SECURITIES AND EXCHANGE COMMISSION

















Washington, D.C. 20549





















_____________





















FORM 10-QSB

































































(Mark One)











































(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934











































For the quarterly period ended
December 31, 2004











































OR

































































( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT 1934

































































For the transition period from __________ to ___________

































































Commission file number 2-78335-NY































































Providential Holdings, Inc.





















(Exact Name of Registrant as Specified in Its Charter)

































































Nevada

(State or Other Jurisdiction of Incorporation or Organization)



90-0114535





















(I.R.S. employer





















Identification
No.)

































































17011 Beach
Blvd., Huntington Beach, California 92647





















(Address of Principal Executive Offices)    (Zip Code)











































(714)
843-5450





















Issuer's Telephone Number, Including Area Code























































































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





















NONE

































































Indicate by check (X) whether the issuer (1) has filed all reports required  to be filed by Section  13  or  15(d)  of  the Securities  Exchange Act of 1934 during the preceding  12  months (or  shorter period that the registrant was required to file such reports),  and  (2) has been subject to such filing  requirements for the past 90 days.











































YES  (X)     NO  ( )

































































Indicate the number
of shares outstanding of each of the issuer's classes of common stock, as of the
latest practicable date: 143,344,931 shares of common stock, $.04 par value per
share, were outstanding as of February 17, 2005.













































---



CONTENTS





PART I. FINANCIAL INFORMATION





Item 1.   Financial Statements









Balance Sheet - December 31, 2004 (unaudited)



Statements of Operations (unaudited) - Three and Six Months Ended

December 31, 2004 and 2003



Statements of Cash Flows (unaudited) - Six Months Ended

December 31, 2004 and 2003



Notes to Financial Statements (unaudited)









Item 2.   Management's Discussion and Analysis of Financial
Condition





and Results of Operations



Item 3.    Controls and Procedures







PART II. OTHER INFORMATION







Item 1.   Legal Proceedings







Item 2.   Changes in Securities







Item 3.   Defaults Upon Senior Securities







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







Item 5.   Other Information







Item 6.   Exhibits and Reports on Form 8-K



Signatures





---





Part 1





ITEM 1:   Financial Statements



PROVIDENTIAL HOLDINGS,
INC.

CONSOLIDATED BALANCE
SHEET

December 31, 2004

(UNAUDITED)



|ASSETS                                                                  |  |                 
|----------------------------------------------------------------------- |  | ----------------
|CURRENT ASSETS                                                          |  |                 
|Cash and cash
    equivalents                                           |  | $       
	2,182 
|Marketable securities                                                   |  | 407,830         
|Accounts receivable                                                     |  | 4,755           
|Prepaid expenses                                                        |  | 1,650           
|Other receivable                                                        |  | 711,141         
|Due from related party                                                  |  | 19,442          
|Other
    current assets                                                |  | 28,453          
|Total Current Assets                                                    |  | 1,175,453       
|                                                                        |  |                 
|PROPERTY AND EQUIPMENT, net of
    accumulated depreciation of $237,277 |  | 110,825         
|Total assets                                                            |  | $ 1,286,278     
|                                                                        |  |                 
|                                                                        |  |                 
|                                                                        |  |                 
|LIABILITIES AND STOCKHOLDERS'
    DEFICIT                               |  |                 
|CURRENT LIABILITIES                                                     |  |                 
|Accounts payable and accrued
    expenses                               |  | $ 
    2,925,456
|Short-term notes payable                                                |  | 1,342,326       
|Due to
    officer                                                      |  | 456,132         
|Due to preferred stockholders                                           |  | 215,000         
|Other current
    liabilities                                           |  | 252,212         
|Total Current Liabilities                                               |  | 5,191,126       
|                                                                        |  |                 
|NOTES PAYABLE                                                           |  | 332,914         
|                                                                        |  |                 
|Total liabilities                                                       |  | 5,524,040       
|                                                                        |  |                 
|MINORITY INTERESTS                                                      |  | -               
|COMMITMENTS AND CONTINGENCIES                                           |  | -               
|                                                                        |  |                 
|STOCKHOLDERS' DEFICIT                                                   |  |                 
|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         |  |                 
|138,060,619 shares issued and outstanding                               |  | 5,522,424       
|Treasury stock,  10,000,000shares, $.04 par value common stock          |  | (580,104)       
|Additional paid-in capital                                              |  | 12,583,133      
|Shares to be issued                                                     |  | 770,250         
|Other comprehensive income                                              |  | (959,400)       
|Accumulated
    deficit                                                 |  | (21,574,065)    
|Total stockholders' deficit                                             |  | (4,237,762)     
|                                                                        |  |                 
|Total liabilities and stockholders' deficit                             |  | $  1,286,278    
|                                                                        |  |                 

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

---

PROVIDENTIAL HOLDINGS,
INC.

CONSOLIDATED
STATEMENTS OF OPERATIONS

(UNAUDITED)



|                                                       | For the Three Months Ended December 31, |  | For the Six Months Ended December 31,
|------------------------------------------------------ | --------------------------------------- |  | -------------------------------------
|                                                       | 2004                                    |  | 2003                                 
|REVENUES                                               |                                         |  |                                      
|Consulting and advisory fee income                     | $          646,423                      |  | $                 
	-                
|Sales and long-distance services                       | 22,663                                  |  | 2,373,292                            
|Tuition                                                | 43,518                                  |  | 15,757                               
|Net revenues                                           | 712,604                                 |  | 2,389,049                            
|                                                       |                                         |  |                                      
|COST OF SALES                                          | 20,766                                  |  | 2,122,258                            
|COST OF TUITION                                        | 30,803                                  |  | 5,900                                
|GROSS PROFIT                                           | 661,035                                 |  | 260,891                              
|                                                       |                                         |  |                                      
|OPERATING EXPENSES                                     |                                         |  |                                      
|Depreciation and amortization                          | 6,269                                   |  | 7,142                                
|Bad debt expense                                       | -                                       |  | 121,000                              
|Salaries and wages                                     | 169,845                                 |  | 69,918                               
|Professional services, including non-cash compensation | 74,554                                  |  | 634,180                              
|Directors fees                                         | -                                       |  | -                                    
|Impairment of assets                                   | 4,708,159                               |  | 3,150,965                            
|General and administrative                             | 167,377                                 |  | 333,579                              
|Total Operating Expenses                               | 5,126,204                               |  | 4,316,784                            
|LOSS FROM OPERATIONS                                   | (4,465,169)                             |  | (4,055,893)                          
|                                                       |                                         |  |                                      
|OTHER INCOME AND (EXPENSES)                            |                                         |  |                                      
|Interest expense                                       | (313,026)                               |  | (103,256)                            
|Loss on sale of marketable securities                  | (68,579)                                |  | -                                    
|Gain on legal settlement                               | 16,507                                  |  | -                                    
|Gain on recovery of bad debts                          | 39,908                                  |  | -                                    
|Gain on conversion of notes                            | -                                       |  | 242,838                              
|Redemption premium and penalties                       | -                                       |  | (47,363)                             
|Other income (expense)                                 | 283                                     |  | 702                                  
|Net other income and expenses                          | (324,907)                               |  | 92,921                               
|Minority interest                                      | -                                       |  | 1,438                                
|                                                       |                                         |  |                                      
|NET LOSS                                               | (4,790,076)                             |  | (3,961,534)                          
|DIVIDEND REQUIREMENT OF
	PREFERRED STOCK               | (6,450)                                 |  | (13,500)                             
|NET LOSS
	APPLICABLE TO COMMON SHAREHOLDERS            | (4,796,526)                             |  | (3,975,034)                          
|OTHER COMPREHENSIVE
	(LOSS)/GAIN                       |                                         |  |                                      
|Unrealized gain (loss) on marketable securities        | 930,535                                 |  | (356,750)                            
|COMPREHENSIVE LOSS                                     | $ (3,865,991)                           |  | $  (4,331,784)                       
|                                                       |                                         |  |                                      
|NET LOSS PER
	SHARE - BASIC AND DILUTED:               | $         
	(0.04)                      |  | $          (0.04)                    
|                                                       |                                         |  |                                      
|Weighted average number
	of shares outstanding -       |                                         |  |                                      
|basic and diluted                                      | 135,974,402                             |  | 89,323,367                           
|                                                       |                                         |  |                                      



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

---

PROVIDENTIAL HOLDINGS,
INC.

