U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-KSB



(MARK ONE)



[X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES

EXCHANGE ACT OF 1934



FOR THE FISCAL YEAR ENDED: JUNE 30, 2007

OR

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD

FROM _________ TO ________



COMMISSION FILE NO.  2-78335-NY



PROVIDENTIAL HOLDINGS, INC.

(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)



NEVADA90-0114535(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)(I.R.S. EMPLOYER
IDENTIFICATION NO.)




17011 BEACH BLVD., SUITE 1230, HUNTINGTON BEACH, CA 92647

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)



(714) 843-5450

ISSUER'S TELEPHONE NUMBER



SECURITIES REGISTERED UNDER SECTION 12(B) OF THE EXCHANGE ACT:



NAME OF EACH EXCHANGE ON WHICH REGISTEREDTITLE OF EACH CLASSNONENONE




SECURITIES REGISTERED UNDER SECTION 12(G) OF THE EXCHANGE ACT: NONE



Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                         YES [X] NO [  ]



Check if disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [ ]



State the issuer's revenues for the fiscal year ended June 30, 2007: $3,572,347.



The aggregate market value of the voting and non-voting equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as October 9, 2007 was $8,945,609 based on a price of $0.052 per share.



The number of shares of Common Stock, $.04 par value per share, outstanding as of June 30, 2007 was: 172,030,961 shares.



Transitional Small Business Disclosure Format (check one):                                                              YES [ ] NO [X]



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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS



THIS REPORT CONTAINS STATEMENTS THAT ARE FORWARD-LOOKING AND ARE MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. WHEN USED IN THIS REPORT, THE WORDS "BELIEVES," "PLANS," "ESTIMATES," "EXPECTS," "INTENDS," "ANTICIPATES," "MAY," "WILL," "SHOULD," "COULD," "FORTHCOMING," "UPCOMING" AND SIMILAR EXPRESSIONS, TO THE EXTENT USED, ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. ALL FORWARD-LOOKING STATEMENTS ARE BASED LARGELY ON CURRENT EXPECTATIONS AND BELIEFS CONCERNING FUTURE EVENTS THAT ARE SUBJECT TO SUBSTANTIAL RISKS AND UNCERTAINTIES. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THE RESULTS SUGGESTED HEREIN. FACTORS THAT MAY CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THE COMPANY'S ABILITY TO DEVELOP AND SUCCESSFULLY MARKET THE PRODUCTS AND SERVICES DESCRIBED IN THIS REPORT (AND THE COSTS ASSOCIATED THEREWITH); THEIR ACCEPTANCE IN THE MARKETPLACE; TECHNICAL DIFFICULTIES OR ERRORS IN THE PRODUCTS AND/OR SERVICES; THE COMPANY'S CUSTOMER AND ACTIVE PROSPECT BASE CONTAINING A SUBSTANTIALLY LOWER NUMBER OF INTERESTED CUSTOMERS THAN THE COMPANY ANTICIPATES; THE FAILURE TO CONSUMMATE THE PENDING JOINT VENTURES AND ACQUISITIONS AT ALL (OR ON A TIMELY BASIS) DUE TO VARIOUS REASONS; DIFFICULTY INTEGRATING OR MANAGING MULTIPLE COMPANIES FROM TECHNOLOGY, OPERATIONAL AND MARKETING ASPECTS; THE SUCCESS (AND COST) OF NEW MARKETING STRATEGIES AS A RESULT OF MERGERS AND ACQUISITIONS; UNFAVORABLE CRITICAL REVIEWS; INCREASED COMPETITION (INCLUDING PRODUCT AND PRICE COMPETITION); ENTRANCE OF NEW COMPETITORS INTO THE MARKET; TIMING AND SIGNIFICANCE OF ADDITIONAL NEW PRODUCT AND SERVICE INTRODUCTIONS BY THE COMPANY AND ITS COMPETITORS; GENERAL ECONOMIC AND MARKET FACTORS, INCLUDING CHANGES IN SECURITIES AND FINANCIAL MARKETS; TECHNOLOGY OBSOLESCENCE, THE ADEQUACY OF WORKING CAPITAL, CASH FLOWS AND AVAILABLE FINANCING TO FUND THE COMPANY'S BUSINESS MODEL AND THE PROPOSED ACQUISITIONS OR INVESTMENTS ; AND OTHER RISKS AND UNCERTAINTIES INDICATED THROUGHOUT THIS REPORT AND FROM TIME TO TIME IN THE COMPANY'S RELEASES AND FILINGS INCLUDING WITHOUT LIMITATION FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.



As used in this report, the terms "we," "us," "our," the "Company" and "Providential Holdings" mean Providential Holdings, Inc. and the term "common stock" means Providential Holdings, Inc.'s common stock, $.04 par value per share (unless context indicates a different meaning).



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PART I



ITEM 1. BUSINESS OVERVIEW



INTRODUCTION



Providential Holdings, Inc., ("PHI") through its wholly-owned and majority-owned subsidiaries engages in a number of diverse business activities including merger and acquisition advisory services, independent energy, import and export, real estate development, fund management, and telecommunications and maintains minority interests in various companies operating in the areas of infrastructure, construction, natural resources, finance, manufacturing, services and retail.  The Company provides financial consultancy and M&A advisory services to U.S. and foreign companies and invests in selective businesses that may create long-term shareholder value.  No assurances can be made that management will be successful in achieving its plan.



BACKGROUND



Providential Holdings, Inc. ("PHI" or "Providential") was organized under the laws of the State of Nevada on June 8, 1982 under the name of JR Consulting, Inc. The Company changed its name to Providential Securities, Inc., a Nevada corporation, on January 12, 2000, and subsequently changed its name to Providential Holdings, Inc. on February 9, 2000. From its inception through September 7, 1995, the Company generated nominal revenues and did not actively engage in business. Prior to the corporate combination agreement with Providential Securities, Inc., JR Consulting had an operating subsidiary, Diva Entertainment, Inc ("Diva"), which operated two modeling agencies, one in New York and one in California.



Providential Securities, Inc., a California Corporation ("Providential Securities") was incorporated in the State of California on October 8, 1992. It operated a securities brokerage service in California, New York and Oregon. The principal markets for Providential Securities' services were individual investors who were located throughout the United States. Providential Securities bought and sold securities for its customers through a number of different markets, utilizing a brokerage clearinghouse to transact the trades. Due to the results of an NASD examination, Providential Securities withdrew its membership and ceased its securities brokerage business in October 2000.



BUSINESS RESTRUCTURING



Following the discontinuance of its securities brokerage operations in October 2000, the Company restructured its primary scope of business to engage in merger and acquisition advisory services, with particular emphasis on: (1) Technologies, (2) Financial services, (3) International markets, and (4) Special Situations.  During the Fiscal Year ended June 30, 2007, the Company increased its focus on assisting Vietnamese companies to go pubic in the U.S. stock markets and investing in Vietnam. Events and developments relating to these areas are described in more detail below.



SUBSIDIARIES:



PROVIMEX, INC.



Provimex is a wholly-owned division of the Company originally formed on April 10, 2001 under the name "Providential Imex", to focus on trade commerce with Vietnam. This division changed its name to Provimex on July 5, 2001.  Provimex began to generate revenues from its import and export activities in August 2002 through the fiscal year ended June 30, 2005.  For the fiscal years ended June 30, 2007 and 2006, this division did not generate any sales. This subsidiary was later incorporated as a Nevada corporation on September 23, 2004. The Company has declared a 15% stock dividend of Provimex, Inc. to shareholders of record as of September 15, 2004.

In September 2007, Provimex entered into a Business Cooperation Agreement with Timmy Nguyen, sole owner of Pho Express, a Vietnamese-style noodle soup (pho) restaurant in Pomona, California to set up Pho Express



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International, LLC, a California Limited Liability Company, in order to launch a pho restaurant chain. According to the agreement, Provimex will contribute $165,000 towards and own sixty percent (60%) of Pho Express International, LLC.



PROVIDENTIAL CAPITAL, INC.



In May 2003, the Company formed a wholly-owned subsidiary under the name of Providential Capital  to provide financial products and services for the micro-small cap arenas and manage the Company's proprietary merger and acquisition activities.  Providential Capital has mainly focused its attention on the underserved segment of smaller companies in the U.S. and abroad. Providential Capital began providing merger and acquisition advisory services to its clients since the fourth quarter of the fiscal year ended June 30, 2003.  Providential Capital has successfully managed merger plans for several publicly-traded companies and is currently focusing on a number of target companies in the US, China, Korea, and Vietnam.



TOUCHLINK COMMUNICATIONS, INC.



A wholly-owned DBA of Providential Holdings, Inc, Touchlink Communications was formed on July 7, 2003 to provide point-of-sale (POS) terminals and prepaid calling cards to retailers, convenient stores and non-profit organizations across the US. Touchlink Communications signed an agreement with KAGRO (Korean American Grocer Association) to provide pre-paid services to its member stores in the US and Canada.  This subsidiary was later incorporated as a Nevada corporation in February 2004 under the name of Touchlink Communications, Inc. to provide long distance services to residential and business customers in the United States.. The Company has declared a 15% stock dividend of Touchlink Communications, Inc. to shareholders of record as of September 15, 2004.



PHI DIGITAL CORP



On November 1, 2003, the Company formed PHI Video Corp., which was later renamed PHI Digital Corp. ("PHI Digital"), a Nevada corporation, to provide the sale of consumer electronics, including flat-screen television sets and monitors, as part of its distributorship agreement with XOCECO. The distributorship agreement with XOXECO was terminated in June 2004 and PHI Digital has been renamed "TULON INDUSTRIES, INC." to change its scope of business.  This subsidiary did not generate any revenue during the Fiscal Years ended June 30, 2007 or 2006.



PROVIDENTIAL ENERGY CORPORATION



On May 9, 2005, the Company formed Providential Oil & Gas, Inc., a Nevada corporation and wholly-owned subsidiary of the Company, to begin investigating a number of lease properties in the US and abroad. On November 25, 2005, Providential Oil & Gas signed an agreement with Terra-Firma Gas & Oil, LLC, a Nevada corporation with headquarters in Midland, Texas, to co-develop up to twenty four gas wells in Crockett County, West Texas.  As of the date of this report, this subsidiary has not begun drilling any of the gas wells in conjunction with Terra-Firma Gas & Oil under the agreement. Effective June 1, 2006, Providential Oil & Gas amended its Articles of Incorporation and changed its corporate name to Providential Energy Corporation with an intention to broaden its scope of business to include alternative energy. During the Fiscal Year ended June 30, 2007 Providential Energy Corporation entered into a Business Cooperation Agreement with Unitex Energy, LLC, a Texas Limited Liability Company, to establish PhiTex Energy Group, Inc., a Nevada corporation,  in order to acquire and develop oil and gas properties. Providential Energy Corporation currently owns 87.75% stock of PhiTex Energy Group.. In September 2007, Providential Energy Corp entered into an agreement to form a joint-venture company, WRCP PEC Mining Corporation (CPMC), with WRC Partners (WRCP), in order to acquire up to 2,700 acres of mineral, oil and gas rights near Bakersfield, California for development. According to the agreement, Providential Holdings will be responsible for taking CPMC public and will manage the public company related activities required to be in full compliance with regulatory and market demands and Providential Energy Corporation will own up to a maximum of 40% of the equity interest in CPMC. Providential Energy Corporation did not generate any revenue during the years ended June 30, 2007 and 2006.



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PHILAND CORPORATION



PhiLand Corporation is a Nevada corporation and wholly-owned subsidiary of Providential Holdings, Inc., set up in July 2007 to manage the real estate development project in South Hoi An, Quang Nam Province, Vietnam.  In July 2007, Providential Holdings entered into a principle agreement with the Peoples Committee of Quang Nam Province, which allows the Company to lease approximately 8,000 acres of land in South Hoi An, Quang Nam Province, Vietnam to develop an integrated tourism zone under a 70-year lease term.  The total cost of the land lease is $250,250,000. As of the date of this report, the Company has not made any payment towards the lease.



MINORITY INTERESTS:



EASTBRIDGE INVESTMENT GROUP CORP. (FORMERLY ATC TECHNOLOGY CORP.)



On October 6, 2003, the Company completed the acquisition of 100% of ATC Technology Corp. in exchange for $500,000 non-interest bearing notes and 4,000,000 shares of restricted common stock of the Company. ATC Technology Corporation, established in 2001 as an Arizona corporation, manufactured mobile entertainment products, including VidegoTM, GamegoTM and MoviegoTM. During the year ended June 30, 2005, the Company distributed 20% of it's investment in ATC to the Company's shareholders and distributed 70% of its investment to ATC's creditors.  As of June 30, 2005, the Company has written off its investment in ATC.  ATC has subsequently changed its name to EastBridge Investment Group Corp. to provide financial services including public offering guidance, joint venture and merchant banking services to the small-to-medium-size businesses in China and India. The Company currently holds a 10% equity stake in EastBridge Investment Group Corp. which currently trades on the OTCBB under the symbol EBIG.



JEANTEX GROUP, INC.  (FORMERLY LEXOR HOLDINGS, INC.)



On September 26, 2003, Providential Capital, a wholly-owned DBA of the Company, entered into a new agreement to provide merger and acquisition consulting services to Lexor International, Inc., a Maryland corporation, and to assist Lexor in its business combination plan with Western Silver-Lead Corp, a Florida corporation. On September 29, 2003, Western Silver-Lead Corp. signed a definitive agreement to acquire 100% of Lexor in exchange for stock in Western Silver-Plead Corp. This transaction was closed on September 29, 2003 and Western Silver-Lead Corp's corporate name was changed to Lexor Holdings, Inc., a Florida corporation. According to the consulting agreement, Providential Capital received 1,500,000 shares of common stock of Lexor Holdings, Inc. (approximately 10% of the issued and outstanding shares) as compensation for its advisory and consulting services.



On March 31, 2005, Lexor Holdings, Inc. entered into a Rescission Agreement with Lexor International Inc., and Christopher Long. The Rescission Agreement calls for the total rescission of the Merger Agreement and a return of 100% of the issued and outstanding equity interests of International to Long.   Additionally, Long and International have agreed to surrender the 10,867,000 shares of Lexor Common Stock they received under the Merger Agreement.  Each party to the Rescission Agreement will be entitled to a return of any assets which it held prior to the closing of the Merger Agreement and will be responsible for any liabilities accrued on its behalf.



On May 13, 2005, Providential Capital, Inc., a wholly-owned subsidiary of the Company, entered into a business consulting agreement with Lexor Holdings, Inc. to provide merger and acquisition advisory services to Lexor Holdings, Inc. with regard to a proposed merger between Lexor Holdings, Inc. and SB Chemical Co., Ltd., a Republic of Korea corporation. According to this agreement, the Company would be entitled to an additional 14% equity interest in Lexor Holdings, Inc. following the consummation of a merger between Lexor Holdings, Inc. and SB Chemical Co, Ltd. or another established business entity.



On June 22, 2005, Lexor Holdings, Inc. entered into a Stock Purchase Agreement with Jeantex, Inc., a California corporation and Susan Shin, an individual who is the president and sole shareholder of Jeantex Pursuant to the terms of the Agreement, Lexor acquired 100% of the issued and outstanding equity interests of Jeantex in exchange for 56,350,000 shares of Lexor restricted common stock.  The Stock Purchase Agreement was closed on June 29, 2005. Providential Holdings, Inc. received 7,300,000 shares of restricted common stock of Lexor for services rendered in



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connection with this transaction. Lexor Holdings, Inc. has changed its corporate name to Jeantex Group, Inc. following the merger with Jeantex, Inc.  Jeantex Groups common stock is trading on the OTCBB under the symbol JNTX.



DDC INDUSTRIES, INC.



Effective October 1, 2004, the Company entered into a business consulting agreement with Red5 Holdings, Inc., a Nevada corporation, and Mirae Tech Co., Ltd., a Republic of Korea corporation, to provide consulting services in the identification, location, and facilitating a merger between Mirae Tech Co., Ltd. and a fully-reporting publicly-traded company. According to the agreement, the Company would receive common stock in the newly combined company equal to 10% of the then issued and outstanding common shares of the new company.  The Company has received 4,718,421 restricted shares of common stock in Rapid Bio Tests Corp, which was renamed to Bio Warm Corporation, under the terms of the business consulting agreement.



In March 2007, the Company received 45,000,000 shares (900,000 post-reverse split shares), valued at $675,000, of Bio-Warm, which subsequently acquired 100% of Vietnam-based Dai Dung Metallic Manufacture Construction and Trade Company and changed its name to DDC Industries, Inc.. The Company received these shares for advisory services completed earlier in that month.  In June 2007, the Company received 3,763,753 shares of DDC Industries, which is equivalent to 10% of all issued and outstanding shares of DDC Industries, Inc.  for services performed in the merger of Bio-Warm Corp. and Dai Dung Metallic Manufacture Construction and Trade Co. as of closing date of March 30, 2007 valued at $1,881,877. DDC Industries common stock is currently trading on the Pink Sheets under the symbol DDCI.



CAVICO CORP.



