U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-KSB



(MARK ONE)



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

EXCHANGE ACT OF 1934



FOR THE FISCAL YEAR ENDED: JUNE 30, 2005



OR



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

SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD

FROM _________ TO ________



COMMISSION FILE NO.  2-78335-NY





PROVIDENTIAL HOLDINGS, INC.

(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)



|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



Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.



YES [X] NO []





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



State the issuer's revenues for the fiscal year ended June 30, 2005: $4,279,352



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 of  October 31, 2005  was $4,015,480 based on a price of $0.026 per share.



The number of shares of Common Stock, $.04 par value per share, outstanding as of June 30, 2005 was: 151,936,473 shares.



Transitional Small Business Disclosure Format (check one):

YES [ ] NO [X]

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS



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



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



PART I



ITEM 1. BUSINESS OVERVIEW



INTRODUCTION



Providential Holdings, Inc., ("PHI") specializes in 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





BACKGROUND



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



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



Since November 2000, the Company has reorganized its primary scope of business to focus on merger and acquisition advisory services, with particular emphasis on: (1) Technologies, (2) Financial services, (3) International markets, and (4) Special Situations.



BUSINESS RESTRUCTURING



Since the discontinuance of its securities brokerage operations in October 2000, the Company has restructured its primary scope of business to focus on merger and acquisition advisory services, with particular emphasis on: (1) Technologies, (2) Financial services, (3) International markets, and (4) Special Situations.  Events and developments relating to these areas are described in more detail below.



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SUBSIDIARIES:



PROVIMEX, INC.



Provimex is a wholly-owned division of the Company originally formed on April 10, 2001 under the name "Providential Imex", to focus on trade commerce with Vietnam. This division changed its name to Provimex on July 5, 2001.  Provimex began to generate revenues from its import and export activities in August 2002.  For the fiscal years ended June 30, 2004 and June 30, 2005, this division recorded $132,856 and $28,144 in sales, respectively.  This subsidiary was later incorporated as a Nevada corporation on September 23, 2004. Web site:www.provimex.us. The Company has declared a 15% stock dividend of Provimex, Inc. to shareholders of record as of September 15, 2004.



PROVIDENTIAL CAPITAL, INC.



In May 2003, the Company formed a new wholly-owned subsidiary under the name of Providential Capital, a DBA company, 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. This subsidiary was later incorporated as a Nevada corporation on September 23, 2004.



Providential Capital has successfully managed merger plans for several publicly-traded companies and is currently focusing on a number of target companies in the US, China, Korea, and Vietnam.



CLEARPASS SYSTEMS, INC.



On November 20, 2002 the Company entered into an agreement to acquire 51% of the outstanding common stock of Clear Pass, Inc., a Nevada corporation, in exchange for $1,500,000 and 3,000,000 shares of restricted common stock of the Company.  Under an agreement with PASS21 Co, Ltd., a Korean corporation, Clear Pass had the licensing rights to distribute and market PASS21 Co.'s biometric products in the US, Canada and Europe. Besides a total of $175,500.00 investment into Clear Pass, the Company issued 3,000,000 shares of restricted common stock of the Company and a promissory note in the amount of $1,324,500 to Clear Pass, Inc. This agreement between Clear Pass and the Company was rescinded on May 9, 2003. The Company has received 3,000,000 shares of the Company's restricted common stock back from Clear Pass, Inc. and cancelled the $1,324,500.00 promissory note. Concurrently, the Company has set up a new wholly-owned subsidiary under the name of ClearPass, a DBA of Providential Holdings, Inc., to operate as a systems integrator and provider of total biometric security and access management solutions. On March 26, 2003 the Company signed a stock purchase agreement to acquire up to 51% of Real ID Technology Co, Ltd., a Korean corporation, and planned to market Real ID Technology's biometric products through the ClearPass subsidiary. The stock purchase agreement with Real ID Technology was rescinded on August 26, 2003. This subsidiary was later incorporated as a Nevada corporation under the name of ClearPass Systems, Inc. but has only generated nominal revenues to date.  Web site: www.clearpass.us



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TOUCHLINK COMMUNICATIONS, INC.



A wholly-owned DBA of Providential Holdings, Inc, Touchlink Communications was formed on July 7, 2003 to provide point-of-sale (POS) terminals and prepaid calling cards to retailers, convenient stores and non-profit organizations across the US. Touchlink Communications signed an agreement with KAGRO (Korean American Grocer Association) to provide pre-paid services to its member stores in the US and Canada.  This subsidiary was later incorporated as a Nevada corporation in February 2004 under the name of Touchlink Communications, Inc. to provide long distance services to residential and business customers in the United States. For the year ended June 30, 2004 and June 30, 2005, this subsidiary has generated $2,967 and $8,905 in revenues, respectively. The Company has declared a 15% stock dividend of Touchlink Communications, Inc. to shareholders of record as of September 15, 2004. 
Web site: www.touchlinkcom.com



PHI DIGITAL CORP.



On November 1, 2003, the Company formed PHI Video Corp., which was later renamed PHI Digital Corp. ("PHI Digital"), a Nevada corporation, to provide the sale of consumer electronics, including flat-screen television sets and monitors, as part of its distributorship agreement with XOCECO. During the fiscal year ended June 30, 2004, this subsidiary generated $3,566,407 in sales with a cost of goods sold of $3,206,580 for a net gross profit of $359,827. The distributorship agreement with XOXECO was terminated in June 2004 and PHI Digital has been renamed
"TULON INDUSTRIES, INC." to change its scope of business.  This subsidiary did not generate any revenue during the Fiscal Year ended June 30, 2005.



IRVINE COLLEGE OF MEDICAL SCIENCES, INC.



On December 19, 2003, the entered into a Stock Purchase Agreement with Irvine College of Medical Sciences, Inc., a California corporation, ("the College") to acquire 51% of the College's common stock for an aggregate purchase price of $314,437, which was paid with $80,000 in cash and 1,116,369 shares of the Company's common stock.  The shares were issued in August 2004.  The Company has declared a 15% stock dividend of Irvine College of Medical Sciences, Inc. to the Company's shareholders of record as of May 6, 2005. As of June 30, 2005, the Company had written off its investment in the College.



BEGINNING OPERATION OF PROVIDENTIAL OIL & GAS, INC.



On April 4, 2005, the Company announced the launching of Providential Oil & Gas, Inc., a Nevada corporation and wholly-owned subsidiary of the Company.  Providential Oil & Gas has investigated a number of lease properties in the US and abroad but has not consummated any transaction as of the date of this report.





MINORITY INTERESTS:



NETTEL HOLDINGS, INC.





On May 19, 2003 the Company entered into an agreement to provide merger and acquisition consulting services to Nettel Global Communication Corp., a Delaware corporation, and to assist Nettel in its business combination plan with a fully reporting publicly-traded company. On May 23, 2003 Nettel consummated a merger plan with Bio Standard Corp, a Florida corporation, and changed the name of the combined company to Nettel Holdings, Inc., a Florida corporation. The Company has received 2,250,000 shares of common stock of Nettel Holdings, Inc. as compensation for its advisory and consulting services.



Nettel provides long-distance telephony and VoIP (Voice-Over-Internet-Protocol) services to over 40 countries, owns a software development company (Entec Software) and operates an export and import division (Nettel Trading). Web site www.nettelholdings.com



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



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



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



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



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



BIO-WARM CORPORATION



Effective October 1, 2004, the Company entered into a business consulting agreement with Red5 Holdings, Inc., a Nevada corporation, and Mirae Tech Co., Ltd., a Republic of Korea corporation, to provide consulting services in the identification, location, and facilitating a merger between Mirae Tech Co., Ltd. and a fully-reporting publicly-traded company. According to the agreement, the Company would receive common stock in the newly combined company equal to 10% of the then issued and outstanding common shares of the new company.  As the merger between Mirae
Tech Co., Ltd. and Rapid Bio Tests Corp., a Nevada corporation and
fully-reporting publicly-traded company, was consummated on December 15, 2004,
the Company has received 4,718,421 restricted shares of common stock in Rapid
Bio Tests Corp, which was renamed to Bio Warm Corporation, under the terms of
the business consulting agreement.  The Company recorded an income of
$646,423 based on the fair market value of the shares.



E-CHECK RECOVERY, INC.



On June 16, 2004, the Company signed an agreement to acquire a 20% ownership of E-Check Recovery, Inc, a Texas corporation, in exchange for $25,000 worth of the Company's restricted common stock.



The Company distributed one-half of its holding in E-Check Recovery (10%) as a special dividend to PRVH shareholders of record as of July 30, 2004 and currently holds 10% equity ownership in E-Check Recovery, Inc.  The investment in E-Check Recovery, Inc. has been written off as an impairment of assets as of June 30, 2005.



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AGREEMENTS AND STRATEGIC ALLIANCES:



AGREEMENT WITH DATALOGIC INTERNATIONAL, INC.



Datalogic Consulting, Inc., a Texas corporation, is an IT consulting firm and a SAS Institute Quality Partner. The Company has assisted Datalogic in connection with its merger plan with Topclick International, Inc. and other development strategies. On April 25, 2001, but effective April 18, 2001, Datalogic Consulting, Inc. and the Company entered into an agreement whereby the Company would receive 10 percent equity in the new company that would result from the consummation of the proposed merger between Datalogic Consulting, Inc. and Topclick International, Inc. The merger plan between Datalogic and Toplick was consummated on July 20, 2001. The fee for the merger and acquisition consulting services the Company performed resulted in 2,666,922 shares of Datalogic International, Inc. (the new name for Topclick International, Inc.). The Company received and subsequently disposed of 1.2 million shares of Datalogic International in fiscal year ended June 30, 2003.  During the fiscal year ended June 30, 2004, the Company received 250,000 shares of Datalogic International, Inc. in connection with this merger plan.



AGREEMENT WITH TULON PACIFIC, LLC



On September 10, 2004 the Company signed an agreement to acquire a 70% ownership of Tulon
Pacific, LLC, an Irvine, California-based company that provides precision
cutting tools and drilling solutions, for a $1.6 million combination of cash and
a promissory note which may be converted into common shares of the Company in
six months. This transaction was first extended to December 17, 2004, then to February 28, 2005 and finally terminated on October 24, 2005.



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 will primarily focus on providing equipment and liquid gas to high rise buildings and premium residential housings in Vietnam. The Company will 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



SPECIAL NOTE ON ACQUISITIONS



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





STRATEGY



Providential Holdings' strategy is to:



1. Identify, build, acquire 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.



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ITEM 2. DESCRIPTION OF PROPERTIES



During the year ended June 30, 2004, the Company leased its office space at 8700 Warner Avenue, Suite 200, Fountain Valley, CA, 92708 for $4,263 per month.  In August 2004, the Company moved its offices and currently leases its office space at 17011 Beach Blvd., Suite 1230, Huntington Beach, CA 92647 for $3,907 per month. The lease is due to expire on July 31, 2007.





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 CLEARED AS OF YEAR END:



IMPERIAL BUSINESS CREDIT, INC. VS. PROVIDENTIAL SECURITIES, INC., TINA T. PHAN, TIMOTHY DACK FAHMAN, THEODORE DACK FAHMAN, AND HENRY DACK FAHMAN



On or about November 20, 1997, Nara Bank, N.A. and Providential Securities, Inc. entered into a Written Lease Agreement ("Agreement") wherein Nara Bank, N.A. agreed to lease certain computer equipment to Providential Securities, Inc. Thereafter, the Agreement was assigned from Nara Bank, N.A. to Claimant's Assignor Oak Financial Services. Thereafter, the Agreement was assigned from Claimant's Assignor to Claimant. Pursuant to the terms of the Agreement, Providential Securities, Inc. agreed to pay Nara Bank, N.A. the sum of $1,187.40 per month for sixty months. On or about September 15, 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.  Claimant filed a complaint for money with the Superior Court of the State of California, County of Orange (Case No. 01CC07697) on June 14, 2001 seeking $30,873.40 plus interest thereon at the rate of ten percent (10%) per annum from September 15, 2000. This case was settled on December 17, 2001. However, since Providential Securities, Inc. was unable to pay the settlement amount, Claimant entered a judgment for $79,681 on January 23, 2002.Subsequently, on June 18, 2002, $12,000 was paid to Claimant. Then on May 24, 2004, the Company paid Claimant $30,000 for full satisfaction of the judgment and an Acknowledgment of Satisfaction of Judgment was filed on June 30, 2004. A gain in litigation settlement in the amount of $41,417 was recognized and recorded for the period ended June 30, 2004.



FRANCIS VAUSE, MARK VAUSE, FRANCIS VAUSE, JR., IAN VAUSE AND MARGARET HODSON VS. JERSEY TRANSFER & TRUST COMPANY AND PROVIDENTIAL HOLDINGS, INC.



Claimants filed a complaint with the United States District Court, District of New Jersey (Case No. 00-4353(JAGF) on September 6, 2000 seeking damages of $500,000 against Jersey Transfer & Trust Company and Providential Holdings, Inc. for refusing to remove the restrictive legends and register a total of 568,332 shares of Rule 144 stock held by Claimants. Providential Holdings, Inc. and Jersey Transfer & Trust Company ("Defendants") relied on representation by the former management of JR Consulting, Inc., later changed to Providential Holdings, Inc., that the captioned shares were not free of all encumbrances and were issued for invalid consideration.



On July 21, 2004 a settlement agreement was signed by Claimants and Defendants whereby the Company agreed to pay Claimants $25,000 in cash and 2,500,000 shares of common stock of the Company. The Company issued 2,500,000 shares of common stock to Claimants on July 26, 2004 and paid Claimants $25,000 on August 12, 2004, resulting in $75,000 of gains in litigation settlement.



