SUBSTANTIAL AMOUNTS OF CAPITAL.

         In its report dated September 29, 2009, the independent registered
public accounting firm for Consorteum stated that the financial statements for
the years ended June 30, 2009 and 2008 and for the period from inception
(November 7, 2005) to June 30, 2009, were prepared assuming that Consorteum
would continue as a going concern. Our ability to continue as a going concern is
an issue raised as a result of cash flow constraints, an accumulated deficit of
$3,023,280 at June 30, 2009 and recurring losses from operations. We continue to
experience losses. Our ability to continue as a going concern is subject to the
ability to generate a profit from new activities and/or obtain necessary funding
from outside sources, including additional funds from the sale of the Company's
securities or loans from financial institutions/individuals where possible. The
continued operating losses and stockholders' deficit increases the difficulty in
meeting such goals and there can be no assurances that such methods will prove
successful, or that these funds will be available at the times or in the amounts
required on terms acceptable to us.

WE HAVE A LIMITED OPERATING HISTORY

         Although we were incorporated in 2006, we are a development stage
company. We have a limited operating history and will likely encounter the risks
and difficulties frequently encountered by early stage companies. Such risks
include, without limitation, the following:

         o        amount and timing of operating costs and capital expenditures
                  in relation to expansion of our business, operations, and
                  infrastructure;
         o        time line to develop, test, coordinate, market and sell our
                  card programs and processing procedures;
         o        negotiation and implementation of strategic alliances or
                  similar arrangements with companies with sufficient resources
                  to support our programs and processing transactions;
         o        need for acceptance of products;
         o        ability to anticipate and adapt to a competitive market and
                  rapid technological developments;
         o        dependence upon key personnel.

         We cannot be certain our strategy will be successful or that we will
successfully address these risks. In the event that we do not successfully
address these risks, our business, prospects, financial condition, and results
of operations could be materially and adversely affected.


                                      12

<PAGE>

WE HAVE LIMITED SALES, MARKETING, AND DISTRIBUTION CAPABILITIES. WE WILL BE
REQUIRED TO EITHER DEVELOP SUCH CAPABILITIES OR TO OUTSOURCE THESE ACTIVITIES TO
THIRD PARTIES.

         We currently have limited sales, marketing and distribution
capabilities. In order to succeed, we will be required to either develop such
capabilities or to outsource these activities to third parties. We can provide
no assurance that third parties will be interested in acting as our outsourced
sales, marketing, and distribution arms on a timely basis, on commercially
reasonable terms, or at all. If we are unable to establish sales, marketing, or
distribution capabilities either by developing our own organization or by
entering into agreements with others, we may be unable to successfully sell any
products that we are able to begin to commercialize, which would have a material
adverse effect upon our business, prospects, financial condition, and results of
operations. Further, in the event that we are required to outsource these
functions on disadvantageous terms, we may be required to pay a relatively large
portion of our net revenue to these organizations, which would have a material
adverse effect upon our business, prospects, financial condition, and results of
operations.

RISKS RELATING TO THE CREDIT CARD AND TRANSACTION PROCESSING INDUSTRY

THE LEVEL OF TRANSACTIONS GENERATED BY OUR DIFFERENT CARD PROGRAMS IS SUBJECT TO
SUBSTANTIAL SEASONAL VARIATION WHICH MAY CAUSE OUR QUARTERLY RESULTS TO
FLUCTUATE MATERIALLY.

         Our experience is that the level of transactions is subject to seasonal
variation. Transaction levels have consistently been higher in the last quarter
of the year due to increased use of our prepaid credit card programs during the
holiday season. Transaction levels are greater for our loyalty and reward
programs during the second and third quarter of the year. The level of
transactions drops in the first quarter, during which transaction levels are
generally the lowest we experience during the year. As a result of these
seasonal variations, our quarterly operating results, which depend in part on
the number and value of the transactions processed, may fluctuate materially.

THE STABILITY AND GROWTH OF MULTIPLE TYPES OF CARD PROGRAMS DEPENDS ON
MAINTAINING AGREEMENTS WITH SPONSORSHIP BANKS, SOFTWARE PROVIDERS AND
PROCESSORS.

         All of our supplier agreements such as those with banks, processing
companies and software companies, have expiration dates. Although our suppliers
are generally obligated to renew our agreements, they may have the option not to
do so. Therefore, one or more of our critical suppliers such as a bank or
processing company may terminate its contract at expiration. Although we would
have notice of any such decision, we may not be able to replace the relationship
in a timely manner or on favorable economic terms or at all. The requirement to
replace any critical supplier relationship would also generate additional costs
in the replacement process. The inability to maintain or replace these
agreements could have a material adverse effect on our business, and financial
condition or results of operations.

WE DO NOT CONTROL THE TRANSACTION FEES FOR SOME OF OUR PROGRAMS IN THE MARKETS
WHERE THEY OPERATE. THE INTERCHANGE FEES CHARGED AND SHARED ARE ESTABLISHED BY
THE SPONSORING PROCESSORS OR FINANCIAL INSTITUTIONS.

         The amount of fees we receive per transaction is set in the markets in
which we do business. We have and will continue to have card acceptance
agreements with some banks under which fees are set. Also, we derive a portion
of our revenues from "interchange fees" that are set by processors, financial
institutions and the major card associations. We are not in a position to
influence these fees. A significant decrease in the interchange fee could
adversely affect our revenues.

WE ARE DEPENDENT UPON ELECTRONIC FINANCIAL TRANSACTION PROCESSORS OR THE CARD
ISSUING INSTITUTION TO PROVIDE ASSISTANCE IN OBTAINING SETTLEMENT OF FUNDS
RELATING TO INTERCHANGE REVENUE AS WELL AS OTHER TRANSACTIONS FEES AGREED UPON.

         We have agreements in place related to transaction based fee revenues
on credit and debit cards issued by banks. We also have in place arrangements
for the settlement of these types of transactions, but in some cases we do not
have a direct relationship with the card-issuing bank and we rely for settlement
on the regulation rules that are administered by card associations (such as Visa
or MasterCard and others). These contracts are typically terminable by a bank or
processing company on 90 days notice. We have arrangements in place with our
processing partners or card sponsoring institution to collect our fees via
revenue splits at point of origin. The termination of a contract with any one of
these parties could result in the loss of revenues.

                                      13

<PAGE>

A LACK OF BUSINESS OPPORTUNITIES OR FINANCIAL RESOURCES MAY IMPEDE OUR ABILITY
TO EXPAND AT DESIRED LEVELS, AND OUR FAILURE TO EXPAND OPERATIONS COULD HAVE AN
ADVERSE IMPACT ON ITS FINANCIAL CONDITION.

         Our plans and opportunities will be focused on card issuing,
transaction processing and providing financial services to our varied client
base. The expansion and development of our business will depend on various
factors including the following:

         o        The demand for our card products, transaction processing and
                  financial services product by the current markets.

         o        The ability to form the appropriate relationships and obtain
                  necessary approvals for the installation of our card programs.

         o        The ability to install a transaction processing solution in an
                  efficient and timely manner.

         o        The ability to issue a sufficient numbers of cards which
                  relate to loyalty, rebate, reward, prepaid and other card
                  programs.

         o        The availability of financing for the expansion of our
                  business through partnerships, acquisition and hiring of
                  additional personnel.

         o        The increased acceptance of our card products in our target
                  markets.

         o        The increase of transaction fees revenue we receive.

         o        The deployment of larger numbers of the different card types
                  by us, and our different distribution channels

         o        The continued use of our card product by cardholders.

         We expect that transaction levels on a newly created card program in a
developing market will not increase significantly. We will work to improve the
levels of usage of the card products by acquiring high-quality clients and
eliminating less-developed potential markets and adding new transactions types
that are compatible with our different products. However, we may not be
successful in materially increasing transaction levels through these measures.

OUR LOSS OF CURRENT RELATIONSHIPS WITH PROCESSORS, CARD PLANS AND FINANCIAL
INSTITUTIONS WILL HAVE A MATERIAL ADVERSE EFFECT ON FUTURE REVENUES AND
PROSPECTS.

         Our revenue will be derived primarily from fees paid by users of our
card products, by fees shared between us and the processors and also by the
interchange revenues shared with the major card plan providers. Therefore, our
future success will be dependent on our ability to increase the transaction and
fee revenues that are created which are greater than our expenses. There can be
no assurances that our efforts to achieve this in the beginning will be
successful.

WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY WITH THE LEADING SERVICE PROVIDERS
WHO ARE MORE ESTABLISHED AND BETTER CAPITALIZED THAN US.

         We experience significant competition from banks, non-bank providers of
card programs, major processors as well as multiple card program suppliers. Many
of our competitors have materially greater financial resources than us and can
therefore implement ever changing technological developments to meet the level
of convenience that consumers demand. No assurance can be given that we will be
able to compete successfully with our more established and better-capitalized
competitors.


                                      14

<PAGE>

RISKS RELATED TO OUR SHARES

IN RECENT YEARS, THE STOCK MARKET IN GENERAL HAS EXPERIENCED PERIODIC PRICE AND
VOLUME FLUCTUATIONS. THIS VOLATILITY HAS HAD A SIGNIFICANT EFFECT ON THE MARKET
PRICE OF SECURITIES ISSUED BY MANY COMPANIES FOR REASONS OFTEN UNRELATED TO
THEIR OPERATING PERFORMANCE. THESE BROAD MARKET FLUCTUATIONS MAY ADVERSELY
AFFECT OUR STOCK PRICE, REGARDLESS OF OUR OPERATING RESULTS. THE MARKET PRICE OF
OUR COMMON STOCK MAY FLUCTUATE SIGNIFICANTLY.

         The price of our common stock is quoted on the OTCBB and constantly
changes. We expect that the market price of the common stock will continue to
fluctuate. These fluctuations may result from a variety of factors, many of
which are beyond our control. These factors include:

      o     quarterly variations in our financial results;

      o     operating results that vary from the expectations of management,
            securities analysts and investors;

      o     changes in expectations as to our business, prospects, financial
            condition, and results of operations;

      o     announcements by us or our competitors of material developments;

      o     the operating and securities price performance of other companies
            that investors believe are comparable to us;

      o     future sales of our equity or equity-related securities;

      o     changes in general conditions in our industry and in the economy,
            the financial markets and the domestic or international political
            situation;

      o     departures of key personnel; and

      o     regulatory and intellectual property considerations.

FUTURE SALES OF COMMON STOCK OR THE ISSUANCE OF SECURITIES SENIOR TO OUR COMMON
STOCK OR CONVERTIBLE INTO, OR EXCHANGEABLE OR EXERCISABLE FOR, OUR COMMON STOCK
COULD MATERIALLY ADVERSELY AFFECT THE TRADING PRICE OF THE COMMON STOCK, AND OUR
ABILITY TO RAISE FUNDS IN NEW EQUITY OFFERINGS.

         Future sales of substantial amounts of our common stock or other
equity-related securities in the public market or privately, or the perception
that such sales could occur, could adversely affect prevailing trading prices of
our common stock and could impair our ability to raise capital through future
offerings of equity or other equity-related securities. We can make no
prediction as to the effect, if any, that future sales of shares of common stock
or equity-related securities, or the availability of shares of common stock for
future sale, will have on the trading price of our common stock. There are
currently 6,860,000 shares of our common stock available for sale.

OUR COMMON STOCK IS SUBJECT TO THE PENNY STOCK REGULATIONS THAT IMPOSE
RESTRICTIONS ON THE MARKETABILITY OF OUR COMMON STOCK. AS A CONSEQUENCE, THE
ABILITY OF OUR STOCKHOLDERS TO SELL SHARES OF OUR COMMON STOCK COULD BE
IMPAIRED.

         The Securities and Exchange Commission (the "Commission") has adopted
regulations that generally define a "penny stock" to be an equity security that
has a market price of less than $5.00 per share or an exercise price of less
than $5.00 per share subject to certain exceptions that are not applicable to
our company at present. Our common stock is subject to the penny stock rules
that impose additional sales practice requirements on broker-dealers who sell
these securities to persons other than established customers and accredited
investors. The regulations require that prior to any transaction involving a
penny stock, a risk disclosure schedule must be delivered to the buyer
explaining the penny stock market and its risks. For transactions covered by
these rules, the broker-dealer must make a special suitability determination for
the purchase, and must have received the purchaser's written consent to the
transaction prior to sale. As such the market liquidity for the common stock
will be limited to the ability of broker-dealers to sell it in compliance with
the above-mentioned disclosure requirements.


                                      15

<PAGE>

         You should be aware that, according to the Commission, the market for
penny stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns include:

         o        control of the market for the security by one or a few
                  broker-dealers;

         o        "boiler room" practices involving high-pressure sales tactics;

         o        manipulation of prices through prearranged matching of
                  purchases and sales;

         o        the release of misleading information;

         o        excessive and undisclosed bid-ask differentials and markups by
                  selling broker-dealers; and

         o        dumping of securities by broker-dealers after prices have been
                  manipulated to a desired level, which hurts the price of the
                  stock and causes investors to suffer loss.

         We are aware of the abuses that have occurred in the penny stock
market. Although we do not expect to be in a position to dictate the behavior of
the market or of broker-dealers who participate in the market, we will strive
within the confines of practical limitations to prevent such abuses with respect
to our common stock.

FAILURE TO REMAIN CURRENT IN REPORTING REQUIREMENTS COULD RESULT IN DELISTING
FROM THE OVER THE COUNTER BULLETIN BOARD.

         Companies trading on the Over the Counter Bulletin Board ("OTCBB"),
such as the Company, must be reporting issuers under Section 12 of the Exchange
Act, and must be current in their reports under Section 13, in order to maintain
price quotation privileges on the OTCBB. If the Company fails to remain current
in its reporting requirements, the Company could be delisted from the Bulletin
Board.

         In addition, the Financial Industry Regulatory Authority ("FINRA"),
which supervises the OTCBB, has adopted a change to its Eligibility Rule, in a
filing with the SEC. The change makes those OTCBB issuers that are cited for
filing delinquency in their Form 10-K/Form 10-Q three times in a 24-month period
and those OTCBB issuers removed for failure to file such reports two times in a
24-month period ineligible for quotation on the OTCBB for a period of one year.
Under this rule, a company filing with the extension time set forth in a Notice
of Late Filing (Form 12b-25) is not considered late. This rule does not apply to
a company's Current Reports on Form 8-K.

FAILURE TO MAINTAIN MARKET MAKERS MAY AFFECT VALUE OF OUR COMMON STOCK.

         If the Company is unable to maintain FINRA member broker/dealers as
market makers, the liquidity of the common stock could be impaired, not only in
the number of shares of common stock which could be bought and sold, but also
through possible delays in the timing of transactions, and lower prices for the
common stock than might otherwise prevail. Furthermore, the lack of market
makers could result in persons being unable to buy or sell shares of the common
stock on any secondary market. There can be no assurance the Company will be
able to maintain such market makers.

SHARES OF OUR COMMON STOCK ELIGIBLE FOR FUTURE SALE MAY AFFECT MARKET PRICE.

         All the shares held by Consorteum Stockholders who received them in the
Exchange Agreement transaction were issued in reliance on the section 4(2)
exemption under the Securities Act of 1933. Such shares will not be available
for sale in the open market without separate registration except in reliance
upon Rule 144 under the Securities Act of 1933. In general, under Rule 144 a
person (or persons whose shares are aggregated) who has beneficially owned
shares acquired in a non-public transaction for at least six months, including
persons who may be deemed affiliates of the Company (as that term is defined
under that rule) would be entitled to sell within any three-month period a
number of shares that does not exceed 1% of the then outstanding shares of
common stock, provided that certain current Company information is then publicly
available. If a substantial number of the shares owned by these stockholders
were sold pursuant to Rule 144 or a registered offering, the market price of the
common stock at that time could be adversely affected.


                                      16

<PAGE>

WE HAVE NEVER PAID ANY CASH DIVIDENDS BECAUSE WE HAVE NEVER HAD ANY EARNINGS,
AND WE WILL NOT PAY CASH DIVIDENDS IN THE FORESEEABLE FUTURE.