CONSOLIDATED
STATEMENTS OF CASH FLOWS

(UNAUDITED)



|                                                                                | For the Six Months Ended December 31,
|------------------------------------------------------------------------------- | -------------------------------------
|                                                                                | 2004                                 
|Cash flows from
	operating activities:                                          |                                      
|Net loss from continuing operations                                             | $ 
	(5,318,250)                      
|Adjustments
    to reconcile net loss to net cash used in operating activities: |                                      
|Depreciation                                                                    | 13,698                               
|Allowance for bad debts                                                         | 5,000                                
|(Gain) loss on legal settlement                                                 | (33,655)                             
|(Gain) loss on debt settlement - net                                            | -                                    
|Loss on sale of marketable securities - net                                     | 68,579                               
|Amortization of prepaid consulting fees                                         | -                                    
|Securities received for consulting services                                     | -                                    
|Shares issued for services and salaries                                         | 279,347                              
|Shares to be issued for salaries and services                                   | 112,500                              
|Gain on conversion of notes                                                     | (20,392)                             
|Shares issued for distribution agreement                                        | -                                    
|Beneficial conversion of registration penalty                                   | -                                    
|Minority interest in subsidiary                                                 | -                                    
|Impairment of assets                                                            | 4,795,082                            
|Changes in operating assets and liabilities:                                    |                                      
|(Increase) decrease in accounts receivable                                      | 6,043                                
|Increase in other assets and prepaid expenses                                   | (763,083)                            
|Increase in accounts payable                                                    | 83,128                               
|Increase in accrued expenses                                                    | 464,222                              
|Increase in other liabilities                                                   | 3,340                                
|Net cash used in operating activities                                           | (304,441)                            
|                                                                                |                                      
|Cash flows from
	investing activities:                                          |                                      
|Purchase of fixed assets                                                        | -                                    
|Purchase
	of marketable securities                                              | -                                    
|Equity interest in a private entity                                             | (60,000)                             
|Net cash used by investing activities                                           | (60,000)                             
|                                                                                |                                      
|Cash flows from
	financing activities:                                          |                                      
|Proceeds from exercise of stock options                                         | 202,400                              
|Borrowings on notes payable                                                     | 199,250                              
|Payments on notes payable                                                       | (162,207)                            
|Borrowings from officer                                                         | 180,039                              
|Payments on advances from officer                                               | (82,650)                             
|Net cash provided by financing activities                                       | 336,832                              
|                                                                                |                                      
|Net increase (decrease) in cash                                                 | (27,609)                             
|Cash and cash
	equivalents, beginning of period                                 | 29,791                               
|Cash and cash
	equivalents, end of period                                       | $           2,182                    
|                                                                                |                                      
|SUPPLEMENTARY DISCLOSURES
    OF CASH FLOW INFORMATION                          |                                      
|                                                                                |                                      
|Cash paid
    during the period for:                                            |                                      
|Interest                                                                        | $         42,494                     
|Taxes                                                                           | $           1,600                    
|                                                                                |                                      
|Non-cash Financing Activities:                                                  |                                      
|Shares issued for payment of notes                                              | $        491,343                     
|Shares issued for debt conversion                                               | $                   
	-              
|Shares issued for accrued interest and penalties                                | $           
	9,851                  
|Shares issued/to be issued for services                                         | $        391,847                     
|Shares issued for distribution agreement                                        | $                   
	-              
|Shares issued for acquisition of investment                                     | $          26,923                    
|Shares issued for acquisition of subsidiary                                     | $                    
	-             
|Shares issued for legal settlement                                              | $         423,750                    
|                                                                                |                                      

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

---







































PROVIDENTIAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 - GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS AND REORGANIZATION 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.

REORGANIZATION

On October 28, 1999 PHI entered into a corporate combination agreement (the "Agreement")
with Providential Securities, whereby PHI acquired all the outstanding shares of Providential
Securities in exchange for 20,000,000 shares of PHI common stock.  The transaction was
consummated on January 14, 2000. In addition, as a covenant under the Agreement, PHI was
required to enter into an agreement to sell to Havilland Limited all of the shares of Diva owned
by PHI as well as to assign all of its rights, title and interest in an Option Agreement to Havilland
Limited. PHI's officers and directors resigned from their positions and the shareholders of
Providential Securities assumed control of the two entities (together as "the Company").  The
shares issued in the merger are restricted against resale pursuant to the provisions of federal and
state securities laws. Providential Securities' shareholders of record as of the closing date owned
approximately 75% of PHI's common stock. The acquisition has been treated as a capital
transaction in substance, rather than a business combination, and was deemed a "reverse
acquisition" for accounting purposes. Accordingly, Providential was the accounting acquirer and
the historical financial statements prior to January 14, 2000 were those of Providential. In the
accompanying financial statements, the capital structure and losses per share of Providential have
been retroactively restated to reflect the acquisition as if it occurred at the beginning of the
period. The operations of PHI have been included with those of Providential Securities from the
acquisition date.

The sale of Diva was concluded on June 30, 2000, at which time all of the shares of Diva owned
by PHI as well as all of its rights, title and interest in the Option Agreement were exchanged for
assignment to and assumption by Havilland Limited of the amounts due by PHI to officers of the
Company amounting to $617,781, the amounts due to PHI from Diva amounting to $94,843 and
the return of 135,000 shares of common stock of PHI owned by Havilland.

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. The Company believes that its trade commerce business will
grow substantially as a result of the implementation of the Trade Agreement between Vietnam
and the United States. During the six months ended December 31, 2004, Provimex generated
$13,369 in gross sales with $13,279 in cost of goods sold for a net gross profit of $90.

During February 2000 the Company formed a California corporation, Providential Clearing, Inc.
as a vehicle to effectuate the purchase of a self-clearing broker-dealer and to operate a securities
clearing firm. As of  December 31, 2004, this subsidiary has had no operations.

On April 30, 2002, the Company consummated an agreement to acquire 56.67% equity interest
in SlimTech, Inc., a Nevada corporation, in exchange for 3,000,000 shares of the Company's
restricted common stock. SlimTech planned to be a distributor of LCD (liquid crystal display)
computer flat screens and other consumer electronics.  Since SlimTech is a dormant entity with
insignificant assets or liabilities, no pro forma information is presented.  This agreement was
rescinded on May 6, 2003.  The Company has received back the 3,000,000 shares previously
issued to SlimTech and the shares were cancelled on October 1, 2003.

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 Company
consummated the purchase agreement with ATC on October 17, 2003 and delivered $500,000 in
promissory notes and 4,000,000 shares of the Company's common stock.  During the six
months ended December 31, 2004, the Company recorded a loss of $117,459 relating to the
income generated by the subsidiary.

On November 20, 2002 the Company entered into an agreement to acquire 51% of the
outstanding common stock of Clear Pass, Inc. ("Clear Pass"), 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. This company was later incorporated
as a Nevada corporation under the name of ClearPass Systems, Inc. This subsidiary has not
generated any revenues to date.



On March 26, 2003, the Company entered into a Stock Purchase Agreement with Real ID
Technology Co, Ltd., a Korean corporation, ("Real ID") to acquire up to 51% of Real ID's
common stock, in exchange for up to $1 million in cash and the balance in two short-term
promissory notes totaling $4 million. This Stock Purchase Agreement was amended on April 29,
2003 to allow for the closing of the transaction on May 26, 2003, subject to satisfactory due
diligence investigation and review of Real ID's business, legal matters, and accounting by the
Company. The proposed Closing was postponed to June 30, 2003 due to additional due
diligence requirements. This transaction was mutually rescinded on August 1, 2003.



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 will focus its attention on the underserved segment of smaller
companies in the U.S. and abroad. Providential Capital began providing merger and acquisition
advisory services to its clients since the fourth quarter of the fiscal year ended June 30, 2003.



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,
convenience 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. As of December 31, 2004, Touchlink
Communications generated $8,116 in revenues and had losses of $854.

