<PAGE>

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 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 L3R 5G3 Canada
         ---------------------------------------------------------------
                    (Address of Principal Executive Offices)

                                 (866) 824-8854
                                 --------------
                          (Company's Telephone Number)


              -----------------------------------------------------
              (Former Name, Former Address, and Former Fiscal Year,
                          if Changed Since Last Report)

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. Yes [X] No [ ].

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

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

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

As of February 16, 2010, the Company had 82,239,750 shares of common stock
issued and outstanding.

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




<PAGE>


                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)

CONDENSED BALANCE SHEETS AS OF DECEMBER 31, 2009 AND JUNE 30, 2009.            3

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE
SIX-MONTH PERIODS ENDED DECEMBER 31, 2009 AND DECEMBER 31, 2008, AND
CUMULATIVE FOR THE PERIOD FROM INCEPTION (NOVEMBER 7, 2005) THROUGH
DECEMBER 31, 2009.                                                             4

CONDENSED STATEMENTS OF CASH FLOWS FOR THE SIX-MONTH PERIODS ENDED
DECEMBER 31, 2009 AND DECEMBER 31, 2008, AND CUMULATIVE FOR THE PERIOD
FROM INCEPTION (NOVEMBER 7, 2005) THROUGH DECEMBER 31, 2009.                   5

NOTES TO CONDENSED FINANCIAL STATEMENTS.                                  6 - 15



                                      -2-


<PAGE>
<TABLE>
<S>                                <C>
CONSORTEUM HOLDINGS, INC.
 (FORMERLY IMPLEX CORPORATION)
 (A DEVELOPMENT STAGE COMPANY)

Condensed Balance Sheets
(Expressed in U.S. Dollars)
(Unaudited)
                                                                 DECEMBER 31             June 30
                                                                        2009                2009


                                     ASSETS
CURRENT ASSETS
    Cash                                                                  --         $       185
    Accounts receivable                                               10,365               7,303
    Prepaid expense                                                   52,667               1,285
    Deferred debt issuance costs                                      48,300                  --
                                                                 -------------------------------
TOTAL CURRENT ASSETS                                                 111,332               8,773
INVESTMENTS IN AFFILIATED COMPANIES (Note 5)                          45,146              86,123
EQUIPMENT, NET                                                         6,372               6,774
                                                                 -------------------------------
TOTAL ASSETS                                                     $   162,850         $   101,670
                                                                 ===============================

                                   LIABILITIES
CURRENT LIABILITIES
    Bank indebtedness (Note 6)                                   $   125,350         $    87,765
    Accounts payable                                                 290,950             276,459
    Accrued liabilities                                            1,265,050           1,730,325
    Loans payable (Note 7)                                         1,402,248             917,944
    Due to stockholders                                                   --              30,779
                                                                 -------------------------------
TOTAL CURRENT LIABILITIES                                          3,083,598           3,043,272
                                                                 -------------------------------


COMMITMENTS AND CONTINGENCIES (Note 12)

                              STOCKHOLDERS' DEFICIT
CAPITAL STOCK (Note 9)
    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; 74,239,750 shares (2009 -
    46,859,750 shares) issued and outstanding.                        74,240              46,860

DISCOUNT ON COMMON STOCK                                                  --            (116,224)
ADDITIONAL PAID IN CAPITAL                                         1,264,820                  --
COLLATERALIZED SHARES ISSUED                                         (87,500)                 --
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME                        (80,366)            151,042
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE                  (4,091,942)         (3,023,280)
                                                                 -------------------------------
TOTAL STOCKHOLDERS' DEFICIT                                       (2,920,748)         (2,941,602)
                                                                 -------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                      $   162,850         $   101,670
                                                                 ===============================

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


                                                -3-


<PAGE>

CONSORTEUM HOLDINGS, INC.
(FORMERLY IMPLEX CORPORATION)
(A DEVELOPMENT STAGE COMPANY)

Condensed Statements of Operations and Comprehensive Loss
For the Three and Six-Month Periods Ended December 31, 2009 and 2008, and
Cumulative for the Period from Inception (November 7, 2005) Through
December 31, 2009
(Expressed in U.S. Dollars)
(Unaudited)
                                                                                                                 Cumulative for
                                                                                                                the period from
                                                                                                                      Inception
                                                                                                                   (November 7,
                                                                                                                          2005)
                                      FOR THE THREE-MONTH PERIODS ENDED      FOR THE SIX-MONTH PERIODS ENDED            Through
                                       DECEMBER 31,       December 31,       DECEMBER 31,       December 31,       December 31,
                                               2009               2008               2009               2008               2009