         We have never paid any cash dividends on our common stock since we
began our business operations because we have never had earnings from which any
such dividends could be declared. Assuming we attain earnings in the future, we
do not intend to pay cash dividends. We intend to retain future earnings, if
any, for reinvestment in the development and expansion of our business. Any
credit agreements which we may enter into with institutional lenders or
otherwise may restrict our ability to pay dividends. Whether we pay cash
dividends in the future will be at the discretion of our board of directors and
will be dependent upon our financial condition, results of operations, capital
requirements, and any other factors that the board of directors decides is
relevant. See "Dividend Policy" and "Description of Securities - Common Stock".

ITEM 1B.  Unresolved Staff Comments.

None.

ITEM 2.  Properties.

         Consorteum has a lease on office space at Suite 202, 2900 John Street,
Markham, Ontario, L3R 5G3. This lease is for the period commencing May 15, 2009,
and ending May 14, 2010. The property is 2231 square feet, at a rate of $3923.85
per month, inclusive of all fees and taxes.


ITEM 3.  Legal Proceedings.

None.

ITEM 4.  Submission of Matters to a Vote of Security Holders.

None.

ITEM 5.  Market for Registrant's Common Equity, Related Stockholder Matters and
         Issuer Purchases of Equity Securities.

         The Company's shares of common stock are traded on the Over the Counter
Bulletin Board under the symbol "CSRH.OB" The following information is for the
Company under its current trading symbol CSRH which it received at the time of
the closing of the exchange agreement with Consorteum, Inc. in June 2009. There
was no trading activity for the Company under the symbol CSRH for any quarterly
period before the quarter ended June 30, 2009. Prior thereto, the Company's
symbol was IMPL.OB for the quarters ended December 31, 2008 and March 31, 2009
and WLNT.OB for the quarter ended September 30, 2008, during which time periods
there was no trading activity. As a result, the bid and asked prices for the
Company's common stock under its current name, Consorteum Holdings, Inc. is for
the last calendar quarter of the fiscal year ended June 30, 2009, and the prices
shown below for the calendar quarters ended September 30, 2008, December 31,
2008 and March 31, 2009 reflect quotations for the Company under its prior
names, Implex Corporation and Wellentech Services, Inc., and its prior trading
symbols, IMPL.OB and WLNT.OB The range of closing bid prices shown below is as
reported by the Over the Counter Bulletin Board. The quotations shown reflect
inter-dealer prices, without retail mark-up, markdown or commission and may not
necessarily represent actual transactions.


Per Share Common Stock Bid Prices by Quarter
For the Fiscal Year Ended on June 30, 2009
                                                        HIGH          LOW

Quarter Ended September 30, 2008(no trading)           $ 0            $ 0
Quarter Ended  December 31, 2008(no trading)           $ 0            $ 0
Quarter Ended March 31, 2009 (no trading)              $ 0            $ 0
Quarter Ended June 30, 2009                            $ 0.50        $ 0.45

Holders of common equity

         As of September 30, 2009, the Company had approximately 59 record
holders of its common stock. The number of record holders was determined from
the records of the transfer agent and does not include beneficial owners of
common stock whose shares are held in the names of various security brokers,
dealers and registered clearing agencies.

Dividend information

         The Company has not declared or paid a cash dividend to stockholders
since it was organized. The board of directors presently intends to retain any
earnings to finance operations and does not expect to authorize cash dividends
in the foreseeable future. Any payment of cash dividends in the future will
depend upon earnings, capital requirements and other factors.


                                      17

<PAGE>

Equity securities sold without registration

         Sales of unregistered (restricted) securities during the fiscal year
ended June 30, 2009 that have not been previously reported either in a Form 10-Q
or in a Form 8-K: None

         On July 6, 2009 the Company entered into investor relations agreements
with three consultants pursuant to which the Company issued a total of 3,280,000
shares of its common stock for services rendered and to be rendered under the
respective agreements.

         On September 19, 2009, the Company authorized the issuance of 5,800,000
shares of its common stock to four of its officers as compensation for accrued
salary for all periods ended prior to March 31, 2009. See Item 11 "Executive
Compensation--Summary Compensation Table."

Company purchases of equity securities

         There were no purchases of the Company's common stock by the Company or
its affiliates during the year ended June 30, 2009, except for the exchange of
shares of the common stock of Consorteum for shares of the Company's common
stock at the closing of the exchange agreement transaction in June 2009 in which
the Company's officers and directors participated. The events of the exchange
agreement closing are described in the Company's Form 8-K filing made on June
15, 2009 as amended on June 22, 2009.

ITEM 6. Selected Financial Data.

Not required.

ITEM 7. Managements' Discussion and Analysis of Financial Condition and Results
        of Operations

EXECUTIVE LEVEL OVERVIEW

         Consorteum, Inc. was incorporated under the laws of the Province of
Ontario on April 3, 2006. On June 15, 2009, Consorteum became a wholly-owned
subsidiary of the Company as a result of the closing under an agreement and plan
of exchange pursuant to which all of the Consorteum stockholders exchanged all
of their issued and outstanding shares of Consorteum for an equivalent number of
shares of common stock of the Company. As a result of the exchange agreement
closing, Consorteum Inc. will function as the operating company and the Company
will be a holding company.

         Consorteum will focus on providing leading edge solutions to financial
institutions, healthcare, government, associations, and private sector companies
for electronic transaction processing and systems integration. Consorteum's
services provide customized, innovative technology solutions that create,
augment and enhance customers' existing systems. These enhancements and programs
are aimed to serve underserved markets and provide equal opportunity for
financial services to a greater audience. Consorteum works with a multitude of
global technology partners that enable the company to create customized
solutions for each of its clients across a broad spectrum of industries.

         Until the closing of the exchange agreement, Consorteum relied on
financing from sales of its common stock to related parties and private lending
arrangements with individual investors. Management believes Consorteum's changed
status as a subsidiary of a public company will make it easier to provide
working capital stability, allowing Consorteum to grow and meet its operational
forecast. Consorteum must raise an estimated total of $600,000 of operating
capital in order to implement the first phases of the various contract
initiatives described above in Item 1 entitled "The Business." To the extent
that Consorteum receives less than the amount sought or receives it over time
instead of as one payment, management will be required to select which
initiatives to deploy and which to defer pending the receipt of additional
funding.

         Consorteum is currently in negotiations with more than one source of
potential investor funding for the Company; however, the amount, terms and
conditions of any such investment are still to be determined, and there can be
no assurance that any such negotiations will result in a closing for all of the
funds needed or be concluded successfully at all.

         Consorteum has several contracts in place that will begin in the second
quarter of 2010. Consorteum will earn the majority of its revenue in the near
future from debit and credit card transaction fees.

         The financial results of 2008 and 2009 are reflective of an early stage
company that has been focused on growing the proper management team, putting
infrastructures in place and seeking out an acquiring company.


                                      18

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         As of June 30, 2009, Consorteum's fiscal year-end, Consorteum had
$8,773 in total current assets, compared to total current assets of $23,395 as
of June 30, 2008. The June 30, 2009 current assets were comprised of $185 in
cash, $7,303 in accounts receivable and $1,285 in prepaid expenses. As at June
30, 2009, Consorteum fixed assets consisted of computer equipment valued at
$17,221 less accumulated depreciation of $10,447.

         Until Consorteum has the necessary financial operating capital to
execute its business plan, revenues will be limited due to program deployment
delays. Many of the existing contracts and initiatives require capital
expenditure by Consorteum.


RESULTS OF OPERATIONS

         Consorteum had revenues of $581 for the year ended June 30, 2009,
compared with $223,627 for the year ended June 30, 2008. The majority of the
revenue in 2009 was earned from a single customer.

         For the year ended June 30, 2009, Consorteum had a net loss of
$1,158,534 compared to a net loss of $999,247 for the year ended June 30, 2008.
Operating expenses increase from $1,043,198 for the year ended June 30,
2008 to $1,044,446 for the year ended June 30, 2009. The majority of this
increase can be attributed to an increase in general and administrative related
expenses. Approximately $350,000 of expenses for the year were associated with
the negotiations and closing of the Exchange Agreement transaction. In addition,
there was a significant increase in rent ($15,394 in 2009 compared to $3,166 in
2008) and interest on loans ($96,892 in 2009 compared to $33,208 in 2008).

OFF BALANCE SHEET ARRANGEMENTS

         The Company does not currently have any off-balance sheet arrangements.

Contractual Obligations

         The Company does not have any significant contractual obligations
except for a contract to pay $100,000 in four equal quarterly instalments of
$25,000 to Fidelsoft under a software licensing agreement for the period
September 2009 through August 2010.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES ALL:

         The preparation of our financial statements in conformity with
accounting principles generally accepted in the United States of America
requires us to make estimates and judgments that affect our reported assets,
liabilities, revenues, and expenses, and the disclosure of contingent assets and
liabilities. We base our estimates and judgments on historical experience and on
various other assumptions we believe to be reasonable under the circumstances.
Future events, however, may differ markedly from our current expectations and
assumptions. While there are a number of significant accounting policies
affecting our financial statements, we believe the following critical accounting
policies involve the most complex, difficult and subjective estimates and
judgments:


RISK AND UNCERTAINTIES:
         Factors that could affect the Company's future operating results and
cause future results to vary materially from expectations include, but are not
limited to, lower than anticipated retail transactions, and inability to control
expenses, technology changes in the industry, relationships with processing
agencies and networks, changes in its relationship with related parties
providing operating services to the Company and general uncertain economic
conditions. Negative developments in these or other risk factors could have
material adverse affect on the Company's future financial position, results of
operations and cash flow.


                                      19

<PAGE>

CASH AND CASH EQUIVALENTS:

         Consorteum considers all highly-liquid investments with a maturity of
three months or less when purchased to be cash equivalents. There are no cash
equivalents at June 30, 2009 or June 30, 2008.

      Equipment, Net

         Equipment is recorded at cost. Depreciation, based on the estimated
useful life of the equipment, is provided at an annual rate of 30% based on the
declining-balance method.

      Impairment of Long Lived Assets

         In accordance with Statement of Financial Accounting Standard ("SFAS")
No. 144, "ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG LIVED ASSETS," long
lived assets to be held and used are analyzed for impairment whenever events or
changes in circumstances indicate that the related carrying amounts may not be
recoverable. The Company evaluates at each balance sheet date whether events and
circumstances have occurred that indicate possible impairment. If there are
indications of impairment, the Company uses future undiscounted cash flows of
the related asset or asset grouping over the remaining life in measuring whether
the assets are recoverable. In the event such cash flows are not expected to be
sufficient to recover the recorded asset values, the assets are written down to
their estimated fair value. Long lived assets to be disposed of are reported at
the lower of carrying amount or fair value of asset less cost to sell. As
described in Note 1, the long-lived assets have been valued on a going concern
basis. However, substantial doubt exists as to the ability of the Company to
continue as a going concern. If the Company closes operations, the asset values
may be materially imperil.

       Accounts Receivable

         The Company carries its accounts receivable at invoice amount, less an
allowance for doubtful accounts. On a periodic basis, the Company evaluates its
accounts receivable and establishes an allowance for doubtful accounts, based on
a history of past write-offs and collections and current credit conditions.

      Revenue Recognition

         The Company recognizes revenue in accordance with SEC Staff Accounting
Bulletin No. 104, Revenue Recognition ("SAB 104"). SAB 104 requires that four
basic criteria must be met before revenue can be recognized: (1) persuasive
evidence of an arrangement exists; (2) delivery has occurred or services have
been rendered; (3) the selling price is fixed and determinable; and (4)
collectability is reasonably assured.

      Equity Investments

         Equity investments include entities over which the Company exercises
significant influence but does not exercise control. These are accounted for
using the equity method of accounting and are initially recognized at cost net
of any impairment losses. The Company's share of these entities' profits or
losses after acquisition of its interest is recognized in the statement of
operations and cumulative post-acquisition movements are adjusted against the
carrying amount of the investment. When the Company's share of losses of these
investments equals or exceeds the carrying amount of the investment, the Company
only recognizes further losses where it has incurred obligations or made
payments on behalf of the affiliate.

         Joint ventures are entities over which the Company exercises control
         jointly with another party or parties. Joint ventures are also
         accounted for under the equity method as described above.

      Income Taxes

         The Company accounts for income taxes in accordance with SFAS No. 109,
"ACCOUNTING FOR INCOME TAXES." Deferred tax assets and liabilities are recorded
for differences between the financial statement and tax basis of the assets and
liabilities that will result in taxable or deductible amounts in the future
based on enacted tax laws and rates. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be realized.
Income tax expense is recorded for the amount of income tax payable or
refundable for the period increased or decreased by the change in deferred tax
assets and liabilities during the period.


                                      20

<PAGE>

      Foreign Currency Translation

         In accordance with the provision of SFAS No. 52, "FOREIGN CURRENCY
TRANSLATION," the Company, whose functional currency is the Canadian dollar,
translates its balance sheet into U.S. dollars at the prevailing rate at the
balance sheet date and translates its revenues and expenses at the average rates
prevailing during each reporting period. Net gains or losses resulting from the
translation of financial statements are accumulated and charged directly to
accumulated comprehensive income or (loss), a component of stockholders' equity
or (deficit). Realized gains or losses resulting from foreign currency
transactions are included in operations for the period.

      Comprehensive Income or Loss

         The Company applies the provisions of SFAS No. 130, "REPORTING
COMPREHENSIVE INCOME." Unrealized gains and losses from foreign exchange
translation are reported in the accompanying statements as comprehensive income
or loss.

     Earnings or Loss Per Share

         The Company accounts for earnings or loss per share pursuant to SFAS
No. 128, "EARNINGS PER SHARE," which requires disclosure on the financial
statements of "basic" and "diluted" earnings (loss) per share. Basic earnings
(loss) per share is computed by dividing net income (loss) by the weighted
average number of common shares outstanding for the year. Diluted earnings
(loss) per share is computed by dividing net income (loss) by the weighted
average number of common shares outstanding plus potentially dilutive securities
outstanding for each year. The computation of diluted earnings (loss) per share
has not been presented as its effect would be anti-dilutive.

     Use of Estimates

         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting periods. These estimates are based on management's
best knowledge of current events and actions the Company may undertake in the
future. Actual results may ultimately differ from those estimates. These
estimates are reviewed on an ongoing basis and as adjustments become necessary,
they are reported in earnings in the period in which they become known.

      Financial Instruments

         Unless otherwise noted, it is management's opinion that the Company is
not exposed to significant interest, currency or credit risks arising from the
financial instruments. The fair value of the financial instruments approximates
their carrying values, unless otherwise noted.

         Financial risk is the risk that the Company's earnings are subject to
fluctuations in interest risk or currency risk and are fully dependent upon the
volatility of these rates. The Company does not use derivative instruments to
moderate its exposure to financial risk, if any.

            CONCENTRATION OF CREDIT RISK

         SFAS No. 105, "Disclosure of Information About Financial Instruments
with Off-Balance-Sheet Risk and Financial Instruments with Concentration of
Credit Risk," requires disclosure of any significant off-balance-sheet risk and
credit risk concentration. The Company does not have significant
off-balance-sheet risk or credit concentration. The Company maintains cash with
major financial institutions. From time to time, the Company has funds on
deposit with commercial banks that exceed federally insured limits. Management
does not consider this to be a significant credit risk as these banks and
financial institutions are well-known.

      Comparative Financial Information

         Certain financial information for the year ended June 30, 2008, has
been reclassified to conform with the financial statement presentation adopted
in the current year.