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JAMES C. HU VS. MINGMAN HU AND PROVIDENTIAL SECURITIES, INC.

Mingman Hu was a registered representative with Providential Securities, Inc. who served Claimant's investment account. Claimant filed a complaint with the Los Angeles County Superior Court, Northeast District on April 27, 2001 (Case No. G0027156) seeking compensatory damages in the amount of $11,609 plus 12% interest and emotional distress damages in excess of $50,000 for Mingman Hu's failure to honor her written agreement with Claimant. Mingman Hu was an independent contractor with Providential Securities, Inc. and was responsible for any alleged claims by Claimant. This case was settled for $13,908.



LEGAL PROCEEDING SETTLED AND UNPAID AS OF YEAR-END:



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.



LEGAL PROCEEDING PENDING AS OF YEAR END:



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



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





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NGON VU VS. PROVIDENTIAL SECURITIES, INC.



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



VERIO VS. PROVIDENTIAL SECURITIES, INC.



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



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



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





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



None.

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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".  Since October 19, 2005, it has been trading under
"PRVHE" due to the delay in the filing of the Company's Form 10-KSB for the Fiscal Year ended June 30, 2005. The Company expects to have its Common Stock trading under the normal symbol
"PRVH" after the filing of this Form 10-KSB.





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



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



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



Per Share Common Stock Prices by Quarter

For the Most Recent Month and Quarter

High                         Low



Month Ended October 31, 2005                                                0.042                        0.026

Quarter Ended September 30, 2005                                           0.050                        0.037









Per Share Common Stock Prices by Quarter

For the Fiscal Year Ended on June 30, 2005



High                          Low



Quarter Ended June 30, 2005                                                     0.067                        0.004

Quarter Ended March 31, 2005                                                  0.089                        0.046

Quarter Ended December 31, 2004                                            0.125                        0.065

Quarter Ended September 30, 2004                                           0.195                        0.125



Per Share Common Stock Prices by Quarter

For the Fiscal Year Ended on June 30, 2004



High                          Low

Quarter Ended June 30, 2004                                                     0.240                        0.080

Quarter Ended March 31, 2004                                                  0.375                        0.125

Quarter Ended December 31, 2003                                            0.380                        0.055

Quarter Ended September 30, 2003                                           0.110                        0.040





Holders of Common Equity:



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



Dividends:



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



---



payment of cash dividends in the future will depend upon Company's earnings, capital requirements and other factors.



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



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



Except for the audited historical information contained herein, this report specifies forward-looking statements of management of the Company within the meaning of Section 27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act of 1934 ("forward-looking statements") including, without limitation, forward-looking statements regarding the Company's expectations, beliefs, intentions and future strategies. Forward-looking statements are statements that estimate the happening of future events and are not based on historical facts. Forward- looking statements may be identified by the use of forward-looking terminology, such as "could", "may", "will", "expect", "shall", "estimate", "anticipate", "probable", "possible", "should", "continue", "intend" or similar terms, variations of those terms or the negative of those terms. The forward-looking statements specified in this report have been compiled 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, 2005 AND JUNE 30, 2004



Revenues:



The Company generated $4,242,303 from consulting  and advisory services for the year ended June 30, 2005, as compared to,$4,891,990  for the year ended June 30, 2004, which represented a 13
% decrease in consulting and advisory revenue. This decrease is mainly due to a slight decrease in the size and scope of the merger and acquisition activities during the current year.  During the fiscal year ended June 30, 2005, the Company had sales of $37,049 compared to $3,702,650 for the fiscal year ended June 30, 2004.  This decrease is due to the decrease in Provimex and PHI Digital product sales of $3,566,407 and $136,243, respectively.



Operating Expenses:



The Company
incurred total operating expenses of $7,517,916 for the year ended June 30, 2005
as compared to $7,645,620 for the year ended June 30, 2004. The decrease in
operating expenses was primarily due to the decrease professional services,
including non-cash compensation during the current fiscal year.  Also included
in operating expenses is the impairment of assets of $6,195,569 and $3,039,706
for the years ended June 30, 2005 and 2004, respectively.  The impairment in the
current year represents a $6,058,646 decline in the market value of marketable
securities, as well as a $136,923 impairment of the Company's investments.  The impairment in the prior year is for the goodwill from the acquisition of subsidiaries.



Loss from operations:



The Company had loss from operations of $3,268,147 for the year ended June 30, 2005 as compared to a loss from operations of $2,374,990 for the year ended June 30, 2004. This was mainly due to the decrease in revenues, professional services, including non-cash compensation and in general and administrative expenses as well as the increase in the impairment of assets during the current fiscal year.



Net loss from continuing operations:



The Company had a loss from continuing operations of $3,681,487 for the year ended June 30, 2005 as compared to a loss of $3,382,491
 for the year ended June 30, 2004.  Included in the current year amount are non-cash expenses of $74,500 of beneficial conversion feature expense for notes converted during the current year $20,393 gain on the conversion of debt and $52,871 net gain on the settlement of short-term notes.  In the prior year non-cash expenses of $711,331 of beneficial conversion feature expense for notes converted during the current year, $221,174 of redemption premium and penalties on the conversion of convertible notes and $521,372 gain on the conversion of debt and $864 net gain on the settlement of short-term notes were included in the net loss form continuing operations.



---





Net loss:



The Company had a net loss of $2,119,904 for the year ended June 30, 2005 as compared to a net loss of $3,853,160 for the year ended June 30, 2004.  Included in the net loss is a $393,997 loss on discontinued operations for the year ended June 30, 2005.  The loss on discontinued operations as of June 30, 2004 was $421,469.  Fiscal year ended June 30, 2005 also included a gain on the disposal of a subsidiary of $1,955,579.  The net loss based on the basic and diluted weighted average number of common shares outstanding for the year ended June 30, 2005 was ($0.02) as compared to that of ($.05) for the year ended June 30, 2004.



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 $1,881 and $29,791 as of June 30, 2005 and June 30, 2004, respectively.



Our operating activities used $557,788
 cash in the year ended June 30, 2005 and used $1,633,725 cash in the year ended June 30, 2004. The largest use of cash in 2005 was from net loss from continued operations, offset by the net effect of normal fluctuations in operating asset and liability accounts.  The largest use of cash in the 2004 was the increase in other assets and prepaid expenses and the decrease of accounts payable and accrued expenses.



Cash used in investing activities was $52,580
 and $59,109 in the year ended June 30, 2005 and 2004, respectively.  During the current year, the Company used $52,580
 to fund operations of a subsidiary, as compared to $80,000 used to fund subsidiary operations in the prior year.  The Company also purchased $7,743 in fixed assets and $125,050 of marketable securities in the prior year.



---



Cash provided by financing activities was $582,459
 and $1,625,877 for the years ended June 30, 2005 and 2004, respectively.  This was primarily from proceeds from exercise of stock options, and net borrowings on notes payable and net advances from officer.





LOANS AND PROMISSORY NOTES



CONVERTIBLE PROMISSORY NOTES



During the year ended June 30, 2004, $1,100,000 of the notes and accrued interest of $2,558,156 totaling $3,658,156, were converted to 21,019,177 shares of Company's common stock valued at $3,138,833.  The market value of the stock issued for the conversion was calculated and a gain of $519,323 resulted from this note conversion was recorded as a gain on conversion of notes in the accompanying consolidated financial statements.  Other fees generated from the conversion of these notes of $47,363 were recorded as penalty and premium expense in these consolidated financial statements.  In addition, 536,636 shares of the Company's common stock were issued to exercise the repricing warrants relating to the notes converted.  As of June 30, 2004, all of the convertible notes and related interest had been converted.



PROMISSORY NOTES:



As of June 30, 2005, the Company has notes payable to International Mercantile Holding amounting $196,111. The notes are due in the year ended June 30, 2006. The Notes carries an interest rate equal to LIBOR plus 1%.



As of June 30, 2004, the Company had notes payable amounting $3,087 against acquisition of an automobile. The note is secured by the auto, carry interest rate of 8.5%. This note was paid off during as of June 30, 2005.





SHORT TERM NOTES PAYABLE:



As of June 30, 2005, the Company has short term notes payable amounting $1,231,016 with accrued interest of $161,902. The notes amounting to $778,016 are past due and $293,000 of the notes are payable on demand.  These notes bear interest rates ranging from 6% to 20% per annum.  Included in this amount is the payable to the former owners of ATC of $72,323.   During the current year the Company paid $466,031 of notes payable and $133,175 of related accrued interest.  A note of $120,000 was issued during the year for which personal stock of the director of the Company was pledged as collateral.  This note is due in the year ended June 30, 2006.





DUE TO PREFERRED STOCKHOLDERS AND OTHER CURRENT LIABILITIES:



The Company has 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.



The interest payable to holders of preferred stock amounting $134,455 at June 30, 2005 has been classified as other current liabilities.





COMPANY'S PLAN OF OPERATION FOR NEXT 12 MONTHS



After the divestiture of its Diva subsidiaries in June 2000 and the discontinuance of its securities brokerage operations in October 2000, we have restructured and updated our primary scope of business to focus on the following areas: (1) PHI Technologies, (2) PHI Financial services, (3) PHI International markets, and

---



(4) PHI Special Situations.  The Company intends to emphasize on M&A advisory services for small and mid-sized companies in the US and the Pacific Rim for the next twelve months.



1) PHI Technologies:



ATC TECHNOLOGY CORP.



On October 6, 2003, the Company completed the acquisition of 100% of ATC Technology Corp. in exchange for $500,000 non-interest bearing notes and 4,000,000 shares of restricted common stock of the Company. ATC Technology Corporation, established in 2001 as an Arizona corporation, manufactures mobile entertainment products, including VidegoTM, GamegoTM and MoviegoTM.  The VidegoTM, winner of the prestigious 2001 Innovation Engineering and Design Award from IDSA (Industrial Designers Society of America), is one of the finest and affordable car theater systems available to consumers. With its wireless viewing monitor, which attaches easily to the back of any automobile headrest, the patent-pending VidegoTM system provides consumers with the highest quality DVD and Video players and hours of entertainment while traveling.



Launched in 2002, the GamegoTM gives people of all ages the opportunity to play video games in the car, RV, SUV, van or boat by connecting our product to an existing Microsoft X-BoxTM, Sony Playstation2TM, or Nintendo GamecubeTM. Like the VidegoTM, the GamegoTM also has a viewing monitor which attaches easily to the back of any automobile headrest.  Though ATC's products were sold through major retailer chains such as Wal-Mart, Sears, KB Toys, this company has decided to change its focus of business to a more attractive industry.



During the year ended June 30, 2005, the Company distributed 20% of it's investment in ATC to the Company's shareholders and distributed 70% of its investment to ATC's creditors.  As of June 30, 2005, the Company had written off its investment in ATC.



CLEARPASS SYSTEMS, INC.



On November 20, 2002 the Company entered into an agreement to acquire 51% of the outstanding common stock of Clear Pass, Inc., a Nevada corporation, in exchange for $1,500,000 and 3,000,000 shares of restricted common stock of the Company.  Under an agreement with PASS21 Co, Ltd., a Korean corporation, Clear Pass had the licensing rights to distribute and market PASS21 Co.'s biometric products in the US, Canada and Europe. Besides a total of $175,500.00 investment into Clear Pass, the Company issued 3,000,000 shares of restricted common stock of the Company and a promissory note in the amount of $1,324,500 to Clear Pass, Inc. This agreement between Clear Pass and the Company was rescinded on May 9, 2003. The Company had received 3,000,000 shares of the Company's restricted common stock back from Clear Pass, Inc. and cancelled the $1,324,500.00 promissory note. Concurrently, the Company set up a new wholly-owned subsidiary under the name of ClearPass, a DBA of Providential Holdings, Inc., to operate as a systems integrator and provider of total biometric security and access management solutions. On March 26, 2003 the Company signed a stock purchase agreement to acquire up to 51% of Real ID Technology Co, Ltd., a Korean corporation, and planned to market Real ID Technology's biometric products through the ClearPass subsidiary. The stock purchase agreement with Real ID Technology was rescinded on August 26, 2003. This subsidiary was later incorporated as a Nevada corporation in February 2004 under the name of ClearPass Systems, Inc. but has only generated nominal revenues to date.  ClearPass Systems intends to pursue a new merger or acquisition candidate.



---



TOUCHLINK COMMUNICATIONS, INC.

A wholly-owned DBA of Providential Holdings, Inc, Touchlink Communications was formed on July 7, 2003 to provide point-of-sale (POS) terminals and prepaid calling cards to retailers, convenient stores and non-profit organizations across the US. Touchlink Communications signed an agreement with KAGRO (Korean American Grocer Association) to provide pre-paid services to its member stores in the US and Canada.  This subsidiary was later incorporated as a Nevada corporation in February 2004 under the name of Touchlink Communications, Inc. to provide long distance services to residential and business customers in the United States.  The Company has declared a 15% stock dividend of Touchlink Communications, Inc. to shareholders of record as of September 15, 2004. Touchlink intends to expand its business among the ethnic markets in the US, enter into joint venture or strategic agreements with overseas partners, and acquire growing companies with strong potential for revenues and profitability in the communications and telecommunications industries. Web site: www.touchlinkcom.com



2) PHI Financial services:



The Company will continue to develop its financial services portfolio by building, acquiring and investing into companies that operate in this area, including M&A consulting services, investment advisory services, and banking and insurance services.



PROVIDENTIAL CAPITAL, INC.



