SECURITIES AND EXCHANGE COMMISSION

















Washington, D.C. 20549





















_____________





















FORM 10-QSB

































































(Mark One)











































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











































For the quarterly period ended
December 31, 2003











































OR

































































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

































































For the transition period from __________ to ___________

































































Commission file number 2-78335-NY































































Providential Holdings, Inc.





















(Exact Name of Registrant as Specified in Its Charter)

































































Nevada

(State or Other Jurisdiction of Incorporation or Organization)



13-3121128





















(I.R.S. employer





















Identification
No.)

































































8700 Warner Avenue, Fountain Valley, California    92708





















(Address of Principal Executive Offices)    (Zip Code)











































(714)
596-0244





















Issuer's Telephone Number, Including Area Code























































































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





















NONE

































































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











































YES  (X)     NO  ( )

































































Indicate the number
of shares outstanding of each of the issuer's classes of common stock, as of the
latest practicable date: 112,726,338 SHARES OF COMMON STOCK, $.04 PAR VALUE PER
SHARE, WERE OUTSTANDING AS OF JANUARY 14, 2004.













































---



CONTENTS





PART I. FINANCIAL INFORMATION





Item 1.   Financial Statements















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





and Results of Operations



Item 3.    Controls and Procedures







PART II. OTHER INFORMATION







Item 1.   Legal Proceedings







Item 2.   Changes in Securities







Item 3.   Defaults Upon Senior Securities







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







Item 5.   Other Information







Item 6.   Exhibits and Reports on Form 8-K





---





Part 1





ITEM 1:   Financial Statements



PROVIDENTIAL HOLDINGS,
INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE
SHEET

DECEMBER 31, 2003

(UNAUDITED)



|ASSETS                                                                  |  |               
|----------------------------------------------------------------------- |  | --------------
|CURRENT ASSETS                                                          |  |               
|Cash and cash
    equivalents                                           |  | $      309,318
|Marketable securities                                                   |  | 6,808,310     
|Accounts receivable                                                     |  | 1,929,433     
|Other
	current assets                                                   |  | 90,333        
|Total Current Assets                                                    |  | 9,137,394     
|                                                                        |  |               
|PROPERTY AND EQUIPMENT, net of
    accumulated depreciation of $198,895 |  | 135,622       
|Total Assets                                                            |  | $  9,273,016  
|                                                                        |  |               
|LIABILITIES AND SHAREHOLDERS'
    DEFICIT                               |  |               
|CURRENT LIABILITIES:                                                    |  |               
|Accounts payable and accrued
    expenses                               |  | $ 
	6,482,546 
|Convertible
    promissory notes                                        |  | 435,000       
|Short-term
    notes payable                                            |  | 3,117,348     
|Current
    portion of notes payable                                    |  | 129,365       
|Due to
    officer                                                      |  | 385,871       
|Due to preferred stockholders                                           |  | 450,000       
|Other current
    liabilities                                           |  | 265,148       
|Total Current Liabilities                                               |  | 11,265,278    
|                                                                        |  |               
|NOTES PAYABLE                                                           |  | 196,111       
|                                                                        |  |               
|Total liabilities                                                       |  | 11,461,389    
|                                                                        |  |               
|MINORITY INTEREST                                                       |  | 41,627        
|                                                                        |  |               
|COMMITMENTS &
	CONTINGENCIES                                            |  | -             
|                                                                        |  |               
|STOCKHOLDERS' DEFICIT                                                   |  |               
|Preferred
    stock (Class B), $0.001 par value, 100,000,000            |  |               
|shares authorized, no shares issued and outstanding                     |  | -             
|Common stock,
    $.04 par value, 300,000,000 shares authorized         |  |               
|104,826,383 shares issued and outstanding                               |  | 4,193,055     
|Treasury stock, 14,805,200 shares, .04 par value common stock           |  | (772,312)     
|Additional
    paid-in capital                                          |  | 6,975,084     
|Shares to be issued                                                     |  | 234,438       
|Prepaid consulting fees                                                 |  | (186,189)     
|Stock subscription receivable                                           |  | (194,869)     
|Other comprehensive income                                              |  | 732,921       
|Accumulated deficit                                                     |  | (13,212,128)  
|Total stockholders' deficit                                             |  | (2,230,000)   
|                                                                        |  |               
|Total liabilities and stockholders' deficit                             |  | $   9,273,016 
|                                                                        |  |               

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

---

PROVIDENTIAL HOLDINGS,
INC. AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF OPERATIONS

(UNAUDITED)



|                                                       | For the Three Months Ended December 31, |  | For the Six Months Ended December 31,
|------------------------------------------------------ | --------------------------------------- |  | -------------------------------------
|                                                       | 2003                                    |  | 2002                                 
|REVENUES                                               |                                         |  |                                      
|Consulting and advisory fee income                     | $                 
	-                   |  | $           
	243                    
|Sales                                                  | 2,373,292                               |  | 30,600                               
|Tuition                                                | 15,757                                  |  | -                                    
|Net revenues                                           | 2,389,049                               |  | 30,843                               
|                                                       |                                         |  |                                      
|COST OF SALES                                          | 2,122,258                               |  | 26,628                               
|GROSS PROFIT                                           | 266,791                                 |  | 4,215                                
|                                                       |                                         |  |                                      
|OPERATING EXPENSES                                     |                                         |  |                                      
|Depreciation and amortization                          | 7,142                                   |  | 7,295                                
|Bad debt expense                                       | 121,000                                 |  | -                                    
|Salaries and wages                                     | 69,918                                  |  | -                                    
|Professional services, including non-cash compensation | 640,080                                 |  | 309,391                              
|Directors fees                                         | -                                       |  | -                                    
|General and administrative                             | 333,579                                 |  | 233,106                              
|Total Operating Expenses                               | 1,171,719                               |  | 549,792                              
|INCOME (LOSS) FROM OPERATIONS                          | (904,928)                               |  | (545,577)                            
|                                                       |                                         |  |                                      
|OTHER INCOME AND (EXPENSES)                            |                                         |  |                                      
|Interest expense                                       | (103,256)                               |  | (207,167)                            
|Loss on sale of marketable securities                  | -                                       |  | (300,844)                            
|Impairment of goodwill                                 | (3,150,965)                             |  | -                                    
|Gain on legal settlement                               | -                                       |  | -                                    
|Gain on conversion of notes                            | 242,838                                 |  | 396,813                              
|Redemption premium and penalties                       | (47,838)                                |  | -                                    
|Other income (expense)                                 | 702                                     |  | 2,480                                
|Total other income and (expenses)                      | (3,058,044)                             |  | (108,718)                            
|Minority interest                                      | 1,438                                   |  | -                                    
|                                                       |                                         |  |                                      
|NET LOSS                                               | (3,961,534)                             |  | (654,295)                            
|DIVIDEND REQUIREMENT OF
	PREFERRED STOCK               | (13,500)                                |  | (13,500)                             
|NET LOSS
	APPLICABLE TO COMMON SHAREHOLDERS            | (3,975,034)                             |  | (667,795)                            
|OTHER COMPREHENSIVE
	(LOSS)/GAIN                       |                                         |  |                                      
|Unrealized gain (loss) on marketable securities        | (356,750)                               |  | 346,909                              
|COMPREHENSIVE GAIN (LOSS)                              | $ (4,331,784)                           |  | $  (320,886)                         
|                                                       |                                         |  |                                      
|NET LOSS PER
	SHARE - BASIC AND DILUTED:               | $         
	(0.04)                      |  | $        (0.02)                      
|                                                       |                                         |  |                                      
|Weighted average number
	of shares outstanding -       |                                         |  |                                      
|basic and diluted                                      | 89,323,367                              |  | 38,613,718                           
|                                                       |                                         |  |                                      