REVENUES                              $          --      $          --      $          --      $          --      $     246,417
                                      ------------------------------------------------------------------------------------------
OPERATING EXPENSES
    Management and consulting fees          242,871            138,530            497,667            285,982          2,299,172
    General and administration
      expenses                              216,353             26,186            332,793             59,404          1,118,961
    Bad debt expense                             --                 --                 --                 --             99,738
    Selling expenses                             --                 --                 --                 --             98,010
    Depreciation expense                        559                697              1,097              1,508             12,205
                                      ------------------------------------------------------------------------------------------

TOTAL OPERATING EXPENSES                    459,783            165,413            831,557            346,894          3,628,086
                                      ------------------------------------------------------------------------------------------

LOSS FROM OPERATIONS                       (459,783)          (165,413)          (831,557)          (346,894)        (3,381,669)
                                      ------------------------------------------------------------------------------------------

OTHER EXPENSES
    Equity in net loss of an
      affiliated company                    (26,170)            (4,447)           (48,934)            (8,891)          (281,483)
    Write off of investment in an
      affiliated company                         --                 --                 --                 --            (78,783)
    Interest and financing costs           (153,551)           (18,584)          (188,171)           (38,923)          (350,007)
                                      ------------------------------------------------------------------------------------------

TOTAL OTHER EXPENSES                       (180,261)           (23,031)          (237,105)           (47,814)          (710,273)
                                      ------------------------------------------------------------------------------------------

NET LOSS                                   (640,044)          (188,444)        (1,068,662)          (394,708)        (4,091,942)

    Foreign currency translation
      adjustment                              5,926            261,417           (231,408)           343,746            (80,366)
                                      ------------------------------------------------------------------------------------------

COMPREHENSIVE (LOSS) INCOME           $    (634,118)     $      72,974      $  (1,300,070)     $     (50,961)     $  (4,172,308)
                                      ==========================================================================================
LOSS PER SHARE
    BASIC                             $       (0.01)     $       (0.00)     $       (0.02)     $       (0.01)
                                      =======================================================================

    DILUTED                           $       (0.01)     $       (0.00)     $       (0.02)     $       (0.01)
                                      =======================================================================

WEIGHTED AVERAGE NUMBER
   SHARES OUTSTANDING - BASIC            55,294,234         69,859,750         55,294,234         69,859,750
                                      =======================================================================

WEIGHTED AVERAGE NUMBER
   SHARES OUTSTANDING - DILUTED          55,294,234         69,859,750         55,294,234         69,859,750
                                      =======================================================================

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

                                                               -4-


<PAGE>

CONSORTEUM HOLDINGS, INC.
(FORMERLY IMPLEX CORPORATION)
(A DEVELOPMENT STAGE COMPANY)

Condensed Statements of Cash Flows
For the Six-Month Periods Ended December 31, 2009 and 2008, and
Cumulative for the Period from Inception (November 7, 2005)
Through December 31, 2009
(Expressed in U.S. Dollars)
(Unaudited)
                                                                                            Cumulative for
                                                                                          the periods from
                                                                                                 Inception
                                                     FOR THE SIX MONTH PERIODS ENDED    (November 7, 2005)
                                                      DECEMBER 31,     December 31,      Through December,
                                                              2009             2008               31, 2009
CASH FLOWS FROM OPERATING ACTIVITIES
    Net loss                                          $(1,068,662)     $  (393,588)           $(4,091,942)
    Adjustments for non-cash items:
      Equity in net loss of an affiliated company          48,934            8,891                281,483
      Writeoff of investment in an affiliated
        company                                                --               --                 78,213
      Depreciation                                          1,097            1,508                 12,205
      Stock issued for services rendered                  159,833               --                195,412
      Options issued                                      158,436               --                158,436
      Debt issuance costs                                 (48,300)              --                (48,300)

    Changes in non-cash working capital, net of
      effects from reverse merger transaction:
      Accounts receivable                                  (2,283)            (426)               (10,490)
      Prepaid expenses                                      1,422               --                    140
      Accounts payable                                     81,079          143,742                303,345
      Accrued liabilities                                 159,306          137,430              1,884,216
                                                      ----------------------------------------------------

NET CASH USED IN OPERATING ACTIVITIES                    (509,138)        (102,443)            (1,237,282)
                                                      ----------------------------------------------------