On April 18, 2006, Providential Holdings, Inc. entered into a business and consulting agreement with Cavico Vietnam Joint Stock Company, a corporation organized and existing under the laws of Socialist Republic of Vietnam (Cavico).  Pursuant to the agreement, the Company helped Cavico in entering into an Asset Purchase Agreement with Agent155 Media Group, Inc., a Delaware Corporation.  The Asset Purchase Agreement was closed on May 12, 2006 and Agent155 Media Group, Inc. subsequently changed  its name to Cavico Corp.  Providential Holdings, Inc. received 2,000,000 shares of restricted common stock of Cavico Corp. on June 30, 2006 and 2,000,000 shares of restricted common stock of Cavico Corp. on September 18, 2006 for services rendered in connection with this transaction. Cavico Corporation is in the process of filing Form 10 with the Securities and Exchange Commission to become a fully-reporting company on the OTCBB.



ALL LINE, INC.



During the quarter ended June 30, 2007, the Company entered into a consulting agreement with Blueocean Investments, LLC, a California Limited Liability Company, to provide merger and acquisition advisory services in connection with Blueoceans recapitalization plan. The Company received 8,550,000 shares of common stock of Cinnabar Enterprises, Inc. for services rendered through the consulting agreement. Cinnabar Enterprises, Inc. later changed its name to All Line, Inc., which currently trades on the Pink Sheets under the symbol ALIN.



JOINT VENTURES:



PROVIMEX-HTV JOINT VENTURE COMPANY, LTD.



On October 18, 2004, the People's Committee of Ho Chi Minh City, Vietnam approved the joint venture application by the Company and HTV, Ltd., a Vietnam-based company, to form a Joint Venture company under the name of "Provimex-HTV Joint Venture Company, Ltd."  This joint venture company primarily focused on providing equipment and liquid gas to high rise buildings and premium residential housings in Vietnam. The Company was to own 80% equity in the joint venture company.  The investment in Provimex-HTV Joint Venture Company, Ltd. has been written off as an impairment of assets as of June 30, 2005. On May 13, 2007, the Company loaned $67,000 to



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Provimex-HTV Joint Venture Company with interest rate of 8.5% per year. This Note is due November 12, 2007 or upon demand.



CAVICO-PHI CEMENT JOINT STOCK COMPANY



On August 29, 2006, the Company entered into a Principle Business Cooperation Agreement with Cavico Vietnam Joint Stock Company, a Socialist Republic of Vietnam corporation, which is a business conglomerate engaged in various business activities including, but not limited to, infrastructure, construction, energy, mining, information technology, and real estate development.  Pursuant to the terms of the Agreement, Providential and Cavico have agreed to cooperate in funding, building, owning and operating certain businesses in Vietnam and other regions of the world and share in the benefits of these business operations.



In September 2006 Cavico and the Company formed a joint-venture company, namely Cavico PHI Cement Joint Stock Company (CPCC), to jointly fund, build, own, and operate a cement plant in Phu Ly, Ha Nam province. It is anticipated that the Company will contribute 10% of the equity investment towards CPCC. To date, the Company has contributed $30,000 towards the joint venture project.



VIETNAM FINANCIAL INVESTMENT MEDIA CORPORATION



Vietnam Financial Investment Media Corporation (VFMC) is a Vietnam-based joint venture of Hawk Associates, Providential Holdings, Cavico Vietnam, Cavico Hitech and Bao Viet Securities.  The Company has invested $7,500 towards this joint venture and intends to own approximately 10% of VFMC.



SPECIAL NOTE ON ACQUISITIONS



The Company is in the process of evaluating various opportunities and negotiating to acquire other companies and technologies. Acquisitions entail numerous risks, including difficulties in the assimilation of acquired operations and products, diversion of management's attention from other business concerns, amortization of acquired intangible assets and potential loss of key employees of acquired companies. We have limited experience in assimilating acquired organizations into our operations. Although potential synergy may be achieved by acquisitions of related technologies and businesses, no assurance can be given as to the Company's ability to integrate successfully any operations, personnel, services or products that have been acquired or might be acquired in the future. Failure to successfully assimilate acquired organizations could have a material adverse effect on the Company's business, financial condition and operating results.



STRATEGY



Providential Holdings' strategy is to:



1.

Identify, build, acquire, commit and deploy valuable resources with distinctive competitive advantages;

2.

Identify, evaluate, participate and compete in attractive businesses that have large, growing market potential;

3.

Design and implement best-of-breed management systems; and

4.

Build an attractive investment that includes points of exit for investors through capital appreciation or spin-offs of business units.





ITEM 2. DESCRIPTION OF PROPERTIES

In August 2004, the Company started its lease of  current office space at 17011 Beach Blvd., Suite 1230, Huntington Beach, CA 92647 for $3,907 per month. The lease is expired on July 31, 2007 and the Company is in the process of negotiating a new lease in the same location





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ITEM 3. LEGAL PROCEEDINGS AND ARBITRATIONS



Other than as set forth below, Company is not a party to any material pending legal proceedings and, to the best of its knowledge, no such action by or against Company has been threatened. The majority of the legal proceedings and arbitration cases are related to the discontinued operations of Providential Securities, Inc.



LEGAL PROCEEDING SETTLED AND PAID AS OF JUNE 30, 2007:



SETTLEMENT WITH LUBERSKI, INC.



On November 22, 2005, Luberski, Inc., a California corporation, (Plaintiff) filed a claim against the Company and Henry D. Fahman, its president, (Defendants) for damages up to $160,000 in connection with a loan in the amount of $100,000 made by Plaintiff to the Company on August 23, 2004. On 1/11/2006, the Plaintiff entered a default against the Defendants and on 2/06/2006, a judgment in the amount of $154,298, including interest, attorney fees and costs, was entered against the Defendants. The full amount of the judgment is reflected in the consolidated financial statements at June 30, 2006. On 06/09/2006, Plaintiff transferred and subsequently sold 1,000,000 shares of common stock of Providential Holdings, which belonged to Henry Fahman and were given to Luberski, Inc. as collateral for the loan.  During the quarter ended December 31, 2006, the Company paid $80,000 to Luberski, Inc. and during the following quarter ended March 31, 2007, the Company paid $40,000 as the final payment to settle the full amount.  A $22,046 gain on the settlement of debt was recorded in the year ended June 30, 2007 as related to the settlement of this debt.



NICK L. JIORAS AND MELODEE L. JIORAS VS. PROVIDENTIAL HOLDINGS, INC. AND HENRY D. FAHMAN



On November 22, 2005, Nick L. Jioras and Melodee L. Jioras(Plaintiffs) filed a claim against the Company and Henry D. Fahman, its president, (Defendants) for damages up to $15,400 in connection with Plaintiffs purchase of 100,000 shares of the Companys restricted common stock on March 19, 2004. At the time of the purchase, Henry D. Fahman signed a personal guarantee to make up the difference if the Companys stock price would not reach $0.17 per share one year after the date of purchase. On 1/11/2006, the Plaintiffs entered a default against the Defendants and on 2/06/2006, a judgment in the amount of $15,795, including filing fees, was entered against the Defendants. This case was settled in June 2007. The full amount of the judgment which has been accrued in Accrued Expenses was reversed and $15,795 was recorded as gain on legal settlement in the consolidated financial statements in the year ended June 30, 2007.



LEGAL PROCEEDING SETTLED AND UNPAID AS OF JUNE 30, 2007:



QUANG VAN CAO AND NHAN THI NGUYEN CAO VS. PROVIDENTIAL SECURITIES, INC. ET AL.



This case was originally submitted to Orange County Superior Court, CA on June 25, 1997, Case No. 781121, and subsequently moved to NASD Dispute resolution for arbitration. On or about August 24, 2000, the Company's legal counsel negotiated with the Claimant's counsel and unilaterally reached a settlement that had not been approved by the Company. While the Company was in the process of re-negotiating the terms of said settlement, the Claimants filed a request for arbitration hearing before the National Association of Securities Dealers on October 4, 2000, Case No. 99-03160. Thereafter, the Claimants filed a complaint with the Orange County Superior Court, CA on October 31, 2000, Case No. 00CC13067 for alleged breach of contract for damages in the sum of $75,000 plus pre-judgment interest, costs incurred in connection with the complaint, and other relief. Without admitting or denying any allegations, the Company reached a settlement agreement with the Claimants whereby the Company would pay the Claimants a total of $62,500 plus $4,500 in administrative costs. As the date of this report, the Company has paid $2,500 and is subject to an entry of judgment for $79,000. The settlement amount has been accrued in the accompanying consolidated financial statements.



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CONSECO FINANCE VENDOR SERVICES CORPORATION FKA GREEN TREE VENDOR SERVICES CORPORATION VS. PROVIDENTIAL SECURITIES, INC., HENRY D. FAHMAN AND TINA T. PHAN



In September 1997 Providential Securities, Inc. entered into a written Lease Agreement to lease certain items of equipment from Green Tree Vendor Services, in return for which Providential Securities, Inc. agreed to pay thirty-six monthly installments, each in the amount of $1,552. On or about September 12, 2000, and subsequently, Providential Securities, Inc. was unable to make the monthly payments to Claimant due to the lack of revenues following the interruption and subsequent closure of its securities brokerage operations. (See Note 3) Claimant filed a complaint for money with the Superior Court of the State of California, County of Orange (Case No. 01CC02613) on February 23, 2001 seeking $39,102 plus interest thereon at the legal rate from September 12, 2000. The claimant entered a judgment against Providential Securities, Inc., Henry Fahman and Tina Phan for $48,933. The judgment amount has been accrued in the accompanying consolidated financial statements.



MARK TOW, ESQ. VS. PROVIDENTIAL HOLDINGS, INC.



This case is pre-arbitration. The Company hired Mark Tow, Esq. to prepare an SB-2 Registration Statement and prepaid him $25,000 in retainer. Because Mark Tow was unable to complete the work according to schedule, the Company hired another law firm to replace Mark Tow. This new firm completed the SB-2 Registration Statement and filed with the SEC on September 28, 2000. Mark Tow sent the Company a letter in June 2001 seeking a total of $75,000.00 for his allegedly rendered service.   The Company has accrued $50,000 relating to this case in Accrued Expenses in the accompanying consolidated financial statements since the original agreement with Mark Tow was for a total service fee of $75,000 and the Company has already paid $25,000 as a retainer to be offset against the total fees. Since there has been no filing for arbitration by Mark Tow as of June 30, 2007 and the 4- year statue of limitations have been exceeded,  the Company reversed this $50,000 accrual and recorded as gain on legal settlement.



PENDING LITIGATION:



NGON VU VS. PROVIDENTIAL SECURITIES, INC.



Claimant was a former employee of Providential Securities, Inc. who was laid off in 2000 due to closure of business. The Claimant complained to the Department of Industrial Relations (DIR) for allegedly unpaid vacation and salaries. On June 13, 2001, the DIR filed a request to enter a judgment against Providential Securities, Inc. for $9,074 including wages and interest, penalty, post hearing and filing fee. The sought amount of $9,074 has been accrued in the accompanying consolidated financial statements.



VERIO VS. PROVIDENTIAL SECURITIES, INC.



On or about April 1, 2003, Verio, Inc. filed a judgment against Providential Securities, Inc., a wholly-owned subsidiary of the Company which was discontinued in October 2000, for a total of $9,141.  This sum consists of $6,800 for services allegedly rendered by Verio, Inc. to Providential Securities, Inc. in 2000 and $2,341 for legal costs.  Both amounts have been accrued in the accompanying consolidated financial statements.



DOW JONES & COMPANY, INC. VS. PROVIDENTIAL SECURITIES, INC. AND PROVIDENTIAL HOLDINGS, INC.



On March 19, 2002 Dow Jones & Company filed a complaint with the Superior Court of California, County of Orange, West Justice Center (Case No. 02WL1633), against Providential Securities, Inc., the discontinued operations of the Company, and Providential Holdings, Inc. for $9,973 plus prejudgment interest at the rate of ten (10%) per annum from November 1, 2000, reasonable attorneys fees and other and further relief. This claim is in connection with services allegedly rendered by the Plaintiff to Providential Securities, Inc. prior to November 2000. The Company intends to settle this case. The sought amount of $9,973 (excluding interest) has been accrued in Accrued Expenses in the accompanying consolidated financial statements.





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KEY EQUIPMENT FINANCE, INC., VS. 49-6215601204 PROVIDENTIAL SECURITIES, INC.; HENRY D. FAHMAN; TINA T. PHAN, CASE NO 06WL00289

On January 18, 2006 Key equipment Finance filed a suit in the Superior Court of the State of California, County of Orange  West District claiming breach of the terms of lease agreement by failure to make the monthly installment due although demand therefore was made. The remaining balance due and owing to plaintiff under the lease is $14,439 plus interest from the date of default. The plaintiff also claiming for breach of guaranty, common counts, unjust enrichment and cost of law suit and any other relief the Court may deem just and proper. As of June 30, 2007  the Company has accrued $14,439.



NASD CASE:

After the completion of a routine audit of Providential Securities, Inc. in July and August 2000, the National Association of Securities Dealers, Inc. alleged that Providential violated certain provisions of the NASD's Conduct Rules. As a result, Providential Securities, Inc. withdrew its membership from the NASD in October 2000 and ceased its securities brokerage operation. $127,305, including $115,000 fine charged by NASD, is included in accrued expenses in the accompanying consolidated financial statements

ARBITRATION CASES:



The Company had four arbitration cases from day-traders against Providential Securities, Inc., a discontinued stock brokerage operation of the Company.  The total amount of damages for these cases, which were closed as of June 30, 2001, was $54,505.  This amount has been accrued in the accompanying consolidated financial statements.



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



None.





PART II



ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS



On June 29, 1995, Company's Common Stock began trading on the Over the Counter Bulletin Board (OTCBB) under the symbol "JRCI" until December 12, 1999. Since December 12, 1999, the Common Stock was trading under the symbol "JRCIE." Following the corporate combination with Providential Securities, Inc. that was consummated on January 14, 2000, the Common Stock traded under the symbol "PRVH," until October 20, 2000 when it traded under the symbol "PRVHE" due to the delay in its filing of Form 10-KSB for the period ended June 30, 2000. It was trading under the symbol "PRVH" on the OTC Pink Sheets from November 21, 2000 until April 3, 2002 when it was re-listed on the OTCBB. From October 20, 2004 to January 2, 2005, it was trading under the symbol "PRVHE" due to the delay in the filing of Form 10-KSB for the period ended June 30, 2004. From January 3, 2005 to February 27, 2005, it was trading under the symbol "PRVH".  On February 28, 2005, it was trading under the symbol "PRVHE"  and from March 1, 2005 to October 18, 2005, it was trading under "PRVH".  From October 18, 2006 to December 20, 2006, it was  trading under "PRVHE" due to the delay in the filing of the Company's Form 10-KSB for the Fiscal Year ended June 30, 2006. Starting December 21, 2006, the Company has been  trading its Common Stock under the normal symbol "PRVH"



The Company's common stock is also listed on the Berlin, Frankfurt, and Munich Stock Exchanges in Germany under the symbol "PR7: WKN 935160" where it began trading on August 15, 2003, October 27, 2003, and November 19, 2003, respectively.



The following sets forth the high and low prices of the Company's Common Stock in the US for the most recent month, most recent quarter and each quarter during the preceding two fiscal years.





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Though there is a relatively wide following of the Company's stock in the US and in Europe, the prices for the Company's common stock quoted by brokers are not necessarily a reliable indication of the value of the Company's common stock.



Per Share Common Stock Prices by Quarter for the Most Recent Month and Quarter



|                                 |  | High  |  | Low  
|-------------------------------- |  | ----- |  | -----
|Month Ended  September 30, 2007  |  | 0.057 |  | 0.045
|Quarter Ended September 30, 2007 |  | 0.085 |  | 0.045



Per Share Common Stock Prices by Quarter For the Fiscal Year Ended on June 30, 2007



|                                 |  | High  |  | Low  
|-------------------------------- |  | ----- |  | -----
|Quarter Ended June 30, 2007      |  | 0.075 |  | 0.045
|Quarter Ended March 31, 2007     |  | 0.099 |  | 0.027
|Quarter Ended December 31, 2006  |  | 0.049 |  | 0.013
|Quarter Ended September 30, 2006 |  | 0.021 |  | 0.010





Per Share Common Stock Prices by Quarter For the Fiscal Year Ended on June 30, 2006



|                                 |  | High  |  | Low  
|-------------------------------- |  | ----- |  | -----
|Quarter Ended June 30, 2006      |  | 0.035 |  | 0.018
|Quarter Ended March 31, 2006     |  | 0.037 |  | 0.021
|Quarter Ended December 31, 2005  |  | 0.042 |  | 0.014
|Quarter Ended September 30, 2005 |  | 0.060 |  | 0.035



Holders of Common Equity:



There are approximately 1,200 shareholders of record of the Company's common stock.



Dividends:



The Company has not declared or paid a cash dividend to common stock shareholders since the Company's inception. The Board of Directors presently intends to retain any earnings to finance company operations and does not expect to authorize cash dividends to common shareholders in the foreseeable future. Any payment of cash dividends in the future will depend upon Company's earnings, capital requirements and other factors.



The Company has issued share dividends from ATC Technology Corp., E-Check Recovery, Inc., Irvine College of Medical Sciences, Inc., Provimex, Inc., and Touchlink Communications, Inc. to the Company's shareholders.



ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.