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

---

PROVIDENTIAL HOLDINGS,
INC. AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF CASH FLOWS

(UNAUDITED)



|                                                       | For the Six Months Ended December 31,
|------------------------------------------------------ | -------------------------------------
|                                                       | 2003                                 
|CASH FLOWS FROM OPERATING ACTIVITIES                   |                                      
|Net loss from continuing operations                    | $    
	(809,473)                     
|Adjustments
    to reconcile net loss to net cash      |                                      
|used in operating activities:                          |                                      
|Depreciation                                           | 14,161                               
|Gain on legal settlement                               | -                                    
|Shares issued for legal settlement                     | 66,600                               
|Amortization of deferred revenue                       | -                                    
|Amortization of prepaid consulting fees                | 405,000                              
|Securities received for consulting services            | (4,440,000)                          
|Shares issued for consulting services                  | 1,177,301                            
|Gain on settlement of debts                            | (320,309)                            
|Loss on marketable securities                          | -                                    
|Shares issued for distribution agreement               | 24,388                               
|Shares issued for interest on convertible note         | 355,236                              
|Beneficial conversion and registration penalty         | 47,363                               
|Minority interest in subsidiary                        | (1,438)                              
|Impairment of goodwill                                 | 3,150,965                            
|Changes in operating assets and liabilities:           |                                      
|Increase in accounts receivable                        | (1,774,360)                          
|(Increase) decrease in other assets                    | (388,848)                            
|Increase
	in accounts payable                          | 1,572,322                            
|Increase (decrease) in accrued expenses                | (162,950)                            
|Increase in unearned tuition                           | 25,092                               
|Increase in other liabilities                          | -                                    
|NET CASH USED IN OPERATING ACTIVITIES                  | (1,058,950)                          
|                                                       |                                      
|CASH FLOWS FROM INVESTING ACTIVITIES:                  |                                      
|Purchase
	of fixed assets                              | (2,643)                              
|Purchase
	of marketable securities                     | (125,050)                            
|NET CASH USED IN INVESTING ACTIVITIES                  | (127,693)                            
|                                                       |                                      
|CASH FLOWS FROM FINANCING ACTIVITIES                   |                                      
|Proceeds from sale of common stock                     | -                                    
|Proceeds from the exercise of stock options            | 801,791                              
|Borrowings on notes payable                            | 720,546                              
|Payments on notes payable                              | (238,884)                            
|Borrowings from officer                                | 175,125                              
|Payments on
    advances from officer                  | (94,820)                             
|NET CASH PROVIDED BY FINANCING ACTIVITIES              | 1,363,758                            
|                                                       |                                      
|NET INCREASE IN CASH
	& CASH EQUIVALENTS               | 177,115                              
|                                                       |                                      
|Cash and cash
	equivalents, beginning of period        | 132,203                              
|                                                       |                                      
|Cash and cash
	equivalents, end of period              | $     309,318                        
|                                                       |                                      
|SUPPLEMENTARY DISCLOSURES
    OF CASH FLOW INFORMATION |                                      
|Cash paid
    during the period for:                   |                                      
|Interest                                               | $      68,040                        
|Taxes                                                  | $               
	-                  
|                                                       |                                      
|Non-cash Financing
	Activities:                        |                                      
|Shares issued for payment of notes                     | $       25,000                       
|Shares issued for debt conversion                      | $     313,287                        
|Shares issued for interest                             | $     355,239                        
|Shares issued for services                             | $  1,177,301                         
|Shares issued for distribution agreement               | $       24,388                       
|Shares issued for acquisition of subsidiaries          | $     594,438                        
|Shares issued for legal settlement                     | $       66,600                       
|                                                       |                                      

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

---























PROVIDENTIAL HOLDINGS, INC.

NOTES TO UNAUDITED 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 JR Consulting entered into a corporate combination agreement (the
"Agreement") with Providential Securities, whereby JR Consulting acquired all the outstanding
shares of Providential Securities in exchange for 20,000,000 shares of JR Consulting (then
renamed Providential) common stock.  The transaction was consummated on January 14, 2000.
In addition, as a covenant under the Agreement, Providential was required to enter into an
agreement to sell to Havilland Limited all of the shares of Diva owned by Providential as well as
to assign all of its rights, title and interest in an Option Agreement to Havilland Limited. JR
Consulting'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 Providential'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 Securities was the accounting acquirer and the historical financial statements prior to January 14, 2000 were
those of Providential Securities. In the accompanying financial statements, the capital structure
and losses per share of Providential Securities have been retroactively restated to reflect the
acquisition as if it occurred at the beginning of the period. The operations of Providential 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 Providential 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
Providential to officers of the Company amounting to $617,781, the amounts due to Providential
from Diva amounting to $94,843 and the return of 135,000 shares of common stock of
Providential owned by Havilland.