In May 2003, the Company formed a wholly-owned subsidiary under the name of Providential Capital, a DBA company, to provide merger and acquisition advisory services for the micro-small cap arenas and manage the Company's proprietary merger and acquisition activities.  Providential Capital has mainly focused its attention on the underserved segment of smaller companies in the U.S. and abroad. This subsidiary was later incorporated as a Nevada corporation on September 23, 2004.



Providential Capital has successfully managed merger plans for several private and publicly-traded companies.  This subsidiary currently works with a number of target companies in the US, China, Korea, and Vietnam and expects to generate additional business in the Pacific Rim in the next twelve months.





3) PHI International markets:



We currently focus on opportunities in China, Korea, and Vietnam. These are the areas where we have most intimate knowledge and working relationships.



PROVIMEX, INC.



Provimex is a wholly-owned division of the Company originally formed on April 10, 2001 under the name "Providential Imex", to focus on trade commerce with Vietnam. This division changed its name to Provimex on July 5, 2001.  Provimex only began to generate revenues from its import and export activities since August 2002. .For the fiscal years ended June 30, 2004 and June 30, 2005, this division recorded $132,856 and $28,144 in sales, respectively.  This subsidiary was later incorporated as a Nevada corporation on September 23, 2004. Web site:www.provimex.us. The Company has declared a 15% stock dividend of Provimex, Inc. to shareholders of record as of September 15, 2004.





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 will primarily focus on providing equipment and liquid gas to high rise buildings and premium residential housings in Vietnam. The Company will own 80% equity in the joint venture company.



4) PHI Special situations:



By Special Situations we mean special opportunities that may generate significant value for our shareholders. The Company will continue to identify, evaluate and participate in such opportunities in the near term. Transactions falling under this category do not necessary fit into our technologies, financial services or international market initiatives.



IRVINE COLLEGE OF MEDICAL SCIENCES, INC.



On December 19, 2003, the entered into a Stock Purchase Agreement with Irvine College of Medical Sciences, Inc., a California corporation, ("the College") to acquire 51% of the College's common stock for an aggregate purchase price of $314,437, which was paid with $80,000 in cash and 1,116,369 shares of the Company's common stock. The Company has declared 15% stock dividends of Irvine College of Medical Sciences, Inc. to the Company's shareholders of record as of May 6, 2005. The Company plans to assist the College in its acquisition plan in the US and also to establish its presence in other parts of the world.



PROVIDENTIAL OIL & GAS, INC.



On April 4, 2005, the Company announced the launching of Providential Oil & Gas, Inc., a Nevada corporation and wholly-owned subsidiary of the Company.  Providential Oil & Gas has investigated a number of lease properties in the US and abroad but has not consummated any transaction as of the date of this report.



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, 2006 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 7. FINANCIAL STATEMENTS



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Stockholders

Providential Holdings, Inc.



We have audited the accompanying consolidated balance sheet of Providential Holdings, Inc. (a Nevada corporation) and subsidiaries as of June 30, 2005 and the related consolidated statements of operations, stockholders' deficit, and cash flows for the years ended June 30, 2005 and 2004. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.



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



In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Providential Holdings, Inc. and subsidiaries as of June 30, 2005, and the results of its consolidated operations and its cash flows for the years ended June 30, 2005 and 2004 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 an accumulated deficit and incurred losses in the years ended June 30, 2005 and 2004. These factors as discussed in Note 18 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 18. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.



As discussed on Note 3 and 11 to the financial statements, the Company is subject to various law suits and during most recent NASD examination (July - August, 2000) of Providential Securities, Inc. (the wholly owned subsidiary), the NASD declared a net capital deficiency violation pursuant to conduct rules section 17 (a) 3 and 17 (a) 4. As a result of which, Providential Securities, Inc. withdrew the membership from the NASD in October 2000 and ceased its securities brokerage operations.



/s/ KABANI & COMPANY, INC.



CERTIFIED PUBLIC ACCOUNTANTS

Los Angeles, California

September 19, 2005

---

PROVIDENTIAL
HOLDINGS, INC.

CONSOLIDATED BALANCE
SHEET

JUNE 30, 2005



|Current assets:                                                             |                
|--------------------------------------------------------------------------- | ---------------
|Cash and cash
    equivalents                                               | $        1, 881
|Marketable securities                                                       | 1,521,895      
|Other receivable                                                            | 3,285,000      
|Other current assets                                                        | $     124,466  
|Total current assets                                                        | 4,933,242      
|                                                                            |                
|Property and equipment,
	net of
    accumulated depreciation of $191,604    | 4,247          
|                                                                            |                
|Total assets                                                                | $    4,937,48  
|                                                                            |                
|LIABILITIES AND STOCKHOLDERS EQUITY                                        
|Current liabilities:                                                        |                
|Accounts payable and
    accrued expenses                                   | $  1,511,805   
|Short-term notes
    payable                                                | 1,427,127      
|Due to officer                                                              | 312,708        
|Due to preferred
    stockholders                                           | 215,000        
|Other current
    liabilities                                               | 109,691        
|Total current liabilities                                                   | 3,576,331      
|                                                                            |                
|Commitments and Contingencies                                               |                
|                                                                            |                
|Stockholders' equity:                                                       |                
|Preferred stock (Series
    I, Class A), $5.00 par value, 10,000,000 shares |                
|authorized; 90,000 shares issued and outstanding (Note 3)                   |                
|Common stock, $.04 par
    value; 300,000,000 shares authorized;            |                
|151,936,473 issued and outstanding                                          | 6,077,458      
|Treasury stock,
    1,000,000 shares, $0.04 par value common stock          | (40,000)       
|Additional
    paid-in-capital                                              | 12.955.325     
|Subscriptions available                                                     | (337,500)      
|Shares to be issued                                                         | 375,000        
|Prepaid consulting                                                          | (48,834)       
|Other comprehensive
    income                                              | 855,428        
|Accumulated deficit                                                         | (18,375,720)   
|Total stockholders' equity                                                  | 1,361,158      
|                                                                            |                
|Total liabilities and stockholders equity                                   | $  4,937,489   
|                                                                            |                
|                                                                            |                



SEE THE
ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL

---

PROVIDENTIAL
HOLDINGS, INC.

CONSOLIDATED
STATEMENTS OF OPERATIONS





|                                                                      | For the Year Ended June 30,
|--------------------------------------------------------------------- | ---------------------------
|                                                                      | 2005                       
|                                                                      |                            
|Revenues                                                              |                            
|Consulting and advisory
    fee income                                | $    4,242,303             
|Sales                                                                 | 37,049                     
|Net revenues                                                          | 4,279,352                  
|Cost of sales                                                         | 29,584                     
|Gross profit                                                          | 4,249,769                  
|                                                                      |                            
|Operating expenses:                                                   |                            
|Depreciation and
    amortization                                     | 4,615                      
|Bad debt expense                                                      | 5,000                      
|Salaries and wages                                                    | 210,000                    
|Professional services,
    including non-cash compensation            | 718,375                    
|Directors fees                                                        | -                          
|Impairment of assets                                                  | 6,058,646                  
|Impairment of assets                                                  | 136,923                    
|General administrative                                                | 384,357                    
|Total operating expenses                                              | 7,517,916                  
|Loss from operations                                                  | (3,268,147)                
|Other income and (expense)                                            |                            
|Interest expense                                                      | (374,213)                  
|Loss on sale of
    marketable securities                             | (68,579)                   
|Gain (loss) on legal
    settlement                                   | 33,655                     
|Gain on debt settlement
    - net                                     | 52,871                     
|Gain (loss) on
    conversion of notes                                | 20,393                     
|Beneficial conversion
    feature expense                             | (74,500)                   
|Redemption premium and
    penalties                                  | -                          
|Other income (expense)                                                | (2,967)                    
|Net other income and (expenses)                                       | (413,340)                  
|Loss from continuing operations                                       | (3,681,487)                
|Loss from discontinued operations                                     | (393,997)                  
|Gain from disposal of subsidiary                                      | 1,955,579                  
|Net loss                                                              | (2,119,904)                
|Other comprehensive gain/(loss):                                      |                            
|Unrealized gain (loss)
    on marketable securities                   | 855,428                    
|Reclassification                                                      | 4,464,434                  
|Comprehensive income (loss)                                           | $  
    2,344.530          
|                                                                      |                            
|Net income (loss) per share - basic and
    diluted:                  |                            
|Continued operations                                                  | $        
    (0.03)       
|Discontinued operations                                               | $           
    0.01      
|Net income (loss)                                                     | $        
    (0.02)       
|                                                                      |                            
|Weighted average number of shares outstanding -
    basic and diluted | 140,336,204                
|                                                                      |                            
|                                                                     

SEE THE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL
STATEMENTS

---

PROVIDENTIAL
HOLDINGS, INC.

STATEMENT OF
STOCKHOLDER'S DEFICIT

FOR THE YEARS ENDED
JUNE 30, 2004 AND 2005



|                                                                  | Common Stock | Treasury Stock | Additional Paid-In Capital | Stock Subscriptions Receivable | Prepaid Consulting Fees | Shares to be Cancelled | Shares to be Issued | Other Comprehensive Income/(Loss) | Accumulated Deficit | Total Stockholders' deficit
|----------------------------------------------------------------- | ------------ | -------------- | -------------------------- | ------------------------------ | ----------------------- | ---------------------- | ------------------- | --------------------------------- | ------------------- | ---------------------------
|                                                                  | Shares       | Amount         | Shares                     | Amount                        
|Balance at June 30, 2003                                          | 64,253,119   | $2,570,124     | (6,805,200)                | ($272,208)                     | $5,092,950              | $(444,660)             | ($591,189)          | ($120,000)                        | -                   | ($408,004)                 
|                                                                  |              |                |                            |                                |                         |                        |                     |                                   |                     |                            
|Shares sold for cash                                              | 300,000      | 12,000         | -                          | -                              | 44,000                  | -                      | -                   | -                                 | -                   | -                          
|Shares issued under repricing warrants                            | 536,636      | 31,465         | -                          | -                              | (21,465)                | -                      | -                   | -                                 | -                   | -                          
|Shares issued for payment of notes                                | 5,040,268    | 201,611        | -                          | -                              | 650,292                 | -                      | -                   | -                                 | 657,750             | -                          
|Shares issued for debt conversion                                 | 14,613,217   | 584,528        | -                          | -                              | 1,979,565               | -                      | -                   | -                                 | -                   | -                          
|Shares issued for accrued interest                                | 8,176,650    | 327,066        | -                          | -                              | 436,098                 | -                      | -                   | -                                 | -                   | -                          
|Shares issued for debt conversion
		penalties                     | 2,224,595    | 88,984         | -                          | -                              | 298,010                 | -                      | -                   | -                                 | -                   | -                          
|Shares issued for services and salaries                           | 27,206,721   | 1,088,269      | -                          | -                              | 1,403,185               | -                      | -                   | -                                 | -                   | -                          
|Shares issued for legal settlement                                | 375,000      | 15,000         | -                          | -                              | 51,600                  | -                      | -                   | -                                 | -                   | -                          
|Shares issued for distribution agreement                          | 461,391      | 18,456         | -                          | -                              | 5,932                   | -                      | -                   | -                                 | -                   | -                          
|Shares
		issued for preferred stock conversion related
		interest | 2,195,271    | 87,811         | -                          | -                              | 275,472                 | -                      | -                   | -                                 | 144,079             | -                          
|Stock options exercised                                           | 6,100,000    | 244,000        | -                          | -                              | 448,940                 | 244,660                | -                   | -                                 | -                   | -                          
|Acquisition of subsidiary                                         | 4,000,000    | 160,000        | -                          | -                              | 200,000                 | -                      | -                   | -                                 | 234,438             | -                          
|Dividends declared on preferred stock                             | -            | -              | -                          | -                              | -                       | -                      | -                   | -                                 | -                   | -                          
|Amortization of prepaid consulting fees                           | -            | -              | -                          | -                              | -                       | -                      | 591,189             | -                                 | -                   | -                          
|Fair market value of options granted                              | -            | -              | -                          | -                              | 21,000                  | -                      | -                   | -                                 | -                   | -                          
|Unrealized loss on marketable securities                          | -            | -              | -                          | -                              | -                       | -                      | -                   | -                                 | -                   | (4,056,430)                
|Cancellation of shares                                            | (4,000,000)  | (160,000)      | 1,000,000                  | 40,000                         | -                       | -                      | -                   | 120,000                           | -                   | -                          
|Net loss for the year                                             | -            | -              | -                          | -                              | -                       | -                      | -                   | -                                 | -                   | -                          
|Balance at June 30, 2004                                          | 131,482,868  | $5,259,314     | (5,805,200)                | $(232,208)                     | $10,886,216             | $(200,000)             | $       -           | $       
		-                      | $1,036,267          | ($4,464,434)               
|                                                                  |              |                |                            |                                |                         |                        |                     |                                   |                     |                            
|Shares issued for payment of notes                                | 7,174,519    | 286,981        | -                          | -                              | 536,964                 | -                      | -                   | -                                 | (282,750)           | -                          
|Shares issued for services and salaries                           | 10,035,456   | 401,418        | -                          | -                              | 369,708                 | 21,000                 | (48,834)            | -                                 | -                   | -                          
|Shares issued for legal settlement                                | 2,500,000    | 100,000        | -                          | -                              | 323,750                 | -                      | -                   | -                                 | -                   | -                          
|Shares issued for preferred stock                                 |              |                |                            |                                |                         |                        |                     |                                   |                     |                            
|conversion and
		related interest                                 | 1,211,968    | 48,479         | -                          | -                              | 95,601                  | -                      | -                   | -                                 | (144,080)           | -                          
|Stock options exercised                                           | 3,200,000    | 128,000        | -                          | -                              | 117,500                 | (188,500)              | -                   | -                                 | -                   | -                          
|Recovery of stock subscription written
		off                      | -            | -              | -                          | -                              | 202,400                 | -                      | -                   | -                                 | -                   | -                          
|Acquisition of subsidiary                                         | 1,116,369    | -              | -                          | -                              | 189,783                 | -                      | -                   | -                                 | (234,437)           | -                          
|Purchase of minority interest                                     | 142,450      | 5,698          | -                          | -                              | 21,225                  | -                      | -                   | -                                 | -                   | -                          
|Cash received on subscription receivable                          | -            | -              | -                          | -                              | -                       | 30,000                 | -                   | -                                 | -                   | -                          
|Beneficial conversion valuation                                   | -            | -              | -                          | -                              | 74,500                  | -                      | -                   | -                                 | -                   | -                          
|Fair market value of options granted                              | -            | -              | -                          | -                              | 32,800                  | -                      | -                   | -                                 | -                   | -                          
|Unrealized gain on marketable securities                          | -            | -              | -                          | -                              | -                       | -                      | -                   | -                                 | -                   | 5,319,862                  
|Cancellation of shares                                            | (4,927,157)  | (197,086)      | 4,805,200                  | 192,208                        | 4,878                   | -                      | -                   | -                                 | -                   | -                          
|Net loss for the year                                             | -            | -              | -                          | -                              | -                       | -                      | -                   | -                                 | -                   | -                          
|                                                                  |              |                |                            |                                |                         |                        |                     |                                   |                     |                            
|Balance at June 30, 2005                                          | 151,936,473  | $6,077,458     | (1,000,000)                | ($772,312)                     | $12,855,325             | $(337,500)             | $(48,834)           | -                                 | $375,000            | $855,428                   
|                                                                  |              |                |                            |                                |                         |                        |                     |                                   |                     |                            



---



PROVIDENTIAL
HOLDINGS, INC.