On November 1, 2003, the Company formed PHI Video Corp., which was later renamed PHI
Digital Corp. ("PHI Digital"), a Nevada corporation, to provide the sale of consumer electronics,
including flat-screen television sets and monitors, as part of its distributorship agreement with
XOCECO.  The distributorship agreement with XOXECO was terminated in June 2004 and PHI
Digital has been renamed "TULON INDUSTRIES, INC." to change its scope of business.

On December 19, 2003, the entered into, and closed, 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 to
be issued.  On August 19, 2004, the common stock was issued.  During the period ended
December 31, 2004, the Company recorded a loss of $60,560 relating to the income generated by
the subsidiary.

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

The accompanying Interim Condensed Consolidated Financial Statements are prepared in
accordance with rules set forth in Retaliation SB of the Securities and Exchange Commission.
As said, these statements do not include all disclosures required under generally accepted
principles and should be read in conjunction with the audited financial statements for the year
ended June 30, 2004.  In the opinion of management, all adjustments consisting of normal
reoccurring accruals have been made to the financial statements.  The results of operation for the
six months ended December 31, 2004 are not necessarily indicative of the results to be expected
for the fiscal year ending June 30, 2005.

ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting
principles 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
periods. Actual results could differ from those estimates.

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") ATC Technology,
Inc. ("ATC") (from the date of its acquisition) and Irvine College of Medical Sciences, Inc.,
("College") (from the date of its acquisition), collectively referred to as the "Company". All
significant inter-company transactions have been eliminated in consolidation.

COST OF SALES

Cost of sales only includes those amounts associated with the generation of sales and
long-distance service revenue.

RECLASSIFICATIONS

Certain prior year items have been reclassified to conform to the current year presentation.

RECENT ACCOUNTING PRONOUNCEMENTS

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 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 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 second 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.



NOTE 2 - 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, as
follows:

Providential and Henry Fahman accepted and consented, without admitting or denying the
alleged violations, to the entry of the following findings by NASD Regulation, Inc.:

From in or about December 15, 1998 through June 15, 1999, Providential Securities, through its
Private Placement Memorandum, offered and sold one hundred three thousand (103,000) shares
of Series I Class A Convertible Cumulative Preferred Stock in Providential Securities, Inc. for
five hundred fifteen thousand dollars ($515,000) to twenty-two (22) customers. In connection
with the Private Placement Memorandum, Providential Securities made certain
misrepresentations or omissions in soliciting investments from public customers, such as: failure
to disclose that an officer of Providential Securities could make contributions to help meet the
minimum requirement; failure to disclose Providential Securities, Inc.'s disciplinary history
whereby Providential Securities, Inc. and Henry Fahman, jointly and severally, were fined
$28,500 for net capital deficiencies and for failing to send the requisite written notification or
confirmation in fifty eight (58) securities transactions to public customers; and failure to disclose
that Henry Fahman was ordered to requalify by examination as a financial and operational
principal.

That Providential's use of the private placement funds mainly for Providential's own operational
purposes (more than for those represented in the private placement memorandum) amounted to
conversion or improper use of those funds thus violating the Conduct Rules 2110 and 2330.



That Providential, acting through Henry Fahman, violated SEC Rule 15c2-4, SEC Rule 10b-9,
and Conduct Rule 2110 (a) by not utilizing a proper escrow account for the investment funds
received, (b) by not retaining the private placement funds until the minimum requirement was
met, and (c) by not refunding these funds to the customers when the minimum was not met, or
not met in a timely manner.

That by receiving and controlling funds from public customers in connection with the private
placement, Providential became obligated to comply with the full provisions of SEC Rule 15c3-3
(during the period of January through at least March, 1999, Providential Securities, through
Henry Fahman, and Providential's financial and operations principal, Theodore Fahman, failed to
compute the reserve requirements, and set aside appropriate reserves for customer protection.



That Providential, acting through Henry Fahman, in violation of Conduct Rule 3010(a) and
Membership and Registration Rule 1018, was operating three non-registered supervisory
jurisdiction branch offices, and that while Providential's membership agreement limited the
firm's branch activities to two branches, there were at least seven full-service satellite locations,
thereby violating Conduct Rule 2110 and Membership and Registration Rule 1014.



That both Providential and Henry Fahman also violated Membership and Registration Rule 1030
for failing to enforce Membership and Registration Rule 1031(a) by allowing four individuals
with deficiencies in license registration to conduct a securities business during much of 1998 and
1999.



That Providential and Henry Fahman failed to comply with Membership and Registration Rule
1030 by failing to enforce Rule 1032(f) by allowing five individuals to act in the capacity of
equity trader with deficiency in registration as Limited Representative-Equity Traders.

That Providential and Henry Fahman also violated Membership and Registration Rule 1120 and
Conduct Rule 2110 by permitting a broker to conduct business and earn commissions, while his
status was "inactive" as a result of his failing to complete his continuing education requirements.



That from on or about May 2, 2000 through May 30, 2000, Providential Securities, Inc.
distributed biased communications to the public regarding its ProTimer service through the
World Wide Web.

Providential Securities, Inc. and Henry Fahman also consented to the imposition, at a maximum,
of the following sanctions:

Providential shall be censured, fined $115,000.00 and shall offer rescission to those public
customers who participated in the Providential Private Placement. Providential shall provide
proof in form satisfactory to NASDR's District 2 staff of its offer of rescission to the customers
who participated in the Providential Private Placement. In addition, to the extent the offer of
rescission is accepted by any investors, Providential is ordered to provide proof of payment of the
restitution in a form satisfactory to the District 2 NASDR staff, no later than 120 days after
acceptance of the Letter of Acceptance, Waiver and Consent.  Henry Fahman shall be 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.
As of the date of this report the Company has redeemed $65,000 of the preferred stock plus
accrued interest. The balance of unredeemed preferred shares has been reclassified as a current
liability from the stockholder's deficit section on the accompanying consolidated financial
statements.

NOTE 3 - PROPERTY AND EQUIPMENT



Property and equipment consists of the following as of December 31, 2004:



|Equipment                     | $    199,173
|----------------------------- | ------------
|Furniture and Fixtures        | 57,936      
|Automobiles                   | 81,103      
|Leasehold Improvements        | 9,890       
|Subtotal                      | 348,102     
|Less Accumulated Depreciation | (237,277)   
|Total net fixed assets        | $    110,825
|                              |             







NOTE 4 - MARKETABLE SECURITIES

The Company's marketable securities are classified as available-for-sale and, as such, are
carried at fair value.  All of the securities are comprised of shares of common stock of the
investee.  Securities classified as available-for-sale may be sold in response to changes in interest
rates, liquidity needs, and for other purposes.

Each investment in marketable securities represents less than twenty percent (20%) of the
outstanding common stock and stock equivalents of the investee, and each security is nationally
quoted on the National Association of Securities Dealers OTC Bulletin Board ("OTC:BB").  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 December 31, 2004, the investments have been recorded at
$407,830 based upon the fair value of the marketable securities.

Marketable securities classified as available for sale consisted of the following as of December
31, 2004:



|Investee Name (Symbol) | Cost at Dec. 31, 2004 | Market Value at
    Dec. 31, 2004 | Accumulated Unrealized Gain (Loss) | Number of Shares Held at Dec. 31, 2004
|---------------------- | --------------------- | --------------------------------- | ---------------------------------- | --------------------------------------
|Jockey Club (JKCL)     | $              
	15   | $               
    15           | $                
	-               | 1,500 (a)                             
|Tri Kal Int'l (TRIKF)  | 15                    | 15                                | -                                  | 15,165 (a)                            
|Nettel Holdings (NTTL) | 1,365,300             | 405,900                           | (959,400)                          | 2,250,000                             
|Lexor Holdings (LXRH)  | 1,900                 | 1,900                             | -                                  | 1,900,000
	(a)                        
|                       |                       |                                   |                                    |                                       
|                       | $  1,367,230          | $       407,830                   | $     (959,400)                    |                                       
|                       |                       |                                   |                                    |                                       

(a) The value of these shares was permanently impaired during the period ended
December 31, 2004.









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

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.

In December 2004, 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.

NOTE 5 - IMPAIRMENT OF ASSETS

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 $86,923
during the period ended December 31, 2004. The evaluation was based upon market value of
similar investment.

The Company wrote down its marketable securities to the current market value and an
impairment of assets in the amount of $4,708,159 was recognized during the period ended
December 31, 2004 (see note 4).