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.

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 quarter ended December 31, 2003, Provimex generated
$41,182 in gross sales with $32,634 in cost of goods sold for a net gross profit of $8,548.

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.

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.á 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.á
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.á This agreement was rescinded on May 9, 2003.á The Company has received back
the 3,000,000 shares previously issued to Clear Pass and subsequently cancelled the shares and
the promissory note.á 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.á Providential Capital will focus its attention on the underserved segment of smaller
companies in the U.S. and abroad. Providential Capital has recently advised and managed merger
plan for Nettel Holdings, Inc. and Lexor Holdings, Inc.



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 the date of this report, Touchlink
Communications has not generated any revenues.

On November 21, 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
as part of its distributorship agreement with XOCECO (see Note 9).  During the month of
December, the subsidiary generated $1,673,610 in sales with a cost of goods sold of $1,504,882
for a net gross profit of $168,728.

On December 19, 2003, the entered into a Stock Purchase Agreement with Irvine College of
Medical Sciences, Inc., a California corporation, ("the College") to acquire 51% of the
College's common stock for an aggregate purchase price of $314,437.  This amount is to be
paid with $80,000 in cash and 1,116,369 shares of the Company's common stock.  As of the
date of this report, the common stock has not been issued and is reflected as common stock to be
issued in the accompanying financial statements.  The Company recorded a loss of $1,496
relating to the income generated by the subsidiary after the purchase by the Company.

MARKETABLE SECURITIES

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

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

Unrealized holding gains and losses for marketable securities are excluded from earnings and
reported as a separate component of stockholder's equity. Realized gains and losses for
securities classified as available-for-sale are reported in earnings based upon the adjusted cost of
the specific security sold. On December 31, 2003, the investments have been recorded at
$6,808,310 based upon the fair value of the marketable securities.

Marketable securities classified as available for sale consisted of the following as of December
31, 2003:





|Investee Name (Symbol) | Cost at Dec. 31, 2003 | Market Value at
    Dec. 31, 2003 | Accumulated Unrealized Gain (Loss) | Number of Shares Held at Dec. 31, 2003
|---------------------- | --------------------- | --------------------------------- | ---------------------------------- | --------------------------------------
|Jockey Club (JKCL)     | $         
    3,768  | $               
    15           | $         
    (3,753)             | 1,500                                 
|Tri Kal Int'l (TRIKF)  | 141,241               | 15                                | (141,226)                          | 15,165                                
|Nettel Holdings (NTTL) | 1,365,330             | 1,298,280                         | (67,050)                           | 2,250,000                             
|Lexor Holdings (LXRH)  | 4,565,050             | 5,510,000                         | 944,950                            | 1,900,000                             
|                       |                       |                                   |                                    |                                       
|                       | $  6,075,359          | $    6,808,310                    | $      732,921                     |                                       
|                       |                       |                                   |                                    |                                       











There were no sales of securities during the period ended December 31, 2003.

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

The accompanying Interim Condensed 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, 2003.  In
the opinion of management, all adjustments consisting of normal reoccurring accruals have been
made to the financial statements.  The results of operation for the six months ended December
31, 2003 are not necessarily indicative of the results to be expected for the fiscal year ending June
30, 2004.

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., ATC and College, collectively referred to as the
"Company". All significant inter-company transactions have been eliminated in consolidation.

RECLASSIFICATIONS

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

RECENT ACCOUNTING PRONOUNCEMENTS

On April 30, 2003, the FASB issued FASB Statement No. 149 (FAS 149), Amendment of
Statement 133 on Derivative Instruments and Hedging Activities. FAS 149 amends and clarifies
the accounting guidance on (1) derivative instruments (including certain derivative instruments
embedded in other contracts) and (2) hedging activities that fall within the scope of FASB
Statement No. 133 (FAS 133), Accounting for Derivative Instruments and Hedging Activities.
FAS 149 also amends certain other existing pronouncements, which will result in more consistent
reporting of contracts that are derivatives in their entirety or that contain embedded derivatives
that warrant separate accounting. FAS 149 is effective (1) for contracts entered into or modified
after June 30, 2003, with certain exceptions, and (2) for hedging relationships designated after
June 30, 2003. The guidance is to be applied prospectively. The adoption of SFAS 149 does not
have a material effect on the earnings or financial position of the Company.

On May 15, 2003, the Financial Accounting Standards Board (FASB) issued FASB Statement
No. 150 (FAS 150), Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity. FAS 150 changes the accounting for certain financial instruments that,
under previous guidance, could be classified as equity or "mezzanine" equity, by now requiring
those instruments to be classified as liabilities (or assets in some circumstances) in the statement
of financial position. Further, FAS 150 requires disclosure regarding the terms of those
instruments and settlement alternatives. FAS 150 affects an entity's classification of the following
freestanding instruments: a) Mandatorily redeemable instruments b) Financial instruments to
repurchase an entity's own equity instruments c) Financial instruments embodying obligations
that the issuer must or could choose to settle by issuing a variable number of its shares or other
equity instruments based solely on (i) a fixed monetary amount known at inception or (ii)
something other than changes in its own equity instruments d) FAS 150 does not apply to
features embedded in a financial instrument that is not a derivative in its entirety. The guidance in
FAS 150 is generally effective for all financial instruments entered into or modified after May 31,
2003, and is otherwise effective at the beginning of the first interim period beginning after June
15, 2003. For private companies, mandatorily redeemable financial instruments are subject to the
provisions of FAS 150 for the fiscal period beginning after December 15, 2003. The adoption of
SFAS 150 does not have a material effect on the earnings or financial position of the Company.

In December 2003, the Financial Accounting Standards Board (FASB) issued a revised
Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46R). FIN 46R addresses
consolidation by business enterprises of variable interest entities and significantly changes the
consolidation application of consolidation policies to variable interest entities and, thus improves
comparability between enterprises engaged in similar activities when those activities are
conducted through variable interest entities. The Company does not hold any variable interest
entities.

NOTE 2 - NASD EXAMINATION AND DISCONTINUANCE OF PROVIDENTIAL
SECURITIES, INC.

