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 March 31, 2005



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

90-0114535

(State or Other Jurisdiction of

(I.R.S. employer

Incorporation or Organization)

Identification No.)





17011 Beach Blvd, Huntington Beach, California    92647

(Address of Principal Executive Offices)    (Zip Code)





Issuer's Telephone Number, Including Area Code

(714) 843-5450





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 May 13, 2005.

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PROVIDENTIAL HOLDINGS INC, AND SUBSIDIARIES

INDEX TO FORM 10-QSB

MARCH 31, 2005







PART I



Item 1.

Financial Statements



Balance Sheet - March 31, 2005 (unaudited)





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

March 31, 2005 and 2004





Statements of Cash Flows (unaudited)- Nine Months Ended

March 31, 2005 and 2004





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



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







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



1

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PROVIDENTIAL HOLDINGS, INC.

CONSOLIDATED BALANCE SHEET

MARCH 31, 2005

(UNAUDITED)



|ASSETS                                                                  |  |                 
|----------------------------------------------------------------------- |  | ----------------
|CURRENT ASSETS                                                          |  |                 
|Cash and cash
    equivalents                                           |  | $       
	3,643 
|Marketable securities                                                   |  | 998,394         
|Accounts receivable                                                     |  | 2,395           
|Prepaid expenses                                                        |  | 550             
|Other receivable                                                        |  | 83,319          
|Due from related party                                                  |  | 19,442          
|Other
    current assets                                                |  | 26,773          
|Total Current Assets                                                    |  | 1,134,516       
|                                                                        |  |                 
|PROPERTY AND EQUIPMENT, net of
    accumulated depreciation of $243,543 |  | 104,559         
|Total assets                                                            |  | $ 1,239,075     
|                                                                        |  |                 
|                                                                        |  |                 
|                                                                        |  |                 
|LIABILITIES AND STOCKHOLDERS'
    DEFICIT                               |  |                 
|CURRENT LIABILITIES                                                     |  |                 
|Accounts payable and accrued
    expenses                               |  | $ 
    2,821,788
|Short-term notes payable                                                |  | 1,357,636       
|Due to
    officer                                                      |  | 476,311         
|Due to preferred stockholders                                           |  | 215,000         
|Other current
    liabilities                                           |  | 277,568         
|Total Current Liabilities                                               |  | 5,148,303       
|                                                                        |  |                 
|NOTES PAYABLE                                                           |  | 334,914         
|                                                                        |  |                 
|Total liabilities                                                       |  | 5,483,217       
|                                                                        |  |                 
|MINORITY INTEREST                                                       |  | -               
|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         |  |                 
|145,493,435 shares issued and outstanding                               |  | 5,819,737       
|Treasury stock,  10,000,000shares, $.04 par value common stock          |  | (580,104)       
|Additional paid-in capital                                              |  | 13,070,303      
|Shares to be issued                                                     |  | 415,000         
|Common stock subscriptions receivable                                   |  | (188,500)       
|Other comprehensive income                                              |  | (1,015,260)     
|Accumulated
    deficit                                                 |  | (21,765,318)    
|Total stockholders' deficit                                             |  | (4,244,142)     
|                                                                        |  |                 
|Total liabilities and stockholders' deficit                             |  | $  1,239,075    
|                                                                        |  |                 





The accompany notes are an integral part of these financial statements.

2

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PROVIDENTIAL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)