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

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

CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from loans                                   524,821          119,612              1,489,796
    Repayment of loans                                    (45,196)           3,387                (49,485)
    Proceeds from bank indebtedness                        36,156               --                146,022
    Repayment of bank indebtedness                         (7,932)              --                (14,874)
    Proceeds from issuance of capital stock               142,725               --                142,811
    Repayments of stockholders' advances                  (54,177)         (56,287)            (1,270,187)
    Proceeds from stockholders' advances                   15,615               --              1,270,940
    Repayment from related party                          (88,632)              --                (88,632)
                                                      ----------------------------------------------------

NET CASH PROVIDED BY FINANCING ACTIVITIES                 523,380           59,938              1,626,391
                                                      ----------------------------------------------------

EFFECT OF EXCHANGE RATE CHANGE ON CASH                    (14,427)          26,456                (82,944)
                                                      ----------------------------------------------------

NET (DECREASE) INCREASE IN CASH                              (185)          16,049                     --

CASH - BEGINNING OF PERIOD                                    185           16,049                     --
                                                      ----------------------------------------------------

CASH - END OF PERIOD                                  $        --      $        --            $        --
                                                      ====================================================


           (The accompanying notes are an integral part of these condensed financial statements.)
</TABLE>
                                                     -5-


<PAGE>

CONSORTEUM HOLDINGS, INC.
(FORMERLY IMPLEX CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
Notes to Condensed Financial Statements
December 31, 2009 and 2008
(Expressed in U.S. Dollars)
(Unaudited)


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.

       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 December 31, 2009, the Company had a negative working capital of
       $2,972,266 (June 30, 2009 - $3,034,499) and a deficit accumulated during
       the development stage of $4,091,942 (June 30, 2009 - $3,023,280).

       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 condensed financial statements
       could be material.

                                      -6-


<PAGE>

CONSORTEUM HOLDINGS, INC.
(FORMERLY IMPLEX CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
Notes to Condensed Financial Statements
December 31, 2009 and 2008
(Expressed in U.S. Dollars)
(Unaudited)


1.     ORGANIZATION, DEVELOPMENT STAGE ACTIVITIES, AND GOING CONCERN (cont'd)

       Going Concern Assumption (cont'd)
       ---------------------------------

       The accompanying condensed 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.     BASIS OF PRESENTATION

       The accompanying condensed financial statements of the Company have been
       prepared pursuant to the rules and regulations of the Securities and
       Exchange Commission ("SEC") for interim financial information.
       Accordingly, they do not include all of the information and footnotes
       required by generally accepted accounting principles in the United States
       ("US GAAP") for complete financial statements. In the opinion of the
       Company's management, all adjustments (consisting only of normal
       recurring accruals) considered necessary for a fair presentation have
       been included. Operating results for the six-month period ended December
       31, 2009 are not necessarily indicative of the results that may be
       expected for the full fiscal year ending June 30, 2010. The accompanying
       condensed financial statements should be read in conjunction with the
       audited consolidated financial statements of the Company for the fiscal
       year ended June 30, 2009. The Company has evaluated subsequent events for
       recognition or disclosure through February 16, 2010, which was the date
       we filed this Form 10-Q with the SEC.



                                      -7-


<PAGE>

CONSORTEUM HOLDINGS, INC.
(FORMERLY IMPLEX CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
Notes to Condensed Financial Statements
December 31, 2009 and 2008
(Expressed in U.S. Dollars)
(Unaudited)


3.     RECENT ACCOUNTING PRONOUNCEMENTS

       In August 2009, the Financial Accounting Standards Board ("FASB") issued
       Accounting Standards Update ("ASU") 2009-05, "Measuring Liabilities at
       Fair Value" ("ASU 2009-05"), which clarifies, among other things, that
       when a quoted price in an active market for the identical liability is
       not available, an entity must measure fair value using one or more
       specified techniques. ASU 2009-05 was effective for the first reporting
       period, including interim periods, beginning after issuance. The Company
       adopted the update effective July 1, 2009, with no impact on its
       financial statements.

       In October 2009, the FASB issued ASU 2009-13, "Multiple-Deliverable
       Revenue Arrangements" ("ASU 2009-13"). ASU 2009-13 applies to revenue
       arrangements currently in the scope of FASB ASC Subtopic 605-25,
       "Multiple Element Arrangements", and provides principles and application
       guidance on whether arrangements with multiple deliverables exist, how
       the deliverables should be separated, and the consideration allocated to
       the deliverables. ASU 2009-13 is effective prospectively for revenue
       arrangements entered into or materially modified in fiscal years
       beginning on or after June 15, 2010. The Company is currently reviewing
       the effect, if any, the proposed guidance will have on its financial
       statements.

