U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549  FORM 10-K/A   [X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934  FOR THE FISCAL YEAR ENDED:JUNE 30, 2009  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   PHI GROUP, INC. (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)  NEVADA
     90-0114535(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                TITLE OF EACH CLASS: ON WHICH REGISTERED: NONE                                                                       NONE  SECURITIES REGISTERED UNDER SECTION 12(G) OF THE EXCHANGE ACT: NONE  Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes     Nox Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.    YesxNo


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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.    YESxNO [] Check if disclosure of delinquent filers in response to Item 405 of RegulationS-Kis 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-K or any amendment to this Form 10-K.Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. Large accelerated filer            Accelerated filer            Non-accelerated filer      Smaller reporting companyx Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes     Nox  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 12, 2009  was $5,853,929  based on a price of $0.03 per share.  The number of shares outstanding of the registrant's Common Stock, $0.001 par value, was 195,130,961 as of June 30, 2009.


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TABLE OF CONTENTS   PART I   Item 1.
     Business OverviewItem 1A.
Item 1B
     Risk Factors
Unresolved Staff CommentsItem 2.
     Description of PropertiesItem 3.
     Legal ProceedingsItem 4.
     Submission of Matters to a Vote of Security Holders
    PART II  Item 5.
     Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
  Item 6.
     Selected Financial Data
  Item 7.
     Management’s Discussion and Analysis of Financial Condition and Results of OperationsItem 7A.
     Quantitative and Qualitative Disclosures About Market RiskItem 8.
     Financial Statements and Supplementary DataItem 9.
     Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 9A.
     Controls and ProceduresItem 9B.
     Other Information
   PART III   Item 10.
     Directors and Executive Officers of the RegistrantItem 11.
     Executive CompensationItem 12.
     Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13.
     Certain Relationships and Related TransactionsItem 14.
     Principal Accountant Fees and Services
    PART IV   Item 15.
     Exhibits and Financial Statement Schedules
    SIGNATURES  EXHIBITS


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The statements contained in this annual report that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our financial condition, results of operations and business, which can be identified by the use of forward-looking terminology, such as “estimates,” “projects,” “plans,” “believes,” “expects,” “anticipates,” “intends,” or the negative thereof or other variations thereon, or by discussions of strategy that involve risks and uncertainties.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 "PHI" mean PHI Group, Inc. And the term "common stock" means PHI Group, Inc.'s common stock, $.001 par value per share (unless context indicates a different meaning). PART I  ITEM 1. BUSINESS OVERVIEW  INTRODUCTION  PHI Group, Inc., ("PHI") through its wholly-owned and majority-owned subsidiariesengages in a number of diverse business activities including consulting, merger and acquisition advisory services,  real estate development, mining, and independent energy 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  PHI Group, Inc. ("PHI" ) 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.  The Company changed its name to PHI Group, Inc. on April 13, 2009.


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BUSINESS STRATEGY  PHI Group Inc.'s 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.  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) Consulting and Financial services (2) Real estate development, (3) Independent Energy and Resources, and (4) Special Situations.  During the Fiscal Year ended June 30, 2009, 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:  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 and Vietnam and expects to generate additional business in the Pacific Rim in the next twelve months. PROVIDENTIAL VIETNAM LTD. Providential Vietnam is a Vietnamese corporation and wholly-owned subsidiary of PHI Group, Inc. This subsidiary started operation in May 2008 to provideM&A advisory services, financial and management consulting, corporate restructuring, and investment banking services to companies in Vietnam. PHILAND RANCH LIMITED and PHILAND CORPORATION Philand Ranch Limited is a company registered under the laws of England and Wales. On June 5, 2009, Philand Ranch Limited acquired all the issued and outstanding common stock of PhiLand Corporation in exchange for the same amount of ordinary shares of Philand Ranch Limited. Philand Corporation is a Nevada corporation which was set up in July 2007 to manage the real estate development project in South Hoi An, Quang Nam Province, Vietnam.  In July 2007, PHI Group, Inc. 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 once it is signed will be $250,250,000 which can be paid over a period of time to be determined by both parties. As of the date of this report, the Company has not made any payment towards the lease. On December 14, 2007, PhiLand Corporation was granted Investment License No.333043000025 by the Authority of Chu Lai Open Economic Zone, Quang Nam Province, Vietnam and formed PhiLand Vietnam, Ltd., a wholly-owned subsidiary of PhiLand Corporation, to manage Pointe 91, its first development project of a 118-acre  residential community and resort in Bien Rang, Nui Thanh District, Quang Nam Province, Vietnam. Philand Corporation has engaged Urban Arena to coordinate and provide survey, site plan and architectural designs for Pointe91, CB Richard Ellis Vietnam, Ltd. to provide marketing and selling of the residential units, and Mayer Brown JSM for legal representation in connection with our real estate development activities. During the year  ended June 30, 2009, 3,500,000 shares of PhiLand Corporation were issued to employees and consultants of the Company.  244,286 shares which were
 owned by the Company were sold to individuals for $140,000 and 900,000 shares which were owned by the Company were exchanged with 23,285,714 shares of Jeantex Group, Inc and 29,000 shares which were owned by the Company were exchanged for the payment of note of $29,000.  In addition, during the year ended June 30, 2009, 208,000 shares of PhiLand Corporation were newly issued for cash of $24,000 and 200,000 shares PhiLand Corporation were issued for consulting service. The total of 5,081,287 shares held by minority shareholders makes up approximately 21% of outstanding shares.  As a result of the stock exchange between Philand Corporation and Philand Ranch Limited, the Company currently owns 18,734,753 shares of ordinary stock of Philand Ranch Limited, which is listed on the Open Market Segment of the Frankfurt Stock Exchange under the symbol 1P8.F, WKN A0RPEA.


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PHI MINING GROUP, INC.(FORMERLY, DDC INDUSTRIES, INC.) and INDOCHINA MINING CORPORATION **** In March 2007, the Company received 900,000 shares, valued at $675,000, of Bio-Warm, which subsequently acquired 100% of Vietnam-based Dai Dung Metallic Manufacture Construction and Trade Company (DDMMCT) 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 for services performed in the merger of Bio-Warm Corp. and DDMMCT which was closed on March 30, 2007 and received the remaining 3,763,753 shares during the year ended June 30, 2008 per the agreement, which in total, is equivalent to 20% of all issued and outstanding shares of DDC Industries, Inc. The merger agreement with DDMMCT was rescinded on November 18, 2008 in entirety and shareholders of DDMMCT agreed to return 28,610,025 shares of 30,110,025 issued shares. On December 1, 2008, DDC Industries Inc. changed its name toPHI Mining Group, Inc. The common stock of PHI Mining Group, Inc.  is currently trading on the Pink Sheets under the symbol PHIG.PHI Mining Group did not generate any revenues in the year ended June 30, 2009.  IndoChina Mining Corporation, a Nevada corporation, was incorporated on March 20, 2008 for exploitation and processing of diatomite mines. On April 14, 2008, IndoChina Mining Corporation (IMC), entered into a Cooperation agreement with Phu Yen Minerals Joint Stock Company (PYMICO). Under this agreement, PYMICO and IMC will cooperate to contribute capital for establishment of a joint venture specializing in exploitation and processing of diatomite in Phu Yen province and IMC will participate in PYMICO through purchasing a maximum of 30% shares of PYMICO when the latter issues additional shares in 2008. During the year ended June 30, 2009,IndoChina Mining also entered into an agreement with Mr. Chinnawat Chaikijjanuwat of Thailand to establish a joint venture company to exploit and process a black pearl granite mine in Nakhornrajchasima province, Thailand and an agreement with Truong Son Group to establish a joint venture company to survey, mine and process lead and zinc in Tuyen Quang province, Vietnam. As of the date of this report, IndoChina Mining Corp. has not perfected its interest in these joint venture companies.  On December 1, 2008, Indochina Mining Corporation entered into stock purchase agreement with PHI Mining Group (formerly DDC Industries, Inc.) to exchange all of its capital stock with the same number of newly issued shares of PHI Mining Group. As a result, the Company owns approximately 83% of PHI Mining Group.  PROVIMEX, INC.  Provimex, Inc.  was 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 and 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 and currently owns 85% of Provimex, Inc. For the fiscal years ended June 30, 2009 and 2008, this subsidiary did not generate any sales.  VIETNAM MEDIA GROUP, INC., formerly TOUCHLINK COMMUNICATIONS, INC.  Touchlink Communications was formed on July 7, 2003 as a division of the Company 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. as a wholly-owned subsidiary of the Company 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 and currently owns 85% of Touchlink Communications. On November 03, 2008, Touchlink Communications, Inc. changed its name to Vietnam Media Group, Inc. to focus on on multi-media business. This subsidiary did not have any activities during the Fiscal Years ended June 30, 2009 or 2008.


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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, 2009 and 2008. MINORITY INTERESTS:  JEANTEX GROUP, INC.  (formerly LEXOR HOLDINGS, INC.)  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. PHI Group, Inc. received 7,300,000 shares of restricted common stock of Lexor for services rendered in 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”.  During the year ended  June 30, 2009,23,285,714 shares of Jeantex Group, Inc. were exchanged with 900,000 shares of PhiLand Corporation which were owned by the Company. As a result, the Company owns 32,977,831 shares Jeantex Group, Inc. common stock, or equivalent to 34.26%.   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 Provimex-HTV Joint Venture Company with interest rate of 8.5% per year. This Note was written off as bad debt of as the date of this report.


