UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM 10-KSB





[X]
      ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the year ended December 31, 2007[ 
      ] TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACTFor
      the transition period from __________to ___________Commission
      file number 333-140257





Phoenix
      International Ventures, Inc(Name
      of small business issuer in its charter)Nevada
            20-8018146(State
      or other jurisdiction of incorporation or organization)
            (I.R.S.
      Employer Identification No.)42
      Carry Way,
              Carson City NV 89706
            89706(Address
      of principal executive offices)
            (Zip
      Code)Issuer’s
      telephone number:  (775) 882
9700Securities
      registered under Section 12(b) of the Exchange Act:Title
      of each class
            Name
      of each exchange on which registeredNone
            NoneSecurities
      registered under Section 12(g) of the Exchange Act:Common Stock, par value
    $0.001(Title
      of class)




Check
whether the issuer is not required to file reports pursuant to Section 13 or
15(d) of the Exchange
Act               Yes
[ ]   No [X]





Check
whether the Issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act during the past 12 months (or for such
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
[   ]





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





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).   Yes
[   ]   No [X]





State
issuer’s revenue for its most recent fiscal
year.  $948,775





State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the average bid and asked price of such
common equity, as of a specified date within the past 60 days.


$4,650,165





State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of the latest practicable date. 7,746,143 shares of Common Shares as of
December 31, 2007





Transitional
Small Business Disclosure Format (Check One):  Yes:
[   ]     No: [X]






-1-


TABLE OF
CONTENTS








PagePART IItem
      1.
            Description of Business
            3Item
      1A.
            Risk Factors
            12Item
      2.
            Description of Property
            18Item
      3.
            Legal Proceedings
            19Item
      4.
            Submission of Matters to a Vote of Security
      Holders
            19PART IIItem
      5.
            Market for Common Equity, Related Stockholder Matters and Small
      Business Issuer Purchases of Equity Securities
            20Item
      6.
            Management’s Discussion and Analysis or Plan of
      Operation
            22Item
      7.
            Financial Statements
            28Item
      8.
            Changes In and Disagreements With Accountants on Accounting and
      Financial Disclosure
            45Item
      8A.
            Controls and Procedures
            46Item
      8B.
            Other Information
            46PART IIIItem
      9.
            Directors, Executive Officers, Promoters and Control Persons
      and Corporate Governance; Compliance With Section 16(a) of the Exchange
      Act
            47Item
      10.
            Executive Compensation
            49Item
      11.
            Security Ownership of Certain Beneficial Owners and Management
      and Related Stockholder Matters
            52Item
      12.
            Certain Relationships and Related Transactions, and Director
      Independence
            54Item
      13.
            Exhibits
            55Item
      14.
            Principal Accountant Fees and Services
            56








-2-


PART
I


Item 1.  Description of Business





Corporate
information





We were
incorporated on August 7, 2006 under the laws of the State of Nevada. Phoenix
Aerospace, Inc. was incorporated on April 18, 2003 under the laws of the State
of Nevada. The Company, Zahir