       In December 2009, the FASB issued ASU 2009-17 which codifies SFAS No.
       167, "Amendments to FASB Interpretations No. 46(R)" issued in June 2009.
       ASU 2009-17 requires a qualitative approach to indentifying a controlling
       financial interest in a variable interest entity ("VIE"), and requires
       ongoing assessment of whether an entity is a VIE and whether an interest
       in a VIE makes the holder the primary beneficiary of the VIE. ASU 2009-17
       is effective for annual reporting periods beginning after November 15,
       2009. The Company does not expect the adoption of ASU 2009-17 to have a
       material impact on its financial statements.

       In January 2010, the FASB issued ASU 2010-06, "Improving Disclosures
       about Fair Value Measurements" ("ASU 2010-6"). The standard amends ASC
       Topic 820, "Fair Value Measurements and Disclosures" to require
       additional disclosures related to transfers between levels in the
       hierarchy of fair value measurements. ASU 2010-6 is effective for interim
       and annual fiscal years beginning after December 15, 2009. The standard
       does not change how fair values are measured, accordingly the standard
       will not have an impact on the Company.

       The FASB issues ASUs to amend the authoritative literature in Accounting
       Standards Certification ("ASC"). There have been a number of ASUs to date
       that amend the original text of ASC. Except for the ASUs listed above,
       those issued to date either (i) provide supplemental guidance, (ii) are
       technical corrections, (iii) are not applicable to the Company or (iv)
       are not expected to have a significant impact on the Company.


                                      -8-


<PAGE>

CONSORTEUM HOLDINGS, INC.
(FORMERLY IMPLEX CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
Notes to Condensed Financial Statements
December 31, 2009 and 2008
(Expressed in U.S. Dollars)
(Unaudited)


4.     FAIR VALUE MEASUREMENTS

       The Company adopted Statement of Financial Accounting Standards ("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, excluding loans 3, 4, 5, 9 and 12 (Note 7), (Level 2)
       are reflected in the balance sheets at carrying value, which approximates
       fair value due to the short-term nature of these instruments. For loans
       3, 4, 5, 9 and 12, the fair value is $473,111 (June 30, 2009 - $142,140).


5.     INVESTMENTS IN AFFILIATED COMPANIES
<TABLE>
<S>                 <C>
                                                           DECEMBER 31,        June 30,
                                                                   2009            2009

       Acquisition costs
         49% ownership interest in My Golf Rewards
           Canada Inc.                                        $ 343,502       $ 343,502
                                                              -------------------------
       Accumulated equity in net loss of My Golf
           Rewards Canada Inc.
         Balance, beginning of period                          (257,379)       (224,945)
         Equity in net loss for the six month period            (48,934)        (17,777)
         Translation adjustment                                   7,957         (14,657)
                                                              -------------------------

         Balance, end of period                                (298,356)       (257,379)
                                                              -------------------------

     Total                                                    $  45,146       $  86,123
                                                              =========================

                                      -9-



<PAGE>

CONSORTEUM HOLDINGS, INC.
(FORMERLY IMPLEX CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
Notes to Condensed Financial Statements
December 31, 2009 and 2008
(Expressed in U.S. Dollars)
(Unaudited)


6.     BANK INDEBTEDNESS

       Bank indebtedness is comprised of a Royal Bank of Canada ("RBC") demand
       term loan, in the amount of $89,194 (June 30, 2009 - $87,765) and an
       overdraft of $36,156 (June 30, 2009 - $nil). 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.


7.     LOANS PAYABLE

                                                                  DECEMBER 31,      June 30,
                                                                          2009          2009
       Loan 1
       Investment loan, secured against shares of an individual
       shareholder, interest rate of 18% per annum, no fixed
       terms of repayment.                                        $    380,812  $    315,188

       Loan 2
       Investment loan, secured against shares of an individual
       shareholder, interest rate of 18% per annum, principal
       due February 13, 2010.                                          276,789       229,091

       Loan 3
       Investment loan, unsecured, bearing no interest,
       no fixed terms of repayment.                                    142,725       146,166

       Loan 4
       Investment loan, unsecured, bearing no interest,
       monthly payments commencing January 30, 2010,
       interest of 15% accrued on late payments.                       130,000            --

       Loan 5
       Investment loan, secured against 1,000,000
       shares of an individual shareholder, bearing no interest,
       due February 26, 2010.                                          200,000            --

       Loan 6
       Investment loan, unsecured, interest rate of 18%,
       per annum, no fixed terms of repayment.                          93,758        83,887