NOTE 6 - LOANS AND PROMISSORY NOTES

CONVERTIBLE PROMISSORY NOTES

The Company issued convertible promissory notes in March and April 2000 amounting
$1,350,000 plus interest due on September 28, 2000 and $400,000 plus interest due on October
21, 2000. These notes are essentially demand notes that have a six-month term and bear interest
at 8% annually, unless the notes are in default, in which instance the interest rate will increase to
12% annually.  Further, the notes bear a redemption premium, based upon the date of redemption
equal to: 5% if within the first 60 days; 10% if within the second 60 days; 15% if within the third
60 day-period, and 20% if redeemed after 181 days.  On the 180th day, the Company can require
the holders to convert (if a registration statement is in effect) the notes into common stock.  After
the 180th day, only the holders can elect to convert - no right of the Company to force conversion
after that time.  On the second anniversary, any remaining notes will automatically covert into
common stock (if a registration statement is in effect).  If the conversion is at the direction of the
Company, then, in addition to the redemption amount, the Company would also owe a 20% per
annum rate of return on the redemption amount.  No registration statement went into effect for
these shares.

The notes may be paid by tender of common stock of the Company, with the conversion rate for
the issuance of the common stock equal to the "closing price" on the date of the initial purchase
of the notes, which is the average of the closing bid price for the five previous trading days.  The
original conversion price was $1.725 and $2.40 per share.  Re-pricing warrants were issued in
contemporaneous amounts, such that any decrease in the trading price of the stock entitled the
note holders to reset the exercise price to a lower price than that which existed on the closing
date.  The number of shares issued under the re-pricing warrants is directly linked to the
Company's stock price on the conversion date of the notes.  As the stock price decreases, the
number of shares to be issued pursuant to the re-pricing warrants increase.  The note purchasers
were also entitled to a separate set of warrants, equal to 20% of the total purchase amounts of the
notes acquired, allowing for an exercise price of 110% of the closing price and having a 5-year
term.  These warrants have been fully exercised.

In accepting these subscriptions for these convertible notes, the Company had agreed to file a
registration statement with respect to the Company's common stock to be issued upon
conversion of the notes and any exercise of the warrants, with the initial filing to occur within 60
days of the "first closing", which occurred on March 28, 2000.  A 2% per month penalty will
accrue if the registration statement is not declared effective on or prior to the 181st day following
the first closing.  The holders had the right to require repayment in cash if no registration
statement is in effect on the 181st day.  Since this registration statement was not filed within the
first 60 days of the first closing, nor has it been declared effective within 181 days after the first
closing, the note holders had the right to the 2% penalty and repayment in cash or stock.  No
registration statement was filed and the Company did  not pay these notes as required and
accordingly, incurred additional penalties and redemption premiums.  These penalties and
premiums were paid with the issuance of additional shares of the Company's common stock.

During the year ended June 30, 2003, $425,000 of the notes and accrued interest and other fees of
$447,494, totaling $872,494, were converted to 363,637 shares of Company's common stock.
The market value of the stock issued for the conversion was calculated and a gain of $472,420
resulted from this note conversion was recorded as a gain on conversion of notes in the
accompanying consolidated financial statements. In addition, 8,726,425 shares of the
Company's common stock were issued to exercise the re-pricing warrants relating to the notes
converted.

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 re-pricing 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 December 31, 2004, 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 carry an
interest rate equal to LIBOR plus 1%.

In connection with the acquisition of Atlantis Career College, the company assumed two notes
payable to the former owner of the College. The notes are unsecured, interest free and are due
one year and one day from demand. As of June 30, 2004, the balance of these notes was
$154,303.  During the six months ended December 31, 2004, $17,500 was paid on the notes and
the balance as of December 31, 2004 was $136,803.

The consolidated total of promissory notes is $332,914 as of December 31, 2004.



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 and carried an interest rate of 8.5%. The note was
paid off during the quarter ended December 31, 2004.

Following is the maturity schedule of notes payable:

|Period ending December
		31,
|----------------------------
|                            
|2005                        
|2006                        
|                            



SHORT TERM NOTES PAYABLE:

As of December 31, 2004, the Company has short term notes payable amounting $1,042,750 plus
accrued interest of $412,550. The notes are due to various parties, payable in the year ended June
30, 2005 and bear interest rate ranging from 6% to 40% per annum.  Included in this amount is
the payable to the former owners of ATC of $72,323.  During the period ended December 31,
2004, $211,736 of principal and $9,851 of interest were converted into 1,324,519 shares of the
Company's common stock valued at $201,194.  A gain of $20,392 was recorded on the
conversion of these notes.

In addition, the subsidiaries have $299,576 in short term notes payable and $201,357 in accrued
interest for a consolidated total of $1,342,326 and $613,907, respectively.

DUE TO PREFERRED STOCKHOLDERS:

As of December 31, 2004, 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 six months
ended December 31, 2004.

OTHER CURRENT LIABILITIES:

The dividend amount payable to holders of preferred stock amounting $121,555 at December 31,
2004 has been classified as other current liabilities.

As of December 31, 2004, the Company has recorded an overpayment of common stock
subscription receivable in the amount of $89,691 as other current liabilities.

In addition, the subsidiaries have other liabilities consisting of unearned tuition fees in the
amount of $17,301, income tax provision of $7,165, and other payables of $16,500.

NOTE 7 - DUE TO OFFICERS

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 six months ended December 31, 2004, the officer
loaned an additional $157,600 in cash to the Company and was paid $81,500.  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 December 31, 2004, the balance was $310,830.

In addition, two officers of one of the subsidiaries advanced the subsidiary a total of $124,013 as
of June 30, 2004.  These notes are non-interest bearing, unsecured and due on demand.  During
the period ended December 31, 2004, an additional $22,439 was advanced to the subsidiary and
$1,150 was paid to one of the officers.  The total owing as of December 31, 2004 was $145,302.

NOTE 8 - LITIGATION

LEGAL PROCEEDING SETTLED AND PAID AS OF DECEMBER 31, 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 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.

LEGAL PROCEEDINGS SETTLED AND UNPAID AS OF DECEMBER 31, 2004:

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.

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.

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 $1,552.01.
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. Claimant filed a complaint for
money with the Superior Court of the State of California, County of Orange (Case No.
01CC02613) on February 23, 2001 seeking $39,102 plus interest thereon at the legal rate from
September 12, 2000. The claimant entered a judgment against Providential Securities, Inc.,
Henry Fahman and Tina Phan for $48,933. The judgment amount has been accrued in the
accompanying consolidated financial statements.

PENDING LITIGATION:

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 the accompanying consolidated financial statements.

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. Providential Securities, Inc. is appealing the request for judgment.
The sought amount of $9,074 has been accrued in the accompanying consolidated financial
statements.

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

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

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.



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
$57,105.  This amount has been accrued in the accompanying consolidated financial statements.

NOTE 9 - STOCKHOLDER'S EQUITY

TREASURY STOCK:

During November and December 2000, the Company issued 11.8 million shares of common
stock to its treasury. These shares were issued at their par value of $.04 per share for a total
amount of $472,000. During fiscal year 2002, an additional 3,375,000 shares were added at a
value of $328,875. During fiscal year 2003, an additional 11,100 shares were added at a value of
$666. During the year ended June 30, 2003, the Company settled a loan payable amount of
$24,021 in exchange of 380,900 shares issued out of treasury with a value of $29,229 resulting in
loss on settlement of debts of $5,208.  There was no activity in the Treasury Shares during the
fiscal year ended June 30, 2004.

During the period ended December 31, 2004, the Company cancelled 4,805,200 treasury shares.
The balance as of December 31, 2004 was 10,000,000 shares valued at $580,104.

COMMON STOCK:

During the six months ended December 31, 2004, the Company issued 1,859,602 shares of
common stock for salaries and services valued at $279,347.

During the six months ended December 31, 2004, the Company received $202,400 for stock
options exercised in the prior year.

During the six months ended December 31, 2004, 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 8).

During the six months ended December 31, 2004, the Company issued 142,450 shares of
common stock valued at $26,923 for the purchase of a minority interest in a private company.
This investment was impaired during this period.

During the six months ended December 31, 2004, 1,324,519 shares of the Company's common
stock valued at $201,194 were issued as payment on short-term notes payable of $211,736 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 7).