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

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

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

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



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

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



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



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



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

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



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

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

Providential shall be censured, fined $115,000.00 and shall offer rescission to those public
customers who participated in the Providential Private Placement. Providential shall provide
proof in form satisfactory to NASDR's District 2 staff of its offer of rescission to the customers
who participated in the Providential Private Placement. In addition, to the extent the offer of
rescission is accepted by any investors, Providential is ordered to provide proof of payment of the
restitution in a form satisfactory to the District 2 NASDR staff, no later than 120 days after
acceptance of the Letter of Acceptance, Waiver and Consent.  Henry Fahman shall be banned, in
all capacities, from associating with any NASD member.

Based upon the above-mentioned circumstances, Providential Securities, Inc. withdrew its
membership from the NASD in October 2000 and ceased its securities brokerage operation.  The
fine of $115,000 is included in accrued expenses in the accompanying consolidated financial
statements.  The Company has offered all Preferred Stock holders rescission on their investment.
As of the date of this report the Company has redeemed $65,000 of the preferred stock plus
accrued interest. The balance of unredeemed preferred shares has been reclassified as a current
liability from the stockholder's deficit section on the accompanying consolidated financial
statements.

NOTE 3 - LOANS AND PROMISSORY NOTES

CONVERTIBLE PROMISSORY NOTES

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

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.
Re-pricing warrants have also been issued in contemporaneous amounts, such that any decrease
in the trading price of the stock will entitle 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 are 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.

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 have 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 have the right to the 2% penalty and repayment in cash.  The Company
has not paid these notes as of the date of this report and will also owe the note holders the 12%
default rate and the 20% redemption premium noted above.

During the six months ended December 31, 2003, $665,000 of the notes and accrued interest and
other fees of $394,599, totaling $1,059,599 were converted to 10,813,043 shares of common
stock.  The market value of the stock issued for the conversion was calculated and the gain of
$320,309 resulted from this note conversion was recorded as other income.  During the period
ended December 31, 2003, an additional 536,636 shares of Company's common stock were
issued to exercise the re-pricing warrants relating to the notes converted above.

As of December 31, 2003, total amount due on these notes amounted to $435,000. These notes
have been classified as current liabilities in the accompanying financial statements.

PROMISSORY NOTES:

As of December 31, 2003, the Company has notes payable to International Mercantile Holding
amounting $196,111. The notes are due in the year ended June 30, 2006. The Notes carries an
interest rate equal to Labor plus 1%.

As of December 31, 2003, the Company has notes payable amounting $4,365 against acquisition
of an automobile. The note is secured by the auto, carry interest rate of 8.5%. The entire note is
due by December 31, 2004.

The Company has a note payable to a financial institution amounting $125,000. The note bears
an interest rate of 8% and is past due.

Following is the maturity schedule of notes payable:

Year ended June 30











2004          $129,365





2005              -





2006          196,111



SHORT TERM NOTES PAYABLE:



As of December 31, 2003, the Company has short term notes payable amounting $2,494,605
plus accrued interest of $531,956 on these notes. The notes are due to various parties, payable in
the year ended June 30, 2004 and bear interest rate ranging from 6% to 20% per annum.  In
addition, the subsidiaries have $622,743 in short term notes payable for a consolidated total of
$3,117,348.

DUE TO PREFERRED STOCKHOLDERS AND OTHER CURRENT LIABILITIES:

The Company has classified $450,000 of preferred stock subscribed as a current liability payable
to holders of preferred stock due to non compliance of preferred shares subscription agreement.

The dividend amount payable to holders of preferred stock amounting $192,055 at December 31,
2003 has been classified as other current liabilities.

In addition, the subsidiaries have other liabilities consisting of deferred income taxes and
unearned tuition fees in the amount of $73,093.

NOTE 4 - DUE TO OFFICER

Due to officer, represents advances made by an officer of the Company, which are non-interest
bearing, unsecured and due on demand.  As of December 31, 2003, the total amount due to
officer was $385,871.

NOTE 5 - LITIGATION

LEGAL PROCEEDINGS SETTLED AND UNPAID AS OF DECEMBER 31, 2003:

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 $75,000.00 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 $62,500.00 plus $4,500.00 in administrative costs. As the date of this report,
the Company has paid $8,000 and has accrued $84,000 in the accompanying consolidated
financial statements.

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

In September 1997 Providential Securities, Inc. entered into a written Lease Agreement to lease
certain items of equipment from Green Tree Vendor Services, in return for which Providential
Securities, Inc. agreed to pay thirty-six monthly installments, each in the amount of $1,552.01.
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 $39,102.50 plus interest thereon at the legal rate
from September 12, 2000. The claimant entered a judgment against Providential Securities, Inc.,
Henry Fahman and Tina Phan for $48,933. The judgment amount has been accrued in the
accompanying consolidated financial statements.

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

On or about November 20, 1997, Nara Bank, N.A. and Providential Securities, Inc. entered into
a Written Lease Agreement ("Agreement") wherein Nara Bank, N.A. agreed to lease certain
computer equipment to Providential Securities, Inc. Thereafter, the Agreement was assigned
from Nara Bank, N.A. to Claimant's Assignor Oak Financial Services. Thereafter, the Agreement
was assigned from Claimant's Assignor to Claimant. Pursuant to the terms of the Agreement,
Providential Securities, Inc. agreed to pay Nara Bank, N.A. the sum of $1,187.40 per month for
sixty months. On or about September 15, 2000, and subsequently, Providential Securities, Inc.
was unable to make the monthly payments to Claimant due to the lack of revenues following the
interruption and subsequent closure of its securities brokerage operations.  (See Note 15)
Claimant filed a complaint for money with the Superior Court of the State of California, County
of Orange (Case No. 01CC07697) on June 14, 2001 seeking $30,873.40 plus interest thereon at
the rate of ten percent (10%) per annum from September 15, 2000. This case was settled on
December 17, 2001. However, since Providential Securities, Inc. was unable to pay the
settlement amount, Claimant entered a judgment for $79,681 on January 23, 2002. Subsequently,
$12,000 was paid by Mr. Fahman. The unpaid judgment amount of $71,417 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 $11,609.11 plus 12% interest and emotional distress damages in
excess of $50,000.00 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, which 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
$9,973.10 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 $9,973.10 (excluding interest) has
been accrued in Accrued Expenses in the accompanying consolidated financial statements.