|                                                       | For the Three Months Ended March 31, |  | For the Nine Months Ended March 31,
|------------------------------------------------------ | ------------------------------------ |  | -----------------------------------
|                                                       | 2005                                 |  | 2004                               
|REVENUES                                               |                                      |  |                                    
|Consulting and advisory fee income                     | $                -                   |  | $            67,090                
|Sales                                                  | 7,842                                |  | 1,981,851                          
|Tuition                                                | 84,246                               |  | 70,305                             
|Net revenues                                           | 92,088                               |  | 2,119,246                          
|                                                       |                                      |  |                                    
|COST OF SALES                                          | 321                                  |  | 1,779,674                          
|COST OF TUITION                                        | 31,994                               |  | 25,433                             
|GROSS PROFIT                                           | 59,773                               |  | 314,139                            
|                                                       |                                      |  |                                    
|OPERATING EXPENSES                                     |                                      |  |                                    
|Depreciation and amortization                          | 6,266                                |  | 4,233                              
|Bad debt expense                                       | -                                    |  | -                                  
|Salaries and wages                                     | 96,696                               |  | 76,629                             
|Professional services, including non-cash compensation | 131,598                              |  | 1,264,053                          
|Directors fees                                         | -                                    |  | -                                  
|Impairment of assets                                   | -                                    |  | -                                  
|General and administrative                             | 177,634                              |  | 419,848                            
|Total Operating Expenses                               | 412,194                              |  | 1,767,763                          
|LOSS FROM OPERATIONS                                   | (352,421)                            |  | (1,453,624)                        
|                                                       |                                      |  |                                    
|OTHER INCOME AND (EXPENSES)                            |                                      |  |                                    
|Interest expense                                       | 152,161                              |  | (91,520)                           
|Loss on sale of marketable securities                  | -                                    |  | -                                  
|Gain on legal settlement                               | -                                    |  | -                                  
|Gain on recovery of bad debts                          | 8,218                                |  | -                                  
|Gain (loss) on conversion of notes                     | -                                    |  | (477,891)                          
|Beneficial conversion of notes                         | -                                    |  | (711,331)                          
|Redemption premium and penalties                       | -                                    |  | (106,111)                          
|Other income (expense)                                 | 790                                  |  | 791                                
|Net other income and expenses                          | 161,169                              |  | (1,386,062)                        
|Minority interest                                      | -                                    |  | 28,477                             
|                                                       |                                      |  |                                    
|NET LOSS                                               | (191,252)                            |  | (2,811,209)                        
|DIVIDEND REQUIREMENT OF
	PREFERRED STOCK               | (6,450)                              |  | (13,500)                           
|NET LOSS
	APPLICABLE TO COMMON SHAREHOLDERS            | (197,702)                            |  | (2,824,709)                        
|OTHER COMPREHENSIVE
	(LOSS)/GAIN                       |                                      |  |                                    
|Unrealized gain (loss) on marketable securities        | (55,860)                             |  | (2,503,000)                        
|COMPREHENSIVE LOSS                                     | $ (253,562)                          |  | $  (5,327,709)                     
|                                                       |                                      |  |                                    
|NET LOSS PER
	SHARE - BASIC AND DILUTED:               | $         
	(0.00)                   |  | $          (0.03)                  
|                                                       |                                      |  |                                    
|Weighted average number
	of shares outstanding -       |                                      |  |                                    
|basic and diluted                                      | 143,563,287                          |  | 89,497,280                         
|                                                       |                                      |  |                                    





The accompany notes are an integral part of these financial statements.



3

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PROVIDENTIAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)



|                                                                                | For the Nine Months Ended March 31,
|------------------------------------------------------------------------------- | -----------------------------------
|                                                                                | 2005                               
|Cash flows from
	operating activities:                                          |                                    
|Net loss from continuing operations                                             | $ 
	(5,515,952)                    
|Adjustments
    to reconcile net loss to net cash used in operating activities: |                                    
|Depreciation                                                                    | 19,964                             
|Allowance for bad debts                                                         | 5,000                              
|(Gain) loss on legal settlement                                                 | (33,655)                           
|Amortization of prepaid consulting fees                                         | -                                  
|Securities received for consulting services                                     | (646,423)                          
|Shares issued for consulting services                                           | 509,779                            
|Gain (loss) on conversion of notes                                              | (20,393)                           
|Loss on marketable securities                                                   | 68,579                             
|Shares issued for distribution agreement                                        | -                                  
|Shares issued for interest on convertible note                                  | -                                  
|Shares issued for preferred stock and related dividends                         | -                                  
|Beneficial conversion of registration penalty                                   | -                                  
|Fair market value of options granted                                            | 25,800                             
|Minority interest in subsidiary                                                 | -                                  
|Impairment of assets                                                            | 4,795,082                          
|Changes in operating assets and liabilities:                                    |                                    
|(Increase) decrease in accounts receivable                                      | 8,404                              
|(Increase) decrease in other assets                                             | (98,481)                           
|Increase (decrease) in accounts payable                                         | 71,802                             
|Increase (decrease) in accrued expenses                                         | 373,690                            
|Increase (decrease) in other liabilities                                        | 22,246                             
|Net cash used in operating activities                                           | (414,557)                          
|                                                                                |                                    
|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 sale of common stock                                              | -                                  
|Proceeds from exercise of stock options                                         | 259,400                            
|Borrowings on notes payable                                                     | 239,750                            
|Payments on notes payable                                                       | (168,309)                          
|Borrowings from officer                                                         | 240,339                            
|Payments on advances from officer                                               | (122,771)                          
|Net cash provided by financing activities                                       | 448,409                            
|                                                                                |                                    
|Net increase (decrease) in cash                                                 | (26,148)                           
|Cash and cash
	equivalents, beginning of period                                 | 29,791                             
|Cash and cash
	equivalents, end of period                                       | $          3,643                   
|                                                                                |                                    
|SUPPLEMENTARY DISCLOSURES
    OF CASH FLOW INFORMATION                          |                                    
|                                                                                |                                    
|Cash paid
    during the period for:                                            |                                    
|Interest                                                                        | $         48,394                   
|Taxes                                                                           | $           1,600                  
|                                                                                |                                    
|Non-cash Financing Activities:                                                  |                                    
|Shares issued for payment of notes                                              | $        491,343                   
|Shares issued for debt conversion                                               | $                   
	-            
|Shares issued for interest and penalties                                        | $           
	9,851                
|Shares issued issued for services                                               | $        391,846                   
|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                  
|Shares issued for payment of preferred stock and interest                       | $                   
	-            
|                                                                                |                                    