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 six months ended December 31, 2004, the
Company issued 2,328,337 of these shares valued at $378,517 which results in remaining
balance of $657,750.  In addition, the Company recorded the accrual of $112,500 in wages and
salaries for the quarter ended December 31, 2004, that are to be paid with the issuance of the
Company's common stock.  The balance of  Shares to Be Issued as of December 31, 2004, was
$770,250.

NOTE 10 - NET LOSS PER SHARE



Net loss per share is calculated in accordance with the Statement of financial accounting
standards No.128 (SFAS No.128), "Earnings per share".  Basic net loss per share is based
upon the weighted average number of common shares outstanding. Diluted net loss per share is
based on the assumption that all dilutive convertible shares and stock options were converted or
exercised.  Dilution is computed by applying the treasury stock method.  Under this method,
options and warrants are assumed to be exercised at the beginning of the period (or at the time of
issuance, if later), and as if funds obtained thereby were used to purchase common stock at the
average market price during the period.



The following is a reconciliation of the numerators and denominators of the basic and diluted
earnings per share computations:

|                                                                                                                | Ended December 31,   |  | Ended December 31,  
|--------------------------------------------------------------------------------------------------------------- | -------------------- |  | --------------------
|                                                                                                                | 2004                 |  | 2003                
|Basic and diluted net loss per share:                                                                           |                      |  |                     
|Numerator:                                                                                                      |                      |  |                     
|Net loss                                                                                                        | $  (4,790,076)       |  | $  (3,961,534       
|Dividend
		requirement of preferred stock                                                                       | (6,450)              |  | (13,500)            
|Net loss
		applicable to common shareholders                                                                    | (4,796,526)          |  | (3,975,034)         
|                                                                                                                |                      |  |                     
|Denominator:                                                                                                    |                      |  |                     
|Basic and
		diluted weighted average                                                                            |                      |  |                     
|number of common
		shares outstanding                                                                           | 135,974,402          |  | 89,323,367          
|                                                                                                                |                      |  |                     
|Basic and diluted net loss per share                                                                            |                      |  |                     
|Net loss                                                                                                        | $          
		(0.04) |  | $          
		(0.04)
|Dividends for
		preferred stock                                                                                 | $          
		(0.00) |  | $          
		(0.00)
|Applicable to
		common shareholders                                                                             | $          
		(0.04) |  | $          
		(0.04)
|                                                                                                                |                      |  |                     
|The following weighted average of
		dilutive shares were excluded from the calculation of earnings per
		share:
|                                                                                                                |                      |  |                     
|Preferred stock                                                                                                 | 1,137,566            |  | 2,380,952           
|Convertible
		debentures                                                                                        | -                    |  | 389,583             
|                                                                                                                |                      |  |                     

Weighted average number of shares used to compute basic and diluted loss per share is the same
in the financial statements for the periods ended December 31, 2004 and 2003, since the effect of
dilutive securities is anti-dilutive.

NOTE 11 - STOCK-BASED COMPENSATION PLAN

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

As of December 31, 2004, the Company has 1,000,000 in stock options outstanding which were
granted during the three month period ended September 30, 2003. There were no options granted
during the six months ended December 31, 2004.

Common stock purchase options consist of the following as of December 31, 2004:



|                                                 | Options   |  | Exercise Price
|------------------------------------------------ | --------- |  | --------------
|Outstanding and exercisable,
		June 30, 2004     | 8,000,000 |  | $0.08-$0.50   
|Granted                                          | -         |  | -             
|Exercised                                        | -         |  | -             
|Expired                                          | -         |  | -             
|Outstanding and exercisable,
		December 31, 2004 | 8,000,000 |  |               
|                                                 |           |  |               

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.
There were 11,857,787 shares issued for salaries, consulting and professional services in lieu of
cash under this plan as of December 31, 2003 and 1,055,000 shares issued as of March 31, 2004,
respectively.

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 December 31, 2004, 7,224,129 shares have been issued for salaries, consulting and
professional services in lieu of cash under this plan.

NOTE 12 - CONTRACTS AND COMMITMENTS

AGREEMENT WITH DATALOGIC CONSULTING, 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% 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 Company received 2,666,922 shares of Datalogic International, Inc. (the new name for
Topclick International, Inc.) as the fee for the merger and acquisition consulting services it has
performed. This investment in Datalogic International, Inc. is carried on the financial statements
of Providential Holdings, Inc. at its market value as of June 30, 2002 as a marketable security.
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 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.  As of September 30, 2004, the Company has recorded the value of these
shares of $204,250 as advisory income and as  other assets on the accompanying consolidated
financial statements.

INTERNATIONAL CENTER FOR TRAINING AND CONSULTING, VIETNAM'S
MINISTRY OF TRADE

International Center for Training and Consulting (ICTC) is an organization under the Ministry of
Trade of Vietnam that promotes economics, trade, investment and training activities between
Vietnam and foreign organizations. Providential Holdings, Inc. and ICTC signed an agreement in
March 2001 to cooperate in the areas of trade, economics, and technology. ICTC is responsible
for representing Providential Holdings in connection with appropriate Vietnamese organizations,
businesses, and individual businessmen and investors in Vietnam. ICTC will also perform
consulting services and provide information on various economic, trade and investment projects
as may be required by Providential.  Fees between the parties will be negotiated on an as project
basis.  As of the date of this report there have been no projects completed and none are in
process.

CHU LAI INDUSTRIAL ZONE, QUANG NAM PROVINCE, VIETNAM

Providential Holdings has entered into an agreement with Chu Lai Industrial Zone (CLIZ)
Authority, Quang Nam Province, Central Vietnam, to develop this industrial and export
processing zone, to upgrade a paper mill, and to implement two to five investment projects in
Chu Lai by the end of 2002. The Company expects its main role in this project to be the manager
organizing the different companies that will operate their business at this location. As the date of
this report, the Company has not provided any funding under this agreement.

PROVIMEX

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 implementation of the Trade Agreement between Vietnam and the
United States. During the six months ended December 31, 2004, Provimex generated $13,369 in
gross sales with $13,279 in cost of goods sold for a net gross profit of $90..

AGREEMENT WITH LEXOR INTERNATIONAL, INC.:

On October 9, 2001, the Company entered into an agreement to provide merger and acquisition
consulting services to Lexor International, Inc. ("Lexor"), a Maryland corporation, and to assist
Lexor in its business combination plan with in its business combination plan with Pan-American
Automotive Corporation ("Pan-American"), a Delaware corporation. According to the
agreement, the Company will be receiving 10% equity interest in the resulting company as
compensation for its advisory and consulting services.  On October 22, 2001, Pan-American
signed a definitive agreement to acquire 100% of Lexor in exchange for stock in Pan-American.
This transaction was closed on November 5, 2001 and on November 15, 2001 the Company
received 24,761,900 restricted shares of Pan-American's common stock, (after the 7 to 1
reverse split).  Pan-American changed its name to Lexor International, Inc. and again effectuated
a 10:1 reverse split of its common stock on December 19, 2001.  This business combination plan
between Lexor and Pan-American was later rescinded.  Pan-American changed its name to
Grayling Wireless USA, Inc. ("Grayling".)  On January 16, 2003, Grayling effected a 200:1
reverse split of its common stock.  As a result the Company currently owns 12,380 shares of
Grayling but will not record any value for the shares until a trading market value has been
established for this stock.

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 was entitled to 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.  The stock was received by the
Company on October 31, 2003. During the period ended December 31, 2004, the value of  this
stock was impaired. (Note 4)

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 period ended December 31, 2004, the Company did not recognize any
income in this regard.

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 has been
renamed "TULON INDUSTRIES, INC." to change its scope of business.   This subsidiary had
no activity during the six months ended December 31, 2004.

AGREEMENT WITH MEDICAL CAREER COLLEGE AND ATLANTIS CAREER
COLLEGE



In May 2003, Providential Capital ("ProCap") entered into a business consulting agreement with
Medical Career College and Atlantis Career College ("MCC") to provide Merger and Acquisition
advisory services to MCC. According to this agreement, ProCap will be entitled to 15% equity
interest in the combined company when and only if a merger between MCC and a fully reporting
publicly-traded company is consummated. As of the date of this report, no merger has been
completed for MCC.