                                      21

<PAGE>

      Recent Accounting Pronouncements

         In December 2007, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 141 (revised 2007), "Business Combinations" ("SFAS 141(R)").
This statement replaces SFAS 141, "Business Combinations" and requires an
acquirer to recognize the assets acquired, the liabilities assumed, including
those arising from contractual contingencies, any contingent consideration, and
any noncontrolling interest in the acquiree at the acquisition date, measured at
their fair values as of that date, with limited exceptions specified in the
statement. SFAS 141(R) also requires the acquirer in a business combination
achieved in stages (sometimes referred to as a step acquisition) to recognize
the identifiable assets and liabilities, as well as the noncontrolling interest
in the acquiree, at the full amounts of their fair values (or other amounts
determined in accordance with SFAS 141(R)). In addition, SFAS 141(R)'s
requirement to measure the noncontrolling interest in the acquiree at fair value
will result in recognizing the goodwill attributable to the noncontrolling
interest in addition to that attributable to the acquirer. SFAS 141(R) amends
SFAS No. 109, "Accounting for Income Taxes", to require the acquirer to
recognize changes in the amount of its deferred tax benefits that are
recognizable because of a business combination either in income from continuing
operations in the period of the combination or directly in contributed capital,
depending on the circumstances. It also amends SFAS No. 142, "Goodwill and Other
Intangible Assets", to, among other things, provide guidance on the impairment
testing of acquired research and development intangible assets and assets that
the acquirer intends not to use. SFAS 141(R) applies prospectively to business
combinations for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15, 2008. The
Company is currently assessing the potential impact that the adoption of SFAS
141(R) could have on its financial statements.

            In December 2007, FASB issued SFAS No.160, "Noncontrolling Interests
in Consolidated Financial Statements--amendment of Accounting Research Bulletin
No. 51" ("SFAS 160"). SFAS 160 establishes accounting and reporting standards
for the noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. It also clarifies that a noncontrolling interest in a subsidiary is
an ownership interest in the consolidated entity that should be reported as
equity in the consolidated financial statements. SFAS 160 also changes the way
the consolidated income statement is presented by requiring consolidated net
income to be reported at amounts that include the amounts attributable to both
the parent and the noncontrolling interest. It also requires disclosure, on the
face of the consolidated statement of income, of the amounts of consolidated net
income attributable to the parent and to the noncontrolling interest. SFAS 160
requires that a parent recognize a gain or loss in net income when a subsidiary
is deconsolidated and requires expanded disclosures in the consolidated
financial statements that clearly identify and distinguish between the interests
of the parent owners and the interests of the noncontrolling owners of a
subsidiary. SFAS 160 is effective for fiscal periods, and interim periods within
those fiscal years, beginning on or after December 15, 2008. The adoption of
SFAS 160 will have no impact on the Company's financial statements.

            In February 2008, FASB issued FSP on SFAS No.140-3, "ACCOUNTING FOR
TRANSFERS OF FINANCIAL ASSETS AND REPURCHASE FINANCING TRANSACTIONS" ("FSP SFAS
140-3"). The objective of this FSP is to provide guidance on accounting for a
transfer of a financial asset and a repurchase financing. This FSP presumes that
an initial transfer of a financial asset and a repurchase financing are
considered part of the same arrangement (linked transaction) under SFAS No.140,
"ACCOUNTING FOR TRANSFERS AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENTS
OF LIABILITIES" ("SFAS 140"). However, if certain criteria are met, the initial
transfer and repurchase financing shall not be evaluated as a linked transaction
and shall be evaluated separately under SFAS 140. FSP SFAS 140-3 is effective
for financial statements issued for fiscal years beginning after November 15,
2008, and interim periods within these fiscal years. Earlier application is not
permitted. The Company is currently reviewing the effect, if any, the proposed
guidance will have on its financial statements.

            In February 2008, FASB issued FSP SFAS No. 157-2, "EFFECTIVE DATE OF
FASB STATEMENT NO. 157" ("FSP SFAS 157-2"). FSP SFAS 157-2 delays the effective
date of SFAS No. 157, "FAIR VALUE MEASUREMENT," for nonfinancial assets and
nonfinancial liabilities that are recognized or disclosed at fair value in the
financial statements on a nonrecurring basis to fiscal years beginning after
November 15, 2008, and interim periods within those fiscal years. It does not
defer recognition and disclosure requirements for financial assets and financial
liabilities, or for nonfinancial assets and nonfinancial liabilities that are
remeasured at least annually.

            In March 2008, FASB issued SFAS No. 161, "DISCLOSURES ABOUT
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES--AN AMENDMENT OF FASB STATEMENT
NO. 133" ("SFAS 161"). SFAS 161 requires enhanced disclosures about an entity's
derivative and hedging activities and thereby improves the transparency of
financial reporting. SFAS 161 is effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008. Earlier
application is encouraged. The Company is currently reviewing the effect, if
any, the proposed guidance will have on its financial statements.


                                      22

<PAGE>

            In April 2008, FASB issued FSP SFAS No. 142-3, "DETERMINATION OF THE
USEFUL LIFE OF INTANGIBLE ASSETS" ("FSP SFAS 142-3"). FSP SFAS 142-3 amends the
factors that should be considered in developing renewal or extension assumptions
used to determine the useful life of a recognized intangible asset under FASB
Statement No. 142, "GOODWILL AND OTHER INTANGIBLE ASSETS," ("SFAS 142"). The
intent of this FSP is to improve the consistency between the useful life of a
recognized intangible asset under SFAS 142 and the period of expected cash flows
used to measure the fair value of the asset under SFAS 141(R), and other U.S.
generally accepted accounting principles. FSP SFAS 142-3 is effective for
financial statements issued for fiscal years beginning after December 15, 2008,
and interim periods within those fiscal years. The requirement for determining
useful lives must be applied prospectively to intangible assets acquired after
the effective date and the disclosure requirements must be applied prospectively
to all intangible assets recognized as of, and subsequent to, the effective
date. Early adoption is prohibited. The Company is currently reviewing the
effect, if any, the proposed guidance will have on its financial statements.

            In May 2008, FASB issued FSP Accounting Principles Board ("APB") No.
141-1, "ACCOUNTING FOR CONVERTIBLE DEBT INSTRUMENTS THAT MAY BE SETTLED IN CASH
UPON CONVERSION (INCLUDING PARTIAL CASH SETTLEMENT)" ("FSP APB 141-1"). FSP APB
141-1 clarifies convertible debt instruments that may be settled in cash upon
conversion (including partial cash settlement) are not addressed by paragraph 12
of APB Opinion No. 14, "ACCOUNTING FOR CONVERTIBLE DEBT AND DEBT ISSUED WITH
STOCK PURCHASE WARRANTS." Additionally, FSP APB 141-1 specifies that issuers of
such instruments should separately account for the liability and equity
components in a manner that will reflect the entity's nonconvertible debt
borrowing rate when interest cost is recognized in subsequent periods. FSP APB
141-1 is effective for financial statements issued for fiscal years beginning
after December 15, 2008, and interim periods within those fiscal years. Early
adoption is not permitted. The Company is currently reviewing the effect, if
any, the proposed guidance will have on its financial statements.

            In May 2008, FASB issued SFAS No. 162, "THE HIERARCHY OF GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES" ("SFAS 162"). SFAS 162 identifies the sources of
accounting principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles ("GAAP")
in the United States of America (the GAAP hierarchy). SFAS 162 is effective 60
days following the U.S. Securities and Exchange Commission's approval of the
Public Company Accounting Oversight Board amendments to AU Section 411, "THE
MEANING OF PRESENT FAIRLY IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES." The Company is currently reviewing the effect, if any, the proposed
guidance will have on its financial statements.

            In September 2008, FASB issued FSP No. 133-1 and FIN 45-4,
"DISCLOSURES ABOUT CREDIT DERIVATIVES AND CERTAIN GUARANTEES: AN AMENDMENT OF
FASB STATEMENT NO. 133 AND FASB INTERPRETATION NO. 45; AND CLARIFICATION OF THE
EFFECTIVE DATE OF FASB STATEMENT NO. 161" ("FSP SFAS 133-1 and FIN 45-4"). FSP
133-1 and FIN 45-4 is intended to improve disclosures about credit derivatives
by requiring more information about the potential adverse effects of changes in
credit risk on the financial position, financial performance, and cash flows of
the sellers of credit derivatives. It amends FASB Statement No. 133, "ACCOUNTING
FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES," to require disclosures by
sellers of credit derivatives, including credit derivatives embedded in hybrid
instruments. FSP SFAS 133-1 and FIN 45-4 also amends FASB Interpretation No. 45,
"GUARANTOR'S ACCOUNTING AND DISCLOSURE REQUIREMENTS FOR GUARANTEES, INCLUDING
INDIRECT GUARANTEES OF INDEBTEDNESS TO OTHERS," to require an additional
disclosure about the current status of the payment/performance risk of a
guarantee. The provisions of the FSP SFAS 133-1 and FIN 45-4 that amend
Statement 133 and Interpretation 45 are effective for reporting periods (annual
or interim) ending after November 15, 2008. The Company is currently reviewing
the effect, if any, the proposed guidance will have on its financial statements.
The adoption of FSP 133-1 and FIN 45-4 will have no impact on the Company's
financial statements.

                                       23

<PAGE>

         In December 2008, FASB issued FSP SFAS No. 140-4 and FIN 46 (R)-8,
"Disclosures by Public Entities (Enterprises) about Transfers of Financial
Assets and Interests in Variable Interest Entities" ("FSP SFAS 140-4 and FIN 46
(R)"). FSP SFAS 140-4 and FIN 46 (R) amends FASB SFAS 140, "ACCOUNTING FOR
TRANSFERS AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENTS OF LIABILITIES,"
to require public entities to provide additional disclosures about transfers of
financial assets. It also amends FASB SFAS 46 (revised December 2003),
"CONSOLIDATION OF VARIABLE INTEREST ENTITIES," to require public enterprises,
including sponsors that have a variable interest in a variable interest entity,
to provide additional disclosures about their involvement with variable interest
entities. Additionally, this FSP requires certain disclosures to be provided by
a public enterprise that is (a) a sponsor of a qualifying special purpose entity
("SPE") that holds a variable interest in the qualifying SPE but was not the
transferor (nontransferor) of financial assets to the qualifying SPE and (b) a
servicer of a qualifying SPE that holds a significant variable interest in the
qualifying SPE but was not the transferor (nontransferor) of financial assets to
the qualifying SPE. The disclosures required by FSP SFAS 140-4 and FIN 46 (R)"
are intended to provide greater transparency to financial statement users about
a transferor's continuing involvement with transferred financial assets and an
enterprise's involvement with variable interest entities and qualifying SPEs.
FSP SFAS 140-4 and FIN 46 (R) is effective for reporting periods (annual or
interim) ending after December 15, 2008. The Company is currently reviewing the
effect, if any; the proposed guidance will have on its financial statements.

         In April 2009, FASB issued FSP SFAS No. 157-4, "Determining Fair Value
When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly" ("FSP
SFAS 157-4"),which provides guidance for making fair value measurements more
consistent with the principles presented in SFAS 157. FSP SFAS 157-4 provides
additional authoritative guidance in determining whether a market is active or
inactive, and whether a transaction is distressed. It is applicable to all
assets and liabilities (e.g. financial and nonfinancial) and will require
enhanced disclosures. It is effective for interim and annual reporting periods
ending after June 15, 2009. The Company is currently reviewing the effect, if
any; the proposed guidance will have on its financial statements.


         In April 2009, FASB issued FSP SFAS No. 115-2 and SFAS No. 124-2,
"Recognition and Presentation of Other-Than-Temporary Impairments", ("FSP SFAS
115-2 and SFAS 124-2") which provides additional guidance to provide greater
clarity about the credit and noncredit component of any other-than-temporary
impairment event related to debt securities and to more effectively communicate
when an other-than-temporary impairment event has occurred. It is effective for
interim and annual reporting periods ending after June 15, 2009. The Company is
currently reviewing the effect, if any; the proposed guidance will have on its
financial statements.

         In April 2009, FASB issued FSP SFAS No. 107-1 and APB No. 28-1,
"Interim Disclosures about Fair Value of Financial Instruments", ("FSP SFAS
107-1 and APB 28-1") which amends SFAS 107, "Disclosures about Fair Value of
Financial Instruments", to require disclosures about fair value of financial
instruments in interim as well as in annual financial statements. FSP SFAS 107-1
and APB 28-1 also amends APB Opinion 28, "Interim Financial Reporting", to
require those disclosures in all interim financial statements. It is effective
for interim periods ending after June 15, 2009. The Company is currently
reviewing the effect, if any; the proposed guidance will have on its financial
statements.


                                       24

<PAGE>

            In April 2009, FASB issued FSP SFAS No. 141(R)-1, "Accounting for
Assets Acquired and Liabilities Assumed in a Business Combination That Arise
from Contingencies", ("FSP SFAS141(R)-1"), which amends and clarifies SFAS 141
(revised 2007), "Business Combinations", to address application issues raised by
preparers, auditors, and members of the legal profession on initial recognition
and measurement, subsequent measurement and accounting, and disclosure of assets
and liabilities arising from contingencies in a business combination. It is for
effective assets and liabilities arising from contingencies in business
combinations for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15, 2008. The
Company is currently reviewing the effect, if any; the proposed guidance will
have on its financial statements.

         In April 2009, the SEC released Staff Accounting Bulletin No. 111 ("SAB
111"), which amends SAB Topic 5-M. SAB 111 notes that FSP SFAS 115-2 and SFAS
124-2 were scoped to debt securities only, and the FSP referred readers to SEC
SAB Topic 5-M for factors to consider with respect to other-than-temporary
impairments for equity securities. With the amendments in SAB 111, debt
securities are excluded from the scope of Topic 5-M, but the SEC staff's views
on equity securities are still included within the topic. The Company currently
does not have any financial assets that are other-than-temporary impaired. May
2009, FASB issued SFAS No. 165 "Subsequent Events", ("SFAS 165"), which
establishes general standards for accounting for and disclosure of events that
occur after the balance sheet date but before financial statement are issued or
available to be issued. In particular, SFAS No. 165 sets forth the period after
the balance sheet date during which management of a reporting entity should
evaluate events or transactions that may occur for potential recognition or
disclosure in the financial statements; the circumstances under which an entity
should recognize events or transactions occurring after the balance sheet date
in its financial statements' and the disclosures that an entity should make
about events or transactions that occurred after the balance sheet date. It is
effective for interim and annual periods ending after June 15, 2009. The Company
is currently reviewing the effect, if any; the proposed guidance will have on
its financial statements.

         In June 2009, the FASB issued SFAS No.166 "Accounting for Transfers of
Financial Assets--an amendment of FASB Statement No. 140." This standard
eliminates the concept of a qualifying special purpose entity ("QSPE") and
modifies the derecognition provisions in SFAS No.140. This statement is
effective for financial asset transfers occurring after the beginning of an
entity's first fiscal year that begins after November 15, 2009. The Company is
currently reviewing the effect, if any; the proposed guidance will have on its
financial statements.

         In June 2009, the FASB issued SFAS No. 167 "Amendments to FASB
Interpretation No. 46(R)." This statement amends the consolidation guidance
applicable to variable interest entities and is effective as of the beginning of
an entity's first fiscal year that begins after November 15, 2009. The Company
is currently reviewing the effect, if any; the proposed guidance will have on
its financial statements.

         In June 2009, the FASB issued SFAS No. 168, "The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles - a replacement of FASB Statement No. 162" ("SFAS No. 168"). SFAS No.
168 provides for the FASB Accounting Standards Codification (the "Codification")
to become the single official source of authoritative, nongovernmental U.S.
generally accepted accounting principles (GAAP). The Codification did not change
GAAP but reorganizes the literature. SFAS No. 168 is effective for interim and
annual periods ending after September 15, 2009. The Company does not expect that
adoption of this statement will have a material impact on its financial
statements.


                                       25

<PAGE>


ITEM 7A.  Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

ITEM 8.  Financial Statements and Supplementary Data.


Contents

Report of Independent Registered Public Accounting Firm                   F-1

Balance Sheets at June 30, 2009 and June 30, 2008                         F-2

Statements of Operations and Comprehensive Loss for the
     years ended June 30, 2009 and 2008, and Cumulative from
     Inception (November 7, 2005) Through June 30, 2009                   F-3

Statements of Stockholders' Deficit for the Periods from Inception
   (November 7, 2005) Through June 30, 2009                               F4-5

Statements of Cash Flows for the Years Ended June 30, 2009 and 2008 and
   Cumulative from Inception (November 7, 2005)
   Through June 30, 2009                                                  F-6

Notes to Financial Statements                                             F7-19


                                       26

<PAGE>

            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Stockholders of
CONSORTEUM HOLDINGS, INC.