Except for the audited historical information contained herein, this report specifies forward-looking statements of management of the Company within the meaning of Section 27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act of 1934 ("forward-looking statements") including, without limitation, forward-looking statements regarding the Company's expectations, beliefs, intentions and future strategies. Forward-looking statements are statements that estimate the happening of future events and are not based on historical facts. Forward- looking statements may be identified by the use of forward-looking terminology, such as "could", "may", "will", "expect", "shall", "estimate", "anticipate", "probable", "possible", "should", "continue", "intend" or similar terms, variations of those terms or the negative of those terms. The forward-looking statements specified in this report have been compiled



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by management of the Company on the basis of assumptions made by management and considered by management to be reasonable. Future operating results of the Company, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking statements. The assumptions used for purposes of the forward-looking statements specified in this report represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. In addition, those forward-looking statements have been compiled as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this report. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in this report are accurate and the Company assumes no obligation to update any such forward-looking statements.



RESULTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 2007 AND JUNE 30, 2006



Revenues:



The Company generated $3,572,347from consulting  and advisory services for the year ended June 30, 2007, as compared to $4,119,009 for the year ended June 30, 2006, which represented a 13% decrease in consulting and advisory revenue. This decrease is mainly due to a slight decrease in the size and scope of the merger and acquisition activities during the current year.



Operating Expenses:



The Company incurred total operating expenses of $4,109,367 for the year ended June 30, 2007 as compared to $2,839,159 for the year ended June 30, 2006. This represents a 45% increase in operating expenses from the prior year.  The increase was primarily due to the increase in the impairment of assets



Included in operating expenses is the impairment of assets of $2,966,043 and $1,800,996 for the years ended June 30, 2007 and 2006, respectively.  The impairment in the prior year  represents a $1,790,991 decline in the market value of marketable securities a $10,005 impairment of the Company's investments , while the impairment in the current year represents a $2,903,543  decline in the market value of marketable securities, and a $62,500 impairment of the Company's investment.



Net income (loss) from operations:



The Company had net loss from operations of $537,020 for the year ended June 30, 2007 as compared to a income from operations of $1,279,850 for the year ended June 30, 2006. This was mainly due to a  13% decrease in consulting and advisory revenue and a 45%  increase  in operating expenses during the current fiscal year.  The increase  in operating expenses was primarily due to the increase  in the impairment of assets as well as the increase in professional expense,  including non-cash compensation during the current fiscal year.



Net income (loss):



The Company had net income of $34,304 for the year ended June 30, 2007 as compared to a net income of $991,513 for the year ended June 30, 2006.  Fiscal year ended June 30, 2007  included a gain on sale of marketable securities of  $139,509 compared to $43,930 for the year ended June 30,2006.  In addition, the Company recorded gain on legal settlement of $87,841 for the year ended June 30, 2007 compared to a loss on legal settlement of $28,675 for  the year ended June 30, 2006.  The Company also recorded a gain on debt settlement of $630,749  for the year ended June 30, 2007 compared to $89,681 for the year ended June 30, 2006. The net income based on the basic and diluted weighted



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average number of common shares outstanding for the year ended June 30, 2007 was $0.00 as compared to that of $0.01for the year ended June 30, 2006.



LIQUIDITY AND CAPITAL RESOURCES



Our business plan was restructured in November 2000 and has been updated to its now-current form. We must continue to raise capital to fulfill our plan of acquiring other companies and assisting in the development of those internally.  The Company expects that the working capital cash requirements over the next 12 months will be generated from operations and additional financing.



We had cash and cash equivalents of $7,751 and $2,403 as of June 30, 2007 and June 30, 2006, respectively.



Our operating activities used $950,203 cash in the year ended June 30, 2007 and used $518,148 cash in the year ended June 30, 2006. The largest use of cash in 2006 was from net loss from operations, offset by the net effect of normal fluctuations in operating asset and liability accounts.

Cash provided by investing activities was $804,920 and 451,087 in the year ended June 30, 2007 and 2006, respectively.  During the years ended June 30, 2007 and 2006, the Company received $958,170 and $474,081, respectively from the sale of marketable securities. The Company spent $110,750 to purchase marketable securities in the year ended June 30, 2007. The Company used $42,500 and $20,000 in investment during the year ended June 30, 2007 and 2006, respectively. Cash provided by financing activities was $150,631 and $67,583 for the years ended June 30, 2007 and 2006, respectively.  For the year ended June 30, 2007, this was primarily from proceeds from sale of stock and a payment received for subscription, reduced by the payments on notes and purchase of treasury shares. For the year ended June 30, 2006, cash provided by financing was mainly from net borrowings on notes payable.



LOANS AND PROMISSORY NOTES



PROMISSORY NOTES:



As of June 30, 2006, the Company had promissory notes payable to International Mercantile Holding amounting to $196,111 with accrued interest of $18,318. The notes are past due as of June 30, 2006 and are reflected in the consolidated financial statements under short-term notes payable.  The Company pledged 5,000,000 shares of treasury stock with the lender, which were sold by the note holders   The Company did not receive any proceeds from the sale of the shares nor was an agreement entered into for the settlement of the loan between the Company and the lender.  Accordingly, the value of these shares had been reflected in the financial statements as stock subscriptions receivable. The Company wrote off the notes and related accrued interest against the subscription receivable at June 30, 2007 as International Mercantile Holding is no longer in existence and  recorded a gain on settlement of debts of $20,312.



SHORT TERM NOTES PAYABLE:



As of June 30, 2007, the Company has short term notes payable amounting $768,655 with accrued interest of $394,196.  These notes bear interest rates ranging from 6% to 20% per annum.  $572,000 of these short term notes are past due and remaining balances are due on demand. During the year ended June 30, 2007, the Company paid $295,863 of principal and $171,934 of interest on short term notes.



Some of the notes payable are secured by assets of the Company as summarized below:



|             |                       
|------------ | ----------------------
|Note balance | Secured by            
|             |                       
|$ 125,000.00 | 400,000 Jeantex shares





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DUE TO PREFERRED STOCKHOLDERS



The Company classified $215,000 of preferred stock subscribed as a current liability payable to holders of preferred stock due to non compliance of preferred shares subscription agreement.  This amount was past due as of June 30, 2007. The Company made $5,000 interest payment during the year ended June 30, 2007.



The interest payable to holders of preferred stock of $181,055 has been included in accrued interest included in account payable and accrued expenses on the balance sheet as of June 30, 2007.



OTHER CURRENT LIABILITIES



During the year ended June 30, 2004, the Company received an overpayment of $89,691 for the exercise of stock options receivable.  This amount has not been paid by the Company as of June 30, 2007, and has been classified as other payable and is shown on the consolidated financial statements  in other current liabilities.



COMPANY'S PLAN OF OPERATION FOR NEXT 12 MONTHS



After the divestiture of the Companys Diva subsidiaries in June 2000 and the discontinuance of the  securities brokerage operations in October 2000, we have restructured and updated our primary scope of business to focus on  mergers and acquisitions, merger and acquisition advisory services, and investments in various businesses with potential for high growth.  For the next twelve months, the Company intends to emphasize on M&A advisory services for small and mid-sized companies in the US and the Pacific Rim, to focus on the development of the real estate project in South Hoi An, to advance Providential Vietnam Growth Fund, a Cayman Island-based private equity fund of which the Company is a general partner, to further develop the joint ventures in the cement and financial communications businesses with Cavico Vietnam, to pursue oil and gas transactions through its Providential Energy Corporation , and to engage in other special situations that may create value for the Companys shareholders.  There is no guarantee that the Company will be successful in any of its plans.



PROVIDENTIAL CAPITAL, INC.



In May 2003, the Company formed a wholly-owned subsidiary under the name of Providential Capital, a DBA company, to provide merger and acquisition advisory services for the micro-small cap arenas and manage the Company's proprietary merger and acquisition activities.  Providential Capital has mainly focused its attention on the underserved segment of smaller companies in the U.S. and abroad. This subsidiary was later incorporated as a Nevada corporation on September 23, 2004. Providential Capital has successfully managed merger plans for several private and publicly-traded companies.  This subsidiary currently works with a number of target companies in the US, China, Korea, and Vietnam and expects to generate additional business in the Pacific Rim in the next twelve months.

PHILAND CORPORATION

PhiLand Corporation is a Nevada corporation and wholly-owned subsidiary of Providential Holdings, Inc., set up in July 2007 to manage the real estate development project in South Hoi An, Quang Nam Province, Vietnam.  In July 2007, Providential Holdings entered into a principle agreement with the Peoples Committee of Quang Nam Province, which allows the Company to lease approximately 8,000 acres of land in South Hoi An, Quang Nam Province, Vietnam to develop an integrated tourism zone under a 70-year lease term.  The total cost of the land lease is $250,250,000.  As of the date of this report, the Company has not made any payment towards the lease.

PROVIDENTIAL ENERGY CORPORATION (FORMERLY PROVIDENTIAL OIL & GAS, INC.)

On December 31, 2003, the Company formed Providential Oil & Gas, Inc., a Nevada corporation and wholly-owned subsidiary, to pursue independent oil and gas business. On November 24, 2005, Providential Oil & Gas, Inc. signed an agreement with Terra-Firma Gas & Oil, Inc., a Nevada corporation with headquarters in Midland, Texas, to co-develop up to twenty-four gas wells on Hudspeth Ranch, Crockett County, West Texas.  A $20,000 investment has



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been made by the Company on this project. On June 14, 2006, Providential Oil & Gas, Inc. changed its name to Providential Energy Corporation to expand its scope of business to potentially include alternative energy such as fuel cells and bio-diesel. During the year ended June 30, 2007, the investment has been written off as impairment of asset.  In April 2007 Providential Energy Corporation entered into a Business Cooperation Agreement with Unitex Energy, LLC, a Texas Limited Liability Company, to establish PhiTex Energy Group, Inc., a Nevada corporation, in order to acquire and develop oil and gas properties. Providential Energy Corporation currently owns 87.75% stock of PhiTex Energy Group.  In September 2007, Providential Energy Corp entered into an agreement to form a joint-venture company, WRCP PEC Mining Corporation (CPMC), with WRC Partners (WRCP), in order to acquire up to 2,700 acres of mineral, oil and gas rights near Bakersfield, California for development. According to the agreement, Providential Holdings will be responsible for taking CPMC public and will manage the public company related activities required to be in full compliance with regulatory and market demands and Providential Energy Corporation will own up to a maximum of 40% of the equity interest in CPMC.



PROVIMEX, INC.



Provimex is a wholly-owned division of the Company originally formed on April 10, 2001 under the name "Providential Imex", to focus on trade commerce with Vietnam. This division changed its name to Provimex on July 5, 2001.  Provimex began to generate revenues from its import and export activities in August 2002.  For the fiscal year ended June 30, 2006, this division recorded $3,932 in sales and no sale was generated from this division in the year ended June 30, 2007..  This subsidiary was later incorporated as a Nevada corporation on September 23, 2004.The Company has declared a 15% stock dividend of Provimex, Inc. to shareholders of record as of September 15, 2004. Provimex will continue to pursue additional business opportunities, including acquisition of potential targets as well as strategic alliances and joint venture agreements with other established companies in order to advance its operations in the next twelve months.



In September 2007, Provimex entered into a Business Cooperation Agreement with Timmy Nguyen, sole owner of Pho Express, a Vietnamese-style noodle soup (pho) restaurant in Pomona, California to set up Pho Express International, LLC, a California Limited Liability Company, in order to launch a pho restaurant chain. According to the agreement, Provimex will contribute $165,000 towards and own sixty percent (60%) of Pho Express International, LLC.



TOUCHLINK COMMUNICATIONS, INC.

A wholly-owned DBA of Providential Holdings, Inc, Touchlink Communications was formed on July 7, 2003 to provide point-of-sale (POS) terminals and prepaid calling cards to retailers, convenient stores and non-profit organizations across the US. Touchlink Communications signed an agreement with KAGRO (Korean American Grocer Association) to provide pre-paid services to its member stores in the US and Canada.  This subsidiary was later incorporated as a Nevada corporation in February 2004 under the name of Touchlink Communications, Inc. to provide long distance services to residential and business customers in the United States.  The Company has declared a 15% stock dividend of Touchlink Communications, Inc. to shareholders of record as of September 15, 2004. Touchlink intends to expand its business through joint venture or strategic agreements with partner companies and acquisitions of targets with potential for high growth in the telecommunications and information technology industries.



JOINT VENTURES:



PROVIMEX-HTV JOINT VENTURE COMPANY, LTD.



On October 18, 2004, the People's Committee of Ho Chi Minh City, Vietnam approved the joint venture application by the Company and HTV, Ltd., a Vietnam-based company, to form a Joint Venture company under the name of "Provimex-HTV Joint Venture Company, Ltd."  This joint venture company primarily focused on providing equipment and liquid gas to high rise buildings and premium residential housings in Vietnam. The Company was to own 80% equity in the joint venture company.  The investment in Provimex-HTV Joint Venture Company, Ltd. has been written off as an impairment of assets as of June 30, 2005. On May 13, 2007, the Company loaned $67,000 to



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Provimex-HTV Joint Venture Company with interest rate of 8.5% per year. This Note is due November 12, 2007 or upon demand.



CAVICO-PHI CEMENT JOINT STOCK COMPANY



On August 29, 2006, the Company entered into a Principle Business Cooperation Agreement with Cavico Vietnam Joint Stock Company, a Socialist Republic of Vietnam corporation, which is a business conglomerate engaged in various business activities including, but not limited to, infrastructure, construction, energy, mining, information technology, and real estate development.  Pursuant to the terms of the Agreement, Providential and Cavico have agreed to cooperate in funding, building, owning and operating certain businesses in Vietnam and other regions of the world and share in the benefits of these business operations.



In September 2006 Cavico and the Company formed a joint-venture company, namely Cavico PHI Cement Joint Stock Company (CPCC), to jointly fund, build, own, and operate a cement plant in Phu Ly, Ha Nam province. It is anticipated that the Company will contribute 10% of the equity investment towards CPCC. To date, the Company has contributed $30,000 towards the joint venture project.



VIETNAM FINANCIAL INVESTMENT MEDIA CORPORATION



Vietnam Financial Investment Media Corporation (VFMC) is a Vietnam-based joint venture of Hawk Associates, Providential Holdings, Cavico Vietnam, Cavico Hitech and Bao Viet Securities.  The Company has invested $7,500 towards this joint venture and intends to own approximately 10% of VFMC.



FINANCIAL PLANS



Management has taken action and is formulating additional plans to strengthen the Company's working capital position and generate sufficient cash to meet its operating needs through June 30, 2008 and beyond. Among the actions to be taken, the Company intends to raise additional capital from the US and international markets and is currently in the process of attaining additional financing. In addition, the Company also anticipates generating more revenue through its proposed mergers and acquisitions. No assurances can be made that management will be successful in achieving its plan.





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ITEM 7. FINANCIAL STATEMENTS



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Stockholders

Providential Holdings, Inc.



We have audited the accompanying consolidated balance sheet of Providential Holdings, Inc. (a Nevada corporation) and subsidiaries as of June 30, 2007 and the related consolidated statements of operations, stockholders' equity, and cash flows for the years ended June 30, 2007 and 2006. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.



We conducted our audit of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.



In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Providential Holdings, Inc. and subsidiaries as of June 30, 2007, and the results of its consolidated operations and its cash flows for the years ended June 30, 2007 and 2006 in conformity with accounting principles generally accepted in the United States of America.



The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has accumulated deficit of $17,349,903 and negative cash flow from operations amounting $950,203 for the year ended June 30, 2007. These factors as discussed in Note 19 to the consolidated financial statements raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 19. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.



/s/ KABANI & COMPANY, INC.