STOCK PURCHASE AGREEMENT WITH IRVINE COLLEGE OF MEDICAL SCIENCES,
INC.

On December 19, 2003, the Company entered into and closed a stock purchase agreement with
Irvine College of Medical Sciences, inc., DBA Atlantis Career College ("the College"), a
California corporation to purchase 51% of the issued and outstanding shares of the college.

For consideration, the Company agreed to pay $80,000 in cash and issue 1,116,369 shares of the
Company's common stock valued at $234,437 for a total purchase price of $314,437.  On
December 19, 2003 the $80,000 cash was paid.  On August 19, 2004, the shares were issued.

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 received
$270,000 as a deposit for expenses 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 paid to the Company were converted into short-term notes
payable with a maturity date of December 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. The Joint Venture did not have any operations through December 31,
2004.

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. Since the shares
were not received until February 2005, the amount has been reflected as other receivable in the
accompanying financial statements..



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. The
lease expires on July 31, 2007.  The lease for the College is for $2,880 per month and expires
February 1, 2008.  The lease for ATC is month-to-month and is $480 per month.

Future commitments under operating leases are as follows for the twelve months ending
December 31:



|2005                        | $  81,444 
|--------------------------- | ----------
|2006                        | 81,444    
|2007                        | 61,909    
|2008                        | 2,880     
|Total minimum lease payment | $  227,677
|                            |           









The rent expense was $77,645 and $43,814 for the six months ended December 31, 2004 and
2003, respectively.



NOTE 13 - BUSINESS ACQUISITION



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 Company
consummated the purchase agreement with ATC on October 17, 2003 and delivered $500,000 in
promissory notes and 4,000,000 shares of the Company's common stock valued at approximately
$360,000.  The Company recorded a loss of $117,459 relating to the income generated by the
subsidiary for the six months ended December 31, 2004.

On December 19, 2003, the Company entered into, and closed, 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. This amount
was to be paid with $80,000 in cash and 1,116,369 shares of the Company's common stock.  The
cash was paid on December 19, 2003 and the stock was issued on August 19, 2004.  The
Company recorded a loss of $60,560 relating to the income generated by the subsidiary for the
six months ended December 31, 2004.



The Company has accounted for above transactions under the purchase method of accounting for
business combinations. The assets and liabilities of ATC and the College are included in the
consolidated balance sheet as of December 31, 2004 and included in these statements of
operations and cash flows from the date of acquisition through December 31, 2004.



The purchase price was allocated to the acquired assets and assumed liabilities based on the fair
values as of the date of the acquisition. The excess of the fair value of the net identifiable assets
acquired over the purchase price paid represented goodwill for both transactions amounted to
$3,039,706. The Company determined the value of goodwill at zero on December 31, 2003 and
therefore, has recorded $3,039,706 as an impairment of goodwill in the fiscal year ended June 30,
2004.



The preliminary purchase price was allocated as follows (in thousands):



|                         | ATC        |  | COLLEGE
|------------------------ | ---------- |  | -------
|Goodwill                 | $   2,770  |  | $  270 
|Current assets           | 19         |  | 206    
|Non-current assets       | 3          |  | 131    
|Total assets             | 2,792      |  | 607    
|Less liabilities assumed | (1,932)    |  | (293)  
|Consideration paid       | $      860 |  | $  314 
|                         |            |  |        











NOTE 14 - GOING CONCERN UNCERTAINTY

As shown in the accompanying consolidated financial statements, the Company incurred a net
loss of $5,305,350 for the six months ended December 31, 2004.  As of December 31, 2004, the
Company had a negative working capital of $4.0 million and a shareholder deficit of $4.2
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, 2005 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.

NOTE 15 - GAIN ON LEGAL SETTLEMENT

On July 21, 2004, the Company entered into a settlement agreement with Vause, et al (see Note
8) 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 period ended December 31, 2004, the Company recorded a gain of $16,507 for the
settlement with James Hu (see Note 8) and Mr. Truong that had been fully satisfied.

NOTE 16 - SEGMENT INFORMATION

The current activities of the Company include (1) Advisory and Consulting services, (2) Sales of
product, (3) Long-Distance telephone service sales, and (4) Tuition.

The following table presents a summary of operating information and certain year-end balance
sheet information for the six months ended December 31:



|                                        | 2004                        |  | 2003                       
|--------------------------------------- | --------------------------- |  | ---------------------------
|                                        |                             |  |                            
|Revenues from
		unaffiliated customers: |                             |  |                            
|Consulting and advisory services        | $          
		850,674       |  | $        4,440,000         
|Sales and long-distance services        | 43,140                      |  | 2,373,292                  
|Tuition                                 | 86,641                      |  | 15,757                     
|Consolidated                            | $          
		980,455       |  | $        6,829,049         
|                                        |                             |  |                            
|Operating income (loss):                |                             |  |                            
|Consulting and advisory services        | $            
		4,664,748   |  | $       (878,835)          
|Sales and long-distance services        | (80,358)                    |  | 94,702                     
|Tuition                                 | (129,355)                   |  | (2,934)                    
|Consolidated                            | $            
		4,874,461   |  | $      (787,067)           
|                                        |                             |  |                            
|Identifiable
		assets:                  |                             |  |                            
|Consulting and advisory services        | $        1,110,545          |  | $       7,105,626          
|Sales and long-distance services        | 7,562                       |  | 1,778,796                  
|Tuition                                 | 168,171                     |  | 388,594                    
|Consolidated                            | $         1,286,278         |  | $      9,273,016           
|                                        |                             |  |                            
|Depreciation and
		amortization:        |                             |  |                            
|Consulting and advisory services        | $             
		3,035      |  | $              
		14,161   
|Sales and long-distance services        | -                           |  | -                          
|Tuition                                 | 10,663                      |  | -                          
|Consolidated                            | $           13,698          |  | $              14,161      
|                                        |                             |  |                            
|Capital
		expenditures:                 |                             |  |                            
|Consulting and advisory services        | $                     
		-  |  | $                      
		-
|Sales and long-distance services        | -                           |  | -                          
|Tuition                                 | -                           |  | -                          
|Consolidated                            | $                      
		- |  | $                      
		-
|                                        |                             |  |                            







NOTE 17 - RELATED PARTY TRANSACTIONS

During the six months ended December 31, 2004 and 2003, the Company issued shares to
various related parties in payment for services and salaries.  The amounts of shares issued for the
six months ended December 31, 2003 include payments for past services and salaries. These
payments were as follows:

|              |  | For
			the six months ended
			December 31, 2004 |  | For
			the six months ended
			December 31, 2003
|------------- |  | ------------------------------------------------ |  | ------------------------------------------------
|Related Party |  | #
			Shares                                      |  | Market Value                                    
|Henry Fahman  |  | 166,600                                          |  | $ 
			26,573                                    
|Tina Phan     |  | 66,600                                           |  | 10,623                                          
|Norm Klein    |  | 206,667                                          |  | 32,963                                          
|Keith Wong    |  | 180,550                                          |  | 18,772                                          
|Thorman Hwin  |  | -                                                |  | -                                               
|              |  |                                                  |  |                                                 
|Total         |  | 620,417                                          |  | $  88,931                                       
|              |  |                                                  |  |                                                 







In addition, during the six months ended December 31, 2004, the Company accrued $101,853 in
salaries to related parties.

In October 2004, the Datalogic shares due to the Company (see Note 4) were issued to, an officer
of the Company, rather than the Company.  The shares were sold by the officer for $129,442 but
only $110,000 was transferred to the Company.  The Company has recorded the balance due of
$19,442 as due from related party.

In December 2004, the Company issued 3,350,000 shares of its common stock valued at
$300,000 as payment on officer's loan (see Note 7)

NOTE 18 - SUBSEQUENT EVENTS

BUSINESS CONSUTLING AGREEMENT WITH MOTIV SPORTS, INC.

On January 14, 2005 the Company entered into a business consulting agreement with Motiv
Sports, 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 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.

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.

EQUITY LINE OF CREDIT

On February 15, 2005, the Company entered into a Private Equity Credit Agreement with
Brittany Capital Management Limited, a corporation organized and existing under the laws of
The Bahamas ("Investor") whereby the Investor agrees 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.  As of the date of this report, such a Registration
Statement has not been filed with the Securities and Exchange Commission.