                                      -10-


<PAGE>

CONSORTEUM HOLDINGS, INC.
(FORMERLY IMPLEX CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
Notes to Condensed Financial Statements
December 31, 2009 and 2008
(Expressed in U.S. Dollars)
(Unaudited)


7.     LOANS PAYABLE (cont'd)

                                                                  DECEMBER 31,            June 30,
                                                                          2009                2009
       Loan 7
       Investment loan, unsecured, interest rate of 18%
       per annum, no fixed terms of repayment.                          35,298              45,992

       Loan 8
       Investment loan, unsecured, interest rate of 18%
       per annum, no fixed terms of repayment.                          32,111              26,577

       Loan 9
       Investment loan, unsecured, interest rate of 3%
       per annum, principal due October 30, 2009.                       30,125                  --

       Loan 10
       Investment loan, unsecured, interest rate of 18%
       per annum, principal due October 25, 2010.                       27,956              23,138

       Loan 11
       Investment loan, unsecured, interest rate of 18%
       per annum, principal due February 17, 2010.                      27,674              22,905

       Loan 12
       Investment loan, unsecured, bearing no interest,
       no fixed terms of repayment.                                     25,000              25,000
                                                               ===================================

                                                               $      1,402,248      $     917,944
                                                               ===================================
</TABLE>
                                      -11-


<PAGE>

CONSORTEUM HOLDINGS, INC.
(FORMERLY IMPLEX CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
Notes to Condensed Financial Statements
December 31, 2009 and 2008
(Expressed in U.S. Dollars)
(Unaudited)


8.     RELATED PARTY TRANSACTIONS AND BALANCES

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

                                                  DECEMBER 31,          June 30,
                                                          2009              2009

       a)  Management and consulting fees         $    167,076       $   407,455
                                                  ==============================


       b)   General and administrative            $     29,517       $    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 $579,892 (June 30, 2009 - $1,126,109)
       owed to certain stockholders for management fees, consulting fees and
       other expenses.

       Included in accounts payable is $135,775 (June 30, 2009 - $122,693) owed
       to My Golf Rewards Canada Inc., an affiliated company, as part of the
       Company's equity investment obligation (see Note 5).

                                      -12-


<PAGE>

CONSORTEUM HOLDINGS, INC.
(FORMERLY IMPLEX CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
Notes to Condensed Financial Statements
December 31, 2009 and 2008
(Expressed in U.S. Dollars)
(Unaudited)


9.     CAPITAL STOCK

       The following transactions occurred during the six-month period:

       On July 6, 2009, the 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 $130,988.

       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.

       On November 24, 2009, the Company issued 3,125,000 shares of common stock
       to a company, in relation to marketing services provided for a value of
       $50,000.

       On November 25, 2009, the Company issued 3,125,000 shares of common stock
       to a company, in relation to marketing services provided for a value of
       $50,000.

       On December 1, 2009, the Company issued 1,500,000 shares of common stock
       to a company, in relation to issuance of debt of $130,000.

       On December 9, 2009, the Company issued 1,500,000 shares of common stock
       to a company pursuant to a six-month public and investor relation service
       contract for $60,000.

       On December 18, 2009, the Company issued 8,750,000 shares of common stock
       in relation to legal services provided for a value of $87,500. The common
       stock has been put into an escrow account until May 31, 2010 and will be
       released back to the Company if the services are paid in full, prior to
       that date.

       WARRANTS

       As at December 31, 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 years.

       OPTIONS

       As at December 31, 2009, 2,500,000 options were outstanding, having an
       exercise price of $0.15 per share of common stock with a remaining
       contractual life of 2.98 years. These options were valued at $158,436
       using the Black-Scholes model, using key assumptions of volatility of
       62%, risk-free interest rate of 1.56%, a term life equivalent to the life
       of the options and reinvestment of all dividends in the Company of zero
       percent.

                                      -13-


<PAGE>

CONSORTEUM HOLDINGS, INC.
(FORMERLY IMPLEX CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
Notes to Condensed Financial Statements
December 31, 2009 and 2008
(Expressed in U.S. Dollars)
(Unaudited)


10.    INCOME TAXES

       At December 31, 2009, the Company has unused net operating loss
       carry-forwards of approximately $3,104,000 which expire at various dates
       through 2029. Most of this amount is subject to annual limitations under
       certain provisions of the Internal Revenue Code related to "changes in
       ownership".

       As of December 31, 2009, the deferred tax assets related to the
       aforementioned carry-forwards have been fully offset by valuation
       allowances, since utilization of such amounts is not presently expected
       in the foreseeable future.