CONSOLIDATED
STATEMENTS OF CASH FLOWS





|                                                                           | For the Year Ended June 30,
|-------------------------------------------------------------------------- | ---------------------------
|                                                                           | 2005                       
|                                                                           |                            
|Cash flows from operating activities:                                      |                            
|Net loss from continuing operations                                        | $ (2,119,904)              
|Adjustments to reconcile net loss to net cash used in operating activities |                            
|Depreciation                                                               | 4,615                      
|Allowance fro bad debt                                                     | 5,000                      
|(Gain) loss on legal settlement                                            | (33,655)                   
|(Gain) loss on debt settlement - net                                       | (52,871)                   
|Amortization of prepaid consulting fees                                    | 15,167                     
|Securities received for consulting services                                | (3,931,423)                
|Shares issued for consulting services                                      | 700,292                    
|Note issued in lieu of consulting fees                                     | 50,000                     
|Gain on conversion of notes                                                | (20,393)                   
|Loss on marketable securities                                              | 74,808                     
|Shares issued for distribution agreement                                   | -                          
|Shares issued for interest on convertible note                             | -                          
|Shares issued for preferred stock and related dividends                    | -                          
|Beneficial conversion and registration penalty                             | 74,500                     
|Fair market value of options granted                                       | 32,800                     
|Impairment of assets                                                       | 6,195,569                  
|Los on investment                                                          | 393,997                    
|Gain on disposal of subsidiary                                             | (1,955,579)                
|Changes in operating assets and liabilities:                               |                            
|(Increase) decrease in other assets and prepaid expenses                   | (291,186)                  
|Increase (decrease) in accounts payable                                    | 49,926                     
|Increase (decrease) in accrued expenses                                    | 230,550                    
|Increase (decrease) in other liabilities                                   | 20,000                     
|Net cash used in operating activities                                      | (557,788)                  
|Cash flows from investing activities:                                      |                            
|Purchase of fixed assets                                                   | -                          
|Purchase of marketable securities                                          | -                          
|Cash brought in at acquisition                                             | -                          
|Cash used to fund subsidiary                                               | (52,580)                   
|Net cash provided by investing
    activities                              | (52,80)                    
|Cash flows from financing activities:                                      |                            
|Proceeds from sale of common stock                                         | -                          
|Proceeds from the exercise of stock
    options                            | 259,400                    
|Borrowings on notes payable                                                | 503,950                    
|Payments on notes payable                                                  | (260,311)                  
|Borrowings from officer                                                    | 280,500                    
|Payments on advances from officer                                          | (201,080)                  
|Net cash provided by financing activities                                  | 582,459                    
|Net increase (decrease) in cash                                            | (27,909)                   
|Cash and cash equivalents, beginning of period                             | 29,790                     
|Cash and cash equivalents, end of period                                   | $        1,881             
|                                                                           |                            
|                                                                           |                            

SEE THE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL
STATEMENTS

---

PROVIDENTIAL
HOLDINGS, INC.

CONSOLIDATED
STATEMENTS OF CASH FLOWS - CONTINUED



|                                                              | For the Years Ended June 30,
|------------------------------------------------------------- | ----------------------------
|                                                              | 2005                        
|SUPPLEMENTARY DISCLOSURES OF CASH FLOW
    INFORMATION:       |                             
|Cash paid during the
    period for:                          |                             
|Interest                                                      | $    133,175                
|Taxes                                                         | $               
    -      
|                                                              |                             
|Non-cash investing and
    financing Activities:              | $    541,195                
|Shares issued for
    payment of notes                        | $               
    -      
|Shares issued for
    interest and penalties                  | $               
    -      
|Shares issued for
    services                                | $   
    742,292            
|Shares issued for
    distribution agreement                  | $               
    -      
|Shares issued for
    acquisition of subsidiaries             | $               
    -      
|Shares issued for legal
    settlement                        | $   
    423,750            
|Shares issued for
    payment of preferred stock and interest | $               
    -      
|                                                              |                             

SEE THE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL
STATEMENTS

---

|Purchase of minority interest            | 142,450     | 5,698      | -           | -          | 21,225      | -          | -         | - | -        | -         | -             | 26,923     
|---------------------------------------- | ----------- | ---------- | ----------- | ---------- | ----------- | ---------- | --------- | - | -------- | --------- | ------------- | -----------
|Cash received on subscription receivable | -           | -          | -           | -          | -           | 30,000     | -         | - | -        | -         | -             | 30,000     
|Beneficial conversion valuation          | -           | -          | -           | -          | 74,500      | -          | -         | - | -        | -         | -             | 74,500     
|Fair market value of options granted     | -           | -          | -           | -          | 32,800      | -          | -         | - | -        | -         | -             | 32,800     
|Unrealized gain on marketable securities | -           | -          | -           | -          | -           | -          | -         | - | -        | 5,319,862 | -             | 5,319,862  
|Cancellation of shares                   | (4,927,157) | (197,086)  | 4,805,200   | 192,208    | 4,878       | -          | -         | - | -        | -         | -             | -          
|Net loss for the year                    | -           | -          | -           | -          | -           | -          | -         | - | -        | -         | (2,119,904)   | (2,119,904)
|                                         |             |            |             |            |             |            |           |   |          |           |               |            
|Balance at June 30, 2005                 | 151,936,473 | $6,077,458 | (1,000,000) | ($772,312) | $12,855,325 | $(337,500) | $(48,834) | - | $375,000 | $855,428  | ($18,375,719) | $1,361,158 
|                                         |             |            |             |            |             |            |           |   |          |           |               |            

---



PROVIDENTIAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 - NATURE OF BUSINESS



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



A wholly owned division of the Company, Provimex was formed on April 10, 2001 under the name
"Providential Imex", to focus on trade commerce with Vietnam. This division changed its name to Provimex on July 5, 2001.



On August 23, 2002, the Company entered into a purchase agreement with ATC Technology Corporation ("ATC"), an Arizona corporation, to purchase all the issued and outstanding shares of ATC.  For consideration, the Company agreed to deliver $250,000 in promissory notes, non-interest bearing, payable 270 days after closing, and $250,000 in promissory notes, non-interest bearing, payable 180 days after closing, 3,000,000 shares of restricted stock of the Company with an option of additional shares to be issued after 270 days if the stock price does not reach $0.30, 1,000,000 shares of restricted stock of the Company with an option of additional shares to be issued after one year if the stock price does not reach $0.30. The purchase transaction with ATC was consummated on October 17, 2003...During the year ended June 30, 2005, the Company distributed 20% of it's investment in ATC to the Company's shareholders and distributed 70% of its investment to ATC's creditors.  As of June 30, 2005, the Company had written off its investment in ATC.



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



In May 2003, the Company formed a new 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 fourth quarter of 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.



---



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.

On December 19, 2003, the Company entered into a Stock Purchase Agreement with Irvine College of Medical Sciences, Inc., a California corporation, ("the College") to acquire 51% of the College's common stock for an aggregate purchase price of $314,437.  On December 19, 2003, $80,000 in cash was paid and 1,116,369 shares of the Company's common stock were issued on August 19, 2004.  During the year ended June 30, 2005, the Company declared a dividend of the College's common stock to the Company's shareholders of record as of May 6, 2005.  Each shareholder of record received one College share for every 39.775 shares of Providential Holdings, Inc.  As a result, the Company's owned 36% of the College at June 30, 2005.  The shares of the College were distributed on September 22, 2005.  (See Note 16)



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



PRINCIPLES OF CONSOLIDATION



The consolidated financial statements include the accounts of Providential Holdings, Inc., and its subsidiaries, Providential Securities, Inc., PHI Digital Inc., ("PHI Digital"), Provimex, and Touchlink, collectively referred to as the "Company". All significant inter-company transactions have been eliminated in consolidation.  (There were no operations in PHI Digital Inc. nor ClearPass during the year ended June 30, 2005.)



USE OF ESTIMATES



The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.



CASH AND CASH EQUIVALENTS



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



MARKETABLE SECURITIES



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



Each investment in marketable securities represents less than twenty percent (20%) of the outstanding common stock and stock equivalents of the investee,
and each security is nationally quoted on the National Association of Securities
Dealers OTC Bulletin Board ("OTC:BB").  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, 2005, the marketable securities have been recorded at $1,521,895 based upon the fair value of the marketable securities. (Note 5)



---



ACCOUNTS RECEIVABLE



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



IMPAIRMENT OF LONG-LIVED ASSETS



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



PROPERTY AND EQUIPMENT



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



INTANGIBLE ASSETS



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



DEPRECIATION AND AMORTIZATION



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



NET EARNINGS (LOSS) PER SHARE



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



---



shares outstanding for the period.  Diluted EPS is based on the weighted-average number of shares of common stock outstanding for the period and common stock equivalents outstanding at the end of the period. Common stock equivalents have been excluded from the calculation of weighted-average shares for purposes of calculating diluted earnings per share for 2005 and 2004; as such inclusion is anti-dilutive.



STOCK-BASED COMPENSATION



In October 1995, the FASB issued SFAS No. 123,
"Accounting for Stock-Based Compensation". SFAS No. 123 prescribes accounting and reporting standards for all stock-based compensation plans, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights. SFAS No. 123 requires compensation expense to be recorded (i) using the new fair value method or (ii) using the existing accounting rules prescribed by Accounting Principles Board Opinion No. 25,
"Accounting for stock issued to employees" (APB 25) and related interpretations with proforma disclosure of what net income and earnings per share would have been had the Company adopted the new fair value method. The Company uses the intrinsic value method prescribed by APB 25 and has opted for the disclosure provisions of SFAS No.123.



FAIR VALUE OF FINANCIAL INSTRUMENTS



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



REVENUE RECOGNITION



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



ADVERTISING



The Company expenses advertising costs as incurred.  Advertising costs for the years ended June 30, 2005 and 2004 were $28,530 and $15,967 respectively.



COMPREHENSIVE INCOME



Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS No. 130"), establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income is defined to include all changes in equity, except those resulting from investments by owners and distributions to owners. Among other disclosures, SFAS
No. 130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements.  During the year ended June 30, 2005 and 2004,
comprehensive gain/loss included a $855,428 unrealized gain on marketable
securities and a $4,056,430 unrealized loss on marketable securities, respectively.  Other comprehensive gain, as presented on the accompanying consolidated balance sheet amounted to $4,464,434 as of June 30, 2005.  Comprehensive gain for the year ended June 30, 2005, excludes loss realized during the year that was reflected in comprehensive income in the prior year of $4,056,430.  This has been reclassified during the current year.



---





INCOME TAXES



Deferred income tax assets and liabilities are computed annually for differences between the financial statements and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted laws and rates applicable to the periods in which the differences are expected to affect taxable income (loss). Valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.



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.



RISKS AND UNCERTAINTIES



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



RECLASIFICATIONS



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



ACCOUNTING DEVELOPMENTS



In November 2004, the FASB has issued FASB Statement No. 151, "Inventory Costs, an Amendment of ARB No. 43, and Chapter 4" ("FAS No. 151").  The amendments made by FAS No. 151 are intended to improve financial reporting by clarifying that abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) should be recognized as current-period charges and by requiring the allocation of fixed production overheads to inventory based on the normal capacity of the production facilities.



The guidance is effective for inventory costs incurred during fiscal years beginning after June 15, 2005.  Earlier application is permitted for inventory costs incurred during fiscal years beginning after November 23, 2004.  The provisions of FAS No. 151 will be applied prospectively.  The Company does not expect the adoption of FAS No. 151 to have a material impact on its consolidated financial position, results of operations or cash flows.