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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. During the fiscal year ended June 30, 2007, the Company has contributed $30,000 towards the joint venture project. This investment was impaired as of June 30, 2007.  ITEM 1A.  RISK FACTORS  RISK FACTORS  Investment in our securities is subject to various risks, including risks and uncertainties inherent in our business.  The following sets forth factors related to our business, operations, financial position or future financial performance or cash flows which could cause an investment in our securities to decline and result in a loss.  General Risks Related to Our Business  Our success depends on our management team and other key personnel, the loss of any of whom could disrupt our business operations.  Our future success will depend in substantial part on the continued service of our senior management and founder. The loss of the services of one or more of our key personnel could impede implementation and execution of our business strategy and result in the failure to reach our goals. We do not carry key person life insurance for any of our officers or employees. Our future success will also depend on the continued ability to attract, retain and motivate highly qualified personnel in the diverse areas required for continuing our operations. We cannot assure that we will be able to retain our key personnel or that we will be able to attract, train or retain qualified personnel in the future.  Our service strategy in merger and acquisition involves a number of risks and we have a limited history of successful acquisitions. Even when an acquisition is completed, we may have to continue our service for integration that may not produce results as positive as management may have projected.  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.  Acquisitions involve a number of special risks, including:  •
     
     failure of the acquired business to achieve expected results;
  •
     
     diversion of management’s attention;
  •
     
     failure to retain key personnel of the acquired business;
  •
     
     additional financing, if necessary and available, could increase leverage, dilute equity, or both;
  •
     
     the potential negative effect on our financial statements from the increase in goodwill and other intangibles; and
  •
     
     the high cost and expenses of completing acquisitions and risks associated with unanticipated events or liabilities.


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These risks could have a material adverse effect on our business, results of operations and financial condition since the values of the securities received for the consulting service at the execution of the acquisition depend on the success of the company involved in acquisition.  In addition, our ability to further expand our operations through acquisitions may be dependent on our ability to obtain sufficient working capital, either through cash flows generated through operations or financing activities or both.  There can be no assurance that we will be able to obtain any additional financing on terms that are acceptable to us, or at all.  Our businesses are currently focused in Vietnam, and any adverse change to the economy or business environment in Vietnam could significantly affect our operations, which would lead to lower revenues and reduced profitability. Our operations are currently concentrated in Vietnam. Because of this concentration in a specific geographic location, we are susceptible to fluctuations in our business caused by adverse economic or other conditions in this region, including stock market fluctuation. A stagnant or depressed economy in Vietnam generally, or in any of the other markets that we serve, could adversely affect our business, results of operations and financial condition. Risks Related to our Securities  Insiders have substantial control over the company, and they could delay or prevent a change in our corporate control, even if our other stockholders wanted such a change to occur. Our executive officers/directors and principal stockholders who hold 5% or more of the outstanding common stock owned as of June 30, 2009, in the aggregate, approximately 27% of our outstanding common stock. These stockholders will be able to exercise significant control over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This could delay or prevent an outside party from acquiring or merging with us even if our other stockholders wanted it to occur. In addition, the stock market often experiences significant price fluctuations that are unrelated to the operating performance of the specific companies whose stock is traded. These market fluctuations could adversely affect the trading price of our shares.  The price at which investors purchase shares of our common stock may not be indicative of the price that will prevail in the trading market. Investors may be unable to sell their shares of common stock at or above their purchase price, which may result in substantial losses.  We do not meet the requirements for our stock to be quoted on NASDAQ, the American Stock Exchange or any other senior exchange, the tradability in our securities will be limited under the penny stock regulations. Under the rules of the Securities and Exchange Commission, if the price of our securities on the OTC Bulletin Board is below $5.00 per share, our securities are within the definition of a "penny stock." As a result, it is possible that our securities may be subject to the "penny stock" rules and regulations. Broker-dealers who sell penny stocks to certain types of investors are required to comply with the Commission's regulations concerning the transfer of penny stock. These regulations require broker-dealers to: *Make a suitability determination prior to selling penny stock to the purchaser; *Receive the purchaser's written consent to the transaction; and *Provide certain written disclosures to the purchaser. These requirements may restrict the ability of broker/dealers to sell our securities, and may affect the ability to resell our securities. Our compliance with the Sarbanes-Oxley Act and SEC rules concerning internal controls may be time consuming, difficult and costly for us. It may be time consuming, difficult and costly for us to develop and implement the internal controls and reporting procedures required by the Sarbanes-Oxley Act. We may need to hire additional financial reporting, internal controls and other finance staff in order to develop and implement appropriate internal controls and reporting procedures. If we are unable to comply with the internal
controls requirements of the Sarbanes-Oxley Act, we may not be able to obtain the independent accountant certifications that the Sarbanes-Oxley Act requires publicly-traded companies to obtain.


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ITEM 1B. UNRESOLVED STAFF COMMENTS. None.  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 was expired on July 31, 2007 and the Company paid rent on a month-to month basis through April 30, 2008.  The Company signed on a 5 year lease agreement for the same office effective May 1, 2008. The monthly rental is $6,690.70 and will be increased by 3.5% per annum commencing in the thirteenth month of the initial lease term and continuing annually thereafter.   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 UNPAID AS OF JUNE 30, 2009:  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.  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.  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.


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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 PHI GROUP, 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 PHI Group, 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.  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  On April 10, 2009, the Company held its annual shareholders’ meeting and the following actions were taken place:  Election of directors; Tam Bui, Henry Fahman, Frank Hawkins, Lawrence Olson, and Paul Nguyen.
Ratifying the Board of Directors’ proposals to change the Company’s name to PHI Group, Inc. and the par value of the Company’s common stock from $0.04 to $0.001 per share.
Authorizing the Board of Directors to upgrade the listing of the Company’s common stock to the NASDAQ Stock Market or another senior exchange in the future.


---



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’s Common Stock resumed trading under "PRVH" until its trading symbol was changed to “PHIE” following the change of corporate name to PHI Group, Inc. and par value from $0.04 to $0.001 in April 2009. The Company's common stock is also listed on the Berlin, Frankfurt, Munich Stock Exchanges, and Xetra in Germany under the symbol "PR7,WKN A0RNQV”.  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.  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 Quarter:  HighLow Quarter ended September 30, 2009                                           0.05                         0.010 Per Share Common Stock Prices by Quarter; For the Fiscal Year Ended June 30, 2009 HighLow Quarter Ended June 30, 2009                                                    0.029                       0.010 Quarter Ended March 31, 2009                                                 0.030                       0.010 Quarter Ended December 31, 2008                                           0.030                       0.010 Quarter Ended September 30, 2008                                          0.040                       0.020   Per Share Common Stock Prices by Quarter; For the Fiscal Year Ended June 30, 2008 HighLow Quarter Ended June 30, 2008                                                   0.057                         0.030 Quarter Ended March 31, 2008                                                0.058                         0.032 Quarter Ended December 31, 2007                                          0.055                         0.027 Quarter Ended September 30, 2007                                         0.075                         0.045  Holders of Common Equity:  There are 1,256 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 in the past. ITEM 6.  SELECTED FINANCIAL DATA.
     
     2009
     2008
     2007
     2006Net revenues
     $
     2,006,220
     $
     3,609,318
     $
     3,572,347
     $
     4,119,009Income (loss) from operations
     
     411,211
     
     1,950,784
     
     (537,020)
     
     1,279,850
     )Net other income (expense)
     
     (8,787,048)
     
     408,498
     
     571,324
     
     (288,338)
     )Net income (loss )
     
     (8,322,040)
     
     2,359,282
     
     34,304
     
     991,513
     )Net income ( loss ) per share
     
     (0.04)
     
     0.01
     
     0.00
     
     0.01Total assets
     $
     2, 998,793
     $
     8,334,115
     $
     9,922,178
     $
     8,633,206Total liabilities
     $
     6,727,662
     $
     4,288,657
     $
     3,115,870
     $
     4,004,118
   ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS  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 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, 2009 AND JUNE 30, 2008  Revenues:  The Company generated net revenue of $2,006,220 from consulting  and advisory services for the year ended June 30, 2009, as compared to $3,609,318 for the year ended June 30, 2008, which represented a 44.41% decrease  in consulting and advisory revenue. This decrease is mainly due to a decrease in the size and scope of the merger and acquisition activities during the current year. During the period ended June 30, 2009, the Company earned the following revenues: Revenue
     Related/Unrelated
     Consideration
     Type of ConsiderationConsulting Fees
     Unrelated Party
     $  2,080,200
     SharesManagement Fees
     Unrelated Party
     24,000
     CashTotal revenues earned
     
     2,104,200Cost of sales
     Unrelated Party
     (98,000)Net Revenue
     
     $ 2,006,220
  During the period ended June 30, 2008, the Company earned the following revenues: Revenue
     Related/Unrelated
     Consideration
     Type of ConsiderationConsulting Fees
     Unrelated Party
     $  3,512,838
     SharesConsulting Fees
     Unrelated Party
     49,980
     CashManagement Fees
     Unrelated Party
     46,500
     CashTotal revenues earned
     
     $  3,609,318
   Operating Expenses:  The Company incurred total operating expenses of $1,693,009 for the year ended June 30, 2009 as compared to $1,658,534 for the year ended June 30, 2008. This represents a 2.0% decrease in operating expenses from the prior year.  The decrease was primarily due to the decrease in professional services and general and administrative expenses relative to a decrease in consulting and advisory services. The Company’s professional fees have decreased 23% to $599,804 for the year ended June 30, 2009 compared to $778,440 in the prior year. This is mainly due to a decrease in legal fees. Legal fees were decreased by 94% from $137,635 in the prior year to $7,951 in the current year. The Company incurred high legal fees in the prior year due to legal service related to fund raising activities and the legal fees payment as a part of consulting services for our clients.  Net income (loss) from operations:  The Company had net income from operations of $411,211 for the year ended June 30, 2009 as compared to $1,950,784 for the year ended June 30, 2008. This was mainly due to a 44% decrease in consulting and advisory revenue and 2.0%  decrease  in operating expenses during the current fiscal year.  The decrease in operating expenses was primarily due to the decrease in professional expenses and general and administrative expenses during the current fiscal year.  Net income:  The Company had net loss of $8,322,040for the year ended June 30, 2009 as compared to a net income of $2,359,282 for the year ended June 30, 2008.  Fiscal year ended June 30, 2009 included a loss on marketable securities of $4,018,965compared to a gain of $701,832 for the year ended June 30, 2008. The Company also recorded a gain on debt settlement of $187,794 for the year ended June 30, 2009 compared to $67,719 for the year ended June 30, 2008. The interest expenses increased to $586,468 for the year ended June 30, 2009 compared to $362,536 due to new notes payable added in the current period. The Company recorded an impairment of marketable securities in the amount of $4,061,715 and that of loan receivable in the amount of $282,148 for the year ended June 30,
2009, compared to no impairment recorded for the year ended June 30, 2008. The net loss based on the basic and diluted weighted average number of common shares outstanding for the year ended June 30, 2009 was ($0.04) as compared to net income of $0.01 for the year ended June 30, 2008.