CERTIFIED PUBLIC ACCOUNTANTS

Los Angeles, California

September 25, 2007





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PROVIDENTIAL HOLDINGS, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETJUNE 30, 2007ASSETSCurrent assets:Cash and cash equivalents$          7,751Marketable securities9,666,942Loans receivable from related parties208,462Other current assets37,500Total current assets9,920,655Property and equipment, net of accumulated depreciation of $174,2191,523Total assets$   9,922,178LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable and accrued expenses$   1,574,593Short-term notes payable768,655Due to officer467,932Due to preferred stockholders215,000Other current liabilities89,691Total current liabilities3,115,870Contingencies-Stockholders' equity:Preferred stock (Series I, Class A), $5.00 par value, 10,000,000 sharesauthorized; 90,000 shares issued and outstanding (Note 3)-Common stock, $.04 par value; 300,000,000 shares authorized;172,030,961 issued and outstanding6,881,237Shares to be issued57,000Treasury stock 2,319,940 shares, $0.04 par value common stock(92,798)Additional paid-in-capital13,090,421Subscriptions receivable(25,500)Other comprehensive income4,245,850Accumulated deficit(17,349,903)Total stockholders' equity6,806,307Total liabilities and stockholders' equity$   9,922,178






SEE THE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS



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PROVIDENTIAL HOLDINGS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONSFOR THE YEARS ENDED JUNE 30, 2007 AND 200620072006Net revenuesConsulting and advisory fee income$      3,572,347$   4,111,057Sales-7,952Net revenues3,572,3474,119,009Cost of sales--Gross profit3,572,3474,119,009Operating expenses:Depreciation and amortization2,4483,269Bad debt expense11,080130,746Salaries and wages292,292218,249Professional services, including non-cash compensation493,052386,443Directors fees-35,500Impairment of assets2,966,0431,800,996General and adminstrative344,452263,956Total operating expenses4,109,3672,839,159Income (loss) from operations(537,021)1,279,850Other income and (expenses)Interest expense(276,967)(360,659)Recovery of bad debts25,400-Gain on sale of marketable securities139,50943,930Marketable securities lost-(35,240)Investment deposit forfeited(42,500)-Gain (loss) on legal settlment87,841(28,675)Gain on sale of fixed assets5,000-Gain on debt settlement-net630,74989,681Fair market value of warrants issued(4,902)-Other income7,1942,625Net other income (expenses)571,324(288,338)Net income34,304991,513Other comprehensive gain/(loss):Reclassification(139,509)-Unrealized gain on marketable securities1,557,8861,972,045Comprehensive income$      1,452,680$   2,963,557Net income per share:Basic$               0.00$            0.01Diluted$               0.00$            0.01Weighted average number of shares outstanding:Basic166,669,095157,875,884Diluted168,508,130157,875,884




SEE THE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS

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|PROVIDENTIAL HOLDINGS, INC. AND SUBSIDIARIES
	STATEMENT OF STOCKHOLDERS' EQUITY
	FOR THE YEARS ENDED JUNE 30, 2007 AND 2006
|---------------------------------------------------------------------------------------------------------------------------
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|                                                                                                                           
|Balance at June 30, 2005                                                                                                   
|                                                                                                                           
|Shares issued for debt                                                                                                     
|conversion                                                                                                                 
|Shares issued for services                                                                                                 
|and salaries                                                                                                               
|Shares issued for legal fees                                                                                               
|Shares issued for director fees                                                                                            
|Purchase of treasury shares                                                                                                
|Sale of treasury shares                                                                                                    
|Amortization of prepaid                                                                                                    
|consulting fees                                                                                                            
|Unrealized gain on marketable                                                                                              
|securities                                                                                                                 
|Cancellation of shares                                                                                                     
|Net income for the year                                                                                                    
|                                                                                                                           
|Balance at June 30, 2006                                                                                                   
|                                                                                                                           
|Issuance of shares to be issued                                                                                            
|Shares issued for cash                                                                                                     
|Shares to be issued related                                                                                                
|to legal settlement                                                                                                        
|Purchase of treasury shares                                                                                                
|Amortization of prepaid                                                                                                    
|consulting fees                                                                                                            
|Cash received on subscription                                                                                              
|Write off subscription receivable                                                                                          
|Warrants issued                                                                                                            
|Unrealized gain on marketable                                                                                              
|securities                                                                                                                 
|Net income for the year                                                                                                    
|                                                                                                                           
|Balance at June 30, 2007                                                                                                   
|                                                                                                                           



SEE THE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS

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PROVIDENTIAL HOLDINGS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED JUNE 30, 2007 AND 200620072006Cash flows from operating activities:Net income from operations$          34,304$         991,513Adjustments to reconcile net income  to net cash used in operating activities:Depreciation2,4483,270Amortization of prepaid consulting fees42,66728,667Gain on debt settlement(630,749)(89,681)Gain on legal settlement(87,841)-Gain(loss) on sale of marketable securities(139,507)43,930Marketable securities lost-35,240Shares issued for salaries and consulting services-215,807Shares issued for director fees-35,500Shares to be issued for legal settlement related57,000Fair market value of options granted4,902-Impairment of assets2,966,0431,800,996Bad debt expense11,080130,746Marketable securities received for consulting service rendered(3,411,877)(4,021,204)Marketable securities to be received for consulting service rendered--Changes in operating assets and liabilities:Increase in other assets and prepaid expenses(106,113)(167,215)Increase  in accounts payable and accrued expenses307,440494,283Decrease in other liabilities-(20,000)Net cash used in operating activities(950,203)(518,148)Cash flows from investing activities:Purchase of fixed assets-(2,994)Purchase of marketable securities(110,750)-Proceeds from sale of marketable securities958,170474,081Purchase of investment(42,500)(20,000)Net cash provided by investing activities804,920451,087Cash flows from financing activities:Proceeds from the sale of stock324,746-Proceeds from stock subscription112,000-Purchase of treasury shares(16,781)(10,800)Borrowings on notes payable-109,300Payments on notes payable(455,476)-Borrowings from officer250,062-Payments on advances from officer(63,921)(30,917)Net cash provided by (used in) financing activities150,63167,583Net increase in cash and cash equivalents5,348522Cash and cash equivalents, beginning of period2,4031,881Cash and cash equivalents, end of period$            7,751$             2,403SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION:Cash paid during the period for:Interest$        171,934$         102,957Taxes$                    -$                904


Non-cash investing and financing activities:Shares issued for payment of notes$                    -$           40,000Write off subscription receivable against notes payable$        200,000$                    -




SEE THE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS





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| |  | PROVIDENTIAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | 
| |  | --------------------------------------------------------------------------------------- | 



NOTE 1 - NATURE OF BUSINESS



Providential Holdings, Inc., ("PHI") is engaged in a number of business activities, the most important of which is merger and acquisition advisory services. The Company acquires and consolidates special opportunities in selective industries to create additional value, acts as an incubator for emerging companies and technologies, and provides financial consultancy and M&A advisory services to U.S. and foreign companies.



A wholly owned division of the Company, Provimex was formed on April 10, 2001 under the name "Providential Imex", to focus on trade commerce with Vietnam. This division changed its name to Provimex on July 5, 2001.  This subsidiary was later incorporated as a Nevada corporation on September 23, 2004. The Company has declared a 15% stock dividend of Provimex, Inc. to shareholders of record as of September 15, 2004.



On November 20, 2002 the Company entered into an agreement to acquire 51% of the outstanding common stock of Clear Pass, Inc. ("ClearPass"), a Nevada corporation, in exchange for $1,500,000 and 3,000,000 shares of restricted stock of the Company.  Under an agreement with PASS21 Co., Ltd., ("Pass21"), a Korean corporation, Clear Pass had the licensing rights to distribute and market PASS21's biometric products in the United States, Canada, and Europe.  Besides a total of $175,500 investment into Clear Pass, the Company issued 3,000,000 shares of restricted common stock of the Company and a promissory note in the amount of $1,324,500 to Clear Pass.  This agreement was rescinded on May 9, 2003.  The Company has received back the 3,000,000 shares previously issued to Clear Pass and subsequently cancelled the shares and the promissory note.  Concurrently, the Company has set up a new wholly-owned subsidiary under the name of ClearPass, a DBA of PHI, to operate as a systems integrator and provider of total biometric security and access management solutions.  To-date, this subsidiary has not generated any revenue.



In May 2003, the Company formed a subsidiary under the name of Providential Capital to provide financial products and services for the micro-small cap arenas and to manage the Company's proprietary merger and acquisition activities.  Providential Capital will focus its attention on the underserved segment of smaller companies in the United States and abroad. Providential Capital began providing merger and acquisition advisory services to its clients since the fiscal year ended June 30, 2003.



On July 7, 2003 a wholly-owned DBA of Providential Holdings, Inc, Touchlink Communications was formed to provide point-of-sale (POS) terminals and prepaid calling cards to retailers, convenient stores and non-profit organizations across the US. This POS system enables merchants and participating partners to offer prepaid products without purchasing or storing any inventory in advance.  This company was later incorporated as a Nevada corporation in February 2004 under the name of Touchlink Communications, Inc. to provide long distance services to residential and business customers in the United States. The Company has declared a 15% stock dividend of Touchlink Communications, Inc. to shareholders of record as of September 15, 2004.



On November 1, 2003, the Company formed PHI Video Corp., which was later renamed PHI Digital Corp. ("PHI Digital"), a Nevada corporation, to provide the sale of consumer electronics, including flat-screen television sets and monitors.  PHI Digital has been renamed "TULON INDUSTRIES, INC." to change its scope of business. This subsidiary did not generate any revenue during the fiscal years ended June 2005 and 2006.

On December 19, 2003, the Company entered into a Stock Purchase Agreement with Irvine College of Medical Sciences, Inc., a California corporation, ("the College") to acquire 51% of the College's common stock for an aggregate purchase price of $314,437.  On December 19, 2003, $80,000 in cash was paid and 1,116,369 shares of the Company's common stock were issued on August 19, 2004.  During the year ended June 30, 2005, the Company declared a dividend of the College's common stock to the Company's shareholders of record as of May 6, 2005.  Each





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shareholder of record received one College share for every 39.775 shares of Providential Holdings, Inc.  As a result, the Company's owned 36% of the College at June 30, 2005.  The shares of the College were distributed on September 22, 2005.



On December 31, 2003, the Company formed Providential Oil & Gas, Inc., a Nevada corporation and wholly-owned subsidiary, to pursue independent oil and gas business. On November 24, 2005, Providential Oil & Gas, Inc. signed an agreement with Terra-Firma Gas & Oil, Inc., a Nevada corporation with headquarters in Midland, Texas, to co-develop up to twenty-four gas wells on Hudspeth Ranch, Crockett County, West Texas.  A $20,000 investment has been made by the Company on this project in the fiscal year ended June 30, 2006. The Company wrote off this investment in the quarter ended September 30, 2006. On June 14, 2006, Providential Oil & Gas, Inc. changed its name to Providential Energy Corporation to expand its scope of business to potentially include alternative energy such as fuel cells and biodiesel. This entity did not have any operations during the year ended June 30, 2007 and 2006.



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



PRINCIPLES OF CONSOLIDATION



The consolidated financial statements include the accounts of Providential Holdings, Inc., and its subsidiaries, Providential Securities, Inc., Providential Capital, PHI Digital Inc., (PHI Digital), Provimex, Providential Energy Corporation (formerly Providential Oil & Gas, Inc.) and Touchlink, collectively referred to as the "Company". All significant inter-company transactions have been eliminated in consolidation.  Providential Securities, Inc, Providential Capital, PHI Digital, Provimex, Providential Energy Corporation, and Touchlink are inactive.



USE OF ESTIMATES



The preparation of consolidated 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 disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.



CASH AND CASH EQUIVALENTS



The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents.



MARKETABLE SECURITIES



The Company's securities are classified as available-for-sale and, as such, are carried at fair value. Securities classified as available-for-sale may be sold in response to changes in interest rates, liquidity needs, and for other purposes.



Each investment in marketable securities represents less than twenty percent (20%) of the outstanding common stock and stock equivalents of the investee, and each security is nationally quoted on the National Association of Securities Dealers OTC Bulletin Board ("OTC:BB") or Pink Sheets.  As such, each investment is accounted for in accordance with the provisions of SFAS No. 115.





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Unrealized holding gains and losses for available-for-sale securities are excluded from earnings and reported as a separate component of stockholder's equity. Realized gains and losses for securities classified as available-for-sale are reported in earnings based upon the adjusted cost of the specific security sold.  On June 30, 2007, the marketable securities have been recorded at $9,666,942 based upon the fair value of the marketable securities.



ACCOUNTS RECEIVABLE



The Company maintains reserves for potential credit losses on accounts receivable.  Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves.  Reserves are recorded primarily on a specific identification basis.



IMPAIRMENT OF LONG-LIVED ASSETS



Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No.  144,  "Accounting  for  the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), which addresses financial accounting and reporting for the impairment  or  disposal  of  long-lived  assets  and  supersedes  SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be  Disposed Of," and the accounting and reporting provisions of APB Opinion No. 30,  "Reporting  the  Results  of  Operations  for  a Disposal of a Segment of a Business."  The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with SFAS 144.  SFAS 144 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amounts.  In that  event,  a  loss  is  recognized  based on the amount by which the carrying amount  exceeds  the  fair  market  value  of  the  long-lived  assets.  Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal.



PROPERTY AND EQUIPMENT



Property and equipment are stated at cost. Maintenance and repair costs are charged to expense as incurred; costs of major additions and betterments are capitalized. When property and equipment are sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is reflected in income.  Depreciation is computed using the straight-line method over the estimated useful lives of the assets, ranging from three to ten years.



INTANGIBLE ASSETS



Effective July 1, 2003, the Company adopted Statement of Financial Accounting Standards No. 142.  The Company evaluates intangible assets, goodwill and other long-lived assets for impairment, at least on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable from its estimated future cash flows.  Recoverability of intangible assets, other long-lived assets and, goodwill is measured by comparing their net book value to the related projected undiscounted cash flows from these assets, considering a number of factors including past operating results, budgets, economic projections, market trends and product development cycles.  If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss. The intangible assets of the Company consisted of goodwill, which have been deemed as impaired pursuant to SFAS No. 142.





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DEPRECIATION AND AMORTIZATION



The cost of property and equipment is depreciated over the estimated useful lives of the related assets.  Depreciation and amortization of fixed assets are computed on a straight-line basis.



NET EARNINGS (LOSS) PER SHARE



The Company adopted the provisions of Statement of Financial Accounting Standards No. 128, Earnings per Share ("SFAS No. 128"). SFAS No. 128 eliminates the presentation of primary and fully diluted earnings per share ("EPS") and requires presentation of basic and diluted EPS. Basic EPS is computed by dividing income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period.  Diluted EPS is based on the weighted-average number of shares of common stock outstanding for the period and common stock equivalents outstanding at the end of the period.

The Company has the following dilutive stock options and warrants as of June 30, 2007 and 2006 .

2007
			
			2006Stock options
			
			3,000,000
			
			3,000,000Warrants
			
			250,000
			
			-Total
			
			3,250,000
			
			3,000,000




The net earnings per share is computed as follows:

|                                                             | 2007              |  | 2006              
|------------------------------------------------------------ | ----------------- |  | ------------------
|Basic and diluted net loss per share:                        |                   |  |                   
|Numerator:                                                   |                   |  |                   
|Net income                                                   | $   34,304        |  | $   991,513       
|                                                             |                   |  |                   
|Denominator:                                                 |                   |  |                   
|Basic weighted average number of common shares outstanding   | 166,669,095       |  | 157,875,884       
|Basic net income per share                                   | $            0.00 |  | $             0.01
|Diluted weighted average number of common shares outstanding | 168,508,130       |  | 157,875,884       



|Diluted net income per share | $             0.00 |  | $             0.01
|---------------------------- | ------------------ |  | ------------------
|                             |                    |  |                   



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STOCK-BASED COMPENSATION

Effective July 1, 2006, the Company adopted SFAS 123R and accordingly has adopted the modified prospective application method. Under this method, SFAS 123R is applied to new awards and to awards modified, repurchased, or cancelled after the effective date. Additionally, compensation cost for the portion of awards that are outstanding as of the date of adoption for which the requisite service has not been rendered (such as unvested options) is recognized over a period of time as the remaining requisite services are rendered. Under this transition method, stock compensation expense recognized in the year ended June 30, 2007 includes compensation expense for all stock-based compensation awards vested during the year ended June 30, 2007, based on the grant-date fair value estimated in accordance with the provisions of SFAS No. 123-R.



FAIR VALUE OF FINANCIAL INSTRUMENTS



Statement of financial accounting standard No. 107, Disclosures about fair value of financial instruments, requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for current assets and current liabilities qualifying as financial instruments are a reasonable estimate of fair value.



REVENUE RECOGNITION



The Company's revenue recognition policies are in compliance with Staff accounting bulletin (SAB) 104. Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectibility is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are recorded as unearned revenue.  The Company recognized commission and fee revenue when the security transaction was complete and the commission or fee had been earned.  The Company recognizes other service income when the service has been completed.  Expenses are recognized in the period in which the corresponding liability is incurred.



ADVERTISING



The Company expenses advertising costs as incurred.  Advertising costs for the years ended June 30, 2007 and 2006 were $25,682 and $18,814 respectively.



COMPREHENSIVE INCOME



Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS No. 130"), establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income is defined to include all changes in equity, except those resulting from investments by owners and distributions to owners. Among other disclosures, SFAS No. 130 requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements.  During the year ended June 30, 2007 and 2006, comprehensive gain included $1,418,377 and $1,972,045 unrealized gain on marketable securities, respectively.  Other comprehensive gain, as presented on the accompanying consolidated balance sheet amounted to $4,245,850 as of June 30, 2007.



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INCOME TAXES



The Company accounts for income taxes in accordance with SFAS No. 109, "Accounting for Income Taxes." Deferred taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.



REPORTING OF SEGMENTS



Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information ("SFAS No. 131"), which supersedes Statement of Financial Accounting Standards No. 14, Financial Reporting for Segments of a Business Enterprise, establishes standards for the way that public enterprises report information about operating segments in annual financial statements and requires reporting of selected information about operating segments in interim financial statements regarding products and services, geographic areas and major customers. SFAS No. 131 defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company operates in one segment during the year ended June 30, 2007.



RISKS AND UNCERTAINTIES



In the normal course of business, the Company is subject to certain risks and uncertainties. The Company provides its product on unsecured credit to most of its customers. Consequently, the Company's ability to collect the amounts due from customers is affected by economic fluctuations and each customer's ability to pay.



RECLASIFICATIONS



For comparative purposes, prior year's consolidated financial statements have been reclassified to conform with report classifications of the current year.



RECENT ACCOUNTING PRONOUNCEMENTS



In February 2006, FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments. SFAS No. 155 amends SFAS No 133, Accounting for Derivative Instruments and Hedging Activities, and SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.  SFAS No. 155, permits fair value re-measurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation, clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS No. 133, establishes a requirement to evaluate interest in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation, clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives, and amends SFAS No. 140 to eliminate the prohibition on the qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument.  This statement is effective for all financial instruments acquired or issued after the beginning of the Companys first fiscal year that begins after September 15, 2006.  SFAS No. 155 is not expected to have a material effect on the consolidated financial position or results of operations of the Company.