In December 2004, the FASB issued FASB Statement No. 123R, "Share-Based Payment, an Amendment of FASB Statement No. 123" ("FAS No. 123R").  FAS No. 123R requires companies to recognize in the statement of operations the grant- date fair value of stock options and other equity-based compensation issued to employees.  FAS No. 123R is effective beginning in the Company's first quarter of fiscal 2006.  The Company believes that the adoption of this standard will have no material impact on its financial statements.



---



In December 2004, the FASB issued SFAS Statement No. 153, "Exchanges of Nonmonetary Assets."  The Statement is an amendment of APB Opinion No. 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance.  The Company believes that the adoption of this standard will have no material impact on its financial statements.



In March 2004, the Emerging Issues Task Force ("EITF") reached a consensus on Issue No. 03-1, "The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments." The EITF reached a consensus about the criteria that should be used to determine when an investment is considered impaired, whether that impairment is other-than-temporary, and the measurement of an impairment loss and how that criteria should be applied to investments accounted for under SFAS No. 115, "ACCOUNTING IN CERTAIN INVESTMENTS IN DEBT AND EQUITY SECURITIES." EITF 03-01 also included accounting considerations subsequent to the recognition of an other-than-temporary impairment and requires certain disclosures about unrealized losses that have not been recognized as other-than-temporary impairments. Additionally, EITF 03-01 includes new disclosure requirements for investments that are deemed to be temporarily impaired. In September 2004, the Financial Accounting Standards Board (FASB) delayed the accounting provisions of EITF 03-01; however the disclosure requirements remain effective for annual reports ending after June 15, 2004. The Company will evaluate the impact of EITF 03-01 once final guidance is issued.



In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections." This statement applies to all voluntary changes in accounting principle and requires retrospective application to prior periods' financial statements of changes in accounting principle, unless this would be impracticable. This statement also makes a distinction between "retrospective application" of an accounting principle and the "restatement" of financial statements to reflect the correction of an error. This statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company is evaluating the effect the adoption of this interpretation will have on its financial position, cash flows and results of operations.



In June 2005, the EITF reached consensus on Issue No.  05-6, Determining the Amortization Period for Leasehold Improvements ("EITF 05-6.") EITF 05-6 provides guidance on determining the amortization period for leasehold improvements acquired in a business combination or acquired subsequent to lease inception. The guidance in EITF 05-6 will be applied prospectively and is effective for periods beginning after June 29, 2005.  EITF 05-6 is not expected to have a material effect on its consolidated financial position or results of operations.





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 was paid either in cash or with the issuance of common stock.  (See note 9) The balance of unredeemed preferred shares and the related interest has been included in current liabilities on the accompanying consolidated financial statements.





NOTE 4 - IMPAIRMENT OF ASSETS



During the year ended June 30, 2004, the Company evaluated its investment and goodwill on acquisition of the College and ATC according to FASB 144 and recognized an impairment loss equal to the book value of these intangible assets amounting $3,039,706.



During the year ended June 30, 2005, the Company evaluated its investment in US West Industries and E-Check Recovery and recognized an impairment loss equal to the book value of these investments amounting to $86,923.  On June 30, 2005, the Company also evaluated its investment in Provimex-HTV and recognized an impairment loss equal to the book value of this investment, $50,000. These evaluations were based upon market value of similar investments.



In addition, the Company wrote down its marketable securities to the current market value and an impairment of assets in the amount of $5,319,862 was recognized during the year ended June 30, 2005 (See note 5).



NOTE 5 - MARKETABLE EQUITY SECURITIES AVAILABLE FOR SALE



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



Unrealized holding gains and losses for marketable securities are excluded from earnings and reported as a separate component of stockholder's equity. Realized gains and losses for securities classified as available-for-sale are reported in earnings based upon the adjusted cost of the specific security sold.  On June 30, 2005, the investments have been recorded at $1,521,895 based upon the fair value of the marketable securities.



Following is a summary of marketable equity securities classified as available for sale as of June 30, 2005:



|Investee Name (Symbol) | Cost at June 30, 2005 | Market Value at
    June 30, 2005 | Accumulated Unrealized Gain (Loss) | Number of Shares Held at June 30, 2005
|---------------------- | --------------------- | --------------------------------- | ---------------------------------- | --------------------------------------
|Jockey Club (JKCL)     | $              
	15   | $               
    -            | $         
	(15)                   | 1,500                                 
|Tri Kal Int'l (TRIKF)  | 15                    | -                                 | (15)                               | 15,165                                
|Nettel Holdings (NTTL) | 472,500               | 472,500                           | -                                  | 2,250,000                             
|Lexor Holdings (LXRH)  | 1,900                 | 855,000                           | 853,100                            | 1,900,000                             
|Bio-Warm (BOWC)        | 188,737               | 188,737                           | -                                  | 4,718,424                             
|NASDAQ (NDAQ)          | 3,300                 | 5,658                             | 2,358                              | 300                                   
|                       |                       |                                   |                                    |                                       
|                       | $      666,467        | $    1,521,895                    | $   855,428                        |                                       
|                       |                       |                                   |                                    |                                       



The changes in net unrealized holding gain/loss on securities available for sale has been included as a separate component of stockholders' equity. For the fiscal year ended June 30, 2005 a gain of $5,319,862 was recorded.  The change in the net unrealized holding was a loss of $4,056,430 for the year ended June 30, 2004.



In May 2004, the Company received 250,000 shares of Datalogic International, Inc. as payment for management and advisory services.  The shares were valued at $204,250 or $0.82 per share.  In May and June 2004, the Company sold the 250,000 shares for $153,684 and recorded a realized loss on the sale of $50,566.



In October 2004, the remaining balance due from Datalogic for advisory fees was received in the form of 250,000 shares of Datalogic's common stock.  These shares were valued at $204,250.  The shares were sold during the period ended December 31, 2004 for $129,442 and a loss on the sale of marketable securities in the amount of $74,808 was recognized.

---



During the year ended June 30, 2005, the Company sold 12,381 shares of Grayling Wireless common stock for $6,229.  The Company had received these shares for advisory fees performed in November 2001.  The stock had been fully impaired; therefore a gain on the sale of marketable securities of $6,229 was recognized.



During the period ended December 31, 2004, the Company evaluated its marketable securities holdings and determined that several of them had an other-than-temporary decline in value.  Accordingly, these securities were written down to the current market value and an impairment loss in the amount of $4,708,159 was recognized.



In February 2005, the Company received 4,718,424 shares of Bio-Warm Corporation as payment for advisory services.  The shares were valued at $646,423 when they were received.  As of June 30, 2005, the Company evaluated these securities and determined that the stock had an other- than-temporary decline in value.  Accordingly, these securities were written down to the current market value and an impairment loss in the amount of $457,687 was recognized.



As of June 30, 2005, the Company determined that the Nettel Holdings, Inc. stock had an other-than-temporary decline in value.  Accordingly, these securities were written down to the current market value and an impairment loss in the amount of $892,800 was recognized.



NOTE 6 - OTHER RECEIVABLE



During the year ended June 30,
2005, the Company entered into a business and financial consulting agreement
with Lexor Holdings, Inc.  Pursuant to the agreement, the Company helped
Lexor Holdings, Inc. in entering into a Stock Purchase Agreement with Jeantex,
Inc., a California corporation.  The Stock Purchase Agreement was closed on
June 29, 2005.  Providential Holdings, Inc. received 7,300,000 shares of
restricted common stock of Lexor on September 16, 2005 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. 
The Company recorded the value of these shares as $3,285,000 as other receivable
based on the fair market value as of June 30, 2005.





NOTE 7 - PROPERTY AND EQUIPMENT



Property and equipment at June 30, 2005 consists of the following:



|Equipment                     | $   
		78,625
|----------------------------- | -------------
|Furniture and Fixtures        | 36,123       
|Automobiles                   | 81,103       
|Leasehold Improvements        | -            
|Subtotal                      | 195,851      
|Less Accumulated Depreciation | (191,604)    
|Total
		net fixed assets      | $       4,247
|                              |              



Depreciation expense was $4,615 and $22,509 for the fiscal years ended June 30, 2005 and 2004, respectively.



---





NOTE 8 - DUE TO OFFICER



Due to officer, represents advances made by officers of the Company and its subsidiaries, which are non-interest bearing, unsecured and due on demand.  As of June 30, 2004, the total amount due to officers was $534,730.  During the current year, the officer loaned an additional $280,500 in cash to the Company and was paid $201,080.  In addition, the officer was issued 3,350,000 shares of the Company's common stock valued at $300,000 as payment on his loan. As of June 30, 2005, the balance was $312,708.





NOTE
9 - LOANS AND PROMISSORY NOTES



A summary of loans and promissory notes payable at June 30, 2005 is as follows:



|TYPE                            
|--------------------------------
|Current:                        
|Convertible promissory notes    
|Short-term notes payable        
|Current portion of notes payable
|                                



CONVERTIBLE PROMISSORY NOTES



During the year ended June 30, 2004, $1,100,000 of the notes and accrued interest of $2,558,156 totaling $3,658,156, were converted to 21,019,177 shares of Company's common stock valued at $3,138,833.  The market value of the stock issued for the conversion was calculated and a gain of $519,323 resulted from this note conversion was recorded as a gain on conversion of notes in the accompanying consolidated financial statements.  Other fees generated from the conversion of these notes of $47,363 were recorded as



---



penalty and premium expense in these consolidated financial statements.  In addition, 536,636 shares of the Company's common stock were issued to exercise the repricing warrants relating to the notes converted.  As of June 30, 2004, all of the convertible notes and related interest had been converted.



PROMISSORY NOTES:



As of June 30, 2005, the Company had notes payable to International Mercantile Holding amounting $196,111. The notes are due in the year ended June 30, 2006 and are reflected in the financial statements under current liabilities.  The Company pledged 5,000,000 shares of treasury stock with the note-holder, which were later sold by the note holders   The Company did not receive any proceeds from the sale of the shares nor was an agreement entered into for the settlement of the loan between the Company and the lender.  Accordingly, the value of these shares is reflected in the financial statements as stock subscriptions receivable and the notes are still included in the financial statements as a liability of the Company.   The Notes carries an interest rate equal to LIBOR plus 1%.



As of June 30, 2004, the Company had notes payable amounting $3,087 against acquisition of an automobile. The note was secured by the auto, carry interest rate of 8.5%. The note was paid off during year ended June 30, 2005.



SHORT TERM NOTES PAYABLE:



As of June 30, 2005, the Company has short term notes payable amounting $1,231,016 with accrued interest of $161,902. The notes amounting to $778,016 are past due and $293,000 of the notes are payable on demand.  These notes bear interest rates ranging from 6% to 20% per annum.  Included in this amount is the payable to the former owners of ATC of $72,323. During the current year the Company paid $466,031 of notes payable and $133,175 of related accrued interest.  A note of $120,000 was issued during the year for which personal stock of the director of the Company was pledged as collateral.  This note is due in the year ended June 30, 2006.



In the quarter ended March 31, 2005, the Company renegotiated several notes that had severe non-payment interest penalties whereby the loan-holders agreed to rescind the penalties retroactively.  As a result, the Company reversed $314,500 of interest penalties that had been accrued in the six month period ended December 31, 2004.



During the year ended June 30, 2005, the Company issued a convertible note of $40,000 convertible into 1,000,000 shares of the Company's common stock valued at $50,000.  A beneficial conversion expense was recorded of $10,000 at the time the agreement was signed. The note was converted into shares during the year. Additionally, a beneficial conversion expense of $64,500 was recorded during the year for short term notes that are convertible but have not yet been converted.



In addition, during the year ended June 30, 2005, the Company settled the balance owing of several of the note holders.  The amount of principal and interest settled was $221,587.  The market value of the stock paid as consideration was less than the amount of the notes; therefore, a gain of $20,393 was recorded on the settlement of these notes.



DUE TO PREFERRED STOCKHOLDERS AND OTHER CURRENT LIABILITIES:



PREFERRED STOCKHOLDERS AND INTEREST PAYABLE



At June 30, 2005, the Company has 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.  There were no payments or conversions made during the year ended June 30, 2005.



The $134,455 interest payable to holders of preferred stock at June 30, 2005 has been included in accrued interest.



---





OTHER CURRENT LIABILITIES



During the year ended June 30, 2005, the Company received as a deposit on a business consulting agreement in the amount of $20,000.  As the conditions of the agreement have not been met at June 30, 2005, the amount has been classified as unearned revenues and is shown in the consolidated financial statement in
"other current liabilities" (See Note 16).



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 been classified as other payable and is shown on the consolidated financial statement in
"other current liabilities".





NOTE 10 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES



The accounts payable and accrued expenses at June 30, 2005 consist of the following:



|Accounts Payable                   | $    
		736,299
|---------------------------------- | ---------------
|Accrued salaries and payroll taxes | 88,546         
|Accrued interest                   | 296,357        
|Accrued legal                      | 389,803        
|Accrued expenses - other           | 800            
|                                   | $  1,511,805   
|                                   |                



---



NOTE 11 - LITIGATION



LEGAL PROCEEDING SETTLED AND CLEARED AS OF YEAR END:



FRANCIS VAUSE, MARK VAUSE, FRANCIS VAUSE, JR., IAN VAUSE AND MARGARET HODSON VS. JERSEY TRANSFER & TRUST COMPANY AND PROVIDENTIAL HOLDINGS, INC.



Claimants filed a complaint with the United States District Court, District of New Jersey (Case No. 00-4353(JAGF) on September 6, 2000 seeking damages of $500,000 against Jersey Transfer & Trust Company and Providential Holdings, Inc. for refusing to remove the restrictive legends and register a total of 568,332 shares of Rule 144 stock held by Claimants. Providential Holdings, Inc. and Jersey Transfer & Trust Company ("Defendants") relied on representation by the former management of JR Consulting, Inc., later changed to Providential Holdings, Inc., that the captioned shares were not free of all encumbrances and were issued for invalid consideration.