---



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 $37,813and $117,166 as of June 30, 2009 and June 30, 2008, respectively.  Our operating activities used $550,329 cash in the year ended June 30, 2009 compared to $1,782,930 in the year ended June 30, 2008. The largest items affecting cash from operations was the marketable securities received for services totaling $2,080,200 and the loss on sale of marketable securities of $ $4,018,965 in the year ended June 30, 2009, compared to a gain of $701,832 in the prior year. .  Cash used in investing activities was $ 575,127 compared to cash provided by $473,478 in the year ended June 30, 2009 and 2008, respectively.  During the years ended June 30, 2009 and 2008, the Company received $268,840 and $642,094, respectively from the sale of marketable securities. The Company spent $25,292 and $35,388 to purchase marketable securities in the years ended June 30, 2009 and 2008, respectively. The Company used $125,421 in investments during the year ended June 30, 2009 and $106,000 in investments during the year ended June 30, 2008, respectively. The Company spent $35,792 and $27,228 to purchase of fixed assets in the fiscal year ended June 30, 2009 and 2008, respectively.  Cash provided by financing activities was $1,046,103 and $1,418,866 for the years ended June 30, 2009 and 2008, respectively.  For the year ended June 30, 2009, this was primarily from proceeds on notes including borrowing from officers in the amount of $491,934 and from unrelated parties in the amount of $ 637,600, offset by total payments on notes amounting $214,198. For the year ended June 30, 2008, proceeds from notes totaled $1,322,600, borrowings from officer totaled $355,642, reduced by the payments on notes amounting $255,592 and purchase of treasury shares of $3,784.  SHORT TERM NOTES PAYABLE:  As of June 30, 2009 and 2008, the Company has short term notes payable amounting $2,310,085 and $1,816,255 with accrued interest of $466,387 and $340,753, respectively.  These notes bear interest rates ranging from 6% to 36% per annum.  $1,811,500 of these short term notes are past due and $315,535 are due on demand as of June 30, 2009. During the year ended June 30, 2009 and 2008, the Company paid $167,485 and $174,000 of principal and $200,135 and $196,188 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
     400,000 Jeantex shares,
500,000  Catthai shares$550,000
     2,000,000 Cavico Corp. shares
500,000 Catthai shares$150,000
     1,500,000 PHI Mining Group shares$100,000
     1,500,000 PHI Mining Group 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, 2009. The Company made $5,000 interest payment during the year ended June 30, 2007.  The interest payable to holders of preferred stock of $232,655 has been included in accrued interest included in account payable and accrued expenses on the balance sheet as of June 30, 2009.  OTHER CURRENT LIABILITIES  During the year ended June 30, 2004, the Company received an overpayment of $89,691 from the exercise of stock options.  This amount has not been paid by the Company as of June 30, 2009, and has been classified as other payable and is included  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 program in Chu Lai and South Hoi An, central Vietnam,  through PhiLand Ranch Limited, to develop mining business in Southeast Asia through PHI Mining Group, Inc.,  to pursue oil and gas transactions through Providential Energy Corporation, and to engage in other special situations that may create value for the Company’s shareholders.  There is no guaranty that the Company will be successful in any of its plans.  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, 2010 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.  ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The following discussion about PHI Group Inc.’s market risk involves forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements. Currency Fluctuations and Foreign Currency Risk Some of our operations are conducted in Vietnam using  Vietnamese Dong, which is the official currency of Vietnam.  The effect of the fluctuations of exchange rates is considered minimal to our business operations. Interest Rate Risk We do not have significant interest rate risk, as most of our debt obligations are primarily short-term in nature to individuals, with fixed interest rates. Valuation of Securities Risk Since majority of our income is paid with the marketable securities, the value of our assets may fluctuate significantly depending on the market value of the securities we hold.


---



ITEM 8. FINANCIAL STATEMENTS  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  To the Board of Directors and Stockholders PHI Group, Inc.  (formerly, Providential Holdings, Inc.)  We have audited the accompanying consolidated balance sheets of PHI Group, Inc. (a Nevada corporation) and subsidiaries as of June 30, 2009, and 2008 and the related consolidated statements of operations, stockholders' equity, and cash flows for the years ended June 30, 2009 and 2008. 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 PHI Group, Inc. and subsidiaries as of June 30, 2009, and the results of its consolidated operations and its cash flows for the years ended June 30, 2009 and 2008 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 $23,312,661 and negative cash flow from operations amounting $550,329 for the year ended June 30, 2009. These factors as discussed in Note 20 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 20. 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 October 13, 2009


---



PHI GROUP, INC. AND SUBSIDIARIES(FORMERLY, PROVIDENTIAL HOLDINGS, INC.)CONSOLIDATED BALANCE SHEETSJUNE 30, 2009 AND 20082009
     
     2008ASSETSCurrent assets:Cash and cash equivalents
     $           37,813
     
     $          117,166Accounts receivable
     67,500
     
     3,044,520Marketable securities
     1,750,000
     
     4,435,938Loans receivable from related parties
     111,620
     
     346,962Other current assets
     142,903
     
     197,131Total current assets
     2,109,836
     
     8,141,717Fixed AssetsConstruction in progress
     657,462
     
     -Property and equipment, net
     46,942
     
     26,117Other assets:Deposits
     59,133
     
     166,281Investment
     125,421
     
     -Total assets
     $      2,998,793
     
     $       8,334,115LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT)Current liabilities:Accounts payable and accrued expenses
     $      2,864,325
     
     $       1,605,728Short-term notes payable
     2,310,085
     
     1,816,255Due to officers
     1,013,561
     
     561,982Payable to related party
     235,000
     
     -Due to preferred stockholders (Note 11)
     215,000
     
     215,000Other current liabilities
     89,691
     
     89,691Total current liabilities
     6,727,662
     
     4,288,657Minority interest
     1,071,261
     
     -Stockholders' equity (deficit):Preferred stock , $.001 par value, 100,000,000 sharesauthorized; none issued and outstanding
     -
     
     -Common stock, $.001 par value; 300,000,000 shares authorized;195,130,961 and 193,830,961 issued and outstanding, respectively
     195,131
     
     193,831Shares to be issued
     63,854
     
     57,000Treasury stock, $.001 par value, 1,330,440 shares, 2,440,440 sharesof common stock, respectively
     (1,330)
     
     (2,440)Additional paid-in-capital
     18,254,877
     
     20,373,685Subscriptions receivable
     -
     
     (25,500)Prepaid consulting
     -
     
     (37,500)Other comprehensive loss
     -
     
     (1,522,997)Accumulated deficit
     (23,312,661)
     
     (14,990,621)Total stockholders' equity (deficit)
     (4,800,129)
     
     4,045,458Total liabilities and stockholders' equity(deficit)
     $      2,998,793
     
     $       8,334,115The accompanying notes form an integral part of these audited consolidated financial statements


---






---



PHI GROUP, INC. AND SUBSIDIARIES(FORMERLY, PROVIDENTIAL HOLDINGS, INC.)CONSOLIDATED STATEMENTS OF OPERATIONSFOR THE YEARS ENDED JUNE 30, 2009 AND 20082009
     2008Net revenuesConsulting and advisory fee income
     
     $      2,006,220
     $   3,609,318Operating expenses:Depreciation and amortization
     
     15,843
     2,634Salaries and wages
     
     483,084
     376,341Professional services, including non-cash compensation
     
     599,804
     778,440General and administrative
     
     496,278
     501,118Total operating expenses
     
     1,595,009
     1,658,534Income from operations
     
     411,211
     1,950,784Other income and (expenses)Interest expense
     
     (586,468)
     (362,536)Gain (loss) on sale of marketable securities
     
     (4,018,965)
     701,832Gain on debt settlement-net
     
     187,794
     67,719Gain on merge
     
     -Loss on conversion of note
     
     (27,400)
     -Loss on Acquision
     
     -Impairment of market securities
     
     (4,061,715)Impairment of loan receivable
     
     (282,148)Other income
     
     1,853
     1,483Net other income (expenses)
     
     (8,787,048)
     408,498Income (loss) before minority interest
     
     (8,375,837)
     2,359,282Minority interest
     
     53,797
     -Net income (loss)
     
     (8,322,040)
     2,359,282Other comprehensive gain/(loss):Reclassification
     
     ( 587,308)
     (244,872)Unrealized gain (loss) on marketable securities
     
     2,110,305
     (5,523,975)Comprehensive loss
     
     $    (6,799,043)
     $ (3,409,566)Net income (loss) per share:Basic
     
     $             (0.04)
     $            0.01Diluted
     
     $             (0.04)
     $            0.01Weighted average number of shares outstanding:Basic
     
     191,261,503
     182,427,136Diluted
     
     191,261,503
     182,578,452The accompanying notes form an integral part of these audited financial statements