         We have audited the accompanying balance sheets of CONSORTEUM HOLDINGS,
INC. (formerly known as Implex Corporation) (A Development Stage Company) (the
"Company") as of June 30, 2009, and 2008, and the related statements of
operations and comprehensive (loss), stockholders' (deficit) and cash flows for
each of the two years in the period ended June 30, 2009, and the period from
November 7, 2005 (date of inception) through June 30, 2009. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

         We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Consorteum Holdings,
Inc. as of June 30, 2009, and 2008, and the results of its operations and its
cash flows for each of the two years in the period ended June 30, 2009, and the
period from November 7, 2005 (date of inception) through June 30, 2009, in
conformity with accounting principles generally accepted in the United States of
America.

         The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company is in the development stage, has an
accumulated deficit during the development stage, and has insufficient working
capital to meet its planned business operations. These and other factors raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 1.
These financial statements do not include any adjustments that might result from
the outcome of this uncertainty.




                                               /s/ SF Partnership, LLP

TORONTO, CANADA                               CHARTERED ACCOUNTANTS
September 29, 2009


                                      F-1

<PAGE>

<TABLE>
<CAPTION>
<S>     <C>


CONSORTEUM HOLDINGS, INC.
(FORMERLY IMPLEX CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
Balance Sheets
June 30, 2009, and 2008
(Expressed in U.S. Dollars)
                                                                    2009           2008
                                                                 -----------    -----------
                                     ASSETS
CURRENT ASSETS
    Cash                                                         $       185    $    16,049
    Accounts receivable, net (Note 4)                                  7,303          7,346
    Prepaid expense                                                    1,285             --
                                                                 -----------    -----------

TOTAL CURRENT ASSETS                                                   8,773         23,395

INVESTMENTS IN AFFILIATED COMPANIES (Note 5)                          86,123        118,557

EQUIPMENT, NET (Note 6)                                                6,774         11,038
                                                                 -----------    -----------

TOTAL ASSETS                                                     $   101,670    $   152,990
                                                                 -----------    -----------

                                   LIABILITIES
CURRENT LIABILITIES
    Bank indebtedness (Note 7)                                   $    87,765    $   122,588
    Accounts payable                                                 276,459        210,054
    Accrued liabilities                                            1,730,325      1,105,415
    Loans payable (Note 8)                                           917,944        557,128
    Due to stockholders (Note 9)                                      30,779         68,685
                                                                 -----------    -----------

TOTAL CURRENT LIABILITIES                                          3,043,272      2,063,870
                                                                 -----------    -----------



COMMITMENTS AND CONTINGENCIES (Note 14)

                             STOCKHOLDERS' (DEFICIT)
CAPITAL STOCK (Note 11)
    Preferred stock, par value $0.001 per share; 100,000,000
       shares authorized; none issued and outstanding.                    --             --
    Common stock, par value $0.001 per share; 100,000,000
       shares authorized; 46,859,750 shares (2008 - 69,859,750
       shares) issued and outstanding.                                46,860         69,860



DISCOUNT ON COMMON STOCK                                            (116,224)       (34,195)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)                        151,042        (81,799)

(DEFICIT) ACCUMULATED DURING THE DEVELOPMENT STAGE                (3,023,280)    (1,864,746)
                                                                 -----------    -----------

TOTAL STOCKHOLDERS' (DEFICIT)                                     (2,941,602)    (1,910,880)
                                                                 -----------    -----------

TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)                    $   101,670    $   152,990
                                                                 -----------    -----------

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


                                      F-2

<PAGE>


CONSORTEUM HOLDINGS, INC.
(FORMERLY IMPLEX CORPORATION)
(A DEVELOPMENT STAGE COMPANY) Statements of Operations and Comprehensive Loss
For the Years Ended June 30, 2009, and 2008, and Cumulative from Inception
(November 7, 2005) Through June 30, 2009
(Expressed in U.S. Dollars)
                                                                                   Cumulative from
                                                                                         Inception
                                                                                     (November 7,
                                                                                             2005)
                                                         Year Ended     Year Ended          Through
                                                           June 30,        June 30,        June 30,
                                                               2009            2008            2009


REVENUES                                               $        581    $    223,627    $    246,417
                                                       ------------    ------------    ------------

OPERATING EXPENSES
    Management and consulting fees                          628,344         706,438       1,801,505
    General and administration expenses                     413,205         183,332         786,168
    Bad debt expense                                             --          99,738          99,738
    Selling expenses                                             --          49,475          98,010
    Depreciation expense                                      2,897           4,215          11,108
                                                       ------------    ------------    ------------

TOTAL OPERATING EXPENSES                                  1,044,446       1,043,198       2,796,529
                                                       ------------    ------------    ------------

(LOSS) FROM OPERATIONS                                   (1,043,865)       (819,571)     (2,550,112)
                                                       ------------    ------------    ------------

OTHER (EXPENSES)
    Equity in net (loss) of an affiliated company           (17,777)       (111,835)       (232,549)
    Write off of investment in an affiliated company             --         (34,633)        (78,783)
    Interest and financing costs                            (96,892)        (33,208)       (161,836)
                                                       ------------    ------------    ------------

TOTAL OTHER (EXPENSES)                                     (114,669)       (179,676)       (473,168)
                                                       ------------    ------------    ------------

NET (LOSS)                                               (1,158,534)       (999,247)     (3,023,280)

Foreign currency translation adjustment                     232,841         (30,722)        151,042
                                                       ------------    ------------    ------------

COMPREHENSIVE (LOSS)                                   $   (925,693)   $ (1,029,969)   $ (2,872,238)
                                                       ------------    ------------    ------------

(LOSS) PER SHARE

    BASIC                                              $      (0.02)   $      (0.01)
                                                       ------------    ------------

    DILUTED                                            $      (0.02)   $      (0.01)
                                                       ------------    ------------

WEIGHTED AVERAGE NUMBER SHARES OUTSTANDING - BASIC       68,914,545      69,854,695
                                                       ------------    ------------


WEIGHTED AVERAGE NUMBER SHARES OUTSTANDING - DILUTED     69,753,887      69,854,695
                                                       ------------    ------------


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

                                             F-3

<PAGE>



CONSORTEUM HOLDINGS, INC.
(FORMERLY IMPLEX CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
Statements of Stockholders' Deficit
For the Periods from Inception (November 7, 2005) Through June 30, 2009
(Expressed in U.S. Dollars)


                                                          Preferred Stock                 Common Stock            Discount on
                                                ---------------------------     ------------------------------         Common
                                                      Shares         Amount          Shares          Amount             Stock
                                                --------------------------------------------------------------------------------

Opening balance - November 7, 2005                       --   $                    39,999,750   $      40,000    $     (40,000)
   Common stock issued at inception                                                24,000,000          24,000          (23,900)
   Common stock issued for cash                          --              --         3,200,000           3,200           12,800
   Net loss for the period                               --              --                --              --               --
                                                 -------------------------------------------------------------------------------

Balance - December 31, 2005                              --              --        67,199,750          67,200          (51,100)
  Common stock issued for cash                           --              --         2,250,000           2,250            9,000
  Common stock issued for services rendered              --              --           400,000             400            5,600
  Services contributed by stockholder                    --              --                --              --           10,320
  Net loss for the period                                --              --                --              --               --
                                                 -------------------------------------------------------------------------------

Balance - December 31, 2006                              --              --       69,849,750           69,850          (26,180)
  Stockholder contributions                              --              --               --               --               --
  Services contributed by stockholder                    --              --               --               --               --
  Net loss for the period                                --              --               --               --               --
                                                 -------------------------------------------------------------------------------

Balance - December 31, 2007                              --              --      69,849,750           69,850          (26,180)
  Common stock issued for cash                           --              --          10,000               10               --
  Stockholder contributions                              --              --              --               --               --
  Services contributed by stockholder                    --              --              --               --               --
  Recapitalization on reverse merger                     --              --              --               --           (8,015)
  Foreign currency translation adjustment                --              --              --               --               --
  Net loss for the period                                --              --              --               --               --
                                                 -------------------------------------------------------------------------------

Balance - June 30, 2008                                  --              --      69,859,750           69,860          (34,195)
   Stock cancellation                                    --              --     (23,000,000)         (23,000)          23,000
  Assumptions of liabilities and
    loan on reverse merger
    transaction                                          --              --              --               --         (105,029)
  Foreign currency translation
   Adjustment                                            --              --              --               --               --
  Net loss for the period                                --              --              --               --               --
                                                 -------------------------------------------------------------------------------

Balance - June 30, 2009                                  --   $          --      46,859,750    $      46,860    $    (116,224)
                                                 -------------------------------------------------------------------------------

[continued next page]

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

                                                                F-4

<PAGE>

                                                                                       (Deficit)
                                                                                     Accumulated
                                                   Additional             Other       During the           Total
                                                      Paid-In     Comprehensive      Development   Stockholders'
                                                      Capital     Income (Loss)            Stage       (Deficit)
                                                ----------------------------------------------------------------

Opening balance - November 7, 2005               $          --    $          --    $          --              --
   Common stock issued at inception                                                                          100
   Common stock issued for cash                             --               --               --          16,000
   Net loss for the period                                  --               --              467              467
                                                -----------------------------------------------------------------

Balance - December 31, 2005                                 --               --              467           16,567
  Common stock issued for cash                              --               --               --           11,250
  Common stock issued for services rendered                 --               --               --            6,000
  Services contributed by stockholder                       --               --               --           10,320
  Net loss for the period                                   --               --          (24,960)         (24,960)
                                                -----------------------------------------------------------------

Balance - December 31, 2006                                 --               --          (24,493)          19,177
  Stockholder contributions                              6,085               --               --            6,085
  Services contributed by stockholder                    2,400               --               --            2,400
  Net loss for the period                                   --               --          (38,862)         (38,862)
                                                -----------------------------------------------------------------

Balance - December 31, 2007                             8,485               --          (63,355)         (11,200)
  Common stock issued for cash                             --               --               --               10
  Stockholder contributions                             4,174               --               --            4,174
  Services contributed by stockholder                   1,700               --               --            1,700
  Recapitalization on reverse merger                  (14,359)         (51,077)        (802,144)        (875,595)
  Foreign currency translation adjustment                  --          (30,722)              --          (30,722)
  Net loss for the period                                  --               --         (999,247)        (999,247)
                                                -----------------------------------------------------------------

Balance - June 30, 2008                                    --          (81,799)      (1,864,746)      (1,910,880)
   Stock cancellation                                      --               --               --               --
  Assumptions of liabilities and
    loan on reverse merger
    transaction                                            --               --               --         (105,029)
  Foreign currency translation
   Adjustment                                              --          232,841               --          232,841
  Net loss for the period                                  --               --       (1,158,534)      (1,158,534)
                                                -----------------------------------------------------------------

Balance - June 30, 2009                         $          --    $     151,042     $ (3,023,280)   $  (2,941,602)
                                                -----------------------------------------------------------------

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

                                                        F-5

<PAGE>



CONSORTEUM HOLDINGS, INC.
(FORMERLY IMPLEX CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
Statements of Cash Flows
For the Years Ended June 30, 2009, and 2008, and Cumulative from
Inception (November 7, 2005) Through June 30, 2009
(Expressed in U.S. Dollars)

                                                                                                        Cumulative from
                                                                                                              Inception
                                                                           Year Ended     Year Ended   November 7, 2005)
                                                                             June 30,       June 30,            Through
                                                                                 2009           2008      June 30, 2009
                                                                          -----------    -----------    --------------

CASH FLOWS FROM OPERATING ACTIVITIES
    Net loss                                                              $(1,158,534)   $  (999,247)      $(3,023,280)
    Adjustments to reconcile net (loss) to net cash (used in) operating
       activities:
      Equity in net loss of an affiliated company                              17,777        111,835           232,549
      Writeoff of investment in an affiliated company                              --         34,633            78,213
      Depreciation                                                              2,897          4,215            11,108
      Stock issued on reverse merger                                               --          1,563            35,579

    Changes in non-cash working capital, net of effects
      from reverse merger transaction:
      Accounts receivable                                                        (861)        (1,114)           (8,207)
      Prepaid expenses                                                         (1,282)            --            (1,282)
      Accounts payable                                                         12,212        104,070           222,266
      Accrued liabilities                                                     759,441        571,632         1,724,910
                                                                          -----------    -----------    --------------

NET CASH (USED IN) OPERATING ACTIVITIES                                      (368,350)      (172,413)         (728,144)
                                                                          -----------    -----------    --------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Acquisition of equipment                                                       --         (3,158)          (19,249)
    Acquisition of investment in affiliated companies                              --       (115,621)         (286,916)
                                                                          -----------    -----------    --------------

NET CASH (USED IN) INVESTING ACTIVITIES                                            --       (118,779)         (306,165)
                                                                          -----------    -----------    --------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from loans                                                       407,847        275,548           964,975
    Repayment of loan                                                          (4,289)            --            (4,289)
    Proceeds from bank indebtedness                                           (19,664)         5,263           109,416
    Repayment of bank indebtedness                                                 --         (6,492)           (6,492)
    Proceeds from issuance of capital stock                                        --             --                86
    Repayments of stockholders' advances                                     (224,097)      (732,130)       (1,216,010)
    Proceeds from stockholders' advances                                      194,727        790,073         1,255,325
                                                                          -----------    -----------       -----------

NET CASH PROVIDED BY FINANCING ACTIVITIES                                     354,524        332,262         1,103,011
                                                                          -----------    -----------       -----------

EFFECT OF EXCHANGE RATE CHANGE ON CASH                                         (2,038)       (25,021)          (68,517)
                                                                          -----------    -----------       -----------

NET (DECREASE) INCREASE IN CASH                                               (15,864)        16,049               185

CASH - BEGINNING OF PERIOD                                                     16,049             --                --
                                                                          -----------    -----------       -----------

CASH - END OF PERIOD                                                      $       185    $    16,049       $       185
                                                                          ===========    ===========       ===========


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

                                                           F-6
</TABLE>


<PAGE>



1.    ORGANIZATION, DEVELOPMENT STAGE ACTIVITIES, AND GOING CONCERN


      Consorteum Holdings, Inc. ("Holdings" and subsequent to the reverse
      merger, the "Company"), formerly known as Implex Corporation, was
      incorporated in the State of Nevada on November 7, 2005. On April 9, 2009,
      Holdings changed its name to Consorteum Holdings, Inc.


      On June 15, 2009 Holdings entered into an agreement and plan of exchange
      whereby Holdings acquired 100% of the issued and outstanding shares of
      common stock of Consorteum Inc. ("Consorteum") from Consorteum's
      stockholders, by exchanging 39,999,750 shares of Holdings' common stock,
      in a reverse merger transaction. Consorteum is a company incorporated
      under the laws of the province of Ontario on April 3, 2006. Prior to the
      agreement and plan of exchange, Holdings had 29,860,000 shares of its
      common stock, issued and outstanding. At the closing of the exchange
      transaction, Holdings cancelled 23,000,000 shares of its common stock held
      by one stockholder. As a result of the exchange, the principal
      stockholders of Consorteum control 85% of Holdings. While Holdings is the
      legal parent, Consorteum became the parent for accounting purposes.


      DEVELOPMENT STAGE ACTIVITIES


      The Company provides pioneering technology solutions and management
      expertise to companies and organizations looking to develop, streamline or
      augment their methods of processing payment transactions. It operates as a
      technology and services aggregator to meet the diverse needs of its client
      base by leveraging its wide-ranging partner technologies to develop
      end-to-end, turn-key card and payment transaction processing solutions.


                                      F-7

<PAGE>


1.    ORGANIZATION, DEVELOPMENT STAGE ACTIVITIES, AND GOING CONCERN (CONT'D)

      GOING CONCERN ASSUMPTION

      The Company's financial statements are presented on a going concern basis,
      which contemplates the realization of assets and discharge of liabilities
      in the normal course of business. The Company's negative working capital
      and accumulated deficit during the development stage raise substantial
      doubt as to its ability to continue as a going concern. As of June 30,
      2009, the Company had a negative working capital of $3,034,499 (2008 -
      $2,040,475) and a deficit accumulated during the development stage of
      $3,023,280 (2008 - $1,864,746).