---



ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion includes the operations of the Company for each of the periods
discussed. This discussion and analysis should be read in conjunction with the Company's
consolidated financial statements and the related notes thereto, which are included elsewhere in
this document.

This discussion contains "forward looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Although the Company believes that the expectations reflected in such forward looking
statements are reasonable, it can give no assurance that such expectations will prove to be
correct. Such forward looking statements involve risks and uncertainties and actual results could
differ from those described herein and future results may be subject to numerous factors, many of
which are beyond the control of the Company.

OVERVIEW

Providential Holdings, Inc. ("PHI") was organized under the laws of the State of Nevada on June
8, 1982 under the name of JR Consulting, Inc.; subsequently on February 9, 2000 it changed its
name to Providential Holdings, Inc. 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. PHI had an operating subsidiary, Diva
Entertainment, Inc ("Diva").  Diva operated two modeling agencies, one in New York and one in
California.

Providential Securities, Inc. ("Providential") was incorporated in the State of California on
October 8, 1992.  It operated a securities brokerage service in Fountain Valley, CA and New
York City, NY.  The principal markets for Providential's services were individual investors who
were located throughout the United States. Providential bought and sold securities for its
customers through a number of different markets, utilizing a brokerage clearing house to transact
the trades.  In October 2000, due to the results of a NASD examination, Providential has ceased
its operations in the securities brokerage business.

REORGANIZATION

On October 28, 1999 PHI entered into a corporate combination agreement (the "Agreement")
with Providential, whereby PHI acquired all the outstanding shares of Providential in exchange
for 20,000,000 shares of PHI common stock.  The transaction was consummated on January 14,
2000. In addition, as a covenant under the Agreement, PHI was required to enter into an
agreement to sell all of the shares of Diva owned by PHI.  PHI's officers and directors resigned
their positions and the shareholders of Providential assumed control of the two entities (together
as "the Company").  Providential's shareholders of record as of the closing date owned
approximately 75% of PHI's common stock.  The acquisition has been treated as a capital
transaction in substance, rather than a business combination, and was deemed a "reverse
acquisition" for accounting purposes.  Accordingly, Providential was the accounting acquirer and
the historical financial statements prior to January 14, 2000 were those of Providential.  The
operations of PHI have been included with those of Providential from the acquisition date.

BUSINESS RESTRUCTURING

Since the discontinuance of its securities brokerage operations in October 2000, the Company
has restructured its primary scope of business to include the following areas: (1) Technologies,
(2) Financial services, (3) International markets, and (4) Special Situations. Events and
developments relating to these areas are described in more detail elsewhere in this report.  The
current activities of the Company include (1) Advisory and Consulting services, (2) Sales of
product, (3) Long-Distance telephone service sales, and (4) Tuition.

CRITICAL ACCOUNTING POLICIES

The Company's financial statements and related public financial information are based on the
application of accounting principles generally accepted in the United States ("GAAP").  GAAP
requires the use of estimates; assumptions, judgments and subjective interpretations of
accounting principles that have an impact on the assets, liabilities, revenue and expense amounts
reported. These estimates can also affect supplemental information contained in the external
disclosures of the Company including information regarding contingencies, risk and financial
condition. We believe our use of estimates and underlying accounting assumptions adhere to
GAAP and are consistently and conservatively applied. Valuations based on estimates are
reviewed by us for reasonableness and conservatism on a consistent basis throughout the
Company. Primary areas where financial information of the Company is subject to the use of
estimates, assumptions and the application of judgment include acquisitions, valuation of
long-lived and intangible assets, and the realizability of deferred tax assets.  We base our
estimates on historical experience and on various other assumptions that we believe to be
reasonable under the circumstances. Actual results may differ materially from these estimates
under different assumptions or conditions.

Valuation of Long-Lived and Intangible Assets

The recoverability of long lived assets requires considerable judgment and is evaluated on an
annual basis or more frequently if events or circumstances indicate that the assets may be
impaired.  As it relates to definite life intangible assets, we apply the impairment rules as
required by SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and Assets to
Be Disposed Of" as amended by SFAS No. 144, which also requires significant judgment and
assumptions related to the expected future cash flows attributable to the intangible asset.  The
impact of modifying any of these assumptions can have a significant impact on the estimate of
fair value and, thus, the recoverability of the asset.

Income Taxes

We recognize deferred tax assets and liabilities based on the differences between the financial
statement carrying amounts and the tax bases of assets and liabilities.  We regularly review our
deferred tax assets for recoverability and establish a valuation allowance based upon historical
losses, projected future taxable income and the expected timing of the reversals of existing
temporary differences.  As of December 31, 2004, we estimated the allowance on net deferred
tax assets to be one hundred percent of the net deferred tax assets.

RESULTS OF OPERATIONS

SIX MONTHS ENDED DECEMBER 31, 2004 COMPARED TO SIX MONTHS ENDED
DECEMBER 31, 2003:

Revenues:

Total revenues were $980,455 and $6,829,049 for the six months ended December 31, 2004, and
2003, respectively.   The net revenues are broken out by subsidiary as follows:



|Subsidiary                |  | Type                               | 2004         |  | 2003        
|------------------------- |  | ---------------------------------- | ------------ |  | ------------
|                          |  |                                    |              |  |             
|Providential
		Capital    |  | Advisory and
		consulting services | $ 
		850,674 |  | $  4,440,000
|Touchlink                 |  | Long-Distance
		Services           | 8,116        |  | -           
|Provimex                  |  | Sales                              | 13,369       |  | 41,182      
|PHI Digital               |  | Sales                              | -            |  | 1,673,610   
|ATC Technology            |  | Sales                              | 21,655       |  | 658,500     
|Atlantis Career
		College |  | Tuition                            | 86,641       |  | 15,757      
|Total Net Revenues        |  |                                    | $  980,455   |  | $  6,829,049
|                          |  |                                    |              |  |             

























The Company received revenue for two consulting agreements of $850,674 during the six
months ended  December 31, 2004 compared to one agreement of $4,440,000 for the comparable
period.  Touchlink began operations in the first quarter of fiscal 2005.  Both Provimex and ATC
experienced a decline in sales as the Companies refocus their business structure.  Tuition revenue
for the six months ended December 31, 2003 was only for one month, from the time of
acquisition in December 2003.

General and Administrative:

Total general and administrative expenses were $5,766,123 and $5,487,958 for the six months
ended December 31, 2004, and 2003, respectively.  The increase is primarily due to the
impairment of assets.  Professional services were $306,316 and $1,629,392 for the comparable
periods.  Included in this amount for the current period is $172,091 for services paid with
common stock compared to $396,347 for the six months ended December 31, 2003.  In addition,
during the six months ended December 31, 2003, $646,320 for past services and $22,500 for
director's fees were paid with common stock.  During the current six months ended December
31, 2004, the Company paid salaries of $303,372 of which $219,754 was paid with the issuance
of common stock as compared to $122,134 of salaries which was paid with common stock in the
comparable period .  Included in general and administrative expenses is $4,795,082 and
$3,150,965 for the six months ended December 31, 2004 and 2003, respectively, for the
impairment of assets.

Other Expenses

Interest expense was $486,455 and $271,527 for the six months ended December 31, 2004, and
2003, respectively.



During the six months ended December 31, 2004, and 2003,  the Company recorded a gain of
conversion of notes of $20,392 and $320,309, respectively.  In addition, the Company realized a
net loss of $68,579 on the sale of marketable securities, a gain from legal settlement of $33,655
and recognized a gain of $69,089 from the recovery of bad debts during the six months ended
December 31, 2004.



Net Loss

Net loss for the six months ended December 31, 2004 was $5,305,350, compared to $782,472 for
the same period in 2003, which is equivalent to a net loss of $0.04 and  $0.01 per share,
respectively, based on the weighted average number of basic and diluted shares outstanding.  The
difference is primarily attributed to the impairment of assets and decreased revenues for the
current period.