The accompany notes are an integral part of these financial statements.





5

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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 nine months ended March 31, 2005, Provimex generated $17,681 in gross sales with $13,279 in cost of goods sold for a net gross profit of $4,402.



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 March 31, 2005, 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.



6

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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





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 nine months ended March 31, 2005, the Company recorded a loss of $177,076 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, convenient stores and non-profit organizations across the US. This POS system enables merchants and participating partners to offer prepaid products without purchasing or storing any inventory in advance.  This company was later incorporated as a Nevada corporation in February 2004 under the name of Touchlink Communications, Inc. to provide long distance services to residential and business customers in the United States. As of March 31, 2005, Touchlink Communications generated $8,936 in revenues and had losses of $34.



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 March 31, 2005, the Company recorded a loss of $43,471 relating to the income generated by the subsidiary.





7

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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS







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 nine months ended March 31, 2005 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
is in the process of evaluating the impact of this pronouncement on its
financial statements.



In December 2004, the FASB issued SFAS Statement No. 153, "Exchanges of Non-monetary Assets."  The Statement is an amendment of APB Opinion No. 29 to eliminate the exception for non-monetary exchanges of similar productive assets and



8

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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





replaces it with a general exception for exchanges of non-monetary 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.



9

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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS







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 March 31, 2005:



|Equipment                     | $    199,173
|----------------------------- | ------------
|Furniture and Fixtures        | 57,936      
|Automobiles                   | 81,103      
|Leasehold Improvements        | 9,890       
|Subtotal                      | 348,102     
|Less Accumulated Depreciation | (243,543)   
|Total net fixed assets        | $    104,559
|                              |             



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 March 31, 2005, the investments have been recorded at $998,394 based upon the fair value of the marketable securities.



Marketable securities classified as available for sale consisted of the following as of March 31, 2005:



10

---



PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



|Investee Name (Symbol) | Cost at March 31, 2005 | Market Value at
    March 31, 2005 | Accumulated Unrealized Gain (Loss) | Number of Shares Held at March 31, 2005
|---------------------- | ---------------------- | ---------------------------------- | ---------------------------------- | ---------------------------------------
|Jockey Club (JKCL)     | $              
	15    | $               
    15            | $                
	-               | 1,500 (a)                              
|Tri Kal Int'l (TRIKF)  | 15                     | 15                                 | -                                  | 15,165 (a)                             
|Nettel Holdings (NTTL) | 1,365,300              | 468,000                            | (897,300)                          | 2,250,000                              
|Lexor Holdings (LXRH)  | 1,900                  | 1,900                              | -                                  | 1,900,000
	(a)                         
|Bio-Warm (BOWC)        | 646,423                | 528,463                            | (117,960)                          | 4,718,424                              
|                       | $  2,013,653           | $       998,393                    | $     (1,015,260)                  |                                        
|                       |                        |                                    |                                    |                                        





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.



In February 2005, the Company received 4,718,424 shares of Bio-Warm Corporation as payment for advisory services.  The shares were valued at $646,423.



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



11

---



PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





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 March 31, 2005, the Company has notes payable to International Mercantile Holding amounting $196,111. The notes are due in the year ended June 30, 2006. The notes 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 nine months ended March 31, 2005, $17,500 was paid on the notes and the balance as of March 31, 2005 was $138,803.



The consolidated total of promissory notes is $334,914 as of March 31, 2005.