      The Company's continuance as a going concern is dependent on the
      successful efforts of its directors and principal stockholders in
      providing financial support in the short term; raising additional
      long-term equity or debt financing either from its own resources or from
      third parties; and the attainment of key contracts. In the event that such
      resources are not secured, the assets may not be realized or liabilities
      discharged at their carrying amounts, and differences from the carrying
      amounts reported in these financial statements could be material.

      The accompanying financial statements do not include any adjustments to
      reflect the possible future effects on the recoverability and
      classification of assets or the amounts and classification of liabilities
      that may result from the inability of the Company to continue as a going
      concern.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      The accounting policies of the Company are in accordance with accounting
      principles generally accepted in the United States of America, and their
      basis of application is consistent with that of the previous year. Set
      forth below are the Company's significant accounting policies:

      a)    Basis of Presentation

            The merger of Holdings and Consorteum has been recorded as a
            recapitalization of Holdings, with the net assets of Consorteum and
            Holdings brought forward at their historical bases and represents a
            continuation of the financial statements of Consorteum. The
            substance of the Company's share issuance and the reorganization is
            a transaction which results in Consorteum becoming a listed public
            entity through Holdings' acquisition of Consorteum's net assets.

      b)    Equipment, Net

            Equipment is recorded at cost. Depreciation, based on the estimated
            useful life of the equipment, is provided at an annual rate of 30%
            based on the declining-balance method.

      c)    Impairment of Long Lived Assets

            In accordance with Statement of Financial Accounting Standard
            ("SFAS") No. 144, "ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG
            LIVED ASSETS," long lived assets to be held and used are analyzed
            for impairment whenever events or changes in circumstances indicate
            that the related carrying amounts may not be recoverable. The
            Company evaluates at each balance sheet date whether events and
            circumstances have occurred that indicate possible impairment. If
            there are indications of impairment, the Company uses future
            undiscounted cash flows of the related asset or asset grouping over
            the remaining life in measuring whether the assets are recoverable.
            In the event such cash flows are not expected to be sufficient to
            recover the recorded asset values, the assets are written down to
            their estimated fair value. Long lived assets to be disposed of are
            reported at the lower of carrying amount or fair value of asset less
            cost to sell. As described in Note 1, the long-lived assets have
            been valued on a going concern basis. However, substantial doubt
            exists as to the ability of the Company to continue as a going
            concern. If the Company closes operations, the asset values may be
            materially imperil.

                                      F-8

<PAGE>

       d)    Accounts Receivable

             The Company carries its accounts receivable at invoice amount, less
             an allowance for doubtful accounts. On a periodic basis, the
             Company evaluates its accounts receivable and establishes an
             allowance for doubtful accounts, based on a history of past
             write-offs and collections and current credit conditions.

      e)    Revenue Recognition

            The Company recognizes revenue in accordance with SEC Staff
            Accounting Bulletin No. 104, Revenue Recognition ("SAB 104"). SAB
            104 requires that four basic criteria must be met before revenue can
            be recognized: (1) persuasive evidence of an arrangement exists; (2)
            delivery has occurred or services have been rendered; (3) the
            selling price is fixed and determinable; and (4) collectability is
            reasonably assured.

      f)    Equity Investments

            Equity investments include entities over which the Company exercises
            significant influence but does not exercise control. These are
            accounted for using the equity method of accounting and are
            initially recognized at cost net of any impairment losses. The
            Company's share of these entities' profits or losses after
            acquisition of its interest is recognized in the statement of
            operations and cumulative post-acquisition movements are adjusted
            against the carrying amount of the investment. When the Company's
            share of losses of these investments equals or exceeds the carrying
            amount of the investment, the Company only recognizes further losses
            where it has incurred obligations or made payments on behalf of the
            affiliate.

            Joint ventures are entities over which the Company exercises control
            jointly with another party or parties. Joint ventures are also
            accounted for under the equity method as described above.

      g)    Income Taxes

            The Company accounts for income taxes in accordance with SFAS No.
            109, "ACCOUNTING FOR INCOME TAXES." Deferred tax assets and
            liabilities are recorded for differences between the financial
            statement and tax basis of the assets and liabilities that will
            result in taxable or deductible amounts in the future based on
            enacted tax laws and rates. Valuation allowances are established
            when necessary to reduce deferred tax assets to the amount expected
            to be realized. Income tax expense is recorded for the amount of
            income tax payable or refundable for the period increased or
            decreased by the change in deferred tax assets and liabilities
            during the period.

      h)    Foreign Currency Translation

            In accordance with the provision of SFAS No. 52, "FOREIGN CURRENCY
            TRANSLATION," the Company, whose functional currency is the Canadian
            dollar, translates its balance sheet into U.S. dollars at the
            prevailing rate at the balance sheet date and translates its
            revenues and expenses at the average rates prevailing during each
            reporting period. Net gains or losses resulting from the translation
            of financial statements are accumulated and charged directly to
            accumulated comprehensive income or (loss), a component of
            stockholders' equity or (deficit). Realized gains or losses
            resulting from foreign currency transactions are included in
            operations for the period.

      i)    Comprehensive Income or Loss

            The Company applies the provisions of SFAS No. 130, "REPORTING
            COMPREHENSIVE INCOME." Unrealized gains and losses from foreign
            exchange translation are reported in the accompanying statements as
            comprehensive income or loss.

                                      F-9

<PAGE>

      j)    Earnings or Loss Per Share

            The Company accounts for earnings or loss per share pursuant to SFAS
            No. 128, "EARNINGS PER SHARE," which requires disclosure on the
            financial statements of "basic" and "diluted" earnings (loss) per
            share. Basic earnings (loss) per share is computed by dividing net
            income (loss) by the weighted average number of common shares
            outstanding for the year. Diluted earnings (loss) per share is
            computed by dividing net income (loss) by the weighted average
            number of common shares outstanding plus potentially dilutive
            securities outstanding for each year. The computation of diluted
            earnings (loss) per share has not been presented as its effect would
            be anti-dilutive.

      k)    Use of Estimates

            The preparation of financial statements in conformity with
            accounting principles generally accepted in the United States of
            America requires management to make estimates and assumptions that
            affect the reported amounts of assets and liabilities and the
            disclosure of contingent assets and liabilities at the date of the
            financial statements and the reported amounts of revenues and
            expenses during the reporting periods. These estimates are based on
            management's best knowledge of current events and actions the
            Company may undertake in the future. Actual results may ultimately
            differ from those estimates. These estimates are reviewed on an
            ongoing basis and as adjustments become necessary, they are reported
            in earnings in the period in which they become known.

      l)    Financial Instruments

            Unless otherwise noted, it is management's opinion that the Company
            is not exposed to significant interest, currency or credit risks
            arising from the financial instruments. The fair value of the
            financial instruments approximates their carrying values, unless
            otherwise noted.

            Financial risk is the risk that the Company's earnings are subject
            to fluctuations in interest risk or currency risk and are fully
            dependent upon the volatility of these rates. The Company does not
            use derivative instruments to moderate its exposure to financial
            risk, if any.

            CONCENTRATION OF CREDIT RISK


            SFAS No. 105, "DISCLOSURE OF INFORMATION ABOUT FINANCIAL INSTRUMENTS
            WITH OFF-BALANCE-SHEET RISK AND FINANCIAL INSTRUMENTS WITH
            CONCENTRATION OF CREDIT RISK," requires disclosure of any
            significant off-balance-sheet risk and credit risk concentration.
            The Company does not have significant off-balance-sheet risk or
            credit concentration. The Company maintains cash with major
            financial institutions. From time to time, the Company has funds on
            deposit with commercial banks that exceed federally insured limits.
            Management does not consider this to be a significant credit risk as
            these banks and financial institutions are well-known.


      m)    Comparative Financial Information

            Certain financial information for the year ended June 30, 2008, has
            been reclassified to conform with the financial statement
            presentation adopted in the current year.

      n)    Recent Accounting Pronouncements

            In December 2007, the Financial Accounting Standards Board ("FASB")
            issued SFAS No. 141 (revised 2007), "Business Combinations" ("SFAS
            141(R)"). This statement replaces SFAS 141, "Business Combinations"
            and requires an acquirer to recognize the assets acquired, the
            liabilities assumed, including those arising from contractual
            contingencies, any contingent consideration, and any noncontrolling
            interest in the acquiree at the acquisition date, measured at their

                                      F-10

<PAGE>

            fair values as of that date, with limited exceptions specified in
            the statement. SFAS 141(R) also requires the acquirer in a business
            combination achieved in stages (sometimes referred to as a step
            acquisition) to recognize the identifiable assets and liabilities,
            as well as the noncontrolling interest in the acquiree, at the full
            amounts of their fair values (or other amounts determined in
            accordance with SFAS 141(R)). In addition, SFAS 141(R)'s requirement
            to measure the noncontrolling interest in the acquiree at fair value
            will result in recognizing the goodwill attributable to the
            noncontrolling interest in addition to that attributable to the
            acquirer. SFAS 141(R) amends SFAS No. 109, "Accounting for Income
            Taxes", to require the acquirer to recognize changes in the amount
            of its deferred tax benefits that are recognizable because of a
            business combination either in income from continuing operations in
            the period of the combination or directly in contributed capital,
            depending on the circumstances. It also amends SFAS No. 142,
            "Goodwill and Other Intangible Assets", to, among other things,
            provide guidance on the impairment testing of acquired research and
            development intangible assets and assets that the acquirer intends
            not to use. SFAS 141(R) applies prospectively to business
            combinations for which the acquisition date is on or after the
            beginning of the first annual reporting period beginning on or after
            December 15, 2008. The Company is currently assessing the potential
            impact that the adoption of SFAS 141(R) could have on its financial
            statements.

            In December 2007, FASB issued SFAS No.160, "Noncontrolling Interests
            in Consolidated Financial Statements--amendment of Accounting
            Research Bulletin No. 51" ("SFAS 160"). SFAS 160 establishes
            accounting and reporting standards for the noncontrolling interest
            in a subsidiary and for the deconsolidation of a subsidiary. It also
            clarifies that a noncontrolling interest in a subsidiary is an
            ownership interest in the consolidated entity that should be
            reported as equity in the consolidated financial statements. SFAS
            160 also changes the way the consolidated income statement is
            presented by requiring consolidated net income to be reported at
            amounts that include the amounts attributable to both the parent and
            the noncontrolling interest. It also requires disclosure, on the
            face of the consolidated statement of income, of the amounts of
            consolidated net income attributable to the parent and to the
            noncontrolling interest. SFAS 160 requires that a parent recognize a
            gain or loss in net income when a subsidiary is deconsolidated and
            requires expanded disclosures in the consolidated financial
            statements that clearly identify and distinguish between the
            interests of the parent owners and the interests of the
            noncontrolling owners of a subsidiary. SFAS 160 is effective for
            fiscal periods, and interim periods within those fiscal years,
            beginning on or after December 15, 2008. The adoption of SFAS 160
            will have no impact on the Company's financial statements.

            In February 2008, FASB issued FSP on SFAS No.140-3, "ACCOUNTING FOR
            TRANSFERS OF FINANCIAL ASSETS AND REPURCHASE FINANCING TRANSACTIONS"
            ("FSP SFAS 140-3"). The objective of this FSP is to provide guidance
            on accounting for a transfer of a financial asset and a repurchase
            financing. This FSP presumes that an initial transfer of a financial
            asset and a repurchase financing are considered part of the same
            arrangement (linked transaction) under SFAS No.140, "ACCOUNTING FOR
            TRANSFERS AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENTS OF
            LIABILITIES" ("SFAS 140"). However, if certain criteria are met, the
            initial transfer and repurchase financing shall not be evaluated as
            a linked transaction and shall be evaluated separately under SFAS
            140. FSP SFAS 140-3 is effective for financial statements issued for
            fiscal years beginning after November 15, 2008, and interim periods
            within these fiscal years. Earlier application is not permitted. The
            Company is currently reviewing the effect, if any, the proposed
            guidance will have on its financial statements.

            In February 2008, FASB issued FSP SFAS No. 157-2, "EFFECTIVE DATE OF
            FASB STATEMENT NO. 157" ("FSP SFAS 157-2"). FSP SFAS 157-2 delays
            the effective date of SFAS No. 157, "FAIR VALUE MEASUREMENT," for
            nonfinancial assets and nonfinancial liabilities that are recognized
            or disclosed at fair value in the financial statements on a
            nonrecurring basis to fiscal years beginning after November 15,
            2008, and interim periods within those fiscal years. It does not
            defer recognition and disclosure requirements for financial assets
            and financial liabilities, or for nonfinancial assets and
            nonfinancial liabilities that are remeasured at least annually.

            In March 2008, FASB issued SFAS No. 161, "DISCLOSURES ABOUT
            DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES--AN AMENDMENT OF FASB
            STATEMENT NO. 133" ("SFAS 161"). SFAS 161 requires enhanced
            disclosures about an entity's derivative and hedging activities and
            thereby improves the transparency of financial reporting. SFAS 161
            is effective for financial statements issued for fiscal years and
            interim periods beginning after November 15, 2008. Earlier
            application is encouraged. The Company is currently reviewing the
            effect, if any, the proposed guidance will have on its financial
            statements.

                                      F-11

<PAGE>

            In April 2008, FASB issued FSP SFAS No. 142-3, "DETERMINATION OF THE
            USEFUL LIFE OF INTANGIBLE ASSETS" ("FSP SFAS 142-3"). FSP SFAS 142-3
            amends the factors that should be considered in developing renewal
            or extension assumptions used to determine the useful life of a
            recognized intangible asset under FASB Statement No. 142, "GOODWILL
            AND OTHER INTANGIBLE ASSETS," ("SFAS 142"). The intent of this FSP
            is to improve the consistency between the useful life of a
            recognized intangible asset under SFAS 142 and the period of
            expected cash flows used to measure the fair value of the asset
            under SFAS 141(R), and other U.S. generally accepted accounting
            principles. FSP SFAS 142-3 is effective for financial statements
            issued for fiscal years beginning after December 15, 2008, and
            interim periods within those fiscal years. The requirement for
            determining useful lives must be applied prospectively to intangible
            assets acquired after the effective date and the disclosure
            requirements must be applied prospectively to all intangible assets
            recognized as of, and subsequent to, the effective date. Early
            adoption is prohibited. The Company is currently reviewing the
            effect, if any, the proposed guidance will have on its financial
            statements.

            In May 2008, FASB issued FSP Accounting Principles Board ("APB") No.
            141-1, "ACCOUNTING FOR CONVERTIBLE DEBT INSTRUMENTS THAT MAY BE
            SETTLED IN CASH UPON CONVERSION (INCLUDING PARTIAL CASH SETTLEMENT)"
            ("FSP APB 141-1"). FSP APB 141-1 clarifies convertible debt
            instruments that may be settled in cash upon conversion (including
            partial cash settlement) are not addressed by paragraph 12 of APB
            Opinion No. 14, "ACCOUNTING FOR CONVERTIBLE DEBT AND DEBT ISSUED
            WITH STOCK PURCHASE WARRANTS." Additionally, FSP APB 141-1 specifies
            that issuers of such instruments should separately account for the
            liability and equity components in a manner that will reflect the
            entity's nonconvertible debt borrowing rate when interest cost is
            recognized in subsequent periods. FSP APB 141-1 is effective for
            financial statements issued for fiscal years beginning after
            December 15, 2008, and interim periods within those fiscal years.
            Early adoption is not permitted. The Company is currently reviewing
            the effect, if any, the proposed guidance will have on its financial
            statements.

            In May 2008, FASB issued SFAS No. 162, "THE HIERARCHY OF GENERALLY
            ACCEPTED ACCOUNTING PRINCIPLES" ("SFAS 162"). SFAS 162 identifies
            the sources of accounting principles and the framework for selecting
            the principles used in the preparation of financial statements of
            nongovernmental entities that are presented in conformity with
            generally accepted accounting principles ("GAAP") in the United
            States of America (the GAAP hierarchy). SFAS 162 is effective 60
            days following the U.S. Securities and Exchange Commission's
            approval of the Public Company Accounting Oversight Board amendments
            to AU Section 411, "THE MEANING OF PRESENT FAIRLY IN CONFORMITY WITH
            GENERALLY ACCEPTED ACCOUNTING PRINCIPLES." The Company is currently
            reviewing the effect, if any, the proposed guidance will have on its
            financial statements.