On July 21, 2004 a settlement agreement was signed by Claimants and Defendants whereby the Company agreed to pay Claimants $25,000 in cash and 2,500,000 shares of common stock of the Company. The Company issued 2,500,000 shares of common stock to Claimants on July 26, 2004 valued at $423,750 and paid Claimants $25,000 in cash on August 12, 2004.  The Company also agreed to reimburse its transfer agent the $25,000 it was required to pay to the Claimant.  The Company recorded $17,147 as a gain in litigation settlement.  The Company was also required to issue 200,000 shares of its common stock to the Claimants attorney.  This stock payment was issued on July 26, 2004, and was valued at $33,900 and was recorded as legal expense.



JAMES C. HU VS. MINGMAN HU AND PROVIDENTIAL SECURITIES, INC.



Mingman Hu was a registered representative with Providential Securities, Inc. who served Claimant's investment account. Claimant filed a complaint with the Los Angeles County Superior Court, Northeast District on April 27, 2001 (Case No. G0027156) seeking compensatory damages in the amount of $11,609 plus 12% interest and emotional distress damages in excess of $50,000 for Mingman Hu's failure to honor her written agreement with Claimant. Mingman Hu was an independent contractor with Providential Securities, Inc. and was responsible for any alleged claims by Claimant. This case was settled for $13,908.



LEGAL PROCEEDING SETTLED AND UNPAID AS OF YEAR-END:



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.



LEGAL PROCEEDING PENDING AS OF YEAR END:



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



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



NGON VU VS. PROVIDENTIAL SECURITIES, INC.



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



VERIO VS. PROVIDENTIAL SECURITIES, INC.



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



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



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



ARBITRATION CASES:



The Company has several arbitration cases against Providential Securities, Inc. relating to the daily trading operations of the Company.  The total amount of damages for these cases is $54,505.  This amount has been accrued in the accompanying consolidated financial statements.



---



NOTE 12 - INCOME TAXES

The Company's income tax provision in the current year represents mandatory state taxes for each corporation and some penalties and interest relating to late payments.



The reconciliation of income tax expense (benefit) computed at the U.S. Federal statutory rate to income tax expense (benefit) is as follows:



|                                             | June 30, 2005           | June 30, 2004           
|-------------------------------------------- | ----------------------- | ------------------------
|Tax at U.S. Federal statutory
		rates:       | $ 
		(720,800)          | $ 
		(1,283,000)        
|                                             |                         |                         
|State income taxes, net of
		federal effect: | $   
		(63,700)         | $    
		(226,000)       
|                                             |                         |                         
|Change in valuation allowance:               | $     784,500           | $     1,509,000         
|                                             | $                  
		- | $                   
		-
|                                             |                         |                         



As of June 30, 2005 the Company's deferred tax asset amounted to approximately $ 4.8
 million, which relates primarily to NOL carry-forwards.  The deferred tax asset for the year had a related valuation allowance in the same amount.



As of June 30, 2005, the Company estimated the available federal NOL carry-forwards to be approximately $15.37 million, subject to certain limitations, which will expire on various dates through 2024. The Company also estimates state NOL carry-forwards to be approximately $14.9 million, subject to certain limitations, which will expire on various dates through 2015.





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 bythe 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. Common stock equivalents have been excluded from the calculation of weighted-average shares for purposes of calculating diluted net loss per share for 2005 and 2004 periods, as such inclusion is anti-dilutive.



|                                                                         | 2005                 |  | 2004                
|------------------------------------------------------------------------ | -------------------- |  | --------------------
|Basic and diluted net loss per share:                                    |                      |  |                     
|Numerator:                                                               |                      |  |                     
|Net loss                                                                 | $  (2,119,904)       |  | $  (3,853,160)      
|                                                                         |                      |  |                     
|Denominator:                                                             |                      |  |                     
|Basic and
		diluted weighted average number of common shares outstanding | 140,336,204          |  | 83,523,306          
|                                                                         |                      |  |                     
|Basic and diluted net loss per share                                     | $          
		(0.02) |  | $          
		(0.05)
|                                                                         |                      |  |                     



NOTE 14 - STOCKHOLDER'S DEFICIT



Treasury Stock:



During the years ended June 30, 2004 and June 30, 2005, the Company cancelled 1,000,000 and 4,805,200 treasury shares, respectively.  The balance as of June 30, 2005 was 1,000,000 shares valued at $40,000.



Common Stock:



Fiscal year ended June 30, 2004:



The Company issued 300,000 shares of common stock for cash valued at $56,000.  The Company received $937,600, including $244,660 in stock subscription receivable from the prior year, for 6,100,000 shares of stock options ranging between $0.07 and $0.32 per share which were exercised.  The Company also issued 27,206,721 shares of common stock for services and salaries amounting $2, 2491,454.



During the year ended June 30, 2004, 536,636 shares of Company's common stock were issued to exercise the re-pricing warrants for the notes converted during the period.



During the year ended June 30, 2004, $1,100,000 of the convertible debenture notes and accrued interest of $2,558,156, totaling $3,658,156 were converted to 21,019,177 shares of common stock valued at $3,138,833.  A loss of $519,323 resulted from these note conversions, which is included in other expenses in the accompanying consolidated financial statements.



During the year ended June 30, 2004, the Company converted notes payable and related interest of $315,341 into 3,995,285 shares of the Company's common stock valued at $668,855.  A beneficial conversion expense of $353,514 was recorded, which is included in other expenses in the accompanying consolidated financial statements.



During the year ended June 30, 2004, 2,560,000 shares of the Company's common stock valued at $372,360 were issued as payment on short-term notes payable valued at $336,660 and related accrued interest of $43,775.  A beneficial conversion expense of $11,125 and a gain of $19,200 resulted from these note conversions, which is included in other expenses in the accompanying consolidated financial statements.  In addition, loan repayments of 4,000,000 shares valued at $657,750 have not been issued as of June 30, 2004 and are included in
"Shares to Be Issued" on the accompanying consolidated financial statements.



During the year ended June 30, 2004, 2,480,268 shares of the Company's common stock were issued as payment on short-term notes payable - officers valued at $133,488.  A beneficial conversion expense of $346,692 resulted from these note conversions, which is included in other expenses in the accompanying consolidated financial statements.



The Company issued 2,195,271 shares of common stock valued at $507,363 for the conversion of preferred stock payable of $235,000 and related dividend payable of $105,600.  A redemption expense of $173,812 resulted from these conversions, which is included in other expenses in the accompanying consolidated financial statements.  As of June 30, 2004, 1,211,968 shares valued at $144,079 related to the conversion of



---



these shares of preferred stock payable have not been issued and are included in
"Shares to Be Issued" on the accompanying consolidated financial statements.



In March 2004, the Company cancelled 1,000,000 shares previously issued as collateral to a note holder when the note was settled.



During the year ended June 30, 2004, the Company acquired two subsidiaries.  4,000,000 shares of the Company's common stock valued at $360,000 were issued to ATC.  1,116,369 shares of the Company's common stock valued at $234,437 are to be issued to Irvine College of Medical Sciences.  As of June 30, 2004, these shares were not issued and were included in
"Shares to Be Issued" on the accompanying consolidated financial statements.



Fiscal year ended June 30, 2005:



During the year ended June 30 2005, the Company issued 10,035,456 shares of common stock for salaries and services valued at $743,293.



The Company received $202,400 as payment on stock subscriptions that were written off in the prior year.  These payments were applied to additional paid in capital. The stock subscription that was written off in the prior year was for stock options that were exercised during the year ended June 30, 2004.



During the year ended June 30, 2005, the Company issued 3,200,000 shares of common stock valued at $245,500 for stock options exercised.  As of June 30, 2005, the Company has received payment of $57,000 on these options and has recorded a subscription receivable of $188,500.  The stock option agreements were issued to a few key consultants and as such, the $25,800 fair market value of these stock options was reflected in consulting fees as of June 30, 2005.



During the year ended June 30, 2005, the Company issued 2,500,000 shares of common stock for settlement of litigation valued at $423,750.  The Company recorded a gain on legal settlement of $17,147 (see note 7).



Additionally, the Company issued 142,450 shares of common stock valued at $26,923 for the purchase of a minority interest in a private company during the current year.  This investment was impaired during this period.



During the year ended June 30, 2005, 2,824,519 shares of the Company's common stock with a fair market value of $483,944 were issued as payment on short-term notes payable of $494,486 and related interest of $9,851.  The Company recorded a gain of $20,393 on the conversion, which is included in other income and expense in the accompanying consolidated financial statements.  In addition, the Company issued 3,350,000 shares of its common stock valued at $300,000 as payment on officer loan (See Note
8).



Shares to be Issued:



From time to time, the Company experiences a delay from the date shares are due to be issued and when they are actually issued.  The Company records these shares as of the date of the obligation to issue the shares as Shares to be issued.   When the shares are issued, the Company reduces this amount accordingly.



As of June 30, 2004, the Company had the obligation to issue a total of 6,328,337 shares of its common stock valued at $1,036,267.  During the year ended June 30, 2005, the Company issued 3,828,337 of these shares valued at $661,267 which results in remaining balance of $375,000

---



During the fiscal year 2005, 1,500,000 shares valued at $282,750 were issued for payments of notes; 1,211,968 shares valued at $144,080 relating to the preferred stock conversion in the prior year; and 1,116,369 shares valued at $234,437 were issued in accordance with the stock purchase agreement for Irvine College of Medical Sciences (see note 1).



Prepaid Consulting:



On April 15, 2002, the Company signed an agreement with an unrelated third-party for consulting services.  The consultant will consult with the Company in identifying, locating and acquiring various business opportunities for the Company over a two year period.  The Company issued 3,000,000 shares of common stock to the consultant valued at $1,620,000 based upon the market value of the stock at the time of consummation of the agreement.  The Company has recorded the shares issued as a contra-equity account.



During the year ended June 30, 2005, the Company signed two additional agreements with unrelated third-parties for consulting services.  The service periods for the consulting contracts vary from six months to two years.  The Company issued 1,380,900 shares of common stock to the consultants valued at $64,000 based upon the market value of the stock at the time of consummation of the agreements.  The Company has recorded the shares issued as a contra-equity account.



During the years ended June 30, 2004 and 2005, the Company has amortized $591,189 and $15,166, respectively, as an operating expense.  The balance of the prepaid consulting fees at June 30, 2005 is $48,834.





NOTE 15 - STOCK BASED COMPENSATION PLAN



Stock Options:



On July 10, 2000 the Company adopted a Stock Option and Incentive Plan (the "Plan") which provides for the issuance of up to a maximum of 16 million shares of the Company's common stock to officers, employees and non-employee directors at the sole discretion of the board of directors.  On August 10, 2000 the Company granted 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 expire on December 31, 2005.  As of the date of this report there have been no options exercised and seven million of these options have been forfeited.



During the year ended June 30, 2005, the Company granted 6,200,000 of options to four consultants with an exercise price ranging from $0.05 to $0.50 per share.  The Company valued these options using the fair value method and recorded an expense of $32,800 based on the Black-Scholes option pricing model with the following assumptions:



|Risk-free interest rate | 3.25%    
|----------------------- | ---------
|Expected life           | 1-3 years
|Expected volatility     | 8%       
|Dividend yield          | 0%       





Common stock purchase options consist of the following as of June 30, 2005:



|                                             | Options     |  | Exercise Price
|-------------------------------------------- | ----------- |  | --------------
|Outstanding and exercisable,
		June 30, 2004 | 8,000,000   |  | $0.08-$0.50   
|Granted                                      | 6,200,000   |  | $0.05-$0.50   
|Exercised                                    | (3,200,000) |  | $0.07-$0.08   
|Expired                                      | (1,000,000  |  | -             
|Outstanding and exercisable,
		June 30, 2005 | 10,000,000  |  |               
|                                             |             |  |               



Stock-Based Compensation:



In December 2002, the FASB issued SFAS No. 148 "Accounting for Stock Based Compensation-Transition and Disclosure".  SFAS No. 148 amends SFAS No. 123, "Accounting for Stock Based Compensation", to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation.  In addition, this Statement amends the disclosure requirements of Statement 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used, on reported results.  The Statement is effective for the Companies' interim reporting period ending January 31, 2003. In compliance with FAS No. 148, the Company has elected to continue to follow the intrinsic value method in accounting for its stock-based employee compensation plan as defined by APB No. 25.



On July 2, 2003, the Company adopted a stock-based compensation plan and set aside 15,000,000 shares of common stock for selected eligible participants of the Company and subsidiaries, and certain independent contractors providing certain services to the Company.  All of 15,000,000 shares were issued for salaries, consulting and professional services in lieu of cash under this plan as of June 30, 2005.



On February 2, 2004, the Company adopted a stock-based compensation plan and set aside 9,000,000 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, 2005, 8,921,814 shares have been issued for salaries, consulting and professional services in lieu of cash under this plan.



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, 2005, 8,786,129 shares have been issued for salaries, consulting and professional services in lieu of cash under this plan.



---





NOTE 16 - CONTRACTS AND COMMITMENTS



AGREEMENT WITH DATALOGIC CONSULTING, INC.



During the fiscal year ended June 30, 2004, the Company received 250,000 shares of Datalogic International, Inc. in connection with consulting services provided and recorded $204,250 in advisory fees.  The shares were sold and a loss of $50,566 was recorded.   In October 2004, the Company received the remaining balance of 250,000 shares under this agreement.  During the year ended June 30, 2005, the Company recorded the value of these shares of $204,250 as advisory income in the accompanying consolidated financial statements.  (See Note 5).