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:





12

---



PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





Period ending December 31,

|     |         
|---- | --------
|2005 | $      -
|2006 | $334,914
|     |         



SHORT TERM NOTES PAYABLE:



As of March 31, 2005, the Company has short term notes payable amounting $1,060,050 plus accrued interest of $199,816. 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.  In the quarter ended March 31, 2005, the Company renegotiated several notes that had severe non-payment interest penalties whereby the loan-holders agreed to rescind the penalties retroactively.  As a result, the Company reversed $314,500 of interest penalties that had been accrued in the quarter ended December 31, 2005.  Included in this amount is the payable to the former owners of ATC of $72,323.  During the period ended March 31, 2005, $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 $297,586 in short term notes payable and $219,891 in accrued interest for a consolidated total of $1,357,636 and $419,707, respectively.



DUE TO PREFERRED STOCKHOLDERS:



As of March 31, 2005, the Company has classified $215,000 of preferred stock subscribed as a current liability payable to holders of preferred stock due to non compliance of preferred shares subscription agreement.  There were no payments or conversions made during the nine months ended March 31, 2005.



OTHER CURRENT LIABILITIES:



The dividend amount payable to holders of preferred stock amounting $128,005 at March 31, 2005 has been classified as other current liabilities.



As of March 31, 2005, the Company has recorded an overpayment of common stock subscription receivable in the amount of $89,691 as other current liabilities.



As of March 31, 2005, the Company has recorded $20,000 in unearned revenue representing deposits on advisory services to find a merger candidate for a client.  The fee is earned when a suitable candidate has been identified and a merger is completed.



In addition, the subsidiaries have other liabilities consisting of unearned tuition fees in the amount of $16,207, 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 nine months ended March 31, 2005, the officer loaned an additional $217,900 in cash to the Company and was paid $121,621.  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 March 31, 2005, the balance was $331,009.



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 March 31, 2005, an additional $22,439 was advanced to the subsidiary and $1,150 was paid to one of the officers.  The total owing as of March 31, 2005 was $145,302.



NOTE 8 - LITIGATION



13

---



PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS







LEGAL
PROCEEDING SETTLED AND PAID AS OF MARCH 31, 2005:



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 MARCH 31, 2005:



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



14

---



PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





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 $54,505.  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.



15

---



PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS







During the nine month period ended March 31, 2005, the Company cancelled 4,805,200 treasury shares.  The balance as of March 31, 2005 was 10,000,000 shares valued at $580,104.



COMMON STOCK:



During the nine months ended March 31, 2005, the Company issued 4,592,418 shares of common stock for salaries and services valued at $509,779.



During the nine months ended March 31, 2005, the Company received $202,400 for stock options exercised in the prior year.



During the nine months ended March 31, 2005, the Company issued 3,200,000 shares of common stock for stock options exercised valued at $245,500.  As of March 31, 2005, the Company has received payment of $57,000 on these options and has recorded a subscription receivable of $188,500.



During the nine months ended March 31, 2005, the Company issued 2,500,000 shares of common stock for settlement of litigation valued at $423,750.  The Company recorded a gain on legal settlement of $17,147 (see note 8).



During the nine months ended March 31, 2005, 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 nine months ended March 31, 2005, 2,824,519 shares of the Company's common stock valued at $483,944 were issued as payment on short-term notes payable of $494,486 and related interest of $9,851.  The Company recorded a gain of $20,393 on the conversion, which is included in other income and expense in the accompanying consolidated financial statements.  In addition, the Company issued 3,350,000 shares of its common stock valued at $300,000 as payment on officer loan (see Note 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 nine months ended March 31, 2005, the Company issued 3,828,337 of these shares valued at $661,267 which results in remaining balance of $375,000.  In addition, the Company recorded the accrual of $112,500 in wages and salaries for the quarter ended December 31, 2004 that were to be paid with the issuance of the Company's common stock.  These shares were issued in January 2005.  During the quarter ended March 31, 2004, the Company recorded $40,000 in salaries that is to be paid with the issuance of the Company's common stock.  The balance of Shares to Be Issued as of March 31, 2005, was $415,000.