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 $500,000.00 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.
Defendants are seeking a dismissal of the case and may cross-claim against the appropriate
former management of JR Consulting, Inc. The sought amount of $490,898 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 $9,073.64 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. The
other law firm completed the SB-2 Registration Statement and filed with the SEC on 9/28/2000.
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. There has been no further communication between Mark Tow and
the Company since June 2001.



NOTE 6 - BASIC AND DILUTED NET LOSS PER SHARE

Net loss per share is calculated in accordance with SFAS No. 128, "Earnings per Share".  Under
the provision of SFAS No. 128, basic net loss per share is computed by dividing the net loss for
the period by the weighted-average number of common shares outstanding for the period.
Diluted EPS is based on the weighted-average number of shares of common stock outstanding
for the period and common stock equivalents outstanding at the end of the period.

NOTE 7 - STOCKHOLDER'S EQUITY

COMMON STOCK

During the six months ended December 31, 2003, the Company issued 21,587,194 shares of
common stock for services and salaries amounting $1,177,301.

During the six months ended December 31, 2003, the Company received cash of $357,991 for
5,100,000 shares of stock options exercised ranging between $0.07 and $0.20 per share.

During the six months ended December 31, 2003, 536,636 shares of Company's common stock
were issued to exercise the re-pricing warrants for the notes converted during the period.

During the six months ended December 31, 2003, $665,000 of the notes and accrued interest and
other fees of $394,599, totaling $1,581,870 were converted to 10,813,043 shares of common
stock.  A gain of $320,309 resulted from these note conversions, which is included in other
income in the accompanying financial statements.

During the six months ended December 31, 2003, 500,000 shares of the Company's common
stock were issued as payment on short-term notes payable valued at $25,000.  In addition,
200,000 shares were issued for interest valued at $8,000.

During the six months ended December 31, 2003, the Company issued 375,000 shares of the
Company's common stock valued at $66,600 for litigation settlement.

In September 2003, the Company signed a letter of intent with Xiamen Overseas Chinese
Electronic Co., Ltd to enter into a distribution agreement.  As part of this agreement, 461,391
shares of the Company's common stock valued at $24,388 were issued.

The Company received $443,800 as payment against the subscription receivable for the exercise
of stock options.

In September 2003, the Company cancelled 3,000,000 shares previously issued to Clear Pass Inc.
as the agreements were terminated during the year ended June 30, 2003.

During the six months ended December 31, 2003, the Company acquired two subsidiaries.
4,000,000 shares of the Company's common stock valued at $360,000 were issued to ATC.
1,116,369 shares of the Company's common stock valued at $234,437 are to be issued to Irvine
College of Medical Sciences.  As of the date of this report, these shares have not been issued and
are included in "Shares to Be Issued" on the accompanying financial statements.

PREPAID CONSULTING

On April 15, 2002, the Company signed an agreement an un-related third party for consulting
service. The consultant will consult the Company in identifying, locating and acquiring various
business opportunities for the Company for a period of two years through April 15, 2004. The
Company issued 3,000,000 shares of common stock to the consultant valued at $1,620,000 based
upon market value of the stock at the time of consummation of the agreement. The Company has
recorded the shares issued to the consultant as prepaid fees.

The Company is amortizing these prepaid consulting fees over the life of the contract.  During the
six months ended December 31, 2003 amortization expense was $405,000.  The balance of the
prepaid consulting fees at December 31, 2003 is $186,189.

NOTE 8 - STOCK-BASED COMPENSATION PLAN

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

As of December 31, 2003, the Company has 1,000,000 in stock options outstanding which were
granted during the six month period ended December 31, 2003.

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 and has made the applicable disclosures below. During the period
ended December 31,2003, the Company granted 6,100,000 options, out of which, 5,100,000
options have been exercised as of December 31, 2003.

Had the Company determined employee stock-based compensation cost based upon the fair value
at the grant date consistent with Statement of Financial Accounting Standards No. 123 (SFAS
No. 123), "Accounting for Stock-Based Compensation," the Company's net loss and loss per
share as of December 31, 2003 would have been as follows ($ in thousands, except per share
amounts):



Net loss  as reported                                                         
$(782)





Stock-based employee
compensation





expense included in
reported net





income, net of
tax                                                                    -











Total stock-based
employee/consultant





compensation expense
determined





under
fair-value-based method for





all rewards, net of
tax (166)

















Net income- pro
forma $(948)











Profit per
share:





Basic, as
reported                                                            0.01





Diluted,
as reported                                                         0.01





Basic,
pro forma                                                               0.01





Diluted,
pro forma                                                            0.01







NOTE 9 - CONTRACTS AND COMMITMENTS

JOINT VENTURE AGREEMENT WITH MIMI BAN

On November 27, 2001 but effective November 23, 2001, the Company signed a joint venture
agreement with Mimi Ban, an individual, whereby Mimi Ban would transfer the liquid crystal
display (LCD) technologies to Providential for the purpose of setting up and operating one or
more LCD manufacturing plants in Vietnam. According to the joint venture agreement, Mimi
Ban will share 30%, Providential Holdings, Inc. will share 60% and other business partners and
investors, including HTV Co., Ltd., will share 10% of the net profits that will be generated from
any and all LCD plant(s) that will be established in Vietnam and elsewhere as a result of this
agreement. This joint venture agreement supersedes all prior agreements, arrangements and
covenants, including but not limited to the Joint Venture Agreement between Boxo, Inc. and the
Company dated January 4, 2001 and the Letter of Intent between Boxo, Inc. and the Company
dated December 20, 2000 and any amendment thereof. As of the date of this report there have
been no manufacturing plants operating or has been set-up. Due to the lack of funding, the Joint
Venture Agreement between HTV CO, Ltd and the Company was rescinded on May 19, 2003.

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

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

CHU LAI INDUSTRIAL ZONE, QUANG NAM PROVINCE, VIETNAM



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



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 period ended December 31, 2003, the revenue from this division was
$41,182.