PROVIMEX, INC.



A wholly-owned division of the Company originally formed on April 10, 2001 under the name "Providential Imex", to focus on trade commerce with Vietnam. This division changed its name to Provimex on July 5, 2001. The Company believes that its trade commerce business will grow substantially as a result of the imminent ratification of the Trade Agreement between Vietnam and the United States. During the year ended June 30, 2004 the Company generated $132,856 in revenue and $117,430 of cost of sales for a gross profit of $15,426 from this operation.  During the year ended June 30, 2005, Provimex generated $28,144 in gross sales with $13,279 in cost of goods sold for a net gross profit of $14,865.



AGREEMENTS WITH NETTEL GLOBAL COMMUNICATION CORP.



On May 19, 2003, the Company entered into an agreement to provide merger and acquisition consulting services to Nettel and to assist Nettel in its business combination plans with a fully reporting publicly-traded company.  As of June 30, 2003, the Company received 2,250,000 restricted common shares of Nettel, and recorded consulting income of $1,365,300 on this transaction.  During the year ended June 30, 2005, the Company did not generate any income based on this agreement.



DISTRIBUTORSHIP AGREEMENT WITH XIAMEN OVERSEAS CHINESE



On October 28, 2003, the Company entered into an agreement with Xiamen
Overseas Chinese Electronics Company ("Xoceco") to establish a new majority-owned subsidiary to distribute consumer electronics products for Xoceco. The Company will own 95% of the new subsidiary.



According to the agreement, Xoceco will be granted options to acquire up to 4,300,000 shares of common of the Company with exercise prices ranging from $0.10 to $.35 per share until December 31, 2005, subject to a minimum level of annual revenues not less than $5,000,000 and profit of sales not less than 10%.  In December 2003, the Company established PHI Digital Corp. under this agreement.  During the year ended June 30, 2004, the Company recognized $3,566,407 in sales from this venture with $3,206,580 in cost of goods sold for a gross profit of $359,827.  Xoceco charged PHI Digital $359,827 in management fees, resulting in a zero net income.  In June 2004, the Company terminated the agreement with Xoceco and PHI Digital was renamed
"TULON INDUSTRIES, INC." to change its scope of business.This subsidiary had no activity during the year ended June 30, 2005.



STOCK PURCHASE AGREEMENT



On February 5, 2004 an unrelated private investment company signed an agreement with the Company to purchase $3,000,000 worth of the Company's restricted common stock based upon a price equal to 20% discount from the average 10 day
"Bid" price when the Company's stock is traded for at least One Dollar ($1.00) per share and there is average daily trade volume of at least thirty thousand (30,000) shares of volume per day. In addition, the purchaser will be given the option to purchase up to one million shares of the Company's restricted common stock at a price equal to 30% discount from the market price or thirty (30) cents per share, whichever is lower. This option shall be for a period of one year from the close of the proposed transaction. As of the date of this report, the conditions of the agreement have not been met and therefore the agreement has not been consummated.



BUSINESS CONSULTING AGREEMENT WITH ENTEC SOFTWARE, INC.



On February 28, 2004, the Company entered into a business consulting agreement with Entec Software, Inc. ("Entec") to provide services in the identification, location, and facilitating a merger with a fully-reporting publicly-traded company.  If a merger is successful, the Company is to receive common stock in the newly combined company equal to 20% of the then issued and outstanding common shares of the new company.  As of the date of this report, a successful merger has not been completed.  In connection with this agreement, the Company has received $270,000 as a deposit for expenses and has recorded this as
"other liabilities" in the accompanying consolidated financial statements as of June 30, 2004.  On July 15, 2004, the merger failed to be consummated and the deposits received by the Company were converted into short-term notes payable with a maturity date of December 15, 2004.  These notes have been renegotiated to reflect more favorable terms.  (See Note
9).



---



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 will primarily focus on providing equipment and liquid gas to high rise buildings and premium residential housings in Vietnam. The Company will own 80% equity in the joint venture company. The Joint Venture did not have any operations through June 30, 2005.  The Company evaluated this investment and has deemed this investment to be impaired as of June 30, 2005.



BUSINESS CONSULTING AGREEMENT WITH MIRAE TECH CO.



Effective October 1, 2004, the Company entered into a business consulting agreement with Red5 Holdings, Inc., a Nevada corporation, and Mirae Tech Co., Ltd., a Republic of Korea corporation, to provide consulting services in the identification, location, and facilitating a merger between Mirae Tech Co., Ltd. and a fully-reporting publicly-traded company. According to the agreement, the Company would receive common stock in the newly combined company equal to 10% of the then issued and outstanding common shares of the new company.  As the merger between Mirae Tech Co., Ltd. and Rapid Bio Tests Corp., a Nevada corporation and fully-reporting publicly-traded company, was consummated on December 15, 2004, the Company was entitled to 4,718,421 restricted shares of common stock in Rapid Bio Tests Corp, which was renamed to Bio Warm Corporation, under the terms of the business consulting agreement. The shares were received during the current year and were valued at $646,423 when they were received.  As of June 30, 2005, the values of these shares were impaired and an impairment loss of $457,687 has been recorded in the accompanying financial statements.



BUSINESS CONSUTLING AGREEMENT WITH MOTIV SPORTS, INC.



On January 14, 2005 the Company entered into a business consulting agreement with Motiv
Sports, Inc. ("Motiv"), a California corporation, to provide services in the identification, location, and facilitating a merger with a fully-reporting publicly-traded company.  If a merger is successful, the Company is to receive common stock in the newly combined company equal up to 27% of the then issued and outstanding common shares of the new company. As of the date of this report, a successful merger has not been completed.   As of June 30, 2005, Motiv has paid the Company $20,000 as a deposit against this agreement, which is reflected as unearned income in Other Current Liabilities.



BUSINESS CONSUTLING AGREEMENT WITH ZEROMICRON, INC.



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



BEGINNING OPERATION OF PROVIDENTIAL OIL & GAS, INC.



On April 4, 2005, the Company announced the launching of Providential Oil & Gas, Inc., a Nevada corporation and wholly-owned subsidiary of the Company.  Providential Oil & Gas has investigated a number of lease properties in the US and abroad but has not consummated any transaction as of the date of this report.

---



TERMINATION OF EQUITY LINE OF CREDIT WITH SOUTHRIDGE CAPITAL MANAGEMENT, LLC.



On April 15, 2005, the Company announced the termination of the $10 million equity line of credit agreement with Brittany Capital Management Limited, a corporation organized and existing under the laws of The Bahamas ("Investor") whereby the Investor agreed to purchase up to Ten Million Dollars ($10,000,000) of the Company's common stock at a 7% discount to the market  bid price, subject to the effectiveness of a Registration Statement to be filed with the Securities and Exchange Commission by the Company.



JOINT VENTURE AGREEMENT WITH NEXIS CAPITAL MANAGEMENT CORPORATION, LTD.



On May 10, 2005, the Company entered into a Joint Venture Agreement with Nexis Capital Management Corporation, Ltd., to assist Chinese companies in their pursuit of capital from sources in the United States.



Both parties agree to share equally in all gross fee revenues based upon a mutually agreeable compensation schedule. As of the date of this report, the Company has reviewed a number of proposals from China that are introduced by Nexis Capital Management Corp. but have not consummated any transaction.



NEW CONSULTING AGREEMENT WITH 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 will 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.  These services were completed during the year ended June 30, 2005, and as such, a receivable for the market value of the 7,300,000 shares earned has been recorded in Other Assets in the accompanying financial statements.  The value of these shares was $3,285,000 based upon the market value of the shares at June 30, 2005.



---





OFFICE SPACE LEASE



The Company leased its office space at $4,263 per month during the year ended June 30, 2004.  This lease expired on March 31, 2004 and the Company paid the rent on a month to month basis.  In August 2004, the Company moved to a new office with a lease at $3,907 per month.



Future commitments under operating leases are as follows for the twelve months ending June 30:



|2006                         | 46,884 
|---------------------------- | -------
|2007                         | 46,884 
|2008                         | 3,907  
|Total minimum lease payments | $97,675



The rent expense was $60,644 and $71,259 for the year ended June 30, 2005 and 2004, respectively.





NOTE 17 - DISCONTINUED OPERATIONS



ATC Technology Corp.:



During the year ended June 30, 2005, the Company distributed 20% of it's investment in ATC Technology Corp. to the Company's shareholders and returned 70% of it's investment to the subsidiary's creditors.  As of June 30, 2004, the Company had written off it's investment in ATC and the goodwill associated with the initial purchase.  Accordingly, no dividend was recorded in the financial statements since the basis of the investment was zero.



As a result of this transaction, the Company recorded a gain of $1,670,925 which represents the relief from the liabilities of ATC, net of a $725,000 inter-company receivable that was written off during the current year.



In addition, the Company incurred a loss of $277,166 relating to the discontinued operations of the subsidiary.



---





Irvine College of Medical Sciences, Inc.:



During the year ended June 30, 2005, the Company declared a dividend of the Irvine College of Medical Sciences, Inc.'s common stock to the Company's shareholders of record as of May 6, 2005.  Each shareholder of record received one College share for every 39.775 shares of Providential Holdings, Inc.  As a result, the Company's owned 36% of the College at June 30, 2005.  The shares of the College were distributed on September 22, 2005. (See Note 23)



The Company has recorded a loss of $116,831 relating to the discontinued operations of the subsidiary, and a gain of $284,654 on the disposal of Irvine College as of June 30, 2005.





NOTE 18 - GOING CONCERN UNCERTAINTY



As shown in the accompanying consolidated financial statements, the Company incurred a net loss of $2,119,904 for the year ended June 30, 2005.  As of June 30, 2005, the Company had a working capital of $1.4 million and shareholder's equity of $1.4 million. These factors, as well as the uncertain conditions that the Company faces in its day-to-day operations, 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, 2006 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 19 - GAIN ON LEGAL SETTLEMENT AND SETTLEMENT OF DEBT



Gain on Legal Settlements:



On July 21, 2004, the Company entered into a settlement agreement with Vause, et al (see Note 10) whereby the Company agreed to pay the Claimants $25,000 in cash, 2,500,000 shares of the Company's common stock, valued at $423,750.  The Company also agreed to reimburse its transfer agent $25,000 which it was required to pay to the Claimants.  The Company recorded a gain of $17,147 from the settlement.



During the year ended June 30, 2005, the Company recorded a gain of $16,507 for the settlement with James Hu (See Note 11) and Mr. Truong that had been fully satisfied.



Gain on Settlement of Debt:



During the year ended June 30, 2005, the Company recorded a gain of $52,871 on the settlement of debt.  The gain is due to the settlement of obligations of the Company that were settled at less than book value.



NOTE 20 - SEGMENT INFORMATION

The following table presents a summary of operating information and certain year-end balance sheet information as of June 30:



|                                        | 2005                        |  | 2004                    
|--------------------------------------- | --------------------------- |  | ------------------------
|                                        |                             |  |                         
|Revenues from
		unaffiliated customers: |                             |  |                         
|Consulting and advisory services        | $           4,242,303       |  | $        4,891,990      
|Sales                                   | 37,049                      |  | 3,702,650               
|Consolidated                            | $          
		4,279,352     |  | $        8,594,640      
|                                        |                             |  |                         
|Operating income (loss):                |                             |  |                         
|Consulting and advisory services        | $         
		(3,275,614)    |  | $       (2,393,803)     
|Sales                                   | 7,465                       |  | 18,813                  
|Consolidated                            | $         
		(3,268,148)    |  | $      (2,374,990)      
|                                        |                             |  |                         
|Identifiable
		assets:                  |                             |  |                         
|Consulting and advisory services        | $          4,886,441        |  | $       4,886,441       
|Sales                                   | -                           |  | -                       
|Consolidated                            | $         4,886,441         |  | $      4,886,441        
|                                        |                             |  |                         
|Depreciation and
		amortization:        |                             |  |                         
|Consulting and advisory services        | $                
		4,615   |  | $              
		22,509
|Sales                                   | -                           |  | -                       
|Consolidated                            | $                 4,615     |  | $              22,509   
|                                        |                             |  |                         
|Capital
		expenditures:                 |                             |  |                         
|Consulting and advisory services        | $                      
		- |  | $                7,743  
|Sales                                   | -                           |  | -                       
|Consolidated                            | $                      
		- |  | $                 7,743 
|                                        |                             |  |                         



NOTE 21 - RELATED PARTY TRANSACTIONS



During the year ended June 30, 2005, the Company issued shares to various related parties in payment for services and salaries.   These payments were as follows:



|Related Party |  | # Shares  |  | Market Value    
|------------- |  | --------- |  | ----------------
|Henry Fahman  |  | 1,730,125 |  | $     
		140,195
|Tina Phan     |  | 692,035   |  | 56,077          
|Keith Wong    |  | 942,450   |  | 58,772          
|Norm Klein    |  | 506,667   |  | 53,963          
|Thorman Hwin  |  | -         |  | -               
|              |  |           |  |                 
|              |  | 3,871,277 |  | $  3  09,007    
|              |  |           |  |                 



In addition, Henry Fahman, an officer of the Company was issued 3,500,000 shares for the payment of amounts owed to him.  The value of the stock at the time of issuance was $300,000.  No gain or loss was recorded as this amount was applied as payment on officer's loan.  (See Note 7).



As of June 30, 2005, the Company also had $13,728 in accrued salaries to related parties.