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:





16

---



PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





|                                                                                                                | Ended March 31,      |  | Ended March 31,     
|--------------------------------------------------------------------------------------------------------------- | -------------------- |  | --------------------
|                                                                                                                | 2005                 |  | 2004                
|Basic and diluted net loss per share:                                                                           |                      |  |                     
|Numerator:                                                                                                      |                      |  |                     
|Net loss                                                                                                        | $  (191,253)         |  | $  (2,811,209)      
|Dividend
		requirement of preferred stock                                                                       | (6,450)              |  | (13,500)            
|Net loss
		applicable to common shareholders                                                                    | (197,703)            |  | (2,824,709)         
|                                                                                                                |                      |  |                     
|Denominator:                                                                                                    |                      |  |                     
|Basic and
		diluted weighted average                                                                            |                      |  |                     
|number of common
		shares outstanding                                                                           | 143,563,287          |  | 89,497,280          
|                                                                                                                |                      |  |                     
|Basic and diluted net loss per share                                                                            |                      |  |                     
|Net loss                                                                                                        | $          
		(0.00) |  | $          
		(0.03)
|Dividends for
		preferred stock                                                                                 | $          
		(0.00) |  | $          
		(0.00)
|Applicable to
		common shareholders                                                                             | $          
		(0.00) |  | $          
		(0.03)
|                                                                                                                |                      |  |                     
|The following weighted average of
		dilutive shares were excluded from the calculation of earnings per
		share:
|                                                                                                                |                      |  |                     
|Preferred stock                                                                                                 | 3,387,969            |  | 170,380             
|Convertible
		debentures                                                                                        | -                    |  | 105,865             
|                                                                                                                |                      |  |                     





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 March 31, 2005 and 2004, 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 March 31, 2005, the Company has 1,000,000 in stock options outstanding which were granted during the three month period ended September 30, 2003.

During the quarter ended March 31, 2005, the Company granted 3,200,000 of options to three consultants with an exercise price ranging from $0.07 to $0.08 per share.  All of the options were exercised at the time of grant.  
The Company valued these options using the fair value method and recorded an expense of $25,800 based on the Black-Scholes option pricing model with the following assumptions:



Risk-free interest rate

3.25%

Expected life

1 years

Expected volatility

8%

Dividend yield

0%





Common stock purchase options consist of the following as of March 31, 2005:



17

---



PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS







|                                                 | Options     |  | Exercise Price
|------------------------------------------------ | ----------- |  | --------------
|Outstanding and exercisable,
		June 30, 2004     | 8,000,000   |  | $0.08-$0.50   
|Granted                                          | 3,200,000   |  | $0.07-$0.08   
|Exercised                                        | (3,200,000) |  | $0.07-$0.08   
|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.  All of 15,000,000 shares were issued for salaries, consulting and professional services in lieu of cash under this plan as of March 31, 2005.



On February 2, 2004, the Company adopted a stock-based compensation plan and set aside 9,000,000 shares of common stock for selected eligible participants of the Company and subsidiaries, and certain independent contractors providing certain services to the Company.  As of March 31, 2005, 8,921,814 shares have been issued for salaries, consulting and professional services in lieu of cash under this plan.



On February 7, 2005, the Company adopted a stock-based compensation plan and set aside 14,000,000 shares of common stock for selected eligible participants of the Company and subsidiaries, and certain independent contractors providing certain services to the Company.  As of March 31, 2005, 4,411,191 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



18

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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS







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 OPEN ECONOMIC  ZONE, QUANG NAM PROVINCE, VIETNAM



Providential Holdings has entered into an agreement with Chu Lai Open Economic Zone (CLOEZ) Authority, Quang Nam Province, Central Vietnam, to assist in the development of  this industrial and export processing zone.. 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. The Company is not contractually obligated to provide any funding for these projects and has not provided any funding under this agreement as of the date of this report.



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 nine months ended March 31, 2005, Provimex generated $17,681 in gross sales with a net gross profit of $4,402.



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 owned 12,351 shares of Grayling.  In the quarter ended December 31, 2004, these shares were sold for $6,229 and a gain for that amount was recorded (see Note 4).



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



19

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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





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 March 31, 2005, 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 nine months ended March 31, 2005.



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.



20

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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS







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 March 31, 2005.



BUSINESS CONSULTING AGREEMENT WITH MIRAE TECH CO.



Effective October 1, 2004, the Company entered into a business consulting agreement with Red5 Holdings, Inc., a Nevada corporation, and Mirae Tech Co., Ltd., a Republic of Korea corporation, to provide consulting services in the identification, location, and facilitating a merger between Mirae Tech Co., Ltd. and a fully-reporting publicly-traded company. According to the agreement, the Company would receive common stock in the newly combined company equal to 10% of the then issued and outstanding common shares of the new company.  As the merger between Mirae Tech Co., Ltd. and Rapid Bio Tests Corp., a Nevada corporation and fully-reporting publicly-traded company, was consummated on December 15, 2004, the Company was entitled to 4,718,421 restricted shares of common stock in Rapid Bio Tests Corp, which was renamed to Bio Warm Corporation, under the terms of the business consulting agreement. During the quarter ended March 31, 2005, the shares were received and were valued at $646,423.