In December 2001, Provimex signed an agreement with Ky Ha Chu Lai Development and
Investment Company, ("CDI") to supply certain consumer and industrial goods to CDI.  In
March 2003, Provimex signed an amendment to this contract to supply an estimated annual
amount of $70 million of consumer and industrial goods to CDI.  As of the date of this report
there have been no shipments under this contract.

AGREEMENT WITH LEXOR INTERNATIONAL, INC.AND RECORDING OF REVENUE
OF $4,440,000

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

On September 26, 2003, Providential Capital, a wholly-owned DBA of the Company, entered
into a new agreement to provide merger and acquisition consulting services to Lexor
International, Inc., a Maryland corporation, and to assist Lexor in its business combination plan
with Western Silver-Lead Corp, a Florida corporation. On September 29, 2003, Western
Silver-Lead Corp. signed a definitive agreement to acquire 100% of Lexor in exchange for stock
in Western Silver-Plead Corp. This transaction was closed on September 29, 2003 and Western
Silver-Lead Corp's corporate name was changed to Lexor Holdings, Inc., a Florida corporation.
According to the consulting agreement, Providential Capital was entitled to 1,500,000 shares of common stock of Lexor Holdings, Inc. (approximately 10% of the issued and outstanding shares) as compensation for its advisory and consulting services. The stock was valued at $4,440,000 or $2.90 per share.  This amount has
been included as consulting and advisory income in the accompanying financial statements.  The
stock was received by the Company on October 31, 2003.

AGREEMENTS WITH NETTEL GLOBAL COMMUNICATION CORP.

On December 3, 2002, the Company entered into a Stock Purchase Agreement with Nettel
Global Communication Corp. ("Nettel"), a Delaware corporation, whereby the Company would
acquire 46.5% of the common stock of Nettel in exchange for a total of $2,500,000 in
non-interest bearing notes, $500,000 of which would be due 60 days after the closing of the
transaction and $2,000,000 would be due in 90 days after closing.  On January 17, 2003, an
Amendment to Stock Purchase Agreement was entered into between Nettel and the Company
which called for the $500,000 note to be due on April 15, 2003 and the $2,000,000 note to be
due on June 15, 2003.  The Company also agreed to pay Nettel a 2% penalty per month on any
unpaid balances of the notes for a maximum period of 60 days after the respective maturity dates.
The closing of the transaction occurred and became effective on January 17, 2003, at which time
the Company issued and delivered these notes to Nettel.  This agreement was rescinded on May
19, 2003.  As of June 30, 2003, the Company had paid $57,348 to Nettel and has written this
amount off as bad debt expense.

On May 19, 2003, the Company entered into an agreement to provide merger and acquisition
consulting services to Nettel and to assist Nettel in its business combination plans with a fully
reporting publicly-traded company.  As of June 30, 2003, the Company received 2,250,000
restricted common shares of Nettel, and recorded consulting income of $1,365,300 on this
transaction. During the period ended December 31, 2003, the Company did not recognize any
income in this regard

JOINT VENTURE WITH MINH HIEU COMPANY

On January 1, 2002 the Company entered into an agreement with Minh Hieu Joint Stock
Company of Ho Chi Minh City, Vietnam to form "Providential JVC," a joint venture company
under the laws of the Socialist Republic of Vietnam. According to the terms of the agreement, the
Company will contribute $140,000 to the initial required capital and own 70% of Providential
JVC while Minh Hieu Company will contribute $60,000 for 30% of the joint venture enterprise.
Providential JVC's main line of business includes industrial garments, packaging products and
accessories.  To date, no funds have been contributed towards the joint venture.

DISTRIBUTORSHIP AGREEMENT WITH XIAMEN OVERSEAS CHINESE ELECTRONICS
COMPANY

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.

STOCK PURCHASE AGREEMENT WITH ATC TECHNOLOGY CORPORATION

On August 23, 2002, the Company entered into a purchase agreement with ATC Technology
Corp., an Arizona corporation, to purchase all issued and outstanding shares of ATC Technology
Corp.

For consideration, the Company agreed to deliver $250,000 in promissory note, non-interest
bearing, payable 270 days after closing, and $250,000 in promissory note, non-interest bearing,
payable 18 months 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 $.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 $.30.

The initial scheduled closing date of September 12, 2002 was later re-scheduled to close on
October 6, 2003. However, both parties have agreed to reset the final closing date to October 17,
2003 due to the requirement for additional review of ATC's recent developments and the
agreement was consummated on this date.

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 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.  As of the
date of this report, the shares have not been issued.



OFFICE SPACE LEASE

The Company currently leases its office space from PAUB ENTERPRISES, LLC at $4,263 per
month.  This lease commenced on April 1, 2001 and expires on March 31, 2004.

EQUIPMENT LEASES

Providential Securities, Inc., a discontinued subsidiary of the Company, has been unable to make
all their monthly payments on other equipment leases due to the lack of revenues following the
interruption and subsequent closure of its securities brokerage operations. The Company is in
litigation with some of the equipment lessors and is negotiating additional payoffs with other
equipment lessors.



NOTE 10 - INVESTMENTS AND ACQUISITIONS

INVESTMENT IN CLEARPASS

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.
The Company invested $165,500 and $15,000 during the fiscal years ended June 30, 2003 and
2002. On May 9, 2003, the agreement with Clear Pass was rescinded and accordingly the balance
of the investment of $180,500 was written off as an impairment of asset.

INVESTMENT IN SLIMTECH

On April 30, 2002, the Company consummated an agreement to acquire 51% equity interest in
SlimTech, Inc., a Nevada corporation, in exchange for 3,000,000 shares of the Company's
restricted common stock. On May 6, 2003, the agreement was rescinded and the
shares were returned and cancelled, (see Note 1). As a result, the Company wrote
off its minority interest in the Company of $128,560 and cancelled the shares of
common stock, a gain from disposal of subsidiary in the amount of $248,560 was
recorded in the year ended June 30, 2003



INVESTMENT IN PROVIDENTIAL TECHNOLOGY, INC.

The Company purchased less than 10 percent of the outstanding shares of Providential
Technology, Inc., a California corporation.  This corporation was engaged in software
development for financial service providers. The Company provided the initial funding of
$165,000 for Providential Technology to develop a market-timing program and an online trading
platform for equities. These projects were discontinued in October 2000 due to lack of additional
funding.  This investment has been recorded at no value and any funds invested into this
corporation have been written off in the accompanying financials.