---






---



PHI GROUP, INC. AND SUBSIDIARIES(FORMERLY, PROVIDENTIAL HOLDINGS, INC. )STATEMENT OF STOCKHOLDERS' EQUITYFOR THE YEARS ENDED JUNE 30, 2009 AND 2008Additional
     Stock
     Prepaid
     Shares
     Other
     
     TotalCommon Stock
     Treasury Stock
     Paid-in
     Subscription
     Consulting
     to be
     Comprehensive
     Accumulated
     Stockholders'Shares
     Amount
     Shares
     Amount
     Capital
     Receivable
     Fees
     issued
     Income/(loss)
     Deficit
     EquityBalance at June 30, 2007
     172,030,961
     $172,031
     (2,319,940)
     ($2,320)
     $19,709,149
     ($25,500)
     $             -
     $    57,000
     $4,245,850
     ($17,349,903)
     6,806,307Purchase of treasury shares
     -
     -
     (120,500)
     (120)
     (3,664)
     -
     -
     -
     -
     -
     (3,784)Shares  issued for
     -
     -
     -
     -
     
     -
     -
     -
     -
     -conversion of notes
     6,000,000
     6,000
     -
     -
     174,000
     -
     -
     -
     -
     -
     180,000Shares issued for
     
     
     -
     -
     
     -
     -
     -
     -
     -payment of accrued salaries
     14,000,000
     14,000
     -
     -
     406,000
     -
     -
     -
     -
     -
     420,000Shares issued for service
     1,800,000
     1,800
     -
     -
     88,200
     -
     (37,500)
     -
     -
     -
     52,500Unrealized loss on marketable securities
     -
     -
     -
     -
     -
     -
     -
     -
     (5,768,847)
     -
     (5,768,847)Net income for the year ended June 30, 2008
     -
     -
     -
     -
     -
     -
     -
     -
     
     2,359,282
     2,359,282Balance at June 30, 2008
     193,830,961
     193,831
     (2,440,440)
     (2,440)
     20,373,685
     (25,500)
     (37,500)
     57,000
     (1,522,997)
     (14,990,621)
     4,045,458Shares issued for payment of   accrued payroll and fees
     1,300,000
     1,300
     -
     -
     31,200
     -
     -
     -
     -
     -
     32,500Purchase of treasury shares
     -
     -
     (170,000)
     (170)
     (4,063)
     -
     -
     -
     -
     -
     (4,233)Amortization of prepaid consulting
     -
     -
     -
     -
     -
     -
     37,500
     -
     -
     -
     37,500Write-off subscription receivable
     -
     -
     -
     -
     (25,500)
     25,500
     -
     -
     -
     -
     -Recapitalization of DDCI
     -
     -
     -
     -
     (2,153,664)
     
     -
     -
     -
     -
     (2,153,664)Shares issued for investment in Philand UK
     -
     -
     -
     -
     -
     -
     -
     6,854
     -
     -
     6,854Unrealized gain on marketable   securities
     -
     -
     -
     -
     (2,237)
     -
     -
     -
     1,522,997
     -
     1,520,760Conversion of note to treasury
     -
     -
     1,280,000
     1,280
     35,456
     -
     -
     -
     -
     -
     36,736Net income for the year
     -
     -
     -
     -
     -
     -
     -
     -
     -
     (8,322,040)
     (8,322,040)Balance at June 30, 2009
     195,130,961
     $        195,131
     (1,330,440)
     $     (1,330)
     $   18,254,877
     $                   -
     $             -
     $    63,854
     $                        -
     $   (23,312,661)
     $     (4,800,129)The accompanying notes form an integral part of these audited consolidated financial statementsShares issued for Consulitng service
     200,000


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PHI GROUP, INC. AND SUBSIDIARIES(FORMERLY, PROVIDENTIAL HOLDINGS, INC.)CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED JUNE 30, 2009 AND 20082009
     
     2008Cash flows from operating activities:Net income(loss) from operations
     
     $   (8,322,040)
     
     $      2,359,282Adjustments to reconcile net income  to net cash used in operating activities:Depreciation
     
     15,842
     
     2,634Amortization of prepaid consulting fees
     
     121,722
     
     -Gain on debt settlement
     
     (187,794)
     
     (67,719)Loss on conversion of note
     
     27,400
     
     -Loss(gain) on sale of marketable securities
     
     4,018,965
     
     (701,832)Minority interest
     
     (127,569)
     
     -Shares issued for director fees
     
     -Shares  issued for consulting services
     
     -
     
     52,500Fair market value of options granted
     
     -
     
     -Impairment of assets
     
     4,343,863
     
     -Bad debt expense
     
     -
     
     -Marketable securities used for payments for service and fee
     
     18,333
     
     97,121Marketable securities  received for consulting service
     
     (2,080,200)
     
     (639,838)Marketable securities to be received for consulting service rendered
     -
     
     (3,000,000)Changes in operating assets and liabilities:Increase on accounts receivable
     
     (22,980)
     
     (44,520)(Increase)decrease in other assets and prepaid expenses
     
     323,612
     
     (358,412)Increase  in accounts payable and accrued expenses
     
     1,320,518
     
     517,852Net cash used in operating activities
     
     (550,329)
     
     (1,782,930)Cash flows from investing activities:Purchase of property and equipment
     
     (35,792)
     
     (27,228)Construction in progress
     
     (657,462)
     
     -Purchase of marketable securities
     
     (25,292)
     
     (35,388)Proceeds from sale of marketable securities
     
     268,840
     
     642,094Purchase of investment
     
     (125,421)
     
     (106,000)Net cash proved by (used in) investing activities
     
     (575,127)
     
     473,478Cash flows from financing activities:Proceeds from contribution of minority interest
     
     135,000
     
     -Purchase of treasury shares
     
     (4,233)
     
     (3,784)Proceeds on notes payable
     
     637,600
     
     1,322,600Payments on notes payable
     
     (167,485)
     
     (174,000)Borrowings from officer
     
     491,934
     
     355,642Payments on advances from officer
     
     (46,713)
     
     (81,592)Net cash provided by  financing activities
     
     1,046,103
     
     1,418,866Net increase(decrease) in cash and cash equivalents
     
     (79,353)
     
     109,415Cash and cash equivalents, beginning of period
     
     117,166
     
     7,751Cash and cash equivalents, end of period
     
     $          37,813
     
     $         117,166SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION:Cash paid during the period for:Interest
     
     $        211,413
     
     $         196,188Taxes
     
     $                    -
     
     $                    -Non-cash investing and financing activities:Shares  issued for conversion of notes
     
     $                  -
     
     $         180,000Shares  issued for payment of accrued salaries
     
     $          32,500
     
     $         420,000Conversion of note using treasury shares
     
     $          36,736
     
     $                    -The accompanying notes form an integral part of these audited consolidated financial statements


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PHI GROUP, INC. AND SUBSIDIARIES
(FORMERLY, PROVIDENTIAL HOLDINGS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1 - NATURE OF BUSINESS  PHI Group, 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.  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 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 fiscal year ended June 30, 2007. 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, 2009 and 2008.  In July 2007, PhiLand Corporation, a Nevada corporation and wholly-owned subsidiary of the Company, was formed 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.  PhiLand Corporation is currently involved in planning and developing this project. During the year ended June 30, 2009, 3,500,000 shares of PhiLand Corporation were issued to employees and consultants of the Company and 244,286 shares which were owned by the Company were sold to individuals for $140,000, 29,000 shares were exchanged for the payment of note amounting $29,000 and 900,000 shares which were owned by the Company were exchanged with 23,285,714 shares of Jeantex Group, Inc.  In addition, during the year ended June 30, 2009, 408,000 shares of PhiLand Corporation were sold for $49,000. The total of 5,081,286 shares held by minority shareholders makes up approximately 21% of outstanding shares. On June 5, 2009, Philand Ranch Limited, a company registered under the laws of England and Wales, acquired all the issued and outstanding common stock of PhiLand Corporation in exchange for the same amount of ordinary shares of Philand Ranch Limited.  As a result of the stock exchange between Philand Corporation and Philand Ranch Limited, the Company currently owns 18,734,753 shares of
ordinary stock of Philand Ranch Limited, which is listed on the Open Market Segment of the Frankfurt Stock Exchange under the symbol 1P8.F, WKN A0RPEA.


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In March 2007, the Company received 900,000 shares, valued at $675,000, of Bio-Warm, which subsequently acquired 100% of Vietnam-based Dai Dung Metallic Manufacture Construction and Trade Company (DDMMCT) 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 for services performed in the merger of Bio-Warm Corp. and DDMMCT which was closed on March 30, 2007 and received the remaining 3,763,753 shares during the year ended June 30, 2008 per the agreement, which in total, is equivalent to 20% of all issued and outstanding shares of DDC Industries, Inc. The merger agreement with DDMMCT was rescinded on November 18, 2008 in entirety and shareholders of DDMMCT agreed to return 28,610,025 shares of 30,110,025 issued shares. On December 1, 2008, DDC Industries Inc. changed its name toPHI Mining Group, Inc. The common stock of PHI Mining Group, Inc.  is currently trading on the Pink Sheets under the symbol “PHIG”.PHI Mining Group did not generate any revenues in the year ended June 30, 2009. IndoChina Mining Corporation, a Nevada corporation., was incorporated on March 20, 2008 for exploitation and processing of diatomite mines. On April 14, 2008, IndoChina Mining Corporation (IMC), entered into a Cooperation agreement with Phu Yen Minerals Joint Stock Company (PYMICO). Under this agreement, PYMICO and IMC will cooperate to contribute capital for establishment of a joint venture specializing in exploitation and processing of diatomite in Phu Yen providence and IMC will participate in PYMICO through purchasing a maximum of 30% shares of PYMICO when the latter issues additional shares in 2008. IndoChina Mining also entered into agreements On December 1, 2008, Indochina Mining Corporation entered into stock purchase agreement with PHI Mining Group (formerly DDC Industries, Inc.) to exchange all of its capital stock with the same number of newly issued shares of PHI Mining Group. As a result, the Company owns approximately 83% of PHI Mining Group. On May 20, 2008, Providential Vietnam, a Vietnamese corporation and wholly-owned subsidiary of the Company, was formed to provideM&A advisory services, management consulting, corporate restructuring, asset management, fund management, and investment banking, services in independent oil and gas, alternative energy, and mining, commercial and residential real estate, hotels and integrated hospitality and Investments in selective opportunities with potential for high growth.  NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  PRINCIPLES OF CONSOLIDATION  The consolidated financial statements include the accounts of PHI Group, Inc., and its subsidiaries, Providential Securities, Inc., Providential Capital, PHI Digital Inc., (“PHI Digital”), Provimex, Providential Energy Corporation, Touchlink Communications, PHI Mining Group, Providential Vietnam and PhiLand Ranch, and its 100% owned subsidiary. PhiLand Corporation, Ltd., collectively referred to as the "Company". All significant inter-company transactions have been eliminated in consolidation.  Providential Securities, Inc, PHI Digital, Provimex, Providential Energy Corporation, Touchlink Communications 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.