BUSINESS CONSUTLING AGREEMENT WITH MOTIV SPORTS, INC.



On January 14, 2005 the Company entered into a business consulting agreement with Motiv
Sports, Inc. ("Motiv"), a California corporation, to provide services in the identification, location, and facilitating a merger with a fully-reporting publicly-traded company.  If a merger is successful, the Company is to receive common stock in the newly combined company equal up to 27% of the then issued and outstanding common shares of the new company. As of the date of this report, a successful merger has not been completed.   As of March 31, 2005, Motiv has paid the Company $20,000 as a deposit against this agreement (see Note  6).



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.



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 March 31:





21

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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS







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





The rent expense was $107,230 and $99,226 for the nine months ended March 31, 2005 and 2004, 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 $177,076 relating to the income generated by the subsidiary for the nine months ended March 31, 2005.



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 $43,471 relating to the income generated by the subsidiary for the nine months ended March 31, 2005.



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 March 31, 2005 and included in these statements of operations and cash flows from the date of acquisition through March 31, 2005.



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 $5,496,602 for the nine months ended March 31, 2005.  As of March 31, 2005, 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.





22

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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





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 March 31, 200 5
, 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 nine months ended March 31:



|                                        | 2005                        |  | 2004                    
|--------------------------------------- | --------------------------- |  | ------------------------
|                                        |                             |  |                         
|Revenues from
		unaffiliated customers: |                             |  |                         
|Consulting and advisory services        | $          
		850,674       |  | $        4,507,090      
|Sales and long-distance services        | 50,982                      |  | 4,355,143               
|Tuition                                 | 170,887                     |  | 86,062                  
|Consolidated                            | $          
		980,455       |  | $        8,948,295      
|                                        |                             |  |                         
|Operating income (loss):                |                             |  |                         
|Consulting and advisory services        | $         
		(4,989,299)    |  | $       (2,381,888)     
|Sales and long-distance services        | (116,534)                   |  | 194,451                 
|Tuition                                 | (121,048)                   |  | (53,254)                
|Consolidated                            | $         
		(5,226,881)    |  | $      (2,240,691)      
|                                        |                             |  |                         
|Identifiable
		assets:                  |                             |  |                         
|Consulting and advisory services        | $        1,053,934          |  | $       4,620,510       
|Sales and long-distance services        | 6,479                       |  | 3,711,631               
|Tuition                                 | 178,662                     |  | 328,360                 
|Consolidated                            | $         1,239,075         |  | $      8,660,501        
|                                        |                             |  |                         
|Depreciation and
		amortization:        |                             |  |                         
|Consulting and advisory services        | $             
		3,969      |  | $              
		18,394
|Sales and long-distance services        | -                           |  | -                       
|Tuition                                 | 15,995                      |  | -                       
|Consolidated                            | $           19,964          |  | $              18,394   
|                                        |                             |  |                         
|Capital
		expenditures:                 |                             |  |                         
|Consulting and advisory services        | $                     
		-  |  | $                7,743  
|Sales and long-distance services        | -                           |  | -                       
|Tuition                                 | -                           |  | 5,895                   
|Consolidated                            | $                      
		- |  | $              13,638   
|                                        |                             |  |                         



23

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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 17 - RELATED PARTY TRANSACTIONS



During the nine months ended March 31, 2005 and 2004, the Company issued shares to various related parties in payment for services and salaries.  The amounts of shares issued for the nine months ended March 31, 2004 include payments for past services and salaries. These payments were as follows:



|              |  | For
			the nine months ended
			March 31, 2005 |  | For
			the nine months ended
			March 31, 2004
|------------- |  | ---------------------------------------------- |  | ----------------------------------------------
|Related Party |  | #
			Shares                                    |  | Market Value                                  
|Henry Fahman  |  | 733,225                                        |  | $ 
			76,573                                  
|Tina Phan     |  | 293,250                                        |  | 30,623                                        
|Norm Klein    |  | 506,667                                        |  | 53,963                                        
|Keith Wong    |  | 180,550                                        |  | 18,772                                        
|Thorman Hwin  |  | -                                              |  | -                                             
|              |  |                                                |  |                                               
|Total         |  | 1,713,692                                      |  | $  179,931                                    
|              |  |                                                |  |                                               





In addition, as of March 31, 2005, the Company had $87,500 in accrued 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



INVESTMENT IN PROVIMEX-HTV JOINT VENTURE COMPANY



As of April 20, 2005, the Company has invested $50,000 into Provimex-HTV
Joint Venture Company ("JVC"). The Company intends to provide additional funding for this JVC in the near future. Provimex-HTV JVC is engaged in sales and installation of LP gas systems for commercial and residential buildings in Vietnam.