In March 2006, the FASB issued SFAS No. 156 (FAS 156), Accounting for Servicing of Financial Assets-An Amendment of FASB Statement No. 140. Among other requirements, FAS 156 requires a company to recognize a



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servicing asset or servicing liability when it undertakes an obligation to service a financial asset by entering into a servicing contract under certain situations. Under FAS 156 an election can also be made for subsequent fair value measurement of servicing assets and servicing liabilities by class, thus simplifying the accounting and providing for income statement recognition of potential offsetting changes in the fair value of servicing assets, servicing liabilities and related derivative instruments. The Statement will be effective beginning the first fiscal year that begins after September 15, 2006. The Company does not expect the adoption of FAS 156 will have a material impact on the financial position or results of operations

In June 2006, the FASB issued FASB Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes that provides guidance on the accounting for uncertainty in income taxes recognized in financial statements. The Company is currently evaluating the impact of adopting FIN 48 which will be adopted on July 1, 2007; however, does not expect the adoption of this provision to have a material effect on the consolidated financial position, results of operations or cash flows.

In July 2006, the FASB issued FASB Staff Position (FSP) No. FAS 13-2, Accounting for a Change or Projected Change in the Timing of Cash Flows Relating to Income Taxes Generated by a Leveraged Lease Transaction, that provides guidance on how a change or a potential change in the timing of cash flows relating to income taxes generated by a leveraged lease transaction affects the accounting by a lessor for the lease. This staff position will be adopted by the Company on July 1, 2007. The Company is currently evaluating the impact of adopting this FSP; however, the Company does not expect the adoption of this provision to have a material effect on the consolidated financial position, results of operations or cash flows.

In September 2006, FASB issued SFAS 157 Fair Value Measurements.  This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements.  However, for some entities, the application of this Statement will change current practice.  This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The management is currently evaluating the effect of this pronouncement on the consolidated financial statements.



In September 2006, the FASB issued Statement No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plansan amendment of FASB Statements No. 87, 88, 106, and 132(R) (SFAS 158). This Statement improves financial reporting by requiring an employer to recognize the over funded or under funded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not-for-profit organization. This Statement also improves financial reporting by requiring an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. This Statement is effective as of the end of the fiscal year ending after December 15, 2006. The management is currently evaluating the effect of this pronouncement on the consolidated financial statements.



In February 2007, FASB issued FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. FAS 159 is effective for fiscal years beginning after November 15, 2007. Early adoption is permitted subject to specific requirements outlined in the new Statement. Therefore, calendar-year companies may be able to adopt FAS 159 for their first quarter 2007 financial statements.





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The new Statement allows entities to choose, at specified election dates, to measure eligible financial assets and liabilities at fair value that are not otherwise required to be measured at fair value. If a company elects the fair value option for an eligible item, changes in that item's fair value in subsequent reporting periods must be recognized in current earnings. FAS 159 also establishes presentation and disclosure requirements designed to draw comparison between entities that elect different measurement attributes for similar assets and liabilities. Management is currently evaluating the effect of this pronouncement on the consolidated financial statements.



NOTE 3 - NASD EXAMINATION AND DISCONTINUANCE OF PROVIDENTIAL SECURITIES, INC.



After the completion of a routine audit of Providential Securities, Inc. ("Providential") in July and August 2000, the National Association of Securities Dealers, Inc. alleged that Providential violated certain provisions of the NASD's Conduct Rules 2120, 2330, 2110 and 3010, and Rules 15c2-4, 10b-5, 10b-9 and 15c3-3 of the Securities and Exchange Commission. Providential Securities, Inc. and Henry Fahman voluntarily submitted a Letter of Acceptance, Waiver and Consent ("AWC",), which was accepted by NASD Regulation, Inc. on October 27, 2000.



Providential Securities, Inc. was censured, fined $115,000.00 and required to offer rescission to those public customers who participated in the Providential Private Placement.  In addition, Henry Fahman was banned, in all capacities, from associating with any NASD member.



Based upon the above-mentioned circumstances, Providential Securities, Inc. withdrew its membership from the NASD in October 2000 and ceased its securities brokerage operation.  The fine of $115,000 is included in accrued expenses in the accompanying consolidated financial statements.  The Company has offered all Preferred Stock holders rescission on their investment.  During the year ended June 30, 2004, $235,000 from the amount due to Preferred Stock Holders plus $105,600 in related dividends payable totaling $340,600  has been paid either in cash or with the issuance of common stock. The balance of unredeemed preferred shares and the related interest has been included in current liabilities on the accompanying consolidated financial statements. (Note 11)



NOTE 4  LOANS RECEIVABLE FROM RELATED PARTIES



Loans receivable from related parties consist of the following at June 30, 2007:



|Loan to Jeantex Group, Inc.          | $123,102
|------------------------------------ | --------
|Loan to Bio-Warm Corp./DDC Industies | 18,360  
|Loan to Provimex HTV                 | 67,000  
|                                     | $208,462



Loans to Bio-Warm is unsecured, interest free and due on demand.

Loans to Jeantex Group and Provimex HTV is unsecured and bear 8.5% interest per annum  and due on demand  However, during the year ended June 30, 2007 no interest income has been recorded as the Company is not confident of receiving the same. The interest receivable as of June 30, 2007 is $8,099.



NOTE 5  OTHER ASSETS:



The Other Assets comprise of the following as of June 30, 2007:





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|Security Deposit                                               | $15,000
|-------------------------------------------------------------- | -------
|Advance for shares purchase                                    | 15,000 
|Loans Receivable (unsecured, non-interest bearing & unsecured) | 7,500  
|Total                                                          | $37,500



NOTE 6 - IMPAIRMENT OF ASSETS



During the year ended June 30, 2007, the Company evaluated its investment in Terra Firma Gas & Oil, Inc. Cavico-PHI Cement, PhiTex Energy Group, VFMC and recognized an impairment loss of $62,500, a total investment amount.

In addition, considering the permanent decline in the market value of a few marketable securities, the Company wrote down these marketable securities to the current market value and an impairment of assets in the amount of $2,903,543 was recognized during the year ended June 30, 2007.



During the year ended June 30, 2006, the Company evaluated its investment in Red5Holdings, Inc. and recognized an impairment loss equal to the book value of this asset, $10,005.

In addition, considering the permanent decline in the market value of a few marketable securities the Company wrote down its marketable securities as of June 30, 2006, to the current market value and an impairment of assets in the amount of $1,790,991 was recognized during the year ended June 30, 2006.



NOTE 7- MARKETABLE EQUITY SECURITIES AVAILABLE FOR SALE



Each investment in marketable securities represents less than twenty percent (20%) of the outstanding common stock and stock equivalents of the investee, and each security is nationally quoted on the National Association of Securities Dealers OTC Bulletin Board ("OTC:BB") or the Pink Sheets.  As such, each investment is accounted for in accordance with the provisions of SFAS No. 115.



Unrealized holding gains and losses for marketable securities are excluded from earnings and reported as a separate component of stockholder's equity. Realized gains and losses for securities classified as available-for-sale are reported in earnings based upon the adjusted cost of the specific security sold.  On June 30, 2007, the investments have been recorded at $9,666,942 based upon their quoted market value on the Bulletin Board or Pink Sheets at June 30, 2007. The actual realized value of these securities could be significantly different than recorded value.



Following is a summary of marketable equity securities classified as available for sale as of June 30, 2007:





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|                                |               |               |             |                |                 
|------------------------------- | ------------- | ------------- | ----------- | -------------- | ----------------
|                                |               |               |             |                | Traded on       
|                                | Acquisition   | Market        | Accum.      | Number of      | Pink Sheets     
|Investee Name                   | Cost at       | Value at      | Unrealized  | Shares Held at | (PK) or Bulletin
|(Symbol)                        | June 30, 2007 | June 30, 2007 | Gain (Loss) | June 30, 2007  | Board (OB)      
|                                |               |               |             |                |                 
|Tri Kal International (TRIKF)   | 15            | -             | (15)        | 15,165         | -               
|DDC Industries, INc (DDCI) *    | 2,627,653     | 2,379,061     | (248,592)   | 4,758,121      | PK              
|Jeantex Group (JNTX) *          | 1,938,423     | 145,382       | (1,793,042) | 9,692,117      | OB              
|Cavico Corp.(CVCP) *            |               | -             |             | 3,469,166      | N/A             
|All Line, Inc. (ALIN)           | 855,000       | 6,412,500     | 5,557,500   | 8,550,000      | PK              
|Eastbridge Inv. (EBIG) *        | -             | 730,000       | 730,000     | 10,000,000     | OB              
|                                |               |               |             |                |                 
|                                |               |               |             |                |                 
|Totals                          | $5,421,091    | $9,666,942    | $4,245,850  |                |                 
|* All these are related parties



As of June 30, 2007, 400,000 shares of Jeantex Group, Inc. stock were pledged as collateral for short-term notes payable.



The changes in net unrealized holding gain/loss on securities available for sale has been included as a separate component of stockholders' equity.  For the year ended June 30, 2007 and 2006, an unrealized gain of $1,418,377 and  $1,972,045 were  recorded, respectively.



In September 2006, the Company received 2,000,000 shares of Cavico Corp. valued at $1,801,802.  The Company received these shares for advisory fees performed in May 2006 and the receivable for these shares was recorded in Other receivables at June 30, 2006.  The cost basis of the shares, as recorded in Other Receivables at June 30, 2006, was based on the market value of the securities on the date the advisory services were completed.  .



In February 2007, the Company purchased 369,166 shares of Cavico Corp. stock at $.30 per share. The Company sold 1,799,500 shares of Cavico shares valued at $820,706 on the cost basis during the fiscal year ended June 30, 2007. The Company recorded an impairment expense of $2,903,543 on remaining shares of these marketable securities at June 30, 2007 as these securities are currently not trading.



In March 2007, the Company received 45,000,000 shares (900,000 post-reverse split shares) of Bio-Warm, which was merged with DDC Industries, valued at $675,000.  The Company received these shares for advisory services completed earlier in that month.  The cost basis of the shares was based on the market value of the securities on the date the advisory services were completed.  The Company has recorded marketable securities at its quoted market value at March 31, 2007.  The actual realized value of these securities could be significantly different than recorded value.



In June 2007, the Company received 3,763,753 shares of DDC Industries for fees for services performed in the third fiscal quarter of 2007 valued at $1,881,877. In the same month, the Company received 8,550,000 shares of Cinnabar Enterprises, Inc. for services performed and completed on June 18, 2007 and recorded for $855,000. The company recorded the value of these shares based upon fair value of the services provided which was more determinable. The



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Company has recorded the value of the marketable securities at its quoted market value at June 30, 2007.  The actual realized value of these securities could be significantly different than recorded value.  On June 22, 2007, Cinnabar Enterprises, Inc. changed its name to All Line, Inc. and its trading symbol to ALIN.



In addition, during  the year ended June 30, 2007, the Company sold 28,500 shares of Jeantex shares.



The Company recorded a realized gain on the sale of marketable securities of $139,509 and $43,930 in total for the years ended June 30, 2007 and 2006, respectively.



Marketable Securities Lost:



During the year ended June 30, 2006, the Company discovered that it had lost 176,200 shares of common stock of Jeantex Group, Inc. (marketable securities) valued at $35,240 and could not trace them.  These shares were in the custody of the CEO of the Company.  The Company has recorded a loss of $35,240 due to the loss of the marketable securities.



NOTE 8  - PROPERTY AND EQUIPMENT



Property and equipment at June 30, 2007 consists of the following:



|                              |              
|----------------------------- | -------------
|Equipment                     | $    81,619  
|Furniture and Fixtures        | 36,123       
|Automobiles                   | 58,000       
|                              |              
|Subtotal                      | 175,742      
|Less Accumulated Depreciation | (    174,219)
|Total net fixed assets        | $       1,523
|                              |              



Depreciation expense was $2,448 and $3,270 for the fiscal years ended June 30, 2007 and 2006, respectively.



NOTE 9  - ACCOUNTS PAYABLE AND ACCRUED EXPENSES



The accounts payable and accrued expenses at June 30, 2007 consist of the following:



|Accounts payable & Accrued Expenses | $     249,263
|----------------------------------- | -------------
|Accrued salaries and payroll taxes  | 452,480      
|Accrued interest                    | 394,196      
|Accrued legal                       | 339,804      
|Accrued consulting fees             | 138,850      
|                                    | $ 1,574,593  



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | 
| |  | --------------------------------------------------------------------------------------- | 



During the year ended June 30, 2007, the Company wrote off $544,877 of old accounts payable for which the statue of limitation set by the state has expired. This amount of was recorded as a gain on settlement of debts in the consolidated financial statements.



NOTE 10 - DUE TO OFFICER



Due to officer, represents advances made by officers of the Company and its subsidiaries, which are non-interest bearing, unsecured and due on demand. As of June 30, 2007, the balance was $467,932



As of June 30, 2007, the Company has short term notes payable amounting $170,000 with interest bearing  various from $1,800 to $2,000 per month payable to the Chief Technology officer (CTO). The accrued interest of $65,599 was waived by the CTO which is recorded as gain in the accompanying financials.   All  these short term notes are insecured and due on demand.



NOTE 11  - LOANS AND PROMISSORY NOTES



PROMISSORY NOTES PAYABLE:



As of June 30, 2007, the Company had promissory notes payable to International Mercantile Holding amounting to $196,111 with accrued interest of $24,201.  The Company pledged 5,000,000 shares of treasury stock with the lender, which were sold by the note holders   The Company did not receive any proceeds from the sale of the shares nor was an agreement entered into for the settlement of the loan between the Company and the lender.  Accordingly, the value of these shares had been reflected in the financial statements as stock subscriptions receivable. The Company wrote off the notes and related accrued interest against the subscription receivable at June 30, 2007 as International Mercantile Holding is no longer in existence and  recorded a gain on settlement of debts of $20,312.



SHORT TERM NOTES PAYABLE:



|As of June 30, 2007, the Company has short term notes payable amounting $768,655 with accrued interest of $394,196.  These notes bear interest rates ranging from 6% to 20% per annum.  $572,000 of these short term notes are past due and remaining balances are due on demand. During the year ended June 30, 2007, the Company paid $295,863 of principal and $171,934 of interest on short term notes. | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 



|Some of the notes payable are secured by assets of the Company as summarized below: |                       
|----------------------------------------------------------------------------------- | ----------------------
|Note balance                                                                        | Secured by            
|                                                                                    |                       
|$ 115,000.00                                                                        | 400,000 Jeantex shares



DUE TO PREFERRED STOCKHOLDERS:



The Company classified $215,000 of preferred stock subscribed as a current liability payable to holders of preferred stock due to non compliance of preferred shares subscription agreement.  This amount was past due as of June 30, 2007. The Company made $5,000 interest payment during the year ended June 30, 2007.







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| |  | --------------------------------------------------------------------------------------- | 



The interest payable to holders of preferred stock of $181,055 has been included in accrued interest included in account payable and accrued expenses on the balance sheet as of June 30, 2007.



OTHER CURRENT LIABILITIES



During the year ended June 30, 2004, the Company received an overpayment of $89,691 for the exercise of stock options receivable.  This amount has not been paid by the Company as of June 30, 2007, and has been classified as other payable and is shown on the consolidated financial statements  in other current liabilities.



NOTE 12 - LITIGATION



LEGAL PROCEEDING SETTLED AND PAID AS OF JUNE 30, 2007:



SETTLEMENT WITH LUBERSKI, INC.



On November 22, 2005, Luberski, Inc., a California corporation, (Plaintiff) filed a claim against the Company and Henry D. Fahman, its president, (Defendants) for damages up to $160,000 in connection with a loan in the amount of $100,000 made by Plaintiff to the Company on August 23, 2004. On 1/11/2006, the Plaintiff entered a default against the Defendants and on 2/06/2006, a judgment in the amount of $154,298, including interest, attorney fees and costs, was entered against the Defendants. The full amount of the judgment is reflected in the consolidated financial statements at June 30, 2006. On 06/09/2006, Plaintiff transferred and subsequently sold 1,000,000 shares of common stock of Providential Holdings, which belonged to Henry Fahman and were given to Luberski, Inc. as collateral for the loan.  During the quarter ended December 31, 2006, the Company paid $80,000 to Luberski, Inc. and during the following quarter ended March 31, 2007, the Company paid $40,000 as the final payment to settle the full amount.  A $22,046 gain on the settlement of debt was recorded in the year ended June 30, 2007 as related to the settlement of this debt.



NICK L. JIORAS AND MELODEE L. JIORAS VS. PROVIDENTIAL HOLDINGS, INC. AND HENRY D. FAHMAN



On November 22, 2005, Nick L. Jioras and Melodee L. Jioras(Plaintiffs) filed a claim against the Company and Henry D. Fahman, its president, (Defendants) for damages up to $15,400 in connection with Plaintiffs purchase of 100,000 shares of the Companys restricted common stock on March 19, 2004. At the time of the purchase, Henry D. Fahman signed a personal guarantee to make up the difference if the Companys stock price would not reach $0.17 per share one year after the date of purchase. On 1/11/2006, the Plaintiffs entered a default against the Defendants and on 2/06/2006, a judgment in the amount of $15,795, including filing fees, was entered against the Defendants. This case was settled in June 2007. The full amount of the judgment which has been accrued in Accrued Expenses was reversed and $15,795 was recorded as gain on legal settlement in the consolidated financial statements in the year ended June 30, 2007.