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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. 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, 2009 and 2008, the marketable securities have been recorded at $1,750,000 and $4,435,938, respectively 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.  As of June 30, 2009 and 2008, the Company had  balances of $67,500 and $3,044,520 as accounts receivable. The balance as of June 30, 2008 includes the securities receivable of $3,000,000 at the fair market value of shares at the date of the merger consummated on June 30, 2008.  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.  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 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 warrants as of June 30, 2009- and 2008.


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2009
     
     2008Warrants
     
     250,000
     
     250,000Total
     
     250,000
     
     250,000
     The net earnings per share are computed as follows: 2009
     
     2008Basic and diluted net loss per share:Numerator:Net income(loss)
     $(8,322,040)
     
     $   2,359,282Denominator:Basic weighted average number of common shares outstanding
     191,261,503
     
     182,427,136Basic net income (loss) per share
     $            (0.04)
     
     $             0.01Diluted weighted average number of common shares outstanding
     191,261,503
     
     182,578,452
  Diluted net income (loss) per share
     $             (0.04)
     
     $         0.01
 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.  FAIR VALUE OF FINANCIAL INSTRUMENTS  Effective July 1, 2008, the Company adopted Statement of Financial Accounting Standards No. 157 (SFAS 157),Fair Value Measurementsand adopted this Statement for the assets and liabilities shown in the table below. SFAS 157 clarifies the definition of fair value, prescribes methods for measuring fair value, establishes a fair value hierarchy based on the inputs used to measure fair value, and expands disclosures about the use of fair value measurements. The adoption of SFAS 157 did not have a material impact on our fair value measurements. Financial Accounting Standards Board (FASB) Staff Position SFAS No. 157-2,Effective Date of SFAS No. 157, permits the Company to defer the recognition and measurement of the nonfinancial assets and nonfinancial liabilities until January 1, 2009. At June 30, 2009, the Company did not have any nonfinancial assets or nonfinancial liabilities that are recognized or disclosed at fair value. SFAS No. 157 requires that financial assets and liabilities that are reported at fair value be categorized as one of the following types of investments based upon the methodology for determining fair value. Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company utilizes various approaches to measure fair value for available-for-sale securities.


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Assets measured at fair value on a recurring basis are summarized below. The Company has no financial liabilities measured at fair value on a recurring basis. Available-for-sale securities                           Level 1                                 Level 2                                  Level 3                  Total June 30, 2009:                                                    --                                   $1,750,000           $1,750,000 June 30, 2008:$854,500$3,581,438                                    -                     $4,435,938 We use various approaches to measure fair value of available-for-sale securities, while applying the three-level valuation hierarchy for disclosures, specified in SFAS 157. Our Level 1 securities were measured using the quoted prices in active markets for identical assets and liabilities. We received 3,500,000 shares of our client company, Vietnam United Steel Corporation, for the consulting services provided during the year ended June 30, 2009. In addition, these shares constituted 20% of the ownership in the client company. These shares (revenue earned) were valued at $1,750,000 and were considered by our management to be Level 3 in the valuation hierarchy, due to the share’s little or no market activity. We valued these shares received using the (undiscounted) cash flow method. Based on the audited financial statements for the year ended December 31, 2007 of the merger candidate of our client company, we calculated a projected cash flow for three consecutive fiscal periods, with a conservative increase of 20% per year. In addition to the cash flow projection, we also discounted the quoted market price by 50% of the market price at the time of completion of the services provided. Our management believed at the time of completion of the transaction that the fair value was approximately $0.50/share. For the period ended June 30, 2009
     Fair Value Measurement Using Significant Unobservable Input (Level 3)Common StockBeginning balance
     $    1,750,000Total gains/losses (realized/unrealized)
     -Included in earnings
     -Included in other comprehensive income
     -Purchases, issuances, and settlements
     -Transfers in and/or out of level 3
     -Ending balance
     $    1,750,000
   The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at the reporting date
     $     -
  Our company’s policy regarding the transfers in and/or out of Level 3 depends on the trading activity of the security, the volatility of the security, and other observable units which clearly represents the fair value of the security. If a level 3 security can be measured using a more fairly represented fair value, we will transfer these security either into Level 1 or Level 2, depending on the type of inputs.


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REVENUE RECOGNITION  The Company's revenue recognition policies are in compliance with Staff accounting bulletin (SAB) 104.  The Company recognizes consulting and advisory fee revenues when the transaction is completed and the service fees are earned.   Expenses are recognized in the period in which the corresponding liability is incurred. Payments received before all of the relevant criteria for revenue recognition are recorded as unearned revenue.  ADVERTISING  The Company expenses advertising costs as incurred.  Advertising costs for the years ended June 30, 2009 and 2008 were $12,650and $10,759 respectively.  COMPREHENSIVE INCOME (LOSS)  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, 2009 and 2008, the Company recorded $2,110,305 and $5,523,975 as unrealized loss on marketable securities, respectively.  Other comprehensive loss, as presented on the accompanying consolidated balance sheets amounted to $0 and $1,522,997 as of June 30, 2009 and 2008, respectively.  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 years ended June 30, 2009 and 2008.  RISKS AND UNCERTAINTIES  In the normal course of business, the Company is subject to certain risks and uncertainties. The Company provides its service and receives marketable securities upon execution of transactions. Consequently, the value of the securities received from customers can be affected by economic fluctuations and each customer's business growth. The actual realized value of these securities could be significantly different than recorded value.  RECLASIFICATIONS  The reclassification amount of $587,308 on the consolidated statement of operations represents the proportionate amounts of the unrealized gain/loss on marketable securities, which were sold during the period ended June 30, 2009. The following marketable securities were sold (realized) and amount of reclassifications for each security is listed below:


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Marketable Security
     Reclassification amountEastbridge Investments
     $  265,823Cinnabar Enterprises
     $  237,735Cavico Corporation
     $    83,750Total reclassification amount
     $  587,308
  RECENT ACCOUNTING PRONOUNCEMENTS In December 2007, the FASB issued SFAS No. 141 (Revised 2007),“Business Combinations”.The objective of this statement will significantly change the accounting for business combinations. Under Statement 141R, an acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition date fair value with limited exceptions. Statement 141 applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company does not expect the adoption of SFAS No. 141R to have a material impact on the consolidated financial statements. In December 2007, the FASB issued SFAS No. 160,“Noncontrolling Interests in Consolidated Financial Statements-An Amendment of ARB No. 51".The objective of this statement is to establish new accounting and reporting standards for the Noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. Statement 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The Company does not expect the adoption of SFAS No. 160 to have a material impact on the consolidated financial statements. In March 2008, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 161,Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133,which requires additional disclosures about the objectives of the derivative instruments and hedging activities, the method of accounting for such instruments under SFAS No. 133 and its related interpretations, and a tabular disclosure of the effects of such instruments and related hedged items on our financial position, financial performance, and cash flows. The Company does not expect the adoption of SFAS No. 161 to have a material impact on the consolidated financial statements. In May 2008, FASB issued SFASB No.162, “The Hierarchy of Generally Accepted Accounting Principles”. The pronouncement mandates the GAAP hierarchy reside in the accounting literature as opposed to the audit literature. This has the practical impact of elevating FASB Statements of Financial Accounting Concepts in the GAAP hierarchy. This pronouncement will become effective 60 days following SEC approval. The Company does not expect this pronouncement will impact the consolidated financial statements. In May 2008, FASB issued SFASB No. 163, “Accounting for Financial Guarantee Insurance Contracts-an interpretation of FASB Statement No. 60”. The scope of the statement is limited to financial guarantee insurance (and reinsurance) contracts. The pronouncement is effective for fiscal years beginning after December 31, 2008. The Company does not expect this pronouncement will impact the consolidated financial statements.  In June 2008, the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) Emerging Issues Task Force (EITF) No. 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities.” Under the FSP, unvested share-based payment awards that contain rights to receive nonforfeitable dividends (whether paid or unpaid) are participating securities, and should be included in the two-class method of computing EPS. This FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008 and the Company does not expect that FSP EITF No. 03-6-1 would have a material impact on the consolidated financial statements.  In April 2009, the FASB issued FASB Staff Position (“FSP”) FAS No. 107-1 and APB 28-1,Interim Disclosures about Fair Value of Financial Instruments(“FSP FAS 107-1 and APB 28-1”), which amends SFAS No. 107,Disclosures about Fair Value of Financial Instruments, to require disclosures about the fair value of financial instruments for interim reporting periods, as well as
annual reporting periods. FSP FAS 107-1 and APB 28-1 are effective for all interim and annual reporting periods ending after June 15, 2009 and the Company does not expect that FSP No. 107-1 would have a material impact on the consolidated financial statements.