BEGINNING OPERATION OF PROVIDENTIAL OIL & GAS, INC.



On April 4, 2005, the Company announced the launching of Providential Oil & Gas, Inc., a Nevada corporation and wholly-owned subsidiary of the Company. This subsidiary is currently in the process of investigating various oil property leases in the US.



ADVANTAGE EDUCATION GROUP



On April 5, the Company announced that American International University, a wholly-owned subsidiary of the Company, would change its name to Advantage Education Group, a Nevada corporation, to serve as a holding company for post-secondary facilities. Advantage Education Group intends to acquire Apollos University, an online post-secondary entity offering Bachelor and Master degree programs, and to collaborate with other international educational institutions.



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





24

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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





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



EXTENSION OF RECORD DATE FOR DIVIDENDS OF IRVINE COLLEGE OF MEDICAL SCIENCES, INC.



On April 20, 2005, the Company extended the record date for the payment of special dividends in Irvine College of Medical Sciences, Inc., a California corporation, to May 6, 2005. The Company's shareholders of record as of May 6, 2005 will receive 15% common stock of Irvine College of Medical Sciences, Inc. on a pro-rata basis without any action being necessary on their part.



NEW CONSULTING AGREEMENT WITH LEXOR HOLDINGS, INC.



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



25

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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





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



26

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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





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 March 31, 2005, we estimated the allowance on net deferred tax assets to be one hundred percent of the net deferred tax assets.



RESULTS OF OPERATIONS



NINE MONTHS ENDED MARCH 31, 2005 COMPARED TO NINE MONTHS ENDED MARCH 31, 2004:



Revenues:



Total revenues were $1,072,543 and $8,948,295 for the nine months ended March 31, 2005, and 2004 ,
 respectively.   The net revenues are broken out by subsidiary as follows:



|Subsidiary                |  | Type                               | 2005         |  | 2004        
|------------------------- |  | ---------------------------------- | ------------ |  | ------------
|                          |  |                                    |              |  |             
|Providential
		Capital    |  | Advisory and
		consulting services | $ 
		850,674 |  | $  4,507,090
|Touchlink                 |  | Long-Distance
		Services           | 8,936        |  | -           
|Provimex                  |  | Sales                              | 17,681       |  | 101,856     
|PHI Digital               |  | Sales                              | -            |  | 3,590,610   
|ATC Technology            |  | Sales                              | 24,365       |  | 662,677     
|Atlantis Career
		College |  | Tuition                            | 170,887      |  | 86,062      
|Total Net Revenues        |  |                                    | $  1,072,543 |  | $  8,948,295
|                          |  |                                    |              |  |             



The Company received revenue for two consulting agreements of $850,674 during the nine months ended  March 31, 2005 compared to one agreement of $4,507,000 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 nine months ended March 31, 2004 was only for four months, from the time of acquisition in December 2003.



General and Administrative:



Total
general and administrative expenses were $6,178,315 and  $7,255,722 for the nine months ended March 31, 2005, and 2004, respectively.  The increase is primarily due to the impairment of assets.  Professional services were $437,913 and $2,893,445 for the comparable periods.  Included in this amount for the current period is $242,525 for services paid with common stock compared to $2,280,174 for the nine months ended March 31, 2004.  In addition, during the nine months ended March 31, 2004, $646,320 for past services and $22,500 for director's fees were paid with common stock.  During the current nine months ended March 31, 2005, the Company paid salaries of $400,068 of which $267,254 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



27

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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





general and administrative expenses is $4,795,082 and $3,150,965 for the nine months ended March 31, 2005 and 2004, respectively, for the impairment of assets.



Other Expenses



Interest expense was $334,295 and $363,047 for the nine months ended March 31, 2005 and 2004, respectively.



During the nine months ended March 31, 2005 and 2004,  the Company recorded a gain of conversion of notes of $20,392 and a loss of $157,582, 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 $77,307 from the recovery of bad debts during the nine months ended March 31, 2005.