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.

On December 19, 2003, the entered into a Stock Purchase Agreement with Irvine College of
Medical Sciences, Inc., a California corporation, ("the College") to acquire 51% of the
College's common stock for an aggregate purchase price of $314,437.  This amount is to be
paid with $80,000 in cash and 1,116,369 shares of the Company's common stock.  As of the
date of this report, the common stock has not been issued and is reflected as common stock to be
issued in the accompanying financial statements.  The Company recorded a loss of $1,496
relating to the income generated by the subsidiary after the purchase by the Company.

The Company has accounted for above transactions under the purchase method of accounting for business combinations. The assets and liabilities of ATC and the College are
included in the consolidated balance sheet as of December 31, 2003 and Included in this statements of operations and cash flows from the date of acquisition through December 31, 2003.

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 $3,150,965. The Company determined
the value of goodwill at zero on December 31, 2003 and therefore, has recorded $3,150,965 as an
impairment of goodwill.

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

ATC:

Goodwill .........................................................  $  2,881

Current assets ...................................................     19

Non-current assets................................................           3

-----

Total assets......................................................      2,903

Less liabilities assumed..................................(2,043)

-----

Consideration paid...........................................$    860

=====

College:

Goodwill .........................................................  $    270

Current assets ...................................................       206

Non-current assets.............................................131

-----

Total assets......................................................   607

Less liabilities assumed...................................(293)

-----

Consideration paid.........................................$    314

=====

NOTE 11- GOING CONCERN UNCERTAINTY

As of December 31, 2003, the Company had a negative working capital of $2,127,884 and a
shareholder deficit of $2,230,000. Since the main operating subsidiary Providential Securities,
Inc. ceased its securities brokerage operations in October 2000, there has been no significant
revenue stream for the Company until the current fiscal year. The Company is in default of the
terms of convertible notes at December 31, 2003.  These factors, as well as the uncertain
conditions that the Company faces in its day-to-day operations, create an uncertainty as to the
Company's ability to continue as a going concern. The financial statements do not include any
adjustments that might be necessary should the Company be unable to continue as a going
concern.

Management has taken action to strengthen the Company's working capital position and generate
sufficient cash to meet its operating needs through June 30, 2004 and beyond. The Company also
anticipates generating more revenue through its proposed mergers and acquisitions. No
assurances can be made that management will be successful in achieving its plan.  The president
and chairman of the Company has committed to funding the Company's operations for the next
12 months.

NOTE 12- SUBSEQUENT EVENT

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.
The closing of the transaction contemplated by this agreement is scheduled for February 26,
2004, but there is no guarantee that it will be consummated on time.

---

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 clearinghouse 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.

CRITICAL ACCOUNTING POLICIES

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

Valuation of Long-Lived and Intangible Assets

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

Income Taxes

We recognize deferred tax assets and liabilities based on the differences between the financial
statement carrying amounts and the tax bases of assets and liabilities.  We regularly review our
deferred tax assets for recoverability and establish a valuation allowance based upon historical
losses, projected future taxable income and the expected timing of the reversals of existing
temporary differences.  As of July 31, 2003, we estimated the allowance on net deferred tax
assets to be one hundred percent of the net deferred tax assets.

RESULTS OF OPERATIONS

Six Months ended December 31, 2003 compared to Six Months ended December 31, 2002

Revenues

Total revenues were $6,829,049 and $73,352 for the six months ended December 31, 2003, and
2002, respectively.  Revenues for the current period consist of $4,440,000 in consulting fees and
$2,389,049 in sales and tuition compared to $11,552 consulting fees and $61,800 in sales for the
comparable period in the prior fiscal year.  The increase is due primarily in the completion of a
merger agreement the Company facilitated and the acquisition of several new subsidiaries.  Of
this amount, $2,347,867 in sales and tuition was generated by the subsidiaries.

General and Administrative

Total general and administrative expenses were $427,807 and $272,141 for the six months ended
December 31, 2003 and 2002, respectively.  The increase is primarily due to the increased
activity of the Company and the acquisition of the subsidiaries.  Professional services were
$1,635,292 and $531,247 for the comparable periods.  Included in this amount for the current
period is $646,320 for past services paid with common stock.  During the current six months the
Company paid salaries of $122,134 with the issuance of common stock and $22,500 in
director's fees, also paid with common stock.

Other Expenses

Interest expense was $271,527 and $405,723 for the six months ended December 31, 2003, and
2002, respectively.  This is primarily due to the conversion of $665,000 of notes during the
quarter.



During the six months ended December 31, 2003 the Company recorded a gain of conversion of
notes of $320,309 compared to $391,607 for the six months ended December 31, 2002.  In
addition, the Company recognized an expense of $47,363 in redemption premiums and
registration penalties related to the debt conversion during the current fiscal year.



Related to the acquisition of the subsidiaries, the Company recognized an impairment of assets of
$3,150,965 during the current fiscal quarter.  The value represents the difference of the
consideration paid by the Company and the net equity of the subsidiaries acquired.

Net Income (Loss)

Net loss for the six months ended December 31, 2003 was $782,473, compared to $1,034,054
for the same period in 2002, which is equivalent to ($0.01) per share versus ($0.03) per share,
respectively, based on the weighted average number of basic and diluted shares outstanding for
the pertinent quarters.  The difference is primarily attributed to the acquisition of several
subsidiaries in the current quarter and the impairment of assets.

Quarter ended December 31, 2003 compared to quarter ended December 31, 2002

Revenues

Total revenues were $2,389,049 and $30,843 for the quarter ended December 31, 2003, and
2002, respectively.  The increase is due primarily in the completion of a merger agreement the
Company facilitated and the acquisition of several new subsidiaries.  Of this amount, $2,347,867
in sales and tuition was generated by the subsidiaries.

General and Administrative

Total general and administrative expenses were $333,579 and $233,106 for the quarter ended
December 31, 2003 and 2002, respectively.  The increase is primarily due to the increased
activity of the Company and the acquisition of the subsidiaries.  Professional services were
$640,080 and $309,391 for the comparable periods.  During the current quarter the Company
paid salaries of $69,918 with the issuance of common stock.