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In April 2009, the FASB issued FSP FAS 157-4,Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly(FSP 157-4), and FSP FASB 107-1 and Accounting Principles Board (APB) 28-1,Interim Disclosures about Fair Value of Financial Instruments(FSP 107-1). These two staff positions relate to fair value measurements and related disclosures. The FASB also issued a third FSP relating to the accounting for impaired debt securities titled FSP FAS 115-2 and FAS 124-2,Recognition and Presentation of Other-Than-Temporary Impairments(FSP 115-2). These standards are effective for interim and annual periods ending after June 15, 2009. FSP 157-4 and FSP 115-2 do not currently apply to the Company’s activities, but the Company will adopt the disclosure requirements of FSP 107-1.  In May 2009, the FASB issued Statement No. 165, “Subsequent Events” (“SFAS 165”), which establishes general standards of accounting for, and requires disclosure of, events that occur after the balance sheet date but before financial statements are issued or are available to be issued.  We adopted the provisions of SFAS 165 for the quarter ended June 30, 2009.  The adoption of these provisions will not have a material effect on our consolidated financial statements. In June 2009, the FASB issued SFAS No. 167,Amendments to FASB Interpretation No. 46(R)(SFAS 167). The amendments include: (1) the elimination of the exemption for qualifying special purpose entities, (2) a new approach for determining who should consolidate a variable-interest entity, and (3) changes to when it is necessary to reassess who should consolidate a variable-interest entity. SFAS 167 is effective for the first annual reporting period beginning after November 15, 2009 and for interim periods within that first annual reporting period. The Company will adopt SFAS 167 in fiscal 2010 and is evaluating the impact it will have on the consolidated results of the Company. In June 2009, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles” (“SFAS 168”). SFAS 168 establishes the FASB Accounting Standards Codification (the “Codification”) as the single source of authoritative nongovernmental U.S. GAAP. The Codification is effective for interim and annual periods ending after September 15, 2009. The adoption of this standard will not have a material impact on our 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 12).


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NOTE 4 – LOANS RECEIVABLE FROM RELATED PARTIES  Loans receivable from related parties consist of the following at June 30, 2009 and 2008:  2009
     2008Loan to Jeantex Group, Inc.
     1,000
     $162,402Loan to Cavico
     1,020
     -Loan to Pho Express
     109,600
     85,000Loan to Provimex HTV
     -
     67,000Loan to Bio-Warm Corp./DDC Industries
     -
     32,560$111,620
     $346,962
  Loans to Bio-Warm/ DDC Industries and Cavico are unsecured, interest free and due on demand. As DDC Industries became a subsidiary of the Company(Note 1), this loan was eliminated during consolidation.  Loans to Jeantex Group and Provimex HTV is unsecured and bear 8.5% interest per annum  and due on demand.   $30,000 of loan to Pho Express bears 32.5% interest per annum and the remaining portion is interest free and due on demand. The loans to Pho Express will be applied toward the payment of investment upon closing of joint venture agreement.  During the year ended June 30, 2009, the interest income from these loans has not been recorded as the receiving of these interests is not assured.  NOTE 5 – OTHER CURRENT ASSETS:  The Other Assets comprise of the following as of June 30, 2009 and 2008:  2009
     2008Advance for shares purchase
     77, 903
     106,000Loans Receivable (unsecured, non-interest bearing & unsecured)
     65,000
     5,000Prepaid expense & others
     -
     86,131Total
     $    142,903
     $  197,131
   NOTE 6- MARKETABLE EQUITY SECURITIES AVAILABLE FOR SALE  The Company’s marketable securities are classified as available-for-sale and, as such, are carried at fair value.  All of the securities are comprised of shares of common stock of the investee.  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 the Pink Sheets.  As such, each investment is accounted for in accordance with the provisions of SFAS No. 115.  Following is a summary of marketable equity securities classified as available for sale as of June 30, 2009: Traded onAcquisition
     Market
     Accum.
     Impairment
     Number of
     Pink SheetsInvestee Name
     Cost at
     Value at
     Unrealized
     for other than temporary
     Shares Held at
     (PK) or Bulletin(Symbol)
     June 30, 2009
     June 30, 2009
     Gain (Loss)
     June 30, 2009
     June 30, 2009
     Board (OB)Tri Kal International (TRIKF)
     $15
     $-
     $-
     $(15)
     15,165
     -Jeantex Group (JNTX)*
     2,078,138
     -
     -
     (35,000)
     32,977,831
     OBCavico Corporation (CVIC)
     -
     -
     -
     
     1,700,000
     OBAll Line Inc, (ALIN)
     696,500
     -
     -
     (696,500)
     6,965,100
     PKVietnam United Steel (VUSC)
     1,750,000
     1,750,000
     -
     
     3,500,000
     PKCatthai Corporation (CTHI)
     3,330,200
     -
     -
     (3,330,200)
     7,271,300
     PKTotal
     $7,854,853
     $ 1,750,000
     -
     $ (4,061,715)


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*All these are related parties  The changes in net unrealized holding gain/loss on securities available for sale have been included as a separate component of stockholders' equity.  For the years endedJune 30, 2009 and 2008, an unrealized loss of $0 and $1,522,997 were recorded, respectively.  During the year endedJune 30, 2009, the Company sold all 6,645,584 shares of Eastbridge Investment stock for $202,337. The Company sold 335,000 shares of Cavico Corp. for $60,853 and delivered 300,000 shares of Cavico Corp. for payment of interest amounting $45,000.  In addition, the Company received 7,270,000 shares of Catthai Corporation for services of which 6,000,000 shares were recorded as revenue in the year ended June 30, 2008.  The Company purchased 1,200 shares of Catthai Corporation at $2,371 during the year endedJune 30, 2009. The Company received 3,500,000 shares of Vietnam United Steel Corporation for services. The Company used 1,500,000 shares of All Line, Inc. for payment for services valued at $30,000 and sold 85,000 shares for $4,325. In March 2007, Bio-Warm entered into a purchase agreement to acquire 100% of Vietnam-based Dai Dung Metallic Manufacture Construction and Trade Company (DDMMCT) and changed its name to DDC Industries, Inc. The Company received 7,527,506 shares for advisory services, which was equivalent to 20% of all issued and outstanding shares of DDC Industries, Inc. The merger agreement with DDMMCT was rescinded on November 18, 2008 in entirety and shareholders of DDMMCT agreed to return 28,610,025 shares of 30,110,025 issued shares. On December 1, 2008, DDC Industries Inc. changed its name toPHI Mining Group.On December 1, 2008, Indochina Mining Corporation, a subsidiary of the Company, entered into stock purchase agreement with PHI Mining Group to exchange all of its capital stock with the same number of newly issued shares of PHI Mining Group.As a result, the Company owned about 83% of PHI Mining Group, Inc. as of December 1, 2008. Prior to the merger between PHI Mining Group and Indochina, Company held 20% interest in DDCI Industries which was increased to 76% as a result of rescission  as mentioned above and subsequent acquisition of Company’s subsidiary Indochina by PHI  Mining Group (DDCI Industries) resulted in the increase in Company’s interest to 83%. This transaction was recorded as related party transaction which resulted in the capitalization of PHI Mining Group into the Company. During the year ended June 30, 2009, 23,285,714 shares of Jeantex Group, Inc. were exchanged with 900,000 shares of Philand Corporation which were owned by the Company. The Company recorded a realized loss on the sale of marketable securities of $4,018,965 including realized loss of $2,074,647 on securities of DDCI which became a subsidiary of the Company for the year ended June 30, 2009 and a gain of $701,832 for the year ended June 30, 2008.   NOTE 7 - PROPERTY AND EQUIPMENT  Property and equipment at June 30, 2009 and 2008 consists of the following:  2009
     2008Equipment
     $    87,957
     $    85,855Furniture and Fixtures
     59,115
     59,115Automobiles
     93,191
     58,000Subtotal
     240,263
     202,970Less Accumulated Depreciation
     (193,322)
     (176,853)Total net fixed assets
     $   46,941
     $    26,117
   Depreciation expenses were $15,842 and $2,634 for the fiscal years ended June 30, 2009 and 2008, respectively.


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NOTE 8 - CONSTRUCTION IN PROGRESS  Construction in progress represents the costs incurred by Philand Corporation, a subsidiary of the Company for real estate development amounting to $657,462 as of June 30, 2009. The costs included interest capitalized of $80,952.  NOTE 9    - ACCOUNTS PAYABLE AND ACCRUED EXPENSES  The accounts payable and accrued expenses at June 30, 2009 and 2008 consist of the following:  2009
     2008Accounts payable & Accrued Expenses
     $     1,167,455
     $     379,175Accrued salaries and payroll taxes
     300, 199
     166,557Accrued interest
     833,607
     551,323Accrued legal
     385,084
     339,804Accrued consulting fees
     177,981
     168,870$ 2,864,325
     $ 1,605,728
 During the year endedJune 30, 2009, the Company was forgiven for the accrued interest of $131,808 on certain short term notes. This amount of was recorded as a gain on settlement of debts in the consolidated financial statements.  During the year ended June 30, 2008, the Company wrote off $66,719 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, except for $100,000 as described below, unsecured and due on demand. As of June 30, 2009 and 2008, the balances were $1,013,561 and $561,982, respectively.  As of June 30, 2009, the Company has a short term note payable amounting $100,000 with interest bearing $3,000 per month payable to a former officer.  NOTE 11 - LOANS AND PROMISSORY NOTES   SHORT TERM NOTES PAYABLE:  As of June 30, 2009 and 2008, the Company has short term notes payable amounting $2,310,085 and $1,816,255, with accrued interest of $833,607 and $340,753, respectively.  These notes bear interest rates ranging from 6% to 36% per annum.  $1,811,500 of these short term notes are past due and $315,535 are due on demand. During the year ended June 30, 2009 and 2008, the Company paid $167,485and $174,000 of principal and $200,135 and $196,188 of interest on short term notes, respectively.