Net Loss



Net loss for the nine months ended March 31, 2005 was $5,496,602, compared to $3,593,681 for the same period in 2004, which is equivalent to a net loss of $0.04 and  $0.04 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 MARCH 31, 2005 COMPARED TO QUARTER ENDED MARCH 31, 2004:



Revenues:



Total revenues were $92,088 and $2,119,246 for the quarter ended March 31, 2005 and 2004, respectively.   The net revenues are broken out by subsidiary as follows:



|Subsidiary                |  | Type                               | 2005                |  | 2004              
|------------------------- |  | ---------------------------------- | ------------------- |  | ------------------
|                          |  |                                    |                     |  |                   
|Providential
		Capital    |  | Advisory and
		consulting services | $              
		- |  | $        
		67,090
|Touchlink                 |  | Long-Distance
		Services           | 820                 |  | -                 
|Provimex                  |  | Sales                              | 4,312               |  | 60,674            
|PHI Digital               |  | Sales                              | -                   |  | 1,917,000         
|ATC Technology            |  | Sales                              | 2,710               |  | 4,177             
|Atlantis Career
		College |  | Tuition                            | 84,246              |  | 70,305            
|Total Net Revenues        |  |                                    | $      92,088       |  | $  2,119,246      
|                          |  |                                    |                     |  |                   



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.



General and Administrative:



Total
general and administrative expenses were $412,194 and $1,767,763 for the three months ended March 31, 2005 and 2004, respectively.  The decrease is primarily due to lower professional services.  Professional services were $131,598 and $1,264,053 for the comparable periods.  Included in this amount for the current period is $117,932 for services paid with common stock compared to $1,081,873 for the three months ended March 31, 2004.  During the current three months the Company paid salaries of $96,696 of which $47,500 was paid with the issuance of common stock as compared to $35,000 of salaries paid with common stock in the comparable period.



Other Expenses



Interest expense was $162,339 and $91,520 for the three months ended March 31, 2005 and 2004, respectively.  During the current quarter $314,500 of interest penalties accrued in the prior quarter were reversed. The increase is due to several loans with high interest rates.  In addition, the Company recorded a gain from the recovery of bad debts of $8,218 during the current quarter.  During the quarter ended March 31, 2004, the Company recorded a gain of conversion of notes of $477,891, a beneficial conversion feature expense of $711,331 and redemption premium and penalties expense of $106,111.



28

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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS







Net Loss



Net loss for the three months ended March 31, 2005 was $191,252, compared to $2,811,209 for the same period in 2004, which is equivalent to a net loss per share of $0.00 and $0.03, 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 $3,643 and $278,041 as of March 31, 2005 and 2004, respectively.



The Company's operating activities used $414,557 and $1,477,628 in the nine months ended March 31, 2005 and 2004, respectively.  The difference is mainly attributable to the decrease in accounts receivable and an increase in accrued expenses and other liabilities.



Cash used by investing activities was $60,000 and $138,688 for the nine months ended March 31, 2005 and 2004.  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 $448,409 and $1,762,154 for the nine months ended March 31, 2005 and 2004, respectively.  The decrease is primarily due to fewer 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.





29

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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS







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



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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





Exhibit 32.1

Certification of the Chief Executive Officer and 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



31

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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





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     May 13, 2005                                                                PROVIDENTIAL HOLDINGS, INC.





By: /s/ Henry Fahman

Henry Fahman

President and Chairman



By: /s/ Henry Fahman

Henry Fahman

Interim Chief Financial Officer









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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS







Exhibit 31.1 CEO Certification



I, Henry Fahman, certify that:



1.

I have reviewed this Form 10-QSB of Providential Holdings, Inc. and subsidiaries;



2.

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



3.

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



4.

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



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



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



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



5.

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



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



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





Date: May 13, 2005



/s/ Henry Fahman

Henry Fahman

Chief Executive Officer



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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





Exhibit 31.2 CFO Certification



I, Henry Fahman, certify that:



1.

I have reviewed this Form 10-QSB of Providential Holdings, Inc. and subsidiaries;



2.

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



3.

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



4.

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



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



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



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



5.

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



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



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



Date: May 13, 2005



/s/ Henry Fahman

Henry Fahman

Interim Chief Financial Officer



34

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PROVIDENTIAL HOLDINGS, INC.,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





Exhibit 32.1



CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Quarterly Report on Form 10-QSB of Providential Holdings, Inc. and subsidiaries (the
"Company") for the quarter ended March 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the
"Report"), the undersigned Henry Fahman, Chief Executive Officer of Providential Holdings, Inc. and subsidiaries., and Gene Bennett, Chief Financial Officer of Providential Holdings, Inc. and subsidiaries, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:



(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 results of operations of the Company.



Dated: May 13, 2005



/s/Henry Fahman

Henry Fahman

Chief Executive Officer and Interim Chief Financial Officer







35

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