LEGAL PROCEEDING SETTLED AND UNPAID AS OF JUNE 30, 2007:





QUANG VAN CAO AND NHAN THI NGUYEN CAO VS. PROVIDENTIAL SECURITIES, INC. ET AL.



This case was originally submitted to Orange County Superior Court, CA on June 25, 1997, Case No. 781121, and subsequently moved to NASD Dispute resolution for arbitration. On or about August 24, 2000, the Company's legal counsel negotiated with the Claimant's counsel and unilaterally reached a settlement that had not been approved by the Company. While the Company was in the process of re-negotiating the terms of said settlement, the Claimants filed a request for arbitration hearing before the National Association of Securities Dealers on October 4, 2000, Case No. 99-



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03160. Thereafter, the Claimants filed a complaint with the Orange County Superior Court, CA on October 31, 2000, Case No. 00CC13067 for alleged breach of contract for damages in the sum of $75,000 plus pre-judgment interest, costs incurred in connection with the complaint, and other relief. Without admitting or denying any allegations, the Company reached a settlement agreement with the Claimants whereby the Company would pay the Claimants a total of $62,500 plus $4,500 in administrative costs. As the date of this report, the Company has paid $2,500 and is subject to an entry of judgment for $79,000. The settlement amount has been accrued in the accompanying consolidated financial statements.



CONSECO FINANCE VENDOR SERVICES CORPORATION FKA GREEN TREE VENDOR SERVICES CORPORATION VS. PROVIDENTIAL SECURITIES, INC., HENRY D. FAHMAN AND TINA T. PHAN



In September 1997 Providential Securities, Inc. entered into a written Lease Agreement to lease certain items of equipment from Green Tree Vendor Services, in return for which Providential Securities, Inc. agreed to pay thirty-six monthly installments, each in the amount of $1,552. On or about September 12, 2000, and subsequently, Providential Securities, Inc. was unable to make the monthly payments to Claimant due to the lack of revenues following the interruption and subsequent closure of its securities brokerage operations. (See Note 3) Claimant filed a complaint for money with the Superior Court of the State of California, County of Orange (Case No. 01CC02613) on February 23, 2001 seeking $39,102 plus interest thereon at the legal rate from September 12, 2000. The claimant entered a judgment against Providential Securities, Inc., Henry Fahman and Tina Phan for $48,933. The judgment amount has been accrued in the accompanying consolidated financial statements.



MARK TOW, ESQ. VS. PROVIDENTIAL HOLDINGS, INC.



This case is pre-arbitration. The Company hired Mark Tow, Esq. to prepare an SB-2 Registration Statement in the year 2000 and prepaid him $25,000 in retainer. Because Mark Tow was unable to complete the work according to schedule, the Company hired another law firm to replace Mark Tow. This new firm completed the SB-2 Registration Statement and filed with the SEC on September 28, 2000. Mark Tow sent the Company a letter in June 2001 seeking a total of $75,000.00 for his allegedly rendered service.   The Company has accrued $50,000 relating to this case in Accrued Expenses as of June 30, 2006 since the original agreement with Mark Tow was for a total service fee of $75,000 and the Company has already paid $25,000 as a retainer to be offset against the total fees. Since there has been no filing for arbitration by Mark Tow as of June 30, 2007 and the 4-year statue of limitations have been exceeded, the Company reversed this $50,000 accrual and recorded as gain on legal settlement.



PENDING LITIGATION:



NGON VU VS. PROVIDENTIAL SECURITIES, INC.

Claimant was a former employee of Providential Securities, Inc. who was laid off in 2000 due to closure of business. The Claimant complained to the Department of Industrial Relations (DIR) for allegedly unpaid vacation and salaries. On June 13, 2001, the DIR filed a request to enter a judgment against Providential Securities, Inc. for $9,074 including wages and interest, penalty, post hearing and filing fee. The sought amount of $9,074 has been accrued in the accompanying consolidated financial statements.



VERIO VS. PROVIDENTIAL SECURITIES, INC.



On or about April 1, 2003, Verio, Inc. filed a judgment against Providential Securities, Inc., a wholly-owned subsidiary of the Company which was discontinued in October 2000, for a total of $9,141.  This sum consists of $6,800 for services allegedly rendered by Verio, Inc. to Providential Securities, Inc. in 2000 and $2,341 for legal costs.  Both amounts have been accrued in the accompanying consolidated financial statements.



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DOW JONES & COMPANY, INC. VS. PROVIDENTIAL SECURITIES, INC. AND PROVIDENTIAL HOLDINGS, INC.



On March 19, 2002 Dow Jones & Company filed a complaint with the Superior Court of California, County of Orange, West Justice Center (Case No. 02WL1633), against Providential Securities, Inc., the discontinued operations of the Company, and Providential Holdings, Inc. for $9,973 plus prejudgment interest at the rate of ten (10%) per annum from November 1, 2000, reasonable attorneys fees and other and further relief. This claim is in connection with services allegedly rendered by the Plaintiff to Providential Securities, Inc. prior to November 2000. The Company intends to settle this case. The sought amount of $9,973 (excluding interest) has been accrued in Accrued Expenses in the accompanying consolidated financial statements.



KEY EQUIPMENT FINANCE, INC., VS. 49-6215601204 PROVIDENTIAL SECURITIES, INC.; HENRY D. FAHMAN; TINA T. PHAN, CASE NO 06WL00289



On January 18, 2006 Key equipment Finance filed a suit in the Superior Court of the State of California, County of Orange  West District claiming breach of the terms of lease agreement by failure to make the monthly installment due although demand therefore was made. The remaining balance due and owing to plaintiff under the lease is $14,439 plus interest from the date of default. The plaintiff also claiming for breach of guaranty, common counts, unjust enrichment and cost of law suit and any other relief the Court may deem just and proper. As of June 30, 2007  the Company has accrued $14,439.



NASD CASE:

After the completion of a routine audit of Providential Securities, Inc. in July and August 2000, the National Association of Securities Dealers, Inc. alleged that Providential violated certain provisions of the NASD's Conduct Rules. As a result, Providential Securities, Inc. withdrew its membership from the NASD in October 2000 and ceased its securities brokerage operation. $127,305, including $115,000 fine charged by NASD, is included in accrued expenses in the accompanying consolidated financial statements. (Note 3)

ARBITRATION CASES:



The Company had four arbitration cases from day-traders against Providential Securities, Inc., a discontinued stock brokerage operation of the Company.  The total amount of damages for these cases, which were closed as of June 30, 2001, was $54,505.  This amount has been accrued in the accompanying consolidated financial statements.





NOTE 13 - STOCKHOLDER'S EQUITY



Treasury Stock:



During the year ended June 30, 2007, the Company purchased 1,049,940 Treasury Shares for $16,781.  The balance as of June 30, 2007 was 2,319,940 shares valued at $92,798.



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| |  | --------------------------------------------------------------------------------------- | 



Common Stock:



Fiscal year ended June 30, 2007:



During the year ended June 30, 2007, the Company issued 2,500,000 shares of common stock valued at $375,000 against Shares to be issued.



During the year ended June 30, 2007, the Company sold 8,291,000 shares valued at $324,750 to related parties of the company.  The balance as of June 30, 2007 was 172,030,961 shares valued at $6,881,237.



Fiscal year ended June 30, 2006:



During the year ended June 30, 2006, 1,000,000 shares of the Company's common stock valued at $30,000 were issued as payment on short-term notes payable.



During the year ended June 30 2006, the Company issued 6,722,122 shares of common stock for salaries and services valued at $208,885 and service to be provided in the future valued at $22,500. The Company also issued 360,534 shares of common stock for payment of legal fees valued at $14,421 and 1,333,332 shares for director fees valued at $40,000.



During the year ended June 30 2006, the Company cancelled 112,500 shares previously issued for service provided.



Shares to be Issued:



On 06/09/2006, Luberski Inc. transferred and subsequently sold 1,000,000 shares of common stock of Providential Holdings, which belonged to Henry Fahman and were given to Luberski, Inc. as collateral for the loan. As of June 30, 2007, the Company agreed to pay back 1,000,000 shares valued at $57,000 to Henry and recorded the transaction as shares to be issued.



Prepaid Consulting:



During the year ended June 30, 2005, the Company signed a agreement with unrelated third-parties for consulting services for two years.  The Company issued 1,000,000 shares of common stock to the consultants valued at $44,000 based upon the market value of the stock at the time of consummation of the agreements.  The Company amortized $20,168, total remaining balance during the fiscal year ended June 30, 2007.



During the year ended June 30, 2006, the Company signed a consulting agreement for consulting service for one year. The Company issued 1,000,000 shares of common stock to the consultant valued at $30,000 based upon the market value of the stock at the date of stock issuance.  The Company amortized $22,500, total  remaining balance during the fiscal year ended June 30, 2007.



During the years ended June 30, 2007 and 2006, the Company has amortized $42,668 and $28,666, respectively, as an operating expense.



Subscriptions Receivable:



As of June 30, 2007, the subscription receivable amounting $25,500 from a consultant for shares issued during the year ended 2005 are still not received.







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NOTE 14 - STOCK BASED COMPENSATION PLAN



Stock Options:



On July 10, 2000 the Company adopted a Stock Option and Incentive Plan (the "Plan") which provides for the issuance of up to a maximum of 16 million shares of the Company's common stock to officers, employees and non-employee directors at the sole discretion of the board of directors.  On August 10, 2000 the Company granted fourteen million options under the Plan to officers, directors and employees at an exercise price of $.50 per share. As of the date of this report there have been no options exercised and seven million of these options have been forfeited. The remaining seven million options were exercisable on July 1, 2001 and expired on December 31, 2005.



The Company did not grant any options in the fiscal years ended June 30, 2007 and 2006.

Common stock purchase options consist of the following as of June 30, 2007:



|                                           |           |  |                                 |                           
|------------------------------------------ | --------- |  | ------------------------------- | --------------------------
|                                           | Options   |  | Weighted Average
Exercise Price | Aggregate Instrinsic Value
|Outstanding and exercisable, June 30, 2006 | 3,000,000 |  | $0.27                           | $-                        

Granted

-

Expired

-

Exercised

-



|Outstanding and exercisable, June 30, 2007 | 3,000,000 |  | $0.27 | $ 9,500
|------------------------------------------ | --------- |  | ----- | -------

-



These outstanding options were for non-employee and will expire on April 20, 2008.



Following is a summary of the status of options outstanding at June 30, 2007:



|                    |  |                               |  |                        |  |                      |  |                               |  |                    
|------------------- |  | ----------------------------- |  | ---------------------- |  | -------------------- |  | ----------------------------- |  | -------------------
|Exercise Price      |  | Total
Options
Outstanding     |  | Remaining Life
(Years) |  | Total
Exercise Price |  | options
Exercisable           |  | Exercise Price     
|$0.0505
$0.25
$0.50 |  | 1,000,000
1,000,000
1,000,000 |  | .83
.83
.83            |  | $0.0505
$0.25
$0.50  |  | 1,000,000
1,000,000
1,000,000 |  | $0.0505
$0.25
$0.50



Stock-Based Compensation:



On February 7, 2005, the Company adopted a stock-based compensation plan and set aside 14,000,000 shares of common stock for selected eligible participants of the Company and subsidiaries, and certain independent contractors providing certain services to the Company.  As of June 30, 2007, 12,478,512 shares have been issued for salaries, consulting and professional services in lieu of cash under this plan.







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Prior to July 1, 2006, the Company measured stock compensation expense using the intrinsic value method of accounting in accordance with Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations (APB No. 25).

The company adopted SFAS No. 123-R effective July 1, 2006 using the modified prospective method. Under this transition method, stock compensation expense recognized in the year  ended June 30, 2007 includes compensation expense for all stock-based compensation awards vested during the year ended June 30, 2007, based on the grant-date fair value estimated in accordance with the provisions of SFAS No. 123-R. As there were no options granted or vested since the implementation of SFAS 123-R, no expense has been recorded during the year ended June 30, 2007.

No pro forma disclosure was presented since the Company did not have any options issued or vested during the year ended June 30, 2006.



Warrants:



During the year ended June 30, 2007, the Company issued 250,000 stock warrants with a term of 5 years and a three year vesting period.  The following assumptions were used in the Black-Scholes pricing model:

|                        |           
|----------------------- | ----------
|Risk-free interest rate | 4.64%     
|Expected life           | 5.00 years
|Expected volatility     | 198%      
|Expected dividend yield | 0%        





Following is a summary of the warrant activity for the year ended June 30, 2007:

|                           |                      |                |                          
|-------------------------- | -------------------- | -------------- | -------------------------
|                           | Warrants outstanding | Exercise Price | Aggregate Intrinsic Value
|Outstanding, June 30, 2006 | -                    | -              | -                        
|Granted                    | 250,000              |                | -                        
|Forfeited                  | -                    |                | -                        
|Exercised                  | -                    |                | -                        
|Outstanding, June 30, 2007 | 250,000              | $0.015         | $11,250                  





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Following is a summary of the status of warrants outstanding at June 30, 2007:



Exercise PriceTotal
Warrants
OutstandingRemaining Life
(Years)Total
Exercise PriceWarrants
ExercisableExercise Price$0.015250,0004.42$0.015250,000$0.015




NOTE 15- GAIN ON SETTLEMENT OF DEBT



During the year ended June 30, 2007 and 2006, the Company recorded a gain of $630,749 and $89,681 on the settlement of debt, respectively.  (Note 9 and 11)



NOTE 16 - RELATED PARTY TRANSACTIONS



During the year ended June 30, 2006, the Company issued shares to various related parties in payment for services and salaries.   These payments were as follows:



|Related Party                    |  |           | No of Shares |           | Market Value
|-------------------------------- |  | --------- | ------------ | --------- | ------------
|Henry Fahman  Director          |  | 2,494,233 |              | $ 83,936 
|Tina Phan  Director             |  | 1,194,129 |              | 39,432   
|Timothy Pham  Directors family |  | 860,078   |              | 29,403   
|Thorman Hwinn - Director         |  | 333,333   |              | 10,000   
|Robert Stevenson - Director      |  | 333,333   |              | 10,000   
|                                 |  |           |              |           |             
|Total                            |  | 5,215,106 |              | $ 172,771



During the year ended June 30, 2007, the Company did not issue any shares to the directors for services.

The Company accrued $ 330,694 salaries for Henry Fahman and Tina Fahman as of June 30, 2007.



During the year ended June 30, 2006, the Company generated $476,600 income from a related company with common director which represent 12% of total revenue. In addition the Company had revenues from a related company of $3,603,604 which represents 88% of the total revenue for the year ended June 30, 2006. Accounts receivable from the related company of $1,801,802 was recorded as other receivable at June 30, 2006. A brother of the Companys CEO became Executive Vice President and Assistant Secretary of the related company after the Company rendered services and recognized the related revenues.



During the year ended June 30, 2007, the Company had $2,556,877 revenue, which represents 72% of total revenue, from a related company with a common officer.





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NOTE 17 - INCOME TAXES



No provision was made for income tax since the Company has significant net operating loss carry forward. Through June 30, 2007, the Company incurred net operating losses for tax purposes of approximately $18.9 million.  The net operating loss carry forward may be used to reduce taxable income through the year 2025. Net operating loss for carry forwards for the State of California is generally available to reduce taxable income through the year 2015.  The availability  of the Company's net operating loss  carryforward  is subject to limitation if there is a 50% or more positive  change in the  ownership of the Company's  stock.

The net deferred tax asset balance, due to net operating loss carryforwards as of June 30,  2007 and 2006  were  approximately  $3.8 million   and  $4.4 million respectively.  A 100%  valuation  allowance  has been  established  against  the deferred  tax  assets,  as the  utilization  of the  loss  carryforwards  cannot reasonably be assured.

The components of the net deferred tax asset are summarized below:



|                    | June 30, 2007 | June 30, 2006
|------------------- | ------------- | -------------
|Deferred tax asset  | $3.8          | $4.4         
|Valuation allowance | (3.8)         | (4.4)        
|                    | $       -     | $        -   



The following is a reconciliation  of the provision for income taxes at the U.S. federal  income  tax rate to the  income  taxes  reflected  in the  Consolidated Statements of Operations:



June 30,            June 30,



2007                 2006

Tax expense (credit) at statutory rate-federal

34%                34%

State tax expense net of federal tax                                                     6                     6

Changes in valuation allowance                                                        (40)                 (40)



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

Tax expense at actual rate

--                  --



========     ========



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NOTE 18- CONTRACTS AND COMMITMENTS



BUSINESS CONSUTLING AGREEMENT WITH ZEROMICRON, INC.



On January 17, 2005 the Company entered into a business consulting agreement with ZeroMircon, Inc., a California corporation, to provide services in the identification, location, and facilitating a merger with a fully-reporting publicly-traded company.  If a merger is successful, the Company is to receive common stock in the newly combined company equal up to 30% of the then issued and outstanding common shares of the new company. As of the date of this report, a successful merger has not been completed.





JOINT VENTURE AGREEMENT WITH NEXIS CAPITAL MANAGEMENT CORPORATION, LTD.



On May 10, 2005, the Company entered into a Joint Venture Agreement with Nexis Capital Management Corporation, Ltd., to assist Chinese companies in their pursuit of capital from sources in the United States. Both parties agree to share equally in all gross fee revenues based upon a mutually agreeable compensation schedule. As of the date of this report, the Company has not consummated any transaction.