11.    CASH FLOW SUPPLEMENTAL INFORMATION

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

                                                            Cumulative for
                                                           the period from
                                                                 Inception
                                                              (November 7,
                                                             2005) Through
                                                              December 31,
                                2009              2009                2009

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

       Interest         $         --       $        --        $     57,104
                        ==================================================


12.    COMMITMENTS AND CONTINGENCIES

       The Company has contractual commitments for various management and
       consulting fees and general and administrative expenses totaling
       approximately $338,500 for 2010. Of this amount, approximately $201,500,
       is committed to certain stockholders of the Company.

                                      -14-


<PAGE>

CONSORTEUM HOLDINGS, INC.
(FORMERLY IMPLEX CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
Notes to Condensed Financial Statements
December 31, 2009 and 2008
(Expressed in U.S. Dollars)
(Unaudited)


13.    SUBSEQUENT EVENTS

       On January 12, 2010, the Company's Board of Directors passed a resolution
       to issue 500,000 stock options to a private investor as a bonus for a
       loan advanced to the Company. In addition, the Company's Board of
       Directors approved the issuance of 50,000 stock options to an individual
       as a finder's compensation fee for obtaining the private investor.

       On January 13, 2010, the Company has increased its ownership stake in its
       investment in My Golf Rewards Canada Inc. from 49% to 75% with the total
       consideration of $2.

       On January 16, 2010, the Company entered into a joint venture agreement
       with an individual to create a First Nations Financial Services company
       providing financial products. The Company has committed to invest up to
       $250,000 in the project as an initial investment on or before February 1,
       2010.

       On January 18, 2010, the Company settled an outstanding debt of $300,000
       plus interest with a company through the issuance of 1,500,000 restricted
       shares of common stock of the Company.

       On February 3, 2010, the Company obtained debt financing in the form of a
       promissory note from an unrelated company amounting to $404,746. The
       promissory note is due within twelve months and bears interest of 15% per
       annum. The promissory note contains a conversion feature that allows the
       holder of the note to convert the note into shares of common stock of the
       Company at a 50% discount of the average three dip bid on the day of
       conversion. The holder can convert the promissory note in whole or in
       part with the remaining balance of the debt accruing interest in the
       event of a partial conversion. On February 3, 2010, the holder of the
       promissory note converted $50,000 of the note into 6,500,000 shares of
       common stock of the Company. The funds received by the Company were used
       to fulfill debt obligations owed to two of the Company's executives.

                                      -15-


<PAGE>

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


         EXECUTIVE LEVEL OVERVIEW

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

         The Company will focus on providing leading edge solutions to financial
institutions, healthcare, government, associations, and private sector companies
for electronic transaction processing and systems integration. The Company'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. The Company 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, the Company relied on
financing from sales of its common stock to related parties and private lending
arrangements with individual investors. Management believes the Company's
changed status as a subsidiary of a public company will make it easier to attain
working capital stability, allowing the company to grow and meet its operational
forecast. The Company must raise an estimated total of $600,000 of operating
capital in order to implement the first phases of the various contract
initiatives described in Item 1 entitled "The Business" in its filing on Form
10-K for the year ended June 30, 2009. To the extent that the Company 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.

         The Company 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.

         The Company had several existing contracts in place that were to begin
in the fourth quarter of 2009. Due to the financial constraints these project
deployments have been moved to the first quarter of 2010. The Company expects to
earn the majority of its revenues in the near future from upfront project
management retainers, program setup fees, and reoccurring revenues from currency
settlement, debit and credit card transaction fees.

         In the fourth quarter the Company terminated its joint venture
relationship with Trans Screen Group.

                                      -16-


<PAGE>

         The initial pilot program for Mobile Check Cashing has been launched
and is actively being marketed. The first customers are currently being set up
and check cashing services are now scheduled to begin February 2010.

After review of the golf program and financial results, the Company decided to
increase its ownership stake in My Golf Rewards Canada Inc. Consorteum is also
in dialogue with an international group for expansion of the My Golf Rewards
program.

The financial results of the six months ended on December 31, 2009 are
reflective of an early stage company in its initial development phase that has
been focused on growing its project management team for deployments of new and
existing contracts. After review of the quarter and the first six months of the
current fiscal year, management's focus for 2010 is on new global business
development opportunities and expanding its technology partners in order to move
the Company forward into the next growth phase of development.