            In September 2008, FASB issued FSP No. 133-1 and FIN 45-4,
            "Disclosures about Credit Derivatives and Certain Guarantees: An
            Amendment of FASB Statement No. 133 and FASB Interpretation No. 45;
            and Clarification of the Effective Date of FASB Statement No. 161"
            ("FSP SFAS 133-1 and FIN 45-4"). FSP 133-1 and FIN 45-4 is intended
            to improve disclosures about credit derivatives by requiring more
            information about the potential adverse effects of changes in credit
            risk on the financial position, financial performance, and cash
            flows of the sellers of credit derivatives. It amends FASB Statement
            No. 133, "Accounting for Derivative Instruments and Hedging
            Activities," to require disclosures by sellers of credit
            derivatives, including credit derivatives embedded in hybrid
            instruments. FSP SFAS 133-1 and FIN 45-4 also amends FASB
            Interpretation No. 45, "Guarantor's Accounting and Disclosure
            Requirements for Guarantees, Including Indirect Guarantees of
            Indebtedness to Others," to require an additional disclosure about
            the current status of the payment/performance risk of a guarantee.
            The provisions of the FSP SFAS 133-1 and FIN 45-4 that amend
            Statement 133 and Interpretation 45 are effective for reporting
            periods (annual or interim) ending after November 15, 2008. The
            Company is currently reviewing the effect, if any, the proposed
            guidance will have on its financial statements. The adoption of FSP
            133-1 and FIN 45-4 will have no impact on the Company's financial
            statements.

                                      F-12

<PAGE>

            In December 2008, FASB issued FSP SFAS No. 140-4 and FIN 46 (R)-8,
            "Disclosures by Public Entities (Enterprises) about Transfers of
            Financial Assets and Interests in Variable Interest Entities" ("FSP
            SFAS 140-4 and FIN 46 (R)"). FSP SFAS 140-4 and FIN 46 (R) amends
            FASB SFAS 140, "ACCOUNTING FOR TRANSFERS AND SERVICING OF FINANCIAL
            ASSETS AND EXTINGUISHMENTS OF LIABILITIES," to require public
            entities to provide additional disclosures about transfers of
            financial assets. It also amends FASB SFAS 46 (revised December
            2003), "CONSOLIDATION OF VARIABLE INTEREST ENTITIES," to require
            public enterprises, including sponsors that have a variable interest
            in a variable interest entity, to provide additional disclosures
            about their involvement with variable interest entities.
            Additionally, this FSP requires certain disclosures to be provided
            by a public enterprise that is (a) a sponsor of a qualifying special
            purpose entity ("SPE") that holds a variable interest in the
            qualifying SPE but was not the transferor (nontransferor) of
            financial assets to the qualifying SPE and (b) a servicer of a
            qualifying SPE that holds a significant variable interest in the
            qualifying SPE but was not the transferor (nontransferor) of
            financial assets to the qualifying SPE. The disclosures required by
            FSP SFAS 140-4 and FIN 46 (R)" are intended to provide greater
            transparency to financial statement users about a transferor's
            continuing involvement with transferred financial assets and an
            enterprise's involvement with variable interest entities and
            qualifying SPEs. FSP SFAS 140-4 and FIN 46 (R) is effective for
            reporting periods (annual or interim) ending after December 15,
            2008. The Company is currently reviewing the effect, if any; the
            proposed guidance will have on its financial statements.

             In April 2009, FASB issued FSP SFAS No. 157-4, "Determining Fair
             Value When the Volume and Level of Activity for the Asset or
             Liability Have Significantly Decreased and Identifying Transactions
             That Are Not Orderly" ("FSP SFAS 157-4"),which provides guidance
             for making fair value measurements more consistent with the
             principles presented in SFAS 157. FSP SFAS 157-4 provides
             additional authoritative guidance in determining whether a market
             is active or inactive, and whether a transaction is distressed. It
             is applicable to all assets and liabilities (e.g. financial and
             nonfinancial) and will require enhanced disclosures. It is
             effective for interim and annual reporting periods ending after
             June 15, 2009. The Company is currently reviewing the effect, if
             any; the proposed guidance will have on its financial statements.

            In April 2009, FASB issued FSP SFAS No. 115-2 and SFAS No. 124-2,
            "Recognition and Presentation of Other-Than-Temporary Impairments",
            ("FSP SFAS 115-2 and SFAS 124-2") which provides additional guidance
            to provide greater clarity about the credit and noncredit component
            of any other-than-temporary impairment event related to debt
            securities and to more effectively communicate when an
            other-than-temporary impairment event has occurred. It is effective
            for interim and annual reporting periods ending after June 15, 2009.
            The Company is currently reviewing the effect, if any; the proposed
            guidance will have on its financial statements.

            In April 2009, FASB issued FSP SFAS No. 107-1 and APB No. 28-1,
            "Interim Disclosures about Fair Value of Financial Instruments",
            ("FSP SFAS 107-1 and APB 28-1") which amends SFAS 107, "Disclosures
            about Fair Value of Financial Instruments", to require disclosures
            about fair value of financial instruments in interim as well as in
            annual financial statements. FSP SFAS 107-1 and APB 28-1 also amends
            APB Opinion 28, "Interim Financial Reporting", to require those
            disclosures in all interim financial statements. It is effective for
            interim periods ending after June 15, 2009. The Company is currently
            reviewing the effect, if any; the proposed guidance will have on its
            financial statements.

            In April 2009, FASB issued FSP SFAS No. 141(R)-1, "Accounting for
            Assets Acquired and Liabilities Assumed in a Business Combination
            That Arise from Contingencies", ("FSP SFAS141(R)-1"), which amends
            and clarifies SFAS 141 (revised 2007), "Business Combinations", to
            address application issues raised by preparers, auditors, and
            members of the legal profession on initial recognition and
            measurement, subsequent measurement and accounting, and disclosure
            of assets and liabilities arising from contingencies in a business
            combination. It is for effective assets and liabilities arising from
            contingencies in business combinations for which the acquisition
            date is on or after the beginning of the first annual reporting
            period beginning on or after December 15, 2008. The Company is
            currently reviewing the effect, if any; the proposed guidance will
            have on its financial statements.

                                      F-13

<PAGE>

            In April 2009, the SEC released Staff Accounting Bulletin No. 111
            ("SAB 111"), which amends SAB Topic 5-M. SAB 111 notes that FSP SFAS
            115-2 and SFAS 124-2 were scoped to debt securities only, and the
            FSP referred readers to SEC SAB Topic 5-M for factors to consider
            with respect to other-than-temporary impairments for equity
            securities. With the amendments in SAB 111, debt securities are
            excluded from the scope of Topic 5-M, but the SEC staff's views on
            equity securities are still included within the topic. The Company
            currently does not have any financial assets that are
            other-than-temporary impaired.

            In May 2009, FASB issued SFAS No. 165 "Subsequent Events", ("SFAS
            165"), which establishes general standards for accounting for and
            disclosure of events that occur after the balance sheet date but
            before financial statement are issued or available to be issued. In
            particular, SFAS No. 165 sets forth the period after the balance
            sheet date during which management of a reporting entity should
            evaluate events or transactions that may occur for potential
            recognition or disclosure in the financial statements; the
            circumstances under which an entity should recognize events or
            transactions occurring after the balance sheet date in its financial
            statements' and the disclosures that an entity should make about
            events or transactions that occurred after the balance sheet date.
            It is effective for interim and annual periods ending after June 15,
            2009. The Company is currently reviewing the effect, if any; the
            proposed guidance will have on its financial statements.

            In June 2009, the FASB issued SFAS No.166 "Accounting for Transfers
            of Financial Assets--an amendment of FASB Statement No. 140." This
            standard eliminates the concept of a qualifying special purpose
            entity ("QSPE") and modifies the derecognition provisions in SFAS
            No.140. This statement is effective for financial asset transfers
            occurring after the beginning of an entity's first fiscal year that
            begins after November 15, 2009. The Company is currently reviewing
            the effect, if any; the proposed guidance will have on its financial
            statements.

             In June 2009, the FASB issued SFAS No. 167 "Amendments to FASB
             Interpretation No. 46(R)." This statement amends the consolidation
             guidance applicable to variable interest entities and is effective
             as of the beginning of an entity's first fiscal year that begins
             after November 15, 2009. The Company is currently reviewing the
             effect, if any; the proposed guidance will have on its financial
             statements.

            In June 2009, the FASB issued SFAS No. 168, "The FASB Accounting
            Standards Codification and the Hierarchy of Generally Accepted
            Accounting Principles - a replacement of FASB Statement No. 162"
            ("SFAS No. 168"). SFAS No. 168 provides for the FASB Accounting
            Standards Codification (the "Codification") to become the single
            official source of authoritative, nongovernmental U.S. generally
            accepted accounting principles (GAAP). The Codification did not
            change GAAP but reorganizes the literature. SFAS No. 168 is
            effective for interim and annual periods ending after September 15,
            2009. The Company does not expect that adoption of this statement
            will have a material impact on its financial statements.

                                      F-14

<PAGE>

3.    FAIR VALUE MEASUREMENTS

      The Company adopted SFAS No. 157, except as it applies to the nonfinancial
      assets and nonfinancial liabilities subject to FSP SFAS No. 157-2. SFAS
      No. 157 clarifies that fair value is an exit price, representing the
      amount that would be received to sell an asset or paid to transfer a
      liability in an orderly transaction between market participants. As such,
      fair value is a market-based measurement that should be determined based
      on assumptions that market participants would use in pricing an asset or a
      liability. As a basis for considering such assumptions, SFAS No. 157
      establishes a three-tier value hierarchy, which prioritizes the inputs
      used in the valuation methodologies in measuring fair value:

            Level 1 - Observable inputs that reflect quoted prices
                     (unadjusted) for identical assets or liabilities in
                      active markets.

            Level 2 - Other inputs that are directly or indirectly observable in
                      the marketplace.

            Level 3 - Unobservable inputs which are supported by little or no
                      market activity.

      The fair value hierarchy also requires an entity to maximize the use of
      observable inputs and minimize the use of unobservable inputs when
      measuring fair value. Cash, bank indebtedness (Level 1), accounts
      receivable, due to stockholders, accounts payable, accrued liabilities,
      and loans payable (Level 2) are reflected in the balance sheets at
      carrying value, which approximates fair value due to the short-term nature
      of these instruments.

4.    Accounts Receivable, Net
<TABLE>
<CAPTION>
<S>     <C>

                                                                            2009          2008

       Accounts receivable - trade                                      $     --      $ 98,855
       Accounts receivable - other                                         7,303         7,436
                                                                        --------      --------

                                                                           7,303       106,201
       Less allowance for doubtful accounts                                  --       (98,855)
                                                                        --------      --------

                                                                         $  7,303      $  7,346
</TABLE>

5.    INVESTMENTS IN AFFILIATED COMPANIES
<TABLE>
<CAPTION>
<S>     <C>

                                                                            2009          2008

       Acquisition costs
          49% ownership interest in My Golf Rewards Canada Inc.          $ 343,502    $ 343,502
          40% units in FP Financial Ltd.                                        --       83,360
                                                                         ---------    ---------

         Total                                                             343,502      426,862
                                                                         ---------    ---------

       Accumulated equity in net (loss) of My Golf Rewards Canada Inc.
         Balance, beginning of period                                     (224,945)    (109,206)
         Equity in net (loss) for the period                               (17,777)    (111,835)
         Translation adjustment                                            (14,657)      (3,904)
                                                                         ---------    ---------

         Balance, end of period                                           (257,379)    (224,945)
                                                                         ---------    ---------

       Writeoff of investment in FP Financial Ltd.                              --      (83,360)
                                                                         ---------    ---------

        Total                                                            $  86,123    $ 118,557
                                                                         =========    =========
</TABLE>



                                      F-15
<PAGE>

6.    EQUIPMENT, NET

      Equipment comprises the following:
<TABLE>
<CAPTION>
<S>     <C>

                                                   2009                           2008
                                            Accumulated                    Accumulated
                                    Cost   Depreciation             Cost   Depreciation
                                 ------------------------------------------------------


       Computer equipment        $ 17,221    $(10,447)         $   19,643   $   (8,605)
                                 --------    --------          ----------   ----------

       Equipment, net                        $  6,774                       $   11,038
                                              --------                      ----------
</TABLE>

      Depreciation expense charged to operations amounted to $2,897 for the year
      ended June 30, 2009 (2008 - $4,215).

7.    BANK INDEBTEDNESS

      Bank indebtedness is comprised of a Royal Bank of Canada ("RBC") demand
      term loan, in the amount of $87,765 (2008- $122,588). Starting July 2008,
      the loan is repayable on a monthly basis at $1,792 plus interest, at RBC's
      prime rate plus 2% per annum. The loan matures June 2013. The loan is
      secured by a general security agreement signed by the Company constituting
      a first ranking security interest in all personal properties of the
      Company and personal guarantees from certain stockholders.

8.    LOANS PAYABLE

      Loans of $171,166 (2008 - $166,719) for the purpose of funding operations,
      are unsecured, non-interest bearing, with no fixed terms of repayment.

      The remaining loans bear interest at rates ranging from 12% to 18% per
      annum, are unsecured and mature between March and April 2010.

9.    DUE TO STOCKHOLDERS

      The amounts due to stockholders are non-interest bearing, unsecured and
      have no fixed terms of repayment.


                                      F-16

<PAGE>


10.   RELATED PARTY TRANSACTIONS AND BALANCES

      The following were charged to the Company by certain stockholders for
      services provided:

                                                   2009        2008

      a)    Management and consulting fees     $  407,455    $  296,850
                                               ==========    ==========

      b)    General and administrative         $   85,780    $   62,932
                                               ==========    ==========


      These transactions were in the normal course of business and recorded at
      an exchange value established and agreed upon by the related parties.

      Included in accrued liabilities is $1,126,109 (2008 - $736,898) owed to
      certain stockholders for management fees, consulting fees and other
      expenses.

      Included in accounts payable is $122,693 (2008 - $139,946) owed to My Golf
      Rewards Canada Inc., an affiliated company, as part of the Company's
      equity investment obligation (see Note 5).

11.   CAPITAL STOCK

      On April 17, 2009, the Company issued 4,140,000 warrants to stockholders
      to purchase 4,140,000 shares of common stock of the Company, at a purchase
      price of $0.001 per share of common stock.

      On June 15, 2009, the Company cancelled 23,000,000 shares of common stock
      belonging to one individual, pursuant to an exchange agreement for a
      reverse merger.

      On June 15, 2009, the Company issued 39,999,750 shares of common stock to
      the shareholders of Consorteum Inc. in exchange for their shares of common
      stock of Consorteum Inc.

      WARRANTS

      As at June 30, 2009, 4,140,000 warrants were outstanding, having an
      exercise price of $0.001 per share of common stock with a remaining
      contractual life of 2.5 years.


                                      F-17

<PAGE>

12.   INCOME TAXES

      The Company's income tax expense is as follows:
<TABLE>
<CAPTION>
<S>     <C>

                                                                        2009         2008

       Expected income tax recovery at the combined statutory rate
         of 33.25% (2008- 17.57%)                                    $ 385,213    $ 175,568
       Change in enacted tax rates                                     195,115       (9,013)
       Effects of translation adjustments                                5,348        1,029
       Change in valuation allowance                                  (585,576)    (167,584)
                                                                     ---------    ---------

       Benefit from income taxes                                     $      --    $      --
                                                                     =========    =========

      The components of deferred tax assets are as follows:

                                                                        2009         2008

       Net operating loss carryforwards                              $ 692,930    $ 166,036
       Investment in affiliated companies                              113,296       54,169
       Equipment                                                        (1,917)      (1,572)
       Valuation allowance                                            (804,309)    (218,633)
                                                                      ---------    ---------

       Net                                                           $      --    $      --
                                                                     =========    =========
</TABLE>

      The Company has net operating loss carryforwards available to be applied
      against future years' taxable income. Due to the losses from operations
      and expected future operating results, it is more likely than not that the
      deferred tax asset resulting from the tax losses available for carry
      forward will not be realized through the reduction of future income tax
      payments. Accordingly, a 100% valuation allowance has been recorded for
      deferred tax assets and current income taxes.