BUSINESS PARTNERING AGREEMENT BETWEEN TOUCHLINK COMMUNICATIONS, INC. AND FAREAST CONNECT, INC.



On August 22, 2005, the Company entered into a Business Partnering Agreement with Fareast Connect, Inc., a California corporation (Fareast), whereby the Company will invest 51% of the initial operating budget into Touchlink Communications, Inc., a majority-owned subsidiary of the Company, and Fareast will invest 49% of the operating budget in exchange for 49% equity ownership of Touchlink Communications.  As of the date of this report, no investment has been made into Touchlink Communications by Fareast.



PROVIDENTIAL OIL & GAS, INC. AGREEMENT WITH TERRA-FIRMA GAS & OIL, INC.



On November 24, 2005 the Companys wholly-owned subsidiary Providential Oil & Gas, Inc. signed an agreement with Terra-Firma Gas & Oil, Inc., a Nevada corporation with headquarters in Midland, Texas, to co-develop up to twenty-four gas wells on Hudspeth Ranch, Crockett County, West Texas. Providential Oil & Gas, Inc. will be responsible for providing the capital funding for the drilling of these gas wells and Terra-Firma will be responsible for managing the project.  According to the agreement, Providential Oil & Gas will receive a seventy-five percent share in the net working interest from the first two wells until $1,063,800 capital funding is repaid. After the principal is fully repaid to Providential Oil & Gas, it will receive a fifty percent share in the net working interest for the life of the two wells.  For subsequent well packages, Terra-Firma Gas & Oil, Inc. and Providential Oil & Gas, Inc. will determine and agree upon a mutually acceptable arrangement for the sharing of responsibilities and net working interest in these new wells.  A $20,000 investment by the Company on this project was written off as of the date of this report. On June 14, 2006, Providential Oil & Gas, Inc. changed its name to Providential Energy Corporation to expand its scope of business to potentially include alternative energy such as fuel cells and bio-diesel.



AGREEMENT WITH HORACE HORUMBA



On July 1, 2006, the Company entered into a consulting service agreement with Horace Horumba, an individual, to be effective immediately. According to the agreement, Horace Horumba will provide consulting service to the Company with respect to the oil and gas business and import and export contracts between Russia and China, and will assist the Company to set up a division of Providential Holdings, Inc. in Europe. The term of the agreement will be four months after which the agreement may be extended by mutual consent of both parties. The Company has agreed to pay the consultant a total of $30,000 from time to time during the term of this agreement.





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Subsequently, on October 15, 2006, the Company entered into an Employment Agreement with Horace Horumba (Employee), an individual, to be effective immediately. According to the agreement, the Company has agreed to hire the Employee as General Director of Providential Europe, a division of the Company to be established in Germany to focus on developing strategic alliances in and transacting oil and gas business between Russia, China and other countries. The term of the agreement shall be three years. The Company has agreed to pay Employee a monthly remuneration of $5,000 and share seventy percent of all net profits with Employee from the Providential Europe Division operations. As of the date of this report no transaction has been consummated by the Employee under this agreement and the Company terminated the agreement in March 2007.



AGREEMENT WITH BALRAJ SANDHU



On July 17, 2006, the Company entered into a consulting service agreement with Balraj Sandhu, an individual, to be effective immediately. According to the agreement, Balraj Sandhu will provide consulting service to the Company with respect to identifying, evaluating, introducing, recommending, and operating various for-profit post secondary and trade schools that may be approved and adopted by the Company for its educational business. The term of the agreement will be six (6) months. The Company has agreed to pay the consultant a total of $21,500 from time to time during the term of this agreement. As of the date of this report, the Company has paid $5,000 in cash and accrued $7,250. As a result of an extension of the term, the balance of $9,150 was accrued for the fiscal year ended June 30, 2007.



AGREEMENT WITH HAWK ASSOCIATES, INC.



On August 11, 2006, the Company entered into an investor relations consulting agreement with Hawk Associates, Inc., a Florida corporation, to be effective September 1, 2006. According to the agreement, Hawk Associates will provide investor relations consulting services to the Company for a period of six months, after which the agreement will automatically renew monthly until notice is provided by one of the parties to the other. The Company agrees to pay Hawk Associates $4,500 per month for the investor relations consulting services and Hawk Associates will be issued warrants to purchase 250,000 common shares of the Company based on the closing price of $0.015 per share as of September 1, 2006. These warrants will be valid until August 30, 2011. As of June 30, 2007 the Company issued 250,000 warrants and recorded expense.



AGREEMENT WITH BIO-WARM CORPORATION



On September 25, 2006, the Company entered into an agreement with Bio-Warm Corporation (Bio-Warm), a Nevada corporation, whereby the Company agreed to provide management and consulting services to Bio-Warm. During the year ended June 30, 2007, the company received compensation from Bio-Warm under this agreement.    (Note 7).



AGREEMENT WITH DAI DUNG METALLIC MANUFACTURE CONSTRUCTION & TRADE CO.



On November  30, 2006 the Company entered into a Business and Financial Consulting Agreement with DAI DUNG Metallic Manufacture Construction  Trade Co., Ltd., a company duly organized and existing under the laws of Socialist Republic of Vietnam, with its principal offices at B23/474C Tran Dai Nghia St., Tan Nhat Village, Binh Chanh District, Ho Chi Minh City, Vietnam, to provide consulting services in the identification, location, and facilitating a merger with a publicly-traded company in the US.  If a merger is successful, the Company is to receive common stock in the newly combined company equal up to 20% of the then issued and outstanding common shares of the new company.  The merger between Dai Dung and Bio-Warm Corp. was consummated on March 30, 2007. The Company recorded $1,881,877 as part of marketable securities based on the fair market value of shares at the date of the merger.









43

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| |  | PROVIDENTIAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | 
| |  | --------------------------------------------------------------------------------------- | 



BUSINESS AND FINANCIAL CONSUTLING AGREEMENT WITH SAIGON PLASTIC PACKAGING CO., LTD.



On February 11, 2007, the Company entered into a business consulting agreement with Saigon Plastic Packaging Co., Ltd. (SAPLASTIC), a Vietnamese company located in Ho Chi Minh City, Vietnam, to provide services in the identification, location, and facilitating a merger with a publicly-traded company in the US and to arrange $5 million to $10 million for the post-merger company to further its growth.  If a merger is successful, the Company is to receive up to 20% of the then issued and outstanding common shares in the new combined company as payment for its services.  As of the date of this report, a successful merger has not been completed.



AGREEMENT WITH PACIFIC ASSOCIATES INVESTMENT GROUP



On April 25, 2007, Providential Capital, a subsidiary of the Company, entered into an agreement with Pacific Associates Investment Group (PAIG) for consulting services for duration of 12 months. The Company will pay PAIG 30% of all commission fees collected upon contract agreement signed by Providential Capital and Seller. There was no activity as of the date of this report.



BUSINESS AND FINANCIAL CONSULTING AGREEMENT WITH BLUEOCEAN INVESTMENT, LLC



On June 12, 2007, the Company entered into a business consulting agreement with Blueocean Investment, LLC, a company duly organized and existing under the laws of California, located in Los Angeles to provide consulting service in identifying, locating and acquiring various business opportunities, including a reverse merger with publicly-traded company in the US.  As consideration for the services to be provided, Blueocean paid $260,000 in cash which was deposited in the law office and refundable if the Company fails to complete to trasaction contemplated in 90 days from the agreement date. In addition, upon Blueoceans becoming public through initial public offering or on the closing date of the proposed merger with publicly traded company, Blueocean will issue 15% of newly combined companys issued and outstanding shares of common stock. A reverse merger of Blueocean with a publicly traded company was consummated on June 18, 2007.



JOINT VENTRUE AGREEMENT WITH BMFS, INC.



On June 13, 2007, the Company entered into a Joint Venture Agreement with BMFS, Inc. to assist the reverse merger transaction of Blueocean Investment, LLC. Based on this agreement, 50% of total cash payment from Blueocean, Inc. minus the purchase price of the public shell of $60,000 ($30,000) and 60% of compensated stocks of 14,250,000 (8,550,000 shares) were allocated to the Company. The Company recorded the receipt of cash and stocks as consulting income in the year ended June 30, 2007.



BUSINESS AND FINANCIAL CONSUTLING AGREEMENT WITH CATTHAI PLASTIC COMPANY



On June 25, 2007, the Company entered into a business consulting agreement with Catthai Plastic Company (CATHACO, LTD), a Vietnamese company located in Ho Chi Minh City, Vietnam. The services include (1) taking CATHACO public in the US via reverse merger, a business combination or IPO  (2) arranging intermediate funding after it become a fully-reporting publicly traded company on the OTCBB or a higher exchange in the US (3) subsequent listings of the new companys  shares on the Berlin and Frankfurt Stock Exchanges if necessary (4)further long-term funding and capital requirements as needed.  As of the date of this report, a successful merger has not been completed.



44

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| |  | PROVIDENTIAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | 
| |  | --------------------------------------------------------------------------------------- | 



OFFICE SPACE LEASE



The Company started its office lease in August 2004 at $3,907 per month for three years which was terminated in July 2007.  The Company did not renew this lease and is currently in the process of negotiating a new lease.



The rent expense was $51,005 and $52,921 for the year ended June 30, 2007 and 2006, respectively.

NOTE 19 - GOING CONCERN UNCERTAINTY



As shown in the accompanying consolidated financial statements, the Company has accumulated deficit of $17,349,903 and negative cash flow from operations amounting $950,203 for the year ended June 30, 2007. These factors as well as the uncertain conditions that the Company faces in its day-to-day operations with respect to cash flows create an uncertainty as to the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

Management has taken action to strengthen the Company's working capital position and generate sufficient cash to meet its operating needs through June 30, 2008 and beyond. The Company also anticipates generating more revenue through its proposed mergers and acquisitions. No assurances can be made that management will be successful in achieving its plan. The president and chairman of the Company has committed to funding the Company's operations for the next 12 months.



NOTE 20 - SUBSEQUENT EVENTS



On July 10, 2007, the Company entered into a consulting agreement with Affiliated Business Services, Inc. for services concerning management, marketing, consulting, strategic planning, corporate organization and structure financial matters for one year term and continues on a month to month basis until terminated by either party with 30 days of notice. The Company will pay (1)10% in cash of any funds raised by consultant on behalf of Company (2)a fee in the form of cashless exercise warrants in the same amount and at the same term as those negotiated and agreed to by the Company and the Investor for any funds raised by the consultant (3) a fee of $50,000 or 10% whichever is greater of the purchase price of any acquisition or merger made by or involving Company introduced by consultant (4) a fee of 10% of the total value of any contracts brought to the Company.



On July 13, 2007, the Company entered into an agreement with The Peoples Committee of Quang Nam Province to develop the real property project in Vietnam to serve as investor of the project. In order to obtain the rights of usage of the land and to satisfy the purposes of the usage of land, the Company is responsible for a lease payment of $.11/sq meter per annum in accordance with methods described in the agreement. A deposit of $5,000,000 is to be made within 10 business days from the agreement date. No deposit was made as of the date of this report.



On July 27, 2007, Providential Capital, a subsidiary of the Company entered into an agreement to engage Orrick, Herrington & Sutcliffe LLP for establishment of a Vietnam-focused private equity fund in Cayman Islands.



On September 5, 2007, Providential Energy Corp., a subsidiary of the Company entered an agreement with WRC Partners, to be formed joint venture between Intersource Consulting Group, Inc.  WRCP and PEC will cooperate in funding, building, owning and operating certain business in the US and other regions of the world and share in the benefits of these business operations.



On September 17, 2007, Providential Capital, a subsidiary of the Company entered into business and financial consulting agreement with VIP Network Holdings (VIP). to provide consulting services in taking VIP in the US via reverse merger and financing five to ten million in form of a PIPE, Equity Line, SEDA or a comparable instrument through a major institutional fund. Upon successful merger, the Company is to receive common stock in the newly combined company equal to 22.5% of the then issued and outstanding restricted common shares of the new company.



45

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| |  | PROVIDENTIAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | 
| |  | --------------------------------------------------------------------------------------- | 



On September 19, 2007, Provimex, Inc., a subsidiary of the Company entered into business cooperation agreement with a owner of Pho Express to establish a new Vietnamese style noodle soup restaurant, Pho Express International, LLC. Pho Express agreed to contribute all assets and liabilities in exchange for 40% of equity ownership and Provimex agreed to pay $165,000 in exchange for 60% of equity ownership of Pho Express International, LLC. Provimex paid $20,000 cash advance per this agreement































46

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ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE



None.



ITEM 8A. CONTROLS AND PROCEDURES



As of the end of the period covered by this annual report, we carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 15d-15 under the Securities Exchange Act of 1934.  Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in ensuring that the information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.



There have been no changes in internal control over financial reporting that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting subsequent to the date the Chief Executive Officer and Chief Financial Officer completed their evaluation.





ITEM 8B.  OTHER MATTERS



None.





















47

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PART III



ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS, COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT



The following table sets forth certain information as of June 30, 2007, with respect to the Directors and Executive Officers of the Company.



|NAME            |  | AGE |  | POSITION                                                        
|--------------- |  | --- |  | ----------------------------------------------------------------
|Henry D. Fahman |  | 53  |  | Chairman of the Board, President,
Acting Chief Financial Officer
|Tina T. Phan    |  | 40  |  | Director, Secretary and Treasurer                               
|Tam T. Bui      |  | 46  |  | President, PhiLand Corporation                                  
|Thorman Hwinn   |  | 57  |  | Director                                                        



Directors are elected at the annual meeting of shareholders and hold office until the following annual meeting and until their successors are elected and qualified. All Executive Officers serve at the discretion of the Board of Directors.



Henry D. Fahman has been President and Chairman of the Board of Providential Holdings, Inc. since January 14, 2000, and is currently Acting Financial Officer of the Company. Mr. Fahman served as President and Chairman of the Board of Providential Securities, Inc. from its inception in October 1992 to October 2000. He holds a B.S., magna cum laude, in business administration from the University of California at Berkeley, with emphasis in finance and economic analysis and policy, and is a graduate of the Advanced Management Program (AMP166) from Harvard Business School. He has also attended other Executive Education programs at Harvard Business School and Stanford University, including Mergers and Acquisitions, Creating Competitive Advantage, and Advanced General Management. Previously, he served as a Resettlement Coordinator for the United Nations High Commissioner for Refugees. Mr. Fahman is currently Chairman of the Board of Trustees of Union College of California and President of Providential Foundation, Inc., both of which are non-profit organizations.  Mr. Fahman also serves as a Managing Director for Providential Vietnam Growth Fund, a private equity fund of which Providential Holdings is a General Partner. Mr. Fahman is the husband of Tina T. Phan, our Secretary and Treasurer and a member of our Board of Directors.



48

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Tina T. Phan has been a Director and Secretary of the Company since January 2000 and was Vice President of Operations of Providential Securities, Inc. from 1995 to 2000. Mrs. Phan holds a B.S. in management information system from California State University, Los Angeles. Currently Mrs. Phan also serves as Treasurer of the Company. Mrs. Phan was employed by the World Relief Corporation from 1992 to 1995. Mrs. Phan is the wife of Henry D. Fahman.



Tam Bui has served as Chief Technology Officer of the Company from May 2002 and is currently President of PhiLand Corporation, a wholly-owned company of Providential Holdings. Mr. Bui holds Bachelor and Master of Science degrees from the University of Minnesota and has attended continuing Education at the University of California, Los Angeles. He has over 18 years of experience with Honeywell, Inc. and TRW as Senior Production Engineer/Computer Application Engineer, Project Manager, Department Manager, Program Manager and Implementation Manager. He was responsible for the implementation of LAPD Emergency Command Control Communications Systems. He has a broad knowledge and experience in the areas of information technology, intranet/internet technology, inventory management, material resource planning, enterprise resource planning, human resource management, and international business.



Thorman Hwinn has been a Director of the Company since June 30, 2001. Most recently he has held managerial positions for retailers catering to the Vietnamese-American community in California. From 1993 to 1994, he was Vice President of Vinusa Investment & Holding Company, a California corporation. From 1978 to 1987, he was a Professor with Vietnam's University of Finance, serving as Chief of the Mathematics Department. From 1970 to 1975, Mr. Hwinn was an economic specialist at the Cabinet level for the Vice Prime Minister's Office for Economic Development and a banking specialist with the Agricultural Development Bank, Vietnam. Thorman holds an MBA, a Master's Degree in Economics and Bachelor's degrees in philosophy, economics and mathematics.



The Company's securities are not registered under Section 12(g) of the Exchange Act. Accordingly, the Directors and Executive Officers of the Company are not required to file reports under Section 16(a) of that act.





49

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ITEM 10. EXECUTIVE COMPENSATION



(a) Any compensation received by officers, directors, and management personnel of the Company will be determined and approved from time to time by the Board of Directors of the Company as it deems appropriate and reasonable. Officers, directors, and management personnel of the Company will be reimbursed for any out-of-pocket expenses incurred on behalf of the Company.



Except for non-cash payments mentioned in this report, there was no monetary compensation paid to any officers of the Company during the year ended June 30, 2007.



(b) There are no annuity, pension or retirement benefits proposed to be paid to officers, directors, or employees of the Company in the event of retirement at normal retirement date as there is no existing plan provided for or contributed to by the Company.