Recent Developments

On January 12, 2010, the Board approved the issuance of 500,000 stock options to
a private investor as a bonus for a loan advanced to the Company. In addition,
the Board approved the issuance of 50,000 stock options to an individual as a
finder's compensation fee.

On January 13, 2010, the Company increased its ownership stake in My Golf
Rewards Canada Inc, from 49% to 75%. The Company has committed to increasing its
financial commitment in My Golf Rewards by $250,000 and in return has increased
its ownership position.

On January 16, 2010, the Company signed a 50/50 joint venture agreement with
John Bernard, a First Nation representative to create a First Nations financial
services company providing financial products. The services will include benefit
cards, payroll cards, prepaid services, merchant discount rates, and point of
sale solutions. The Company's commitment is $250,000 for the first phase of the
project.

On January 18, 2010, the Company settled an outstanding debt of $300,000 plus
interest with Lucky Pearl Investments Ltd. through the issuance of 1,500,000
restricted shares of common stock of the Company.

On January 18, 2010, the Company signed an agreement with NxSystems Inc. which
enables the Company as agent to offer its clients global card issuance, multiple
currency settlement, global electronic payments, e-wallets, and a variety of
other financial products and services.

On January 20, 2010, the Company was contracted by Blue Sea Manning Ltd. to
provide consulting services for their UK based recruiting company within the
private yachting industry. The Company will provide Blue Sea Manning with global
multi-currency settlement, payroll cards, expense cards and e-wallet
functionality.

On February 3, 2010, the Company obtained debt financing in the form of a
promissory note from an unrelated company amounting to $404,746. The promissory
note is due within twelve months and bears interest of 15% per annum. The
promissory note contains a conversion feature that allows the holder of the note
to convert the note into shares of common stock of the Company at a 50% discount
of the average three dip bid on the day of conversion. The holder can convert
the promissory note in whole or in part with the remaining balance of the debt
accruing interest in the event of a partial conversion. On February 3, 2010, the
holder of the promissory note converted $50,000 of the note into 6,500,000
shares of common stock of the Company. The funds received by the Company were
used to deduce debt obligations owed to two of the Company's executives.

                                      -17-


<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         As of December 31, 2009, the Company had $111,332 in total current
assets, compared to total current assets of $8,773 as of June, 30, 2009. The
December 31, 2009 current assets were comprised of $10,365 in accounts
receivable and $52,667 in prepaid expenses and $48,300 in deferred debt issuance
costs. As at December 31, 2009, the Company's fixed assets consisted of computer
equipment valued at $19,058 less accumulated depreciation of $12,686.

         Until the Company 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 the Company.


RESULTS OF OPERATIONS

         The Company had revenues of $nil for the six-months ended December 31,
2009, compared with $nil for the six-months ended December 31, 2008. The
Companies existing contracts require a ramp up period for revenue generation and
continued project management and sales support. In addition the Company still
requires significant capitalization for operations to fully execute the current
contracts. The Company has engaged in a number of new contracts in 2010, that
will see upfront management retainers for work done and more targeted revenue
opportunities. For the six-months ended December 31, 2009, the Company had a net
loss of $1,068,662 compared to a net loss of $394,708 for the six-months ended
December 31, 2008.

         Operating expenses increased from $346,894 for the six-months ended
December 31, 2008 to $831,557 for the six-months ended December 31, 2009. The
substantial majority of the increase in costs for the past six months can be
attributed to the acquisition costs of Consorteum Holdings, Inc. and subsequent
reverse merger. The Company continues to incur significant overhead costs for
compliance requirement for the publicly trading entity. The Company has also
incurred significant cost increases for auditing, accounting, legal, management,
consulting, investor and public relations,

OFF BALANCE SHEET ARRANGEMENTS

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

CONTRACTUAL OBLIGATIONS

         As at December 31, 2009 the Company did not have any significant
contractual obligations with the exception of a contract to pay $100,000 in four
equal quarterly installments of $25,000 to Fidelisoft under a software licensing
agreement for the period September 2009 through August 2010.

         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 consolidated financial statements, we believe the following
critical accounting policies involve the most complex, difficult and subjective
estimates and judgments:

                                      -18-


<PAGE>

         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 effects on the Company's future financial position, results of
operations and cash flow.

         Cash and Cash equivalents

         The Company 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 December 31, 2009 or December 31, 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 impaired.

         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 U.S. Securities and
Exchange Commission (the "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.

                                      -19-


<PAGE>

         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.

         Foreign Currency Translations

         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 and 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.

                                      -20-


<PAGE>

         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, 2009, has
been reclassified to conform with the financial statement presentation adopted
in the current year.