      As of June 30, 2009, the Company had approximately $2,084,000 of Federal,
      provincial and state net operating loss carryforwards available to offset
      future years' taxable income. Such carryforwards expire in:


                                    2026                  $     62,000
                                    2027                       330,000
                                    2028                       553,000
                                    2029                     1,139,000
                                                          ------------
                                                          $  2,084,000
                                                          ============


                                      F-18

<PAGE>


13.   CASH FLOW SUPPLEMENTAL INFORMATION

      Non-cash financing and investing activities are as follows:
<TABLE>
<CAPTION>
<S>     <C>

                                                                                     Cumulative from
                                                                                           Inception
                                                                                   (November 7, 2005)
                                                                                             Through
                                                               2009           2008     June 30, 2009


       Issuance of shares for services rendered             $    --      $    1,563      $    35,579
                                                            =======      ==========      ===========

       Acquisition of investment in an affiliated company
         through incurrence of liability                    $    --      $  139,946      $    139,946
                                                            =======      ==========      ============

                                                                                     Cumulative from
                                                                                           Inception
                                                                                   (November 7, 2005)
                                                                                             Through
                                                               2009           2008     June 30, 2009

      Assumption of liabilities and loan on reverse
        merger transaction                                  $  105,029   $      --       $    105,029
                                                            ==========   ==========      ============

      During the period, the Company had cash flows arising from interest and
      income taxes paid as follows:

                                                                                      Cumulative from
                                                                                            Inception
                                                                                    (November 7, 2005)
                                                                                              Through
                                                                   2009        2008     June 30, 2009


      Income tax                                            $      --     $      --       $        --
                                                            =========    ==========      ============

      Interest                                              $  15,009     $  10,359      $     57,104
                                                            =========    ==========      ============
</TABLE>

                                      F-19

<PAGE>

14.   COMMITMENTS AND CONTINGENCIES

      The Company leases an office space under a non-cancellable operating
      lease, expiring May 2010. The Company's commitment for minimum rent for
      2010 is approximately $17,500.

      In addition, the Company has contractual commitments for various
      management and consulting fees and general and administrative expenses
      totaling approximately $624,500 for 2010. Of this amount, approximately
      $364,000, is committed to certain stockholders of the Company.


15.   SUBSEQUENT EVENTS

      On July 6, 2009, the Company's Board of Directors passed a resolution
      to issue 3,280,000 shares of common stock to investor relations
      companies and specified consultants for purpose of building market
      awareness. The shares were issued between July 7 and September 14,
      2009.

      On July 13, 2009, the Company issued 300,000 shares of the Company's
      common stock, pursuant to subscription agreements dated July 13, 2009, for
      a value of $150,000.

      On September 17, 2009, the Company entered into an agreement with a
      lender, who provided funds to the Company aggregating $100,000. The funds
      will be repaid along with a bonus of $100,000.

      On September 19, 2009, at a meeting of the Board of Directors, the Company
      granted 2,500,000 stock options pursuant to the stock option plan
      established by the Company. In addition, the Board of Directors approved
      an allotment of 5,800,000 common stock of the Company, valued at $0.15 per
      share of common stock, to satisfy liabilities owed to directors and
      officers of the Company.

                                      F-20

<PAGE>


ITEM 9.  Changes in and Disagreements With Accountants on Accounting and
         Financial Data.

None.

ITEM 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures.

         The Company maintains disclosure controls and procedures (as defined in
Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as
amended) that are designed to ensure that information required to be disclosed
in the Company's periodic reports filed under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms, and that such information is accumulated and communicated
to management, including the Company's principal executive officer and principal
financial officer, to allow timely decisions regarding required disclosures.

         Under SEC Rules that affect the Company, the Company is required to
provide management's report on internal control over financial reporting for its
first fiscal year ending on or after December 15, 2008. The Company has prepared
management's report as required. The Company is not required to file the
auditor's attestation report on internal control over financial reporting until
it files an annual report for its first fiscal year ending on or after June 30,
2009.

         As of the end of the period covered by this report, management carried
out an evaluation, under the supervision and with the participation of the
Company's principal executive officer and principal financial officer, of the
Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and
Rule 15d-15(e) of the Exchange Act). Based upon the evaluation, the Company's
principal executive officer and principal financial officer concluded that its
disclosure controls and procedures were effective at a reasonable assurance
level to ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the SEC's rules
and forms. In addition, the Company's principal executive officer and principal
financial officer concluded that its disclosure controls and procedures were
effective at a reasonable assurance level to ensure that information required to
be disclosed by the Company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the Company's management,
including its principal executive officer and principal financial officer, to
allow timely decisions regarding required disclosure.


                                       27

<PAGE>


ITEM 9A(T)  Controls and Procedures.

Management's Report on Internal Control over Financial Reporting

         Consorteum's management is responsible for establishing and maintaining
adequate internal control over financial reporting. The Company's internal
control over financial reporting is designed to provide reasonable assurance as
to the reliability of the Company's financial reporting and the preparation of
financial statements in accordance with generally accepted accounting
principles. All internal control systems, no matter how well designed, have
inherent limitations. Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement
preparation and presentation. Management conducted an evaluation of the
effectiveness of the Company's internal control over financial reporting as of
June 30, 2009. We identified the following material weakness in our internal
control over financial reporting- we did not have adequately segregation of
duties, in that we only had one person performing all accounting-related on-site
duties. Because of the "barebones" level of relevant personnel, however, certain
deficiencies which are cured by separation of duties cannot be cured, but only a
monitored as a weakness. In addition, we do not have an independent person
serving on the Audit Committee, and we also do not have any person with the
qualifications to serve as an audit committee financial expert.

Attestation Report of Independent Registered Public Accounting Firm

         This annual report does not include an attestation report of our
registered public accounting firm regarding internal control over financial
reporting. Our 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.

Changes in Internal Control over Financial Reporting

         There was no change in our internal control over financial reporting
identified in connection with our evaluation that occurred during our last
quarter (our fourth quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.

Item 9B. Other Information.

None.

Item 10. Directors, Executive Officers and Corporate Governance.

BOARD OF DIRECTORS AND EXECUTIVE OFFICERS

         The names, ages and respective positions of the current director and
executive officer of the Company are set forth below. Directors are elected for
a term ending upon the date of the next annual stockholders' meeting. Officers
will hold their positions until the next annual meeting of directors and until
their respective successors are elected. There are no family relationships
between any two or more of the Company's directors or executive officers. There
are no arrangements or understandings between any two or more of the Company's
directors or executive officers. There is no arrangement or understanding
between any of the Company's directors or executive officers and any other
person pursuant to which any director or officer was or is to be selected as a
director or officer, and there is no arrangement, plan or understanding as to
whether non-management stockholders will exercise their voting rights to
continue to elect the current board of directors. There are also no
arrangements, agreements or understandings between non-management stockholders
that may directly or indirectly participate in or influence the management of
the Company's affairs. There are no legal proceedings involving the executive
officers or directors of the Company.

MR. CRAIG A. FIELDING., B.A. - CEO AND DIRECTOR, AGE 44

         From April 2006 to the present Mr. Fielding has served as a director
and CEO of Consorteum, a company he co-founded. From January 2002 to February
2006 Mr. Fielding was part of the management team (Vice President of Sales) at
Mint Technology Corp, a technology based company in Toronto. Prior to that he
was Vice-President of Sales at Softtracks Enterprises from September 1999-
November 2001, a startup company based in Vancouver, British Columbia From
August 1989 to August 1999 Mr. Fielding worked in a number of Sales Management
and Senior Management roles in North America with Xerox Canada Ltd .


                                      28

<PAGE>

MR. QUENT RICKERBY - PRESIDENT/COO AND DIRECTOR, AGE 43

         Mr. Rickerby co-founded Consorteum in April 2006 and has been serving
as Director, President and COO since inception. Mr. Rickerby has been in the
payments and transactions industry for over 10 years and brings extensive
management and sales experience in the gift, payroll prepaid card, transaction
processing and financial services industry. From January 2003 to December 2005
Mr. Rickerby was part of the management team (Director of Sales) at Mint
Technology Corp, a technology company based in Toronto. Prior to that, from
March 1999 to September 2002 Mr. Rickerby worked as Director of Sales at
Softtracks Enterprises, a start up company based out of Vancouver B.C in the
wireless payment processing industry. Prior to that, Mr. Rickerby spent eight
years working for two national wireless telecom companies in various management
positions, including being part of the start up team for the launch of Clearnet
Wireless in Western Canada.

MR. JAMES D. BEATTY, B.A., M.B.A. - CHAIRMAN AND DIRECTOR, AGE 64

         From July 1982 to the present, Mr. Beatty has been the President and
Chief Executive Officer of Trinity Capital Corporation, a private Canadian
merchant bank. Mr. Beatty has served as the Executive Chairman of Consorteum
since May 2006. From January 2005 to the present Mr. Beatty has also been the
Chairman of Canary Resources Inc., a U.S. publicly traded coal bed methane
company operating in Eastern Kansas and Western Missouri. From March 2006 until
June 2008 Mr. Beatty served as Chairman of First Metals Inc. a Canadian base
metals producer listed on the Toronto Stock Exchange.

MR. PETER SIMPSON, CMA - CHIEF FINANCIAL OFFICER, AGE 44

         Mr. Simpson has been working with Consorteum as their CFO, since April
2006. Mr. Simpson received his professional accounting designation in 1990.
Since that time, he has operated a successful consulting and accounting
practice, working with small to medium sized businesses during rapid growth
stages, creating and maintaining proper infrastructures and financial reporting.
Another area of expertise for Mr. Simpson is in filing R&D tax credit claims
with the Federal and Provincial government. Since 1989, Mr. Simpson has filed
returns that total well over a million dollars in tax savings. Along with R&D
tax credit claims, Mr. Simpson has acted as CFO for companies in the software,
professional medical journal and manufacturing industries. During 2007/2008, Mr.
Simpson assisted a client in successfully completing a buyout of their company.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

       Section 16(a) of the Securities Exchange Act requires our directors,
executive officers and persons who own more than 10% of our common stock to file
reports of ownership and changes in ownership of our common stock with the
Securities and Exchange Commission. Directors, executive officers and persons
who own more than 10% of our common stock are required by Securities and
Exchange Commission regulations to furnish to us copies of all Section 16(a)
forms they file.

       Based solely on our review of such forms furnished to us, we believe that
all filing requirements applicable to our executive officers, directors and
greater than 10% beneficial owners were met for the fiscal year ended June 30,
2009.

CODE OF ETHICS

         The Company has adopted a Code of Ethics that applies to its principal
executive officer, principal financial officer, principal accounting officer,
controller and all others performing similar functions. The Code of Ethics is
not yet posted on the Company's web site. The Company will furnish without
charge a copy of its Code of Ethics to any person requesting a copy. Any request
for a copy should be directed via e-mail to the Company's Chief Financial
Officer at psimpson@consorteum.com.

CORPORATE GOVERNANCE

      Our Board of Directors has no separate committees and all of the members
of our Board of Directors serve as members of the Audit Committee, the
Compensation Committee and the Nominating Committee. There are no independent
directors serving on our Board of Directors. The Company intends to appoint
independent members to each of the committees at such time as it is fiscally
able to do so. We do not have a qualified financial expert serving on our Board
of Directors. During the last fiscal year the Company held one meeting of its
board of directors, which was attended by all of the Company's directors. During
the last fiscal year, there was only one meeting of the Audit Committee and of
the Compensation Committee, and no meetings of the Nominating Committee.


                                       29

<PAGE>


ITEM 11. Executive Compensation.

COMPENSATION OF DIRECTORS

For the fiscal year ended June 30, 2009, none of the current or former directors
were compensated for their services as directors except for Mr. James D. Beatty
for his services as Executive Chairman described below.

EXECUTIVE COMPENSATION

The following table sets forth certain information regarding compensation paid
by the company for services rendered for the fiscal year ended, June 30, 2009 to
each of the individuals who served as Executive Chairman, Chief Executive
Officer, Chief Operating Officer and President, and Chief Financial Officer
(executives collectively referred to as the "Named Executives").
<TABLE>
<CAPTION>
<S>     <C>

--------------------------------------------------------------------------------------------------------------------------
                                              EXECUTIVE COMPENSATION TABLE

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

                                                                                                ALL
                                                              STOCK          OPTION            OTHER
                                            SALARY            AWARDS         AWARDS         COMPENSATION          TOTAL
NAME AND PRINCIPAL POSITION      YEAR         ($)              ($)           ($)(3)            ($)(2)               ($)
------------------------------ --------- ----------------- -------------- --------------- -----------------   --------------
James D. Beatty, Executive       2009        $51,468 (1)             0              0             $14,411        $ 65,879
Chairman..........
------------------------------ --------- ----------------- -------------- --------------- -----------------   --------------
Craig A. Fielding, Chief         2009        $128,670 (1)            0              0             $20,073        $148,743
Executive Officer.........
------------------------------ --------- ----------------- -------------- --------------- -----------------   --------------
Quentin Rickerby, Chief          2009        $128,670 (1)            0              0             $20,073        $148,743
Operating Officer, and
President.........
------------------------------ --------- ----------------- -------------- --------------- -----------------   --------------
Peter Simpson, Chief             2009        $51,468 (1)             0              0                            $ 51,468
Financial Officer.......
----------------------------- --------- ----------------- -------------- --------------- -----------------    --------------
</TABLE>

(1) In September 2009, the Company agreed to convert accrued and unpaid salaries
owed to directors and officers into shares of the Company's common stock. The
names, dollar amounts of salary arrears and the number of shares into which such
arrears were converted are set forth below:

NAME OF EXECUTIVE OFFICER             AMOUNT OF ARREARS         NUMBER OF SHARES

James D. Beatty                            $175,399                  1,300,000
Crag A. Fielding                           $376,163                  2,000,000
Quent Rickerby                             $376,163                  2,000,000
Peter Simpson                              $ 64,485                    500,000

(2) Other compensation consists of a monthly car allowance and a monthly home
office use allowance in the respective amounts set forth below:

James Beatty                                $1,201
Craig Fielding                              $1,673
Quent Rickerby                              $1,673

(3) On September 19, 2009, subsequent to the end of the last fiscal year, the
Company issued 1,750,000 options to purchase shares of its common stock to the
following named directors and officers.

NAME OF EXECUTIVE OFFICER            NUMBER OF OPTIONS            EXERCISE PRICE
-------------------------            -----------------            --------------
James D. Beatty                         500,000                         $0.15
Craig A. Fielding                       500,000                         $0.15
Quent Rickerby                          500,000                         $0.15
Peter Simpson                           250,000                         $0.15

All of the options granted will expire on September 21, 2012, and the Company
and each optionee must enter into definitive option agreements.

         Consorteum, Inc. has entered into management services agreements with
each of three officers in order to retain the named Executive Officers and
retain continuity of management. Each agreement sets for the severance benefits
in the event of a change of control or termination without cause.

                                      30

<PAGE>


(i) On April 3, 2006 Consorteum entered into a management services agreement
with Craig Fielding, its CEO and a member of the board of directors of
Consorteum and the Company under which Mr. Fielding is paid an annual salary of
$128,670 and receives additional compensation aggregating $20,073. Mr.
Fielding's salary has accrued from commencement of his management services
agreement, is carried as a liability on the books of Consorteum and has not been
paid for the period beginning on and after April 1, 2009. For the period prior
thereto, in September 2009 the Company and Mr. Fielding agreed to exchange
$376,163 of his accrued salary for the period through March 31, 2009 for
2,000,000 shares of the Company's common stock at prices ranging from $ 0.15 -
$0.218 per share. If Mr. Fielding leaves Consorteum he is entitled to a
severance of $257,940.