QUARTER ENDED DECEMBER 31, 2004 COMPARED TO QUARTER ENDED
DECEMBER 31, 2003:

Revenues:

Total revenues were $712,604 and $2,389,049 for the quarter ended December 31, 2004, and
2003, respectively.   The net revenues are broken out by subsidiary as follows:



|Subsidiary                |  | Type                               | 2004         |  | 2003                 
|------------------------- |  | ---------------------------------- | ------------ |  | ---------------------
|                          |  |                                    |              |  |                      
|Providential
		Capital    |  | Advisory and
		consulting services | $ 
		646,424 |  | $                
		-
|Touchlink                 |  | Long-Distance
		Services           | 2,578        |  | -                    
|Provimex                  |  | Sales                              | 10,706       |  | 41,182               
|PHI Digital               |  | Sales                              | -            |  | 1,673,610            
|ATC Technology            |  | Sales                              | 9,378        |  | 658,500              
|Atlantis Career
		College |  | Tuition                            | 43,518       |  | 15,757               
|Total Net Revenues        |  |                                    | $  712,604   |  | $  2,389,049         
|                          |  |                                    |              |  |                      







The Company recognized revenues from two consulting agreements during the current period
compared to none in the prior period.  The main decrease in sales is due to the discontinuation of
PHI Digital in fiscal year 2004.  In addition, ATC Technology has experienced a decline in sales
as it refocuses its business structure.  The increase in tuition is the result of a full three months of
revenue in the current period versus one month in the prior period.  The College was acquired in
December 2003.

General and Administrative:

Total general and administrative expenses were $5,126,204 and $4,316,784 for the three months
ended December 31, 2004, and 2003, respectively.  The increase is primarily due to the
impairment of assets.  Professional services were $74,554 and $634,180 for the comparable
periods.  Included in this amount for the current period is $63,770 for services paid with common
stock compared to $252,510 for the three months ended December 31, 2003.  During the current
three months the Company paid salaries of $169,845 of which $93,781 was paid with the
issuance of common stock as compared to $69,918 of salaries paid with common stock in the
comparable period.

Other Expenses

Interest expense was $313,026 and $103,256 for the three months ended December 31, 2004, and
2003, respectively.  The increase is due to several loans with stiff interest penalties for not being
paid on time accruing during the current quarter.  In addition, the Company recorded a realized
net loss on the sale of marketable securities of $68,579, gain on legal settlement of $16,507, and
a gain from the recovery of bad debts of $39,908 during the current quarter.  During the quarter
ended December 31, 2003, the Company recorded a gain of conversion of notes of $242,838 and
redemption premium and penalties expense of $47,363.



Net Loss

Net loss for the three months ended December 31, 2004 was $4,790,076, compared to
$3,961,534 for the same period in 2003, which is equivalent to a net loss per share of $0.04 and
$0.04, respectively, based on the weighted average number of basic and diluted shares
outstanding. The difference is primarily attributed to the impairment of assets and decreased
revenues.

LIQUIDITY AND CAPITAL RESOURCES

The Company had consolidated cash and cash equivalents of $2,182 and $309,318 as of
December 31, 2004 and 2003, respectively.

The Company's operating activities used $304,441 and $1,058,950 in the six months ended
December 31, 2004 and 2003, respectively.  The difference is mainly attributable to the decrease
in accounts receivable and an increase in accrued expenses.

Cash used by investing activities was $60,000 and $127,693 for the six months ended December
31, 2004 and 2003.  During the current period the company purchased an investment and in the
prior period it purchased  marketable securities and fixed assets.

Cash provided by financing activities was $336,832 and $1,363,758 for the six months ended
December 31, 2004 and 2003, respectively.  The decrease is primarily due to less proceeds from
the exercise of stock options and fewer borrowings on notes payable.

The Company's operations are currently financed through various loans.  Management has
taken action to strengthen the Company's working capital position and generate sufficient cash to
meet its operating needs.  Management is exploring additional sources of working capital
including borrowing, sales of securities, mergers and acquisitions.  In addition, the Company also
anticipates generating more revenue through its proposed mergers and acquisitions.  Management
believes that adequate capital can be raised to keep the Company functioning at a minimum level
of operations for the next fiscal year.  However, no assurances can be made that management will
be successful in achieving its plan or that additional capital will be available on a timely basis or
at acceptable terms.

Item 3.    Effectiveness of the registrant's disclosure controls and procedures

(a) As of the end of the period covered by this report, the Chief Executive Officer and the Chief
Financial Officer made an evaluation of the company's disclosure controls and procedures (as
defined in ss.240.13a-15(e) or 240.15d-15(e) of the Securities Exchange Act). Based on the
evaluation of these controls and procedures required by paragraph (b) of Rule 13a-15 or 15d-15
under the Exchange Act, in their opinion, the disclosure controls and procedures are effective.

(b) During the most recent fiscal year, there have not been any significant changes in our internal
controls over financial reporting or in other factors that have materially affected, or are
reasonably likely to materially affect, our internal controls over financial reporting.



---











PART II. OTHER INFORMATION

















Item 1.   LEGAL PROCEEDINGS

















None, except as may be noted elsewhere
in this report.

















Item 2.   CHANGES IN SECURITIES











Not applicable, except as may be noted
elsewhere in this report.













Item 3.   DEFAULTS UPON SENIOR SECURITIES











None, except as may be noted elsewhere
in this report.













Item 4.   SUBMISSION OF MATTERS TO A VOTE OF
SECURITIES HOLDERS











None, except as may be noted elsewhere
in this report.

















Item 5.   OTHER INFORMATION











Audit Committee











The Company does not have an independent
Audit Committee of its Board of Directors.  The entire Board of Directors
functions as the Company's Audit Committee.  The Sarbanes-Oxley Act of 2002 
("Sarbanes-Oxley Act") and proposed U.S. Securities and Exchange Commission
Rules currently under review to implement the Sarbanes-Oxley Act impose certain
standards on listed companies relative to the maintenance and operations of
Board of Directors Audit Committees, including but not limited to the
requirement that Audit Committees be appointed, that membership of such
committees comprise only independent directors, that a financial professional be
among the membership of such committee and that such committee be afforded an
adequate operating budget and be able to employ independent professional
advisors.  The Sarbanes-Oxley Act also requires that the Audit Committee oversee
the work of a company's outside auditors and that the outside auditors be
responsible to the Audit Committee.  At this time, the Company is not in
compliance with the requirements of the Sarbanes-Oxley Act as they relate to
independent Board of Directors Audit Committees.  The Company believes that
under the Rules of the U.S. Securities and Exchange Commission which implement
these provisions of the Sarbanes-Oxley Act, it is not required to comply with
its requirements relating to the appointment of an independent Audit Committee
of its Board of Directors and conforming with the enumerated standards and
guidelines because the Company is not a "Listed Company" as defined therein. 
Notwithstanding, the Company may ultimately be determined to not be in
compliance therewith and may therefore face penalties and restrictions on its
operations until it comes into full compliance.  Additionally, the Company's
failure to comply with the provisions of the Sarbanes-Oxley Act could preclude
it from being listed on NASDAQ or any other stock exchanges until it can show
that it is in compliance.  The Company intends to form an independent Audit
Committee in the near future.





















Item 6.   EXHIBITS AND REPORTS ON FORM 8-K







(a)   
	Exhibits

Exhibit 31.1    Certification of the Chief Executive Officer of Providential Holdings, Inc.
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 31.2    Certification of the Chief Financial Officer of Providential Holdings, Inc. pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32.1    Certification of the Chief Executive Officer of
Providential Holdings, Inc. pursuant to Section 906 of the Sarbanes Oxley Act of 2002

Exhibit 32.2    Certification of the Chief Financial Officer of
Providential Holdings, Inc. pursuant to Section 906 of the Sarbanes Oxley Act of 2002









































































































(b)    Reports on Form 8-K



None.









SIGNATURES

















Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.

















Date     February 22,
2005                                                               PROVIDENTIAL HOLDINGS, INC.

















By:
/s/
Henry Fahman





Henry Fahman





President and Chairman

















By:
/s/ Gene
Bennett





Gene
Bennett





Chief
Financial Officer

---

















Exhibit 99.1



| | 
| | 

---

Exhibit 99.2

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-QSB for the quarter ending December 31,
2004, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I,
Henry Fahman, Chairman and President 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 and Chairman

February 22, 2005

---

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-QSB for the quarter ending December 31,
2004, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I,
Gene Bennett, 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/ Gene Bennett

Gene Bennett

Chief Financial
Officer

February 22, 2005