Other Expenses

Interest expense was $103,256 and $207,167 for the quarter ended December 31, 2003, and
2002, respectively.  This is primarily due to the conversion of $665,000 of notes during the
quarter.

During the quarter ended December 31, 2003 the Company recorded a gain of conversion of
notes of $242,838 compared to $396,813 for the quarter ended December 31, 2002.  In addition,
the Company recognized an expense of $47,363 in redemption premiums and registration
penalties related to the debt conversion during the current fiscal quarter.



Related to the acquisition of the subsidiaries, the Company recognized an impairment of assets of
$3,150,965 during the current fiscal quarter.  The value represents the difference of the
consideration paid by the Company and the net equity of the subsidiaries acquired.



Net Income (Loss)

Net loss for the quarter ended December 31, 2003 was $3,961,534, compared to $654,295 for
the same period in 2002, which is equivalent to ($0.04) per share versus ($0.02) per share,
respectively, based on the weighted average number of basic and diluted shares outstanding for
the pertinent quarters.  The difference is primarily attributed to the acquisition of several
subsidiaries in the current quarter and the impairment of assets.

LIQUIDITY AND CAPITAL RESOURCES

The Company had consolidated cash and cash equivalents of $309,318 and $144,450 as of
December 31, 2003 and 2002, respectively.

The Company's operating activities used $976,471 and $151,591 in the six months ended
December 31, 2003 and 2002, respectively.  The difference is mainly attributable to the increase
in activities and acquisition of several subsidiaries during the current fiscal year.

Cash used by investing activities was $127,693 and $0 for the six months ended December 31,
2003 and September 30, 2002, respectively.  This was primarily due to the purchase of
marketable securities during the period.

Cash provided by financing activities was $1,281,278 and $291,328 for the six months ended
December 31, 2003 and 2002, respectively.  The increase is primarily due proceeds from the
exercise of stock options, borrowings on notes payable and advances from an officer.

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.  In addition, the Company also anticipates generating more revenue through
its proposed mergers and acquisitions.  No assurances can be made that management will be
successful in achieving its plan 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

Within the 90-day period prior to the filing of this report, the Company carried out an evaluation
of the effectiveness of the Company's disclosure controls and procedures (as defined by Rule
13a-14(c) under the Securities Exchange Act of 1934) under the supervision and with the
participation of the Company's chief executive officer and chief financial officer.  Based on and
as of the date of such evaluation, the aforementioned officers have concluded that the
Company's disclosure controls and procedures were effective.

The Company also maintains a system of internal accounting controls that is designed to provide
assurance that assets are safeguarded and that transactions are executed in accordance with
management's authorization and properly recorded.  This system is continually reviewed and is
augmented by written policies and procedures, the careful selection and training of qualified
personnel and an internal audit program to monitor its effectiveness.  During the first quarter of
fiscal year 2003, there were no significant changes to this system of internal controls or in other
factors that could significantly affect those controls.





































































































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























































31.1 - Rule 13a-14a/15d-14(a) Certification

32.1 - Section 1350 Certification











































































SIGNATURES













































































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













































































Date February 20, 2003                                                                                          
PROVIDENTIAL HOLDINGS, INC.













































































By: /s/ Henry Fahman

























Henry Fahman

























President and Chairman













































































By: /s/ Gene Bennett

























Gene Bennett

























Chief Financial Officer

---



























Exhibit 31.1





|Pursuant to the
		requirements of Rule 13a-14 of the Securities Exchange Act of 1934, as
		amended,  provides the following certification.
		     I, Henry Fahman, President and Chairman of
		Providential Holdings, Inc.
		("Company"), certify that:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.                                                                                                                                                                                                                                                     
|2.                                                                                                                                                                                                                                                     
|3.                                                                                                                                                                                                                                                     
|4.                                                                                                                                                                                                                                                     
|5.                                                                                                                                                                                                                                                     

|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 Company's ability to record, process, summarize and
		report financial data; and
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|b. | Any fraud, whether
		or not material, that involves management or other employees who have a
		significant role in the Company's internal control over financial
		reporting; and                                                                                       
|  
|   |                                                                                                                                                                                                                                                                         

|Date: February
		20. 2004 | /s/ Henry
			Fahman                    
|------------------------- | ---------------------------------------
|                          | Henry
		Fahman,  President and Chairman
|                          |                                        





















































|Pursuant to the
		requirements of Rule 13a-14 of the Securities Exchange Act of 1934, as
		amended,  provides the following certification.
		     I, Gene Bennett, Chief Financial Officer of Providential Holdings, Inc.
		("Company"), certify that:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.                                                                                                                                                                                                                                                    
|2.                                                                                                                                                                                                                                                    
|3.                                                                                                                                                                                                                                                    
|4.                                                                                                                                                                                                                                                    
|5.                                                                                                                                                                                                                                                    

|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 Company's ability to record, process, summarize and
		report financial data; and
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|b. | Any fraud, whether
		or not material, that involves management or other employees who have a
		significant role in the Company's internal control over financial
		reporting; and                                                                                       
|  
|   |                                                                                                                                                                                                                                                                         

|Date: February
		20. 2004 | /s/ Gene
			Bennett                   
|------------------------- | --------------------------------------
|                          | Gene Bennett,  Chief Financial Officer
|                          |                                       















































































---



























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 of
Providential Holdings,
Inc. on Form 10-QSB for the quarter ending December 31, 2003, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Henry
Fahman, President and Chairman of the Company, certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that, to the best of my knowledge and belief: (1) the Report fully
complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and (2) the information contained in the Report fairly
presents, in all material respects, the financial condition and result of
operations of the Company.

/s/ Henry Fahaman

Henry Fahman

President and
Chairman

February 19, 2004



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 of
Providential Holdings,
Inc. on Form 10-QSB for the quarter ending December 31, 2003, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Gene
Bennett, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that, to the best of my knowledge and belief: (1) the Report fully
complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and (2) the information contained in the Report fairly
presents, in all material respects, the financial condition and result of
operations of the Company.

/s/ Gene Bennett

Gene Bennett

Chief Financial
Officer

February 19, 2004