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Some of the notes payable are secured by assets of the Company as summarized below:  Note balance
     Secured by$115,000
     400,000 Jeantex shares,
500,000  Catthai shares$550,000
     2,000,000 Cavico Corp. shares
500,000 Catthai shares$150,000
     1,500,000 PHI Mining Group shares$100,000
     1,500,000 PHI Mining Group 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, 2009.  The interest payable to holders of preferred stock of $232,655 and $206,855 has been included in accrued interest included in account payable and accrued expenses on the balance sheet as of June 30, 2009 and 2008, respectively.  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, 2009, 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 UNPAID AS OF JUNE 30, 2009:   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.  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.


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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 PHI GROUP, 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 PHI Group, 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, 2008, 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 - BASIC AND DILUTED NET LOSS PER SHARE  Net loss per share is calculated in accordance with SFAS No. 128, "Earnings per Share".  Under the provision of SFAS No. 128, basic net loss per share is computed by dividing the net loss for the period 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.  Basic and diluted weighted average number of shares for the year ended June 30, 2009 were the same since the inclusion ofCommon stock equivalents is anti-dilutive.


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NOTE 14 - STOCKHOLDER'S EQUITY  Effective April 13, 2009, the Company amended its articles of incorporation to change its par values of preferred and common stock to $0.001. The Company has 400,000,000 authorized capital stock, consisting of 300,000,000 shares of common stock and 100,000,000 shares of preferred stock. The effect of the change has been reflected retroactively in the consolidated financial statements.  Treasury Stock:  During the years ended June 30, 2009 and 2008, the Company purchased 170,000 and 120,500 treasury shares for $4,233and $3,784, respectively. During the year ended June 30, 2009, the Company used 1,280,000 shares of its treasury shares valued at $36,736 to convert a note of $9,336. The Company recorded $27,400 loss on conversion.  The balance of treasury stock of 1,330,440 shares as of June 30, 2009 was valued at $1,330.  Common Stock:  Fiscal year ended June 30, 2009:  During the year ended June 30, 2009, the Company issued 1,300,000 shares of common stock valued at $32,500 for a payment of accrued payroll and consulting fees.  Fiscal year ended June 30, 2008:  During the year ended June 30, 2008, the Company issued 1,800,000 shares of common stock valued at $90,000 for services.  During the year ended June 30, 2008, the Company issued 6,000,000 shares of common stock for conversion of short term notes amounting $180,000.  During the year ended June 30, 2008, the Company issued 14,000,000 shares of common stock for payment of accrued salaries amounting $420,000 for officers.  Shares to be issued:  On 06/09/2006, Luberski Inc. transferred and subsequently sold 1,000,000 shares of common stock of PHI Group, Inc.  Which belonged to the officer of the Company 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 the officer and recorded the transaction as shares to be issued.  Prepaid Consulting:  During the year ended June 30, 2008, the Company signed a consulting agreement for consulting service for one year. The Company issued 1,500,000 shares of common stock to the consultant valued at $75,000 based upon the market value of the stock at the date of stock issuance.  The Company amortized $37,500 during the year endedJune 30, 2009 and $37,500 in the year ended June 30, 2008.  Subscriptions Receivable:  The subscription receivable balance of $25,500 at June 30, 2008 from a consultant for shares issued during the year ended 2005 was written off during the fiscal year ended June 30, 2009.  NOTE 15 - STOCK BASED COMPENSATION PLAN  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, 2009, 13,778,512 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.  Warrants:  During the quarter ended September 30, 2006, 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 yearsExpected volatility
     198%Expected dividend yield
     0%
  Following is a summary of the warrant activity for the year ended June 30, 2009 Warrants outstanding
     Exercise Price
     Aggregate Intrinsic ValueOutstanding, June 30, 2008
     250,000          -
     $0.015
     $11,250Granted
     -
     
     -Forfeited
     -                  -
     
     -Exercised
     -                -
     
     -Outstanding, June 30, 2009
     250,000
     $0.015
     $3,000
   Following is a summary of the status of warrants outstanding at June 30, 2009:  Exercise Price
     
     Total
Warrants
Outstanding
     
     Remaining Life
(Years)
     
     Total
Exercise Price
     
     Warrants
Exercisable
     
     Exercise Price$0.015
     
     250,000
     
     2.42
     
     $0.015
     
     250,000
     
     $0.015
   NOTE 16- GAIN ON SETTLEMENT OF DEBT  During the year ended June 30, 2009 and 2008, the Company recorded a gain of $187,794 and $67,719 on the settlement of debt, respectively.  (Note 9 and 11)  NOTE 17 - RELATED PARTY TRANSACTIONS  The Company accrued $210,000 salaries for Henry Fahman (President of the Company) and Tina Phan (Secretary of the Company) during the years ended June 30, 2009 and 2008. All revenues of the Company were generated by PHI Group (parent company). The Company provides consulting services to its clients and revenues are considered earned when the services are deemed complete. The Company receives consideration for consulting services provided either with cash and/or common stock of the client company. No revenues were earned by any of the Company’s subsidiaries during the periods for which the income statements are presented. In March 2007, Bio-Warm entered into a purchase agreement to acquire 100% of Vietnam-based Dai Dung Metallic Manufacture Construction and Trade Company (DDMMCT) and changed its name to DDC Industries, Inc. The Company received 7,527,506 shares for advisory services, which was equivalent to 20% of all issued and outstanding shares of DDC Industries, Inc. The merger
agreement with DDMMCT was rescinded on November 18, 2008 in entirety and shareholders of DDMMCT agreed to return 28,610,025 shares of 30,110,025 issued shares. On December 1, 2008, DDC Industries Inc. changed its name toPHI Mining Group.


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On December 1, 2008, Indochina Mining Corporation, a subsidiary of the Company, entered into stock purchase agreement with PHI Mining Group to exchange all of its capital stock with the same number of newly issued shares of PHI Mining Group.As a result, the Company owned about 83% of PHI Mining Group, Inc at December 1, 2008. Prior to the merger between PHI Mining Group and Indochina, Company held 20% interest in DDC Industries which was increased to 76% as a result of recession  as mentioned above and subsequent acquisition of Company’s subsidiary Indochina by PMG Mining Group (DDC Industries) resulted in the increase in Company’s interest to 83%. This transaction was recorded as related party transaction which resulted in the consolidation of PHI Mining Group into the Company. NOTE 18 - INCOME TAXES  No provision was made for income tax since the Company has  significant net operating loss carry forward. Through June 30, 2009, the Company incurred net operating losses for tax purposes of approximately $8.3 million.  The net operating loss carry forward may be used to reduce taxable income through the year 2029. Net operating loss for carry forwards for the State of California is generally available to reduce taxable income through the year 2029.  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, 2009 and 2008  were  approximately  $6.7 million   and  $3.4 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, 2009
     June 30, 2008Deferred tax asset
     $6.7
     $3.4Valuation allowance
     (6.7)
     (3.4)$       -
     $        -
  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, 20092008 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 19- CONTRACTS AND COMMITMENTS  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.  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.  The Company recorded $3,000,000 as part of accounts receivable based on the fair market value of 6,000,000 shares at the date of the merger consummated on June 30, 2008. During the period ended December 31, 2008, the Company received these 6,000,000 shares and 1,270,000 additional shares for transaction related to stock purchased from Strategia for merger.  BUSINESS COOPERATION AGREEMENT WITH PHO EXPRESS  *On September 19, 2007, Provimex, Inc., a subsidiary of the Company entered into business cooperation agreement with an 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. The Company paid $96,100 toward this investment and loaned $13,500 to Pho Express as of June 30, 2009. The business cooperation agreement was not closed as of the date of this report.*  BUSINESS AND FINANCIAL CONSULTING AGREEMENT WITH MAST VENTURES, LLC  Effective April 1, 2008, the Company entered into a business and financial consulting agreement with Mast Ventures, LLC to raise capital for a wholly owned subsidiary, PhiLand Corporation for 5 years. The service includes assistance identifying potential investors, developing an approach in seeking such current financing and investor relations. The Company agreed to pay 5% of the total funds raised by the consultant.  OFFICE SPACE LEASE  The Company signed on a 5 year lease agreement for the corporate office effective May 1, 2008. The monthly rental is $6,690.70 and will be increased by 3.5% per annum commencing in the thirteenth month of the initial lease term and continuing annually thereafter.  Theleases for offices in Vietnam are for 12 months starting January 2008 and July 2008.  The monthly rental is ranging from approximately $625 to $4,100 per month.  Future commitments under operating leases are as follows for the twelve months ending June 30:  2010                                                       $ 83,091 2011                                                          86,007 2012                                                          89,017 2013                                                          76,777 2014- Total minimum lease payments$334,892  The rent expense was $147,043 and $81,130 for the year ended June 30, 2009 and 2008, respectively.


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NOTE 20 - GOING CONCERN UNCERTAINTY  As shown in the accompanying consolidated financial statements, the Company has accumulated deficit of $23,312,661 and negative cash flow from operations amounting $550,329 for the year ended June 30, 2009. 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, 2010 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 21 - SUBSEQUENT EVENTS  .On June 5, 2009, Philand Ranch Limited, a company registered under the laws of England and Wales, acquired all the issued and outstanding common stock of PhiLand Corporation in exchange for the same amount of ordinary shares of Philand Ranch Limited.  As a result of the stock exchange between Philand Corporation and Philand Ranch Limited, the Company currently owns 18,734,753 shares of ordinary stock of Philand Ranch Limited. Effective September 07, 2009, Philand Ranch Limited’s ordinary stock was approved to trade on the Open Market Segment of the Frankfurt Stock Exchange under the symbol 1P8.F, WKN A0RPEA.