         Recent accounting pronouncements

         In August 2009, the Financial Accounting Standards Board ("FASB")
issued Accounting Standards Update ("ASU")2009-05, "Measuring Liabilities at
Fair Value" ("ASU 2009-05"), which clarifies, among other things, that when a
quoted price in an active market for the identical liability is not available,
an entity must measure fair value using one or more specified techniques. ASU
2009-05 was effective for the first reporting period, including interim periods,
beginning after issuance. The company adopted the update effective July 1, 2009,
with no impact on its financial statements.

                                      -21-


<PAGE>

         In October 2009, the FASB issued ASU 2009-13, "Multiple-Deliverable
Revenue Arrangements" ("ASU 2009-13"). ASU 2009-13 applies to revenue
arrangements currently in the scope of FASB Accounting Standards Codification
("ASC") Subtopic 605-25, "Multiple Element Arrangements", and provides
principles and application guidance on whether arrangements with multiple
deliverables exist, how the deliverables should be separated, and the
consideration allocated to the deliverables. ASU 2009-13 is effective
prospectively for revenue arrangements entered into or materially modified in
fiscal years beginning on or after June 15, 2010. The company is currently
reviewing the effect, if any, the proposed guidance will have on its financial
statements.

         In December 2009, the FASB issued ASU 2009-17 which codifies SFAS No.
167, "Amendments to FASB Interpretations No. 46(R)" issued in June 2009. ASU
2009-17 requires a qualitative approach to indentifying a controlling financial
interest in a variable interest entity ("VIE"), and requires ongoing assessment
of whether an entity is a VIE and whether an interest in a VIE makes the holder
the primary beneficiary of the VIE. ASU 2009-17 is effective for annual
reporting periods beginning after November 15, 2009. The Company does not expect
the adoption of ASU 2009-17 to have a material impact on its financial
statements.

         In January 2010, the FASB issued ASU 2010-06, "Improving Disclosures
about Fair Value Measurements" ("ASU 2010-6"). The standard amends ASC Topic
820, "Fair Value Measurements and Disclosures" to require additional disclosures
related to transfers between levels in the hierarchy of fair value measurements.
ASU 2010-6 is effective for interim and annual fiscal years beginning after
December 15, 2009. The standard does not change how fair values are measured,
accordingly the standard will not have an impact on the Company.

         The FASB issues ASUs to amend the authoritative literature in
Accounting Standards Certification ("ASC"). There have been a number of ASUs to
date that amend the original text of ASC. Except for the ASUs listed above,
those issued to date either (i) provide supplemental guidance, (ii) are
technical corrections, (iii) are not applicable to the Company or (iv) are not
expected to have a significant impact on the Company.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         Not applicable.

ITEM 4.  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.

                                      -22-


<PAGE>

         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, 2009. 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 June 30, 2010.

         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.

ITEM 4T.  CONTROLS AND PROCEDURES.

         Management's report on internal control over financial reporting

         The Company'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 December 31, 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.

         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.

                                      -23-


<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         None.


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 the 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 the company stated that the financial statements for
the years ended June 30, 2009 and 2008 and for the period of inception
(November 7, 2005) to June 30, 2009, were prepared assuming that the company
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 $4,091,942 at December 31, 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        timeline 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; and
         o        dependence upon key personnel.

                                      -24-


<PAGE>

         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.

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.

         Historic industry 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.

                                      -25-


<PAGE>

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.

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.

                                      -26-


<PAGE>

         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.

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;


                                      -27-


<PAGE>

         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 13,360,000 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.

         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:

                                      -28-


<PAGE>

         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.
The Company failed to file its Report on Form 10-Q for the period ended
September 30, 2009 within the requisite time period, and, as a result, has one
filing delinquency within the meaning of the Eligibility Rules. 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.

                                      -29-


<PAGE>

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. As of February 12, 2010 there were 56,939,750 shares of our common
stock eligible for sale pursuant to Rule 144. 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.

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".

                                      -30-


<PAGE>

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

None.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

None.


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

None.


ITEM 5.  OTHER INFORMATION.

None.


ITEM 6.  EXHIBITS.

None.



                                   SIGNATURES

         Pursuant to the requirements 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.
                                                ------------------------
                                                Registrant



February 16, 2010                                /s/ Craig A. Fielding
-----------------                                -----------------------
     Date                                        Craig A. Fielding, CEO


February 16, 2010                                /s/ Peter Simpson
-----------------                                -----------------------
     Date                                        Peter Simpson, CFO


                                      -31-