(ii) On May 1, 2006 Consorteum entered into a management services agreement with
Quentin Rickerby, its COO, President and a member of the board of directors of
Consorteum and the Company under which Mr. Rickerby is paid an annual salary of
$128,670 and receives additional compensation aggregating $20,073. Mr.
Rickerby's salary has accrued from commencement of his management services
agreement, is carried as a liability on the books of Consorteum and has not been
paid for the period beginning on and after April 1, 2009. For the period prior
thereto, in September 2009 the Company and Mr. Rickerby agreed to exchange
$376,163 of his accrued salary for the period through March 31, 2009 for
2,000,000 shares of the Company's common stock at prices ranging from $ 0.15 -
$0.218 per share. If Mr. Rickerby leaves Consorteum he is entitled to a
severance of $257,940.

(iii) On May 1, 2006 Consorteum entered into a management services agreement
with James D. Beatty Associates, Ltd., a corporation owned by Mr. James D.
Beatty, a member and Chairman of the Board of Directors of Consorteum and the
Company under which Mr. Beatty is paid an annual salary of $51,468 and receives
additional compensation aggregating $14,411. Mr. Beatty's salary has accrued
from commencement of his management services agreement, is carried as a
liability on the books of Consorteum and has not been paid for the period
beginning on and after April 1, 2009. For the period prior thereto, in September
2009 the Company and Mr. Beatty agreed to exchange $175,399 of his accrued
salary for the period through March 31, 2009 for 1,300,000 shares of the
Company's common stock at prices ranging from $ 0.15 - $0.218 per share. If Mr.
Beatty leaves Consorteum he is entitled to a severance of $51,588.

(iv) The Company does not have a written management services agreement with
Peter Simpson. Mr. Simpson's salary has accrued from commencement of his
employment, is carried as a liability on the books of Consorteum and has not
been paid for the period beginning on and after April 1, 2009. For the period
prior thereto, in September 2009 the Company and Mr. Simpson agreed to exchange
$64,485 of his accrued salary for the period through March 31, 2009 for 500,000
shares of the Company's common stock at prices ranging from $ 0.15 - $0.218 per
share.

OTHER COMPENSATION.

         There are no plans that provide for the payment of retirement benefits,
or benefits that will be paid primarily following retirement, including but not
limited to tax-qualified defined benefit plans, supplemental executive
retirement plans, tax-qualified defined contribution plans and nonqualified
defined contribution plans. Except as set forth immediately below, there are no
contracts, agreements, plans or arrangements, whether written or unwritten, that
provide for payment(s) to a named executive officer at, following, or in
connection with the resignation, retirement or other termination of a named
executive officer, or a change in control of the Company or a change in the
named executive officer's responsibilities following a change in control, with
respect to each named executive officer.


                                      31

<PAGE>

The management services agreements between the Company and each of its executive
officers provide for a severance payment in the event of a change of control in
the Company.

<TABLE>
<S>     <C>

                                           POTENTIAL PAYMENTS UPON
                                        TERMINATION OR CHANGE IN CONTROL
--------------------  ------------------  -------------  ---------------  ------------ ------------
                                                                            EXCISE
                            SEVERANCE       BENEFIT       RESTRICTED      TAX GROSS
       NAME                 PAYMENT (1)   PLANS ($)(2)     STOCK (3)         UP         TOTAL ($)
--------------------  ------------------  -------------  ---------------  -----------  ------------

James D. Beatty,            $ 51,588                                                     $ 51,588
Executive Chairman
--------------------  ------------------  -------------  ---------------  -----------  ------------
Craig A. Fielding,          $257,940                                                     $257,940
Chief Executive
Officer
--------------------  ------------------  -------------- ---------------  -----------  ------------
Quentin Rickerby,           $257,940                                                     $257,940
Chief Operating
Officer, President
--------------------  ------------------  -------------  ---------------  -----------  ------------
</TABLE>

STOCK OPTION PLANS AND STOCK COMPENSATION PLANS

         The Company currently has the following forms of stock compensation,
equity compensation, deferred compensation or other plan or pension in place for
its directors, executive officers and employees of the Company: (i) 2008 Stock
Option Plan of the Company and (ii) 2008 Employees Compensation and Stock Option
Plan. The Company is authorized to issue up to a maximum of 2,500,000 shares of
its common stock under each such Plan. No grants of any kind were issued and
outstanding under either Plan during the fiscal year ended June 30, 2009.

         On September 19, 2009, subsequent to the end of the last fiscal year,
the Company issued 1,750,000 options to purchase shares of its common stock to
the following named directors and officers.

NAME OF EXECUTIVE OFFICER            NUMBER OF OPTIONS            EXERCISE PRICE
-------------------------            -----------------            --------------
James D. Beatty                         500,000                         $0.15
Craig A. Fielding                       500,000                         $0.15
Quent Rickerby                          500,000                         $0.15
Peter Simpson                           250,000                         $0.15

All of the options granted will expire on September 21, 2012, and the Company
and each optionee must enter into definitive option agreements.


                                      32

<PAGE>

ITEM 12. Security Ownership of Certain Beneficial Owners and Management and
         Related Stockholder Matters.

The following table sets forth information regarding the beneficial ownership of
the Company's common stock as of September 30, 2009 by: (i) all stockholders
known to the Company to be owners of more than 5% of the outstanding common
stock of the Company; and (ii) all officers and directors of the Company,
individually and as a group:

<TABLE>
<S>     <C>
     Name and Address of              Amount and Nature of Beneficial           Percentage of Class
     Beneficial Owner                       Ownership
     -----------------------------------------------------------------------------------------------

     Quentin Rickerby,                       11,786,035 common shares (1)                  21.0% (2)
     42 Angus Meadow Drive,
     Markham, Ontario,
     Canada, L6C 1Z2
     -----------------------------------------------------------------------------------------------

     Craig A. Fielding,                      10,825,090 common shares (1)                 19.20% (2)
     464 Worthington Avenue,
     Richmond Hill, Ontario,
     Canada, L4E 4R6.
     ------------------------------------------------------------------------------------------------


     Peter Simpson                          600,050 common shares  (1)                     1.07% (2)
     1440 Alfred Crescent,
     Burlington, Ontario.
     Canada, L7S 1K7
     ------------------------------------------------------------------------------------------------


     James D. Beatty,                     3,000,000 common shares (1)                       5.3% (2)
     46 Teddington Park Avenue,
     Toronto, Ontario,
     Canada, M4N 2C6.
     ------------------------------------------------------------------------------------------------


     Peter Rickerby,                      4,165,000 common shares                               7.4%
     21820- 46th Ave,
     Langley, BC.
     Canada, V4A 3J6.
     ------------------------------------------------------------------------------------------------


     Henry Frank Fielding,                3,500,000 common shares                               6.2%
     27 George Avenue,
     Great Harwood, Blackburn,
     Lancashire, U.K. BB6 7NR.
     ------------------------------------------------------------------------------------------------

     OFFICERS AND DIRECTORS             25,611,125 COMMON SHARES (1)                       45.54% (2)
</TABLE>

(1) For each of the named directors and officers the number of shares shown in
the table includes that number of shares of common stock the Company issued to
each of them in exchange for accrued salary through March 31, 2009. The names of
the executive officers, the accrued salary and share amounts are set forth
below. See also "EXECUTIVE COMPENSATION-Summary Compensation Table."

 NAME OF EXECUTIVE OFFICER           AMOUNT OF ARREARS          NUMBER OF SHARES

James D. Beatty                            $175,399                  1,300,000
Crag A. Fielding                           $376,163                  2,000,000
Quent Rickerby                             $376,163                  2,000,000
Peter Simpson                              $64,485                    500,000

(2) The percentage calculations include the shares issued to our directors and
officers for the conversion of their accrued salary arrears through March 31,
2009. See Note (1).


                                      33

<PAGE>

ITEM 13. Certain Relationships and Related Transactions, and Director
         Independence.

Other than as set forth below, during the last fiscal year there has not been
any relationships, transactions or proposed transactions to which the Company
was or is to be a party, in which any of the directors, officers, or 5% or
greater stockholders (or any immediate family thereof) had or is to have a
direct or indirect material interest except for the following:

Management Agreements:

Consorteum, Inc. has entered into management services agreements with
each of three officers as follows:

(i) On April 3, 2006 Consorteum entered into a management services agreement
with Craig Fielding, its CEO and a member of the board of directors of
Consorteum and the Company under which Mr. Fielding is paid an annual salary of
$128,670 and receives additional compensation aggregating $20,073. Mr.
Fielding's salary accrued from commencement of his management services
Agreement until September 19 2009, when by mutual agreement the Company
converted all of Mr. Fielding's accrued salary of $376,163 for all prior periods
up to and including March 31, 2009 into 2,000,000 shares of its common stock. If
Mr. Fielding leaves Consorteum he is entitled to a severance of $257,940.

(ii) On May 1, 2006 Consorteum entered into a management services agreement with
Quentin Rickerby, its COO, President and a member of the board of directors of
Consorteum and the Company under which Mr. Rickerby is paid an annual salary of
$128,670 and receives additional compensation aggregating $20,073. Mr.
Rickerby's salary has accrued from commencement of his management services
Agreement until September 19, 2009 , when by mutual agreement the Company
converted all of Mr. Rickerby's accrued salary of $376,163 for all prior periods
up to and including March 31, 2009 into 2,000,000 shares of its common stock. If
Mr. Rickerby leaves Consorteum he is entitled to a severance of $257,940.

(iii) On May 1, 2006 Consorteum entered into a management services agreement
with James D. Beatty Associates, Ltd., a corporation owned by Mr. James D.
Beatty, a member and Chairman of the Board of Directors of Consorteum and the
Company under which Mr. Beatty is paid an annual salary of $51,468 and receives
additional compensation aggregating $14,411. Mr. Beatty's salary has accrued
from commencement of his management services agreement until September, 19,
2009, when by mutual agreement the Company converted all of Mr. Beatty's's
accrued salary of $204,000 for all prior periods up to and including the period
ended March 31, 2009 into 1,300,000 shares of its common stock . If Mr. Beatty
leaves Consorteum he is entitled to a severance of $51,588.

(iv) Consorteum employs Mr. Peter Simpson as its Chief Financial Officer under
an oral employment agreement under which Mr. Simpson is paid an annual salary of
$51,468. Mr. Simpson's salary has accrued from commencement of his management
services agreement until September, 19, 2009, when by mutual agreement the
Company converted all of Mr. Simpson's accrued salary of $64,485 for all prior
periods up to and including the period ended March 31, 2009 into 500,000 shares
of its common stock.

Share Issuances:

         The Company issued shares of its common stock to each of the directors
and/or named executive officers named below in connection with the closing of
the exchange agreement in June 2009 with Consorteum, Inc., pursuant to which
Consorteum became a wholly-owned subsidiary of the Company. At the time of the
closing each director or officer named below exchanged all of his shares of
common stock of Consorteum for the number of Company shares of common stock set
forth opposite his name below:

NAME OF DIRECTOR/OFFICER   CONSORTEUM SHARES EXCHANGED   COMPANY SHARES RECEIVED
James D. Beatty                     1,500,000                      1,500,000
Craig A. Fielding                   8,815,090                      8,815,090
Quent Rickerby                      9,786,035                      9,786,035
Peter Simpson                         100,050                        100,050

Director Independence

Our Board of Directors has no separate committees and all of the members of our
Board of Directors serve as membes of the Audit Committee, the Compensation
Committee and the Nominating Committee. There are no independent directors
serving on our Board of Directors. The Company intends to appoint independent
members to each of the committees at such time as it is fiscally able to do so.
We do not have a qualified financial expert serving on our Board of Directors.
During the last fiscal year the Company held [to come] meetings of its board of
directors, all of which were attended by all of the Company's directors. During
the last fiscal year, there was only one meeting of the Audit Committee and of
the Compensation Committee, and no meetings of the Nominating Committee..


                                      34

<PAGE>

ITEM 14. Principal Accounting Fees and Services

         (1) Audit Fees

      The aggregate fees billed for each of the last two fiscal years for
professional services rendered by SF Chartered Accountants, LLP, ("Accountant")
for the audit of the Company's annual financial statements, and review of
financial statements included in the Company's Form 10-Q's: 2009 $40,000; 2008:
$40,000.

         (2)Audit Related Fees

      The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the Accountant that are reasonably related to
the performance of the audit or review of the Company's financial statements and
are not reported under Audit Fees above: 2009: $5,000; 2008: $-0-.

         (3)Tax Fees

      The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the Accountant for tax compliance, tax advice,
and tax planning: 2009: $-0-; 2008: $-0-.

         (4)All Other Fees

      The aggregate fees billed in each of the last two fiscal years for
products and services provided by the Accountant, other than the services
reported above: 2009: $-0- 2008: $-0-.


                                       35

<PAGE>

ITEM 15. Exhibits, Financial Statement Schedules.

Index to Exhibits


(3)(i)   Articles of Incorporation of Consorteum, Inc., (incorporated by
         reference to Exhibit (3)(i) to the Company's Current Report on Form 8-K
         filed on June 19, 2009).

(3)(ii)  By-laws of Consorteum, Inc. (incorporated by reference to Exhibit
         (3)(ii) to the Company's Current Report on Form 8-K filed on June 19,
         2009).

10.4     Shareholder Agreement dated January 5, 2009 among Consorteum, Inc.,
         Innovative Solutions, Inc., William Bateman and Michael Frasse
         (incorporated by reference to Exhibit 10.4 to the Company's Current
         Report on Form 8-K filed on June 19, 2009).

10.5     Management Services Agreement dated April 5, 2006 between Consorteum,
         Inc. and FP Financial Services, Ltd. (incorporated by reference to
         Exhibit 10.5 to the Company's Current Report on Form 8-K filed on June
         19, 2009).

10.6     Management Services Agreement dated as of May 1, 2006 between
         Consorteum, Inc. and Craig Fielding (incorporated by reference to
         Exhibit 10.6 to the Company's Current Report on Form 8-K filed on June
         19, 2009).

10.7     Management Services Agreement dated as of May 1, 2006 between
         Consorteum, Inc. and Quentin Rickerby (incorporated by reference to
         Exhibit 10.7 to the Company's Current Report on Form 8-K filed on June
         19, 2009).

10.8     Management Services Agreement dated as of May 1, 2006 between
         Consorteum, Inc. and James D. Beatty and Associates, Inc. (incorporated
         by reference to Exhibit 10.8 to the Company's Current Report on Form
         8-K filed on June 19, 2009).

10.9     Joint Venture Agreement dated December 13, 2006 between Consorteum,
         Inc. and 1510848 Ontario, Inc. (incorporated by reference to Exhibit
         10.9 to the Company's Current Report on Form 8-K filed on June 19,
         2009).

10.10    Amended and Restated Management Services Agreement dated January 16,
         2007 between Consorteum, Inc. and FP Financial Services,
         Ltd. (incorporated by reference to Exhibit 10.10 to the Company's
         Current Report on Form 8-K filed on June 19, 2009).

16.      Letter dated June 25, 2009 from Sutton Robinson Freeman & Co., PC
         regarding change in accountants (filed herewith).

23.      Consent of SF Partnership, LLP, Chartered Accountants (filed herewith).

31.1     Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
         (filed herewith).

31.2     Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer
         (filed herewith).

32.1     Section 1350 Certification of Principal Executive Officer (filed
         herewith).

32.2     Section 1350 Certification of Principal Financial Officer (filed
         herewith).


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<PAGE>

                                   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.

                                       CONSORTEUM HOLDINGS, INC.


Dated: October 13, 2009                  By:/s/ Craig A. Fielding
                                           -------------------------------------
                                           Craig A. Fielding,
                                           Chief Executive Officer
                                           (Principal Executive Officer)

      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 date indicated:


Signature                       Title                               Date

                           Chief Executive Officer,
/a/ Craig A. Fielding      Director,
--------------------       (Principal Executive Officer)        October 13, 2009
Craig A. Fielding

/s/ Peter Simpson
--------------------       Chief Financial Officer/
Peter Simpson              (Principal Accounting Officer)       October 13, 2009


/s/ Quent Rickerby
--------------------
Quent Rickerby             Director                             October 13, 2009


/a/ James D. Beatty
--------------------
James D. Beatty            Director and Chairman of the Board   October 13, 2009






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