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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.   ITEM9A.CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Disclosure controls and procedures are controls and other procedures that are designed to provide reasonable assurance that the information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and accumulated and communicated to management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management, at the direction of our chief executive officer/acting chief financial officer, performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(f) under the Exchange Act). Based on that evaluation and the identification of material weaknesses in our internal control over financial reporting as described in this Item 9A below under the headingManagement's Report on Internal Control over Financial Reporting, our management concluded that our disclosure controls and procedures were not effective as of June 30, 2009. Notwithstanding these material weaknesses, management has concluded that the consolidated financial statements included in this report present fairly, in all material respects, PHI Group’s financial position and results of operations, and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles ("GAAP"). Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting at PHI Group. Internal control over financial reporting is a process designed by or under the supervision of our chief executive officer/acting chief financial officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with GAAP. A company's internal control over financial reporting includes policies and procedures that (1) pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, transactions and dispositions of our assets, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that receipts and expenditures are being made only in accordance with authorizations of our management and board of directors, and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements. Our management assessed the effectiveness of PHI Group's internal control over financial reporting as of June 30, 2009. In making this assessment, our management used the criteria established in theInternal Control—Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). In connection with the evaluation of our disclosure controls and procedures, our management team attempted to identify any "material weakness" in our internal control environment. We defined "material weakness" as a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We defined "significant deficiency" as a deficiency, or combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of our financial reporting.


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We identified on a preliminary basis the following material weaknesses in internal control over financial reporting:
 • Ineffective control over the financial statements closing process; • Insufficient personnel with an appropriate level of accounting knowledge, experience with the Company and/or industry, and training in the application of GAAP; • Lack of segregation of duties; and • Inadequate monitoring of non-routine and non-systematic transactions. Our independent registered public accounting firm, Kabani & Company, have not issued a report on our internal control over financial reporting as of June 30, 2009.  ITEM 9B.  OTHER MATTERS  None.


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PART III  ITEM 10. 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, 2009, with respect to the Directors and Executive Officers of the Company.  NAMEAGEPOSITION Henry D. Fahman                                    55                                     Chairman of the Board, President, Acting Chief Financial Officer Tina T. Phan                                          42                                     Treasurer Tam T. Bui                                                48                                     Director Frank Hawkins                                         68                                     Director Paul K. Nguyen                                        43                                    Director Lawrence G. Olson                                  72                                     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. 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.  Henry D. Fahmanhas been President and Chairman of the Board of PHI Group, 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 also serves as Executive Chairman of PhiLand Ranch Limited. Mr. Fahman is the husband of Tina T. Phan, our Secretary and Treasurer and a member of our Board of Directors.  Tina T. Phanhas been a Treasurer since April 10, 2009 and served as a Director and Secretary of the Company from January 2000 to April 10, 2009 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 serves as Treasurer of the Company. Mrs. Phan is the wife of Henry D. Fahman.  Tam Buihas been a Director of the Company since April 10, 2009 and served as a Chief Technology Officer from May 2002 to April 10, 2009. 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. Paul Nguyenhas been a Director of the Company since April 10, 2009 and is currently Senior Partner of Nguyen & Larsen, LLP, a law firm, and Chief Executive Officer of Summit Medical Group, Inc. in Orange County, CA, Mr. Nguyen received a MS in aeronautical engineering from California Institute of Technology in 1984 and was named Research Scientist by NASA from 1984-1987.  After graduating from the Harvard Business School JD/MBA program in 1991, Mr. Nguyen served as Institutional Investment Associate from 1991-1992 and Managing Director from 1992-1993 for JP Morgan in New York and Tokyo. Mr. Nguyen served as Senior Associate attorney for Baker & McKenzie in Ha Noi, Vietnam from 1993-1995. In 2000, Mr. Nguyen received a MD from Loma Linda School of Medicine and was board certified in plastic surgery in 2005. Lawrence G. Olsonbecame a director of PHI Group, Inc. in January 2008.  Mr. Olson has been a director of Santa Fe Gold Corp., a public company (OTCBB:SGFE), since March 1999 in connection with the Company's acquisition of Arizona Mica
Properties, Inc., a private Arizona corporation owned by Mr. Olson and his partners. He has held the position of Chairman of Santa Fe Gold’s Board of Directors since October 2000 and until October 2003 also held the positions of President and Chief Executive Officer. Mr. Olson has owned and operated a successful business, Olson Precast of Arizona Inc., since 1973. Mr. Olson received a B.S. Degree in Civil Engineering from the University of Southern California.


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Frank Hawkins, Directorhas been a Director of the Company since April 10, 2009 andMr. Hawkins is afounder and CEO of Hawk Associates with nearly 30 years of award-winning investor relations experience, Mr. Hawkins has earned the wide respect of Wall Street's investment community for straight talk and integrity.  He was formerly vice president/corporate relations and planning and head of the investor relations program at Knight-Ridder, Inc. in Miami. Mr. Hawkins started his career as an agent handler in clandestine collection operations for the Defense Intelligence Agency in Germany and went on to become a foreign and war correspondent, international businessman, senior corporate executive and president of the Access Asia Group in Hong Kong. He has lived in eight countries. He has been involved in stock listings in Tokyo and Frankfurt and company presentations in London, Zurich, Geneva and Singapore. Fluent in German, he is a graduate of Cornell University and author of "Ritter's Gold," an adventure novel published in several languages by the New American Library. He is a member of the Association of Former Intelligence Officers and the Audubon Society and is listed in Who's Who in America and Who's Who in the World. He serves on the board of the Florida Keys Electric Cooperative.  ITEM 11.  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, 2009.  (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.  ITEM 12. 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 June 30, 2009 (195,130,961 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:


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NAME AND ADDRESS OF                  AMOUNT OF BENEFICIAL              PERCENT OF TITLE OF CLASSBENEFICIAL OWNER (1)OWNERSHIPCLASS  Common Stock                  Henry D. Fahman                                         27,160,594 (2)                                      13.58% 17011 Beach Blvd., Suite 1230 Huntington Beach, CA 92647  Common Stock                   Tina T. Phan (3)                                         15,829,646                                             7.91% 17011 Beach Blvd., Suite 1230 Huntington Beach, CA 92647  Common Stock              Tam Bui                                             10,519,480 (5)                                      5.26% 17011 Beach Blvd., Suite 1230 Huntington Beach, CA 92647  Common Stock                 Lawrence G. Olson                                       300,000                                     * 3045 S. 35thAvenue Phoenix, AZ 85009  Common Stock                   Shares of all directors and                         53,809,720                                              27.58% executive officers as a group (4 persons)    (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.  * Less than 1%.   ITEM 13. 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 require 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.  ITEM14.PRINCIPAL ACCOUNTANT FEES AND SERVICES Audit Fees The aggregate fees billed by Kabani & Company., independent auditors, for the audit of the Company’s annual consolidated financial statements and reviews of quarterly financial statements for the years ended June 30, 2009 and 2008  were $54,500 and $45,000 respectively.


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All Other Fees The Company did not pay Kabani & Company any non-audit fees for fiscal year 2009 or 2008. PART IV   ITEM 15. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES  Financial Statements The following consolidated financial statements of PHI Group, Inc. and its subsidiaries are included: Consolidated Balance Sheets                                           — June 30, 2009 and 2008. Consolidated Statements of Operations                           — For the fiscal years ended June 30, 2009 and 2008 Consolidated Statements of Cash Flows                          — For the fiscal years ended June 30, 2009 and 2008 Consolidated Statements of Changes in Owners’ Equity — For the fiscal years ended June 30, 2009 and 2008 Notes to Consolidated Financial Statements Report of Independent Registered Public Accounting Firm (Kabani & Company)  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          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)


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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 PHI Group, Inc., dated April 25, 2001. (5) 10.18.1  Letter of Intent between PHI Group, Inc. and Epicenter, Inc., dated October 30, 2000. (5) 10.18.2  Amendment to Letter of Intent between PHI Group, Inc. and Epicenter, Inc., dated November 30, 2000. (5) 10.18.3  Amendment to Letter of Intent between PHI Group, Inc. and Epicenter, Inc., dated January 12, 2001. (5) 10.18.4  Amendment to Letter of Intent between PHI Group, Inc. and Epicenter, Inc., dated June 26, 2001. (5) 10.18.5  Amendment to Letter of Intent between PHI Group, 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 PHI Group, Inc. and Global Systems and Technologies, Corp. dated October 18, 2001. (6) 10.24      Letter of Intent between PHI Group, Inc. and Estate Planning and Investment Company dated November 7, 2001. (6) 10.25      Joint Venture Agreement between PHI Group, 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)


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17.4Resignation 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.   SIGNATURES  Pursuant to the requirement of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.  PHI GROUP, INC.  Date: July 8, 2010 By: /s/ Henry D. Fahman Henry D. Fahman, President  In accordance with the Exchange Actof 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.   SIGNATURETITLEDATE    /s/ Henry D. Fahman HENRY D. FAHMAN               President/Chairman/Acting Chief Financial Officer                              July 8, 2010   /s/ Tina T. PhanTreasurer                                                                                                      July 8, 2010 TINA T. PHAN  /s/ Tam T. BuiDirector                                                                                         July 8, 2010 TAM T. BUI


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/s/ Ghanshyam  DassDirector                                                                                                        July 8, 2010 GHANSHYAM DASS  /s/Frank HawkinsDirector                                                                                                       July 8, 2010 FRANK HAWKINS  /s/Paul K. NguyenDirector                                                                                                   July 8, 2010 PAUL K. NGUYEN  /s/ Lawrence G. OlsonDirector                                                                                                          July 8, 2010 LAWRENCE G. OLSON


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