(c) All members of the Company's Board of Directors, whether officers of the Company or not, may receive an amount yet to be determined annually for their participation in meetings of the Board and will be required to attend a minimum of four meetings per fiscal year. The Company reimburses all expenses for meeting attendance or out of pocket expenses connected directly with their Board participation.



(d) On July 10, 2000 the Company adopted a Stock Option and Incentive Plan (the "Plan") which provides for the issuance of up to a maximum of 16 million shares of the Company's common stock to officers, employees and non-employee directors at the sole discretion of the board of directors. On August 10, 2000 the Company granted fully vested 14 million options under the Plan to officers, directors and employees at an exercise price of $.50 per share. All the options were exercisable on July 1, 2001 and would expire on December 31, 2002. On June 15, 2002, the Company extended the expiration date of these employee stocks to December 31, 2005. As of the date of this report, there have been no options exercised and all of these options have been forfeited.



50

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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT



The following table sets forth information regarding the beneficial ownership of shares of the Company's common stock as of October 10, 2007 (172,203,375 issued and outstanding,) by (i) all shareholders known to the Company to be beneficial owners of more than 5% of the outstanding common stock; and (ii) all directors and executive officers of the Company, and as a group:



|TITLE OF CLASS |  | NAME AND ADDRESS OF BENEFICIAL OWNER(1)                                  |  | AMOUNT OF BENEFICIAL OWNERSHIP |  | PERCENTAGE OF CLASS
|-------------- |  | ------------------------------------------------------------------------ |  | ------------------------------ |  | -------------------
|Common Stock   |  | Henry D. Fahman
17011 Beach Blvd., Suite 1230
Huntington Beach, CA 92647 |  | 25,674,570(2)                  |  | 14.91%             
|Common Stock   |  | Tina T. Phan(3)
17011 Beach Blvd., Suite 1230
Huntington Beach, CA 92647 |  | 11,829,646                     |  | 6.87%              
|Common Stock   |  | Thorman Hwinn
655 W. Roberta Ave.
Fullerton, CA 92832                    |  | 483,333(4)                     |  | 0.28%              
|Common Stock   |  | Shares of all directors and  executive officers as a group (3 persons)   |  | 37,987,549                     |  | 22.06%             



(1)

Each person has sole voting power and sole dispositive power as to all of the shares shown as beneficially owned by them

(2)

Certain of these shares have been pledged to secure certain obligations of the Company.

(3)

Tina Phan is the wife of Henry Fahman.

(4)

Less than 1%.



ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



Henry D. Fahman, Chairman and Chief Executive Officer of the Company, has from time to time made cash advances to the Company. The advances are unsecured, interest free and payable on demand.



Certain of the officers and directors of the Company are engaged in other businesses, either individually or through partnerships and corporations in which they have an interest, hold an office, or serve on a board of directors. As a result, certain conflicts of interest may arise between the Company and its officers and directors. The Company will attempt to resolve such conflicts of interest in favor of the Company. The officers and directors of the Company are accountable to it and its shareholders as fiduciaries, which requires that such officers and directors exercise good faith and integrity in handling the Company's affairs. A shareholder may be able to institute legal action on behalf of the Company or on behalf of itself and other similarly situated shareholders to recover damages or for other relief in cases of the resolution of conflicts is in any manner prejudicial to the Company.





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PART IV



ITEM 13. EXHIBITS, FINANCIAL STATEMENTS, AND REPORTS ON FORM 8-K



|EXHIBIT  NO.                     |  | DESCRIPTION                                                                                                                                                                                                     
|-------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1                              |  | Plan of Exchange between the Company and Prima Eastwest Model Management, Inc. (incorporated by reference to Exhibit 2 to the Form 8-K filed on March 1, 1996)                                                  
|2.2                              |  | Corporate Combination Agreement between the Company and Providential Securities, Inc., effective on January 14, 2000  (incorporated by reference to Exhibit 10.12 to the Form 10-KSB filed on January 10, 2000).
|3.1                          3.1 |  | Articles of Incorporation (1)                                                                                                                                                                                   
|3.2                              |  | Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.1 of the Form 10-KSB for the fiscal year ended June 30, 1995).                                                                   
|3.3                              |  | Amendment to Articles of Incorporation (6)                                                                                                                                                                      
|3.4                              |  | Certificate of Amendment to Articles of Incorporation (6)                                                                                                                                                       
|3.5                              |  | Bylaws, as amended (6)                                                                                                                                                                                          
|4.1                              |  | Form of Series 1 Bridge Notes Purchase and Security Agreement between the Company and investors, dated March 27, 2000 (6)                                                                                       
|4.2                              |  | Form of Series 1 Bridge Note executed by the Company issued by the Company to Investors (6)                                                                                                                     
|4.3                              |  | Form of Common Stock Purchase Warrant issued by the Company to investors. (6)                                                                                                                                   
|4.4                              |  | Form of Re-pricing Warrant issued by the Company to investors. (6)                                                                                                                                              
|4.5                              |  | Form of Registration Rights Agreement between the Company and investors, dated March 27, 2000 (6)                                                                                                               
|4.6                              |  | Form of Common Stock Purchase Warrant to be issued by the Company to Sovereign Capital Advisors, LLC (6)                                                                                                        
|4.7                              |  | Form of Convertible Promissory Note issued by the Company to preferred shareholders of Providential Securities, Inc. (6)                                                                                        
|5.1                              |  | Opinion Re Validity of Agreements (6)                                                                                                                                                                           
|10.1                             |  | Benatone Exchange Agreement, with Creditors (2)                                                                                                                                                                 
|10.2                             |  | Benatone Share Acquisition Agreement (for Weldnow Enterprise, Ltd.) (2)                                                                                                                                         
|10.3                             |  | Benatone Share Acquisition Agreement (Dynedeem Limited) (2)                                                                                                                                                     
|10.4                             |  | Benatone Exchange Agreement (2)                                                                                                                                                                                 
|10.5                             |  | Benatone Asset Sale Agreement (2)                                                                                                                                                                               
|10.6                             |  | Benatone Royalty Agreement (2)                                                                                                                                                                                  
|10.7                             |  | Benatone Consultancy Agreement (2)                                                                                                                                                                              
|10.8                             |  | Benatone Deed (2)                                                                                                                                                                                               
|10.9                             |  | Autokraft Stock Purchase Agreement (3)                                                                                                                                                                          
|10.10                            |  | Autokraft Stock Subscription Agreement (3)                                                                                                                                                                      
|10.11                            |  | Prima Agreement and Plan of Merger (4)                                                                                                                                                                          
|10.12                            |  | Escrow Agreement between the Company and Warshaw Burstein Cohen Schelsinger & Kuh, LLP, dated March 28, 2000. (6)                                                                                               
|10.13                            |  | Placement Agency Agreement between the Company and Sovereign Capital Advisors, LLC, dated March 28, 2000. (6)                                                                                                   
|10.14                            |  | Guaranty Agreement between Henry Fahman and SovCap Equity Partners, Ltd, dated March 28, 2000. (6)                                                                                                              
|10.15                            |  | Pledge Agreement between Henry Fahman and SovCap Equity Partners, Ltd, dated March 28, 2000. (6)                                                                                                                
|10.16                            |  | Partnership Purchase Agreement between the Company and Holt Collins, dated May 31, 2000. (6)                                                                                                                    
|10.17                            |  | Memorandum of Agreement between DataLogic Consulting, Inc. and Providential Holdings, Inc., dated April 25, 2001. (5)                                                                                           
|10.18.1                          |  | Letter of Intent between Providential Holdings, Inc. and Epicenter, Inc., dated October 30, 2000. (5)                                                                                                           
|10.18.2                          |  | Amendment to Letter of Intent between Providential Holdings, Inc. and Epicenter, Inc., dated November 30, 2000. (5)                                                                                             

|10.18.3 |  | Amendment to Letter of Intent between Providential Holdings, Inc. and Epicenter, Inc., dated January 12, 2001. (5)                                                                 
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.18.4 |  | Amendment to Letter of Intent between Providential Holdings, Inc. and Epicenter, Inc., dated June 26, 2001. (5)                                                                    
|10.18.5 |  | Amendment to Letter of Intent between Providential Holdings, Inc. and Epicenter, Inc., dated October 02, 2001. (5)                                                                 
|10.19   |  | Joint Venture Agreement between Providential Holdings, Inc and Boxo, Inc., dated January 1, 2001. (5)                                                                              
|10.20   |  | License of Manna Technologies Joint Venture Company, dated March 21, 2001. (5)                                                                                                     
|10.21   |  | Memorandum of Agreement between International Consulting and Training Center, Ministry of Trade, Vietnam and the Company, dated March 24, 2001. (5)                                
|10.22   |  | Memorandum of Agreement among General Transportation Company No. 5, Chu Lai Industrial Zone and the Company, dated March 25, 2001. (5)                                             
|10.23   |  | Letter of Intent between Providential Holdings, Inc. and Global Systems and Technologies, Corp. dated October 18, 2001. (6)                                                        
|10.24   |  | Letter of Intent between Providential Holdings, Inc. and Estate Planning and Investment Company dated November 7, 2001. (6)                                                        
|10.25   |  | Joint Venture Agreement between Providential Holdings, Inc. and Mimi Ban dated November 23, 2001. (6)                                                                              
|10.26   |  | Plan of acquisition of Nettel Global Communication Corp.  (incorporated by reference to the Company's Current Report on Form 8-K filed May 3, 2002).                               
|10.27   |  | Joint Venture Agreement with Vietnam's Minh Hieu Joint Stock Company. (7)                                                                                                          
|10.28   |  | Memorandum of Agreement with HDT Enterprises, LLC dated March 15, 2002. (7)                                                                                                        
|10.29   |  | Memorandum of Agreement and Principle Contract with Vietnam's Center of Telecom Technology. (7)                                                                                    
|10.30   |  | Stock Purchase Agreement with SlimTech, Inc. (incorporated by reference to the Company's Current Report on Form 8-K, filed May 1, 2002).                                           
|10.31   |  | Stock Purchase Agreement with ATC Technology Corp. (incorporated by reference to the Company's Current Report on Form 8-K, Filed September 17, 2002)                               
|10.32   |  | Mutual Rescission of Stock Purchase Agreement with Nettel Global Communication Corp. (8).                                                                                          
|10.33   |  | Business Consulting Agreement with Nettel Global Communication Corp. (8)                                                                                                           
|10.34   |  | Business Consulting Agreement with Medical Career College (8)                                                                                                                      
|10.35   |  | Mutual Rescission of Stock Purchase Agreement with SlimTech (8)                                                                                                                    
|10.36   |  | Mutual Rescission of Stock Purchase Agreement with Clear Pass, Inc. (8).                                                                                                           
|10.37   |  | Mutual Rescission of Joint Venture Agreement with HTV CO, Ltd. (8).                                                                                                                
|10.38   |  | Mutual Rescission of Stock Purchase Agreement with Real ID Technology (8).                                                                                                         
|10.39   |  | Business Consulting Agreement with Lexor Incorporated (8).                                                                                                                         
|10.40   |  | Amended Closing Memorandum with ATC Technology Corp. (8)                                                                                                                           
|10.41   |  | Stock Purchase Agreement with Tangshan YutianSaw Corporation (incorporated by reference to the Company's Current Report on Form 8-K filed June 15, 2004)                           
|10.42   |  | Asset Purchase Agreement with Western Medical, Inc. (incorporated by reference to the Company's Current Report on Form 8-K, file June 2, 2006)                                     
|10.43   |  | Principle Business Cooperation Agreement with Cavico Vietnam Joint Stock Corporation (incorporated by reference to the Company's Current Report on Form 8-K, filed October 2, 2006)
|16.1    |  | Notification of Change of Accountants, Kabani & Co. appointed (incorporated by reference to exhibits filed with Form 8-K/A, filed September 10, 2001)                              
|17.1    |  | Resignation of Nhi T. Le as director and officer and appointment of Thorman Hwinn as Director (incorporated by reference to exhibits filed with Form 8-K, filed July 9, 2001)      
|17.2    |  | Resignation of Tam Bui as Director (incorporated by reference to the Company's Current Report on Form 8-K, filed September 30, 2004).                                              
|17.3    |  | Resignation of Gene M. Bennett as Chief Financial Officer (incorporated by reference to the Company's Current Report on Form 8-K, filed March 23, 2005)                            
|17.4    |  | Resignation of Robert Stevenson as Director (incorporated by reference to the Company's Current Report on Form 8-K, filed July 18, 2006)                                           

|21.1      |  | Subsidiaries of the Registrant                                                          
|--------- |  | ----------------------------------------------------------------------------------------
|32.1-32.2 |  | Certifications in Accordance with Sections 302 and 906 of the Sarbanes-Oxley Act of 2002



(1)   Incorporated by reference to the Company's Registration  Statement on Form S-18, declared effective August 10, 1982 (SEC File No. 2-78335-NY), and to the Company's Annual Report  on Form 10-K for the fiscal year ended June 30, 1995.

(2)   Incorporated by reference to the Company's Current Report on Form 8-K, dated September 7, 1995



(3)   Incorporated by reference to the Company's Current Report on Form 8-K/A, dated September 12, 1995.

(

(4)   Incorporated by reference to the Company's Current Report on Form 8-K, dated March 1, 1996.



(5)   Incorporated reference to Form 10KSB for the year ended June 30, 2000 filed October 16, 2001.



(6)  
Incorporated by reference to Form 10KSB for the year ended June 30, 2001 filed
December 17, 2001

(7)   Incorporated by reference to Form 10QSB for the quarter ended March 31, 2002 filed May 14, 2002.



(8)  Incorporated by reference to Form 10KSB for the year ended June 30, 2003, filed October 17, 2003.



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ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES



Audit Fees.



The Company paid Kabani & Company Inc. $45,000 and $45,000 in audit and review fees for fiscal 2007 and 2006, respectively.



Financial Information Systems Design and Implementation Fees.



The Company did not pay Kabani & Company Inc. any financial information systems design and implementation fees for fiscal year 2007 or 2006.



All Other Fees.



The Company did not pay Kabani & Company Inc. any non-audit fees for fiscal year 2007 or 2006.





SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(D) OF THE EXCHANGE ACT BY NON-REPORTING ISSUERS.



No annual report or proxy material has been sent to security holders nor are such materials anticipated to be sent, with the exception of this Annual Report on Form 10-KSB.



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SIGNATURES



In accordance with Section 13 or 15 (d) of the Exchange Act, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



PROVIDENTIAL HOLDINGS, INC.





Date: October 11, 2007

By: /s/ Henry D. Fahman

Henry D. Fahman, President







In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.



|SIGNATURE                           |  | TITLE                                              |  | DATE            
|----------------------------------- |  | -------------------------------------------------- |  | ----------------
|/s/ Henry D. Fahman
HENRY D. FAHMAN |  | President/Chairman/ Acting Chief Financial Officer |  | October 11, 2007
|/s/ Thorman Hwinn
THORMAN HWINN     |  | Director                                           |  | October 11, 2007
|/s/ Tina T. Phan
TINA T. PHAN       |  | Secretary/Treasurer/Director                       |  | October 11, 2007







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Exhibit No. 21.1





SUBSIDIARIES OF REGISTRANT



1.       Providential Capital, Inc.

A wholly-owned subsidiary of the Company



2.        Provimex, Inc.

A majority-owned (85%) subsidiary of the Company



3.       Touchlink Communications, Inc.

A majority-owned (85%) subsidiary of the Company



4.       Providential Energy Corporation.

A wholly-owned subsidiary of the Company



5.

PHI Digital, Corp.

A wholly-owned subsidiary of the Company



6.

PhiLand Corporation

A wholly-owned subsidiary of the Company



7.

Providential Vietnam Growth Fund

A Cayman Islands-based private equity fund

of which the Company is the General Partner.





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EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Henry Fahman, Principal Executive Officer, Providential Holdings, Inc., certify that:

1. I have reviewed this report on Form 10-KSB of Providential Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The small business issuer's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the small business issuer and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and

5. The small business issuer's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of small business issuer's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.

PROVIDENTIAL HOLDINGS, INC.

/s/ Henry Fahman
Henry Fahman, Principal Executive Officer 
Dated: October 10, 2007

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Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER



I, Henry Fahman, Acting Principal Financial Officer, Providential Holdings, Inc., certify that:

1. I have reviewed this report on Form 10-KSB of Providential Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4. The small business issuer's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the small business issuer and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



c) disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and



5. The small business issuer's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of small business issuer's board of directors (or persons performing the equivalent functions):



a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and



b) any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.
PROVIDENTIAL HOLDINGS, INC.

/s/ Henry Fahman
Henry Fahman, Acting Principal Financial Officer



Dated: October 10, 2007





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Exhibit 32.1





CERTIFICATION PURSUANT TO 18 U.S.C. Section 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Annual Report of Providential Holdings, Inc. on Form 10-KSB for the year ending June 30, 2007, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Henry Fahman, President and Director of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Henry Fahman

Henry Fahman

President/Director

October 10, 2007























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Exhibit 32.2



CERTIFICATION PURSUANT TO 18 U.S.C. Section 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Annual Report of Providential Holdings, Inc. on Form 10-KSB for the year ending June 30, 2007, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Henry D. Fahman, Acting Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Henry Fahman

Henry Fahman

Acting CFO

October 10, 2007











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