NOTE 22
 - SUBSEQUENT EVENT



AGREEMENT WITH TULON PACIFIC, LLC



On September 10, 2004 the Company signed an agreement to acquire a 70% ownership of Tulon Pacific, LLC, an Irvine, California-based company that provides precision cutting tools and drilling solutions, for a $1.6 million combination of cash and a promissory note which may be converted into common shares of the Company in six months. This transaction has been terminated by both parties as of October 24, 2005.



BUSINESS CONSULTING AGREEMENT WITH SANATEX, INC.



On August 4, 2005, the Company entered into a business consulting agreement with Sanatex,
Inc., a California corporation ("Sanatex"), to assist Sanatex with respect to its becoming a publicly-traded company and its funding requirements.  According to the agreement, the Company will receive a portion of equity ownership in the new public company.



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



On August 22, 2005, the Company entered into a Business Partnering Agreement with Fareast Connect, Inc., a California corporation ("Fareast"), whereby the Company will invest 51% of the initial operating budget into Touchlink Communications, Inc., a majority-owned subsidiary of the Company, and Fareast will invest 49% of the operating budget in exchange for 49% equity ownership of Touchlink Communications.  As of the date of this report, Fareast has not made any investment into Touchlink Communications.



TERM SHEET FOR $5 MILLION FUNDING WITH INSTITUTIONAL INVESTOR



On August 26, 2005, the Company signed a term sheet with an institutional investor for a $5million standby equity distribution. The investor will commit to purchase up to $5 million of common stock of the Company at a price equal to 98% of the market price over the course of twenty four months after an effective registration of the Company's common stock.  The Company and the investor have not entered into formal agreements setting forth their respective rights and obligations in connection with this funding arrangement.



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



None.





ITEM 8A. CONTROLS AND PROCEDURES



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



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



ITEM 8B.  OTHER MATTERS



None.

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PART III



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



The following table sets forth certain information as of June 30, 2005, with respect to the Directors and Executive Officers of the Company.



NAME                                                  AGE                                          POSITION

Henry D. Fahman

52

Chairman of the Board, President,

Acting Chief Financial Officer

Tina T. Phan

38

Director, Secretary and Treasurer

Tam T. Bui

45

Chief Technology Officer

Thorman Hwinn

56

Director

Robert W. Stevenson

66

Director





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







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









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











Tam Bui has been serving as
Chief Technology Officer of the Company since May 2002. 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.











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











Robert W. Stevenson has been a
Director of the Company since June 2003.  Mr. Stevenson is a retired industrial
executive with more than 30 years of experience in the corporate office of Esterline Technologies Corporation and its predecessors.  He served for 25 years
in the roles of Executive Vice President and Chief Financial Officer.  Prior
positions within the corporation included Controller, Secretary and Assistant
Controller.  Prior to joining Esterline, Mr. Stevenson worked in several finance
positions for The Boeing Company, Aerospace Group including as Chief, Financial
Statements and Financials Planning for Aerospace.  Aside from business consulting,
Mr. Stevenson spends most of his time supporting community activities.  He has
been a member of the Mercer Island Presbyterian Church since 1965.  He has
served on many boards and committees for the church including as a deacon and
elder.  He was a trustee of the
Presbyterian Church (U.S.A.) Foundation and a member of its Investment
Committee.  Currently he is representing the Presbytery of Seattle on the
chaplaincy oversight board (The Pastoral Care and Education Board) at Harborview
Hospital in Seattle, Washington and serves as Trustee and Treasurer for Union
College of California (Vietnamese Theological College, Westminster, CA). In
addition, he is Trustee and Treasurer of Sheldon Jackson College (in Sitka,
Alaska).  Also, he serves as Chairman of the Pacific Association for Theological
Studies and Prosthetics Outreach Foundation (also Treasurer) in Seattle,
Washington.  Over the years, he has been active in other community organizations
and currently participates on several boards and committees of the YMCA of
Greater Seattle.











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.



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ITEM 10. EXECUTIVE COMPENSATION



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



Except for non-cash payments mentioned in this report, there was no monetary compensation paid to any officers of the Company during the year ended June 30, 2005.



(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 7 million of these options have been forfeited.





NUMBER OF



SECURITIES

% OF TOTAL



UNDERLYING

OPTIONS

OPTIONS

GRANTED TO

GRANTED

EMPLOYEES

EXERCISE

EXERCISE

EXPIRATION

NAME

TO DATE

TO DATE

PRICE

DATE

DATE

Henry D. Fahman

CEO and Chairman of

5,000,000

71.43%

$.50

7/01/2001

12/31/2005

the Board





Tina T. Phan

Director/Treasurer

2,000,000

28.57%

$.50

7/01/2001

12/31/2005

and Secretary



The options contain no vesting provisions, but rather must be exercised by the end of 2005. They have not been exercised by the date of this report.



ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT



The following table sets forth information regarding the beneficial ownership of shares of the Company's common stock as of October 31, 2005 (155,441,543 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:



NAME AND ADDRESS OF

AMOUNT OF BENEFICIAL

PERCENT OF

TITLE OF CLASS

BENEFICIAL OWNER (1)

OWNERSHIP

CLASS



Common Stock

Henry D. Fahman

27,756,304 (2)

17.86%

17011 Beach Blvd., Suite 1230

Huntington Beach, CA 92647



Common Stock

Tina T. Phan (3)

4,752,028

3.05%

17011 Beach Blvd., Suite 1230

Huntington Beach, CA 92647



Common Stock

Thorman Hwinn

150,000 (4)

655 W. Roberta Ave.



Fullerton, CA 92832



Common Stock

Shares of all directors and

32,658,332

20.91%

executive officers as a group

(3 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.



(4) Less than 1%.

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ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



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



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





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PART IV





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





EXHIBIT

NO.

DESCRIPTION



2.1

Plan of Exchange between the Company and Prima Eastwest Model Management, Inc. (incorporated by reference to Exhibit 2 to the Form 8-K filed on March 1, 1996)



2.2

Corporate Combination Agreement between the Company and Providential Securities, Inc., effective on January 14, 2000  (incorporated by reference to Exhibit 10.12 to the Form 10-KSB filed on January 10, 2000).



3.1

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)



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10.1

Benatone Exchange Agreement, with Creditors (2)



10.2

Benatone Share Acquisition Agreement (for Weldnow Enterprise, Ltd.) (2)



10.3

Benatone Share Acquisition Agreement (Dynedeem Limited) (2)



10.4

Benatone Exchange Agreement (2)



10.5

Benatone Asset Sale Agreement (2)



10.6

Benatone Royalty Agreement (2)



10.7

Benatone Consultancy Agreement (2)



10.8

Benatone Deed (2)



10.9

Autokraft Stock Purchase Agreement (3)



10.10

Autokraft Stock Subscription Agreement (3)



10.11

Prima Agreement and Plan of Merger (4)



10.12

Escrow Agreement between the Company and Warshaw Burstein Cohen Schelsinger & Kuh, LLP, dated March 28, 2000. (6)



10.13

Placement Agency Agreement between the Company and Sovereign Capital Advisors, LLC, dated March 28, 2000. (6)



10.14

Guaranty Agreement between Henry Fahman and SovCap Equity Partners, Ltd, dated March 28, 2000. (6)



10.15

Pledge Agreement between Henry Fahman and SovCap Equity Partners, Ltd, dated March 28, 2000. (6)



10.16

Partnership Purchase Agreement between the Company and Holt Collins, dated May 31, 2000. (6)



10.17

Memorandum of Agreement between DataLogic Consulting, Inc. and Providential Holdings, Inc., dated April 25, 2001. (5)



10.18.1

Letter of Intent between Providential Holdings, Inc. and Epicenter, Inc., dated October 30, 2000. (5)



10.18.2

Amendment to Letter of Intent between Providential Holdings, Inc. and Epicenter, Inc., dated November 30, 2000. (5)



10.18.3

Amendment to Letter of Intent between Providential Holdings, Inc. and Epicenter, Inc., dated January 12, 2001. (5)



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10.18.4

Amendment to Letter of Intent between Providential Holdings, Inc. and Epicenter, Inc., dated June 26, 2001. (5)



10.18.5

Amendment to Letter of Intent between Providential Holdings, Inc. and Epicenter, Inc., dated October 02, 2001. (5)



10.19

Joint Venture Agreement between Providential Holdings, Inc and Boxo, Inc., dated January 1, 2001. (5)



10.20

License of Manna Technologies Joint Venture Company, dated March 21, 2001. (5)



10.21

Memorandum of Agreement between International Consulting and Training Center, Ministry of Trade, Vietnam and the Company, dated March 24, 2001. (5)



10.22

Memorandum of Agreement among General Transportation Company No. 5, Chu Lai Industrial Zone and the Company, dated March 25, 2001. (5)



10.23

Letter of Intent between Providential Holdings, Inc. and Global Systems and Technologies, Corp. dated October 18, 2001. (6)



10.24

Letter of Intent between Providential Holdings, Inc. and Estate Planning and Investment Company dated November 7, 2001. (6)



10.25

Joint Venture Agreement between Providential Holdings, Inc. and Mimi Ban dated November 23, 2001. (6)



10.26

Plan of acquisition of Nettel Global Communication Corp.  (incorporated by reference to the Company's Current Report on Form 8-K filed May 3, 2002).



10.27

Joint Venture Agreement with Vietnam's Minh Hieu Joint Stock Company. (7)



10.28

Memorandum of Agreement with HDT Enterprises, LLC dated March 15, 2002. (7)



10.29

Memorandum of Agreement and Principle Contract with Vietnam's Center of Telecom Technology. (7)



10.30

Stock Purchase Agreement with SlimTech, Inc. (incorporated by reference to the Company's Current Report on Form 8-K, filed May 1, 2002).



10.31

Stock Purchase Agreement with ATC Technology Corp. (incorporated by reference to the Company's Current Report on Form 8-K, Filed September 17, 2002)



10.32

Mutual Rescission of Stock Purchase Agreement with Nettel Global Communication Corp. (8).



10.33

Business Consulting Agreement with Nettel Global Communication Corp. (8)



10.34

Business Consulting Agreement with Medical Career College (8)



10.35

Mutual Rescission of Stock Purchase Agreement with SlimTech (8).



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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 Yutian Saw Corporation.  (incorporated by reference to the Company's Current Report on Form 8-K, filed June 15, 2004).



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).



21.1

Subsidiaries of the Registrant



32.1-32.2

Certifications in Accordance with Sections 302 and 906 of the Sarbanes-Oxley Act of 2002



(1)

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



(2)

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



(3

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



(4)

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



(5)

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



(6)

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



(7)

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



(8)

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



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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES



Audit Fees. The Company paid Kabani & Company Inc. $81,500 and $61,000 in audit and review fees for fiscal 2005 and 2004 respectively.



Financial Information Systems Design and Implementation Fees. The Company did not pay Kabani & Company Inc. any financial information systems design and implementation fees for fiscal year 2005 or 2004.



All Other Fees. The Company did not pay Kabani & Company Inc. any non-audit fees for fiscal year 2005 or 2004.





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



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





SIGNATURES



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



PROVIDENTIAL HOLDINGS, INC.





Date: November 4, 2005                                                                       By: /s/ Henry D. Fahman

Henry D. Fahman, President







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





SIGNATURE

TITLE

DATE





/s/ Henry D. Fahman

HENRY D. FAHMAN

President/Chairman/

Acting Chief Financial Officer

November 4, 2005



/s/ Thorman Hwinn

THORMAN HWINN

Director

November 4, 2005



/s/ Tina T. Phan

TINA T. PHAN

Secretary/Treasurer/Director

November 4, 2005



/s/ Robert W. Stevenson

ROBERT W. STEVENSON

Director

November 4, 2005













Exhibit No. 21.1





SUBSIDIARIES OF REGISTRANT



1.

ATC Technology Corp.



An Arizona corporation and minority-owned (10%) subsidiary of the Company



2.

ClearPass Systems, Inc.

A wholly-owned subsidiary of the Company



3.

Providential Capital, Inc.



A wholly-owned subsidiary of the Company



4.

Provimex, Inc.

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



5.

Provimex-HTV

A majority-owned (80%) joint venture company



6.

Touchlink Communications, Inc.

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



7.

Tulon Industries, Inc. (formerly PHI Digital Corp.)

A wholly-owned subsidiary of the Company



8.

Irvine College of Medical Sciences, Inc.

DBA Atlantis Career College

A minority-owned (36%) subsidiary of the Company



9.

Providential Oil and Gas, Inc.

A wholly-owned subsidiary of the Company



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Exhibit
31.1

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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
I, Henry Fahman, Principal Executive Officer, Providential Holdings, Inc., certify that:
1. I have reviewed this report on Form 10-KSB of Providential Holdings, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
PROVIDENTIAL HOLDINGS, INC.
/s/ Henry Fahman
Henry Fahman, Principal Executive Officer 
Dated: November 4, 2005




Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
I, Henry Fahman, Acting Principal Financial Officer, Providential Holdings, Inc., certify that:
1. I have reviewed this report on Form 10-KSB of Providential Holdings, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
PROVIDENTIAL HOLDINGS, INC.
/s/ Henry Fahman
Henry Fahman, Acting Principal Financial Officer
Dated: November 4, 2005 | 





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| | 

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Exhibit 32.1



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



In connection with the Annual Report of Providential Holdings, Inc. on Form 10-KSB for the year ending June 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Henry Fahman, President and Director of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Henry Fahman

Henry Fahman

President/Director

November 4, 2005



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Exhibit 32.2



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



In connection with the Annual Report of Providential Holdings, Inc. on Form 10-KSB for the year ending June 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Henry D. Fahman, Acting Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Henry Fahman

Henry Fahman

Acting CFO

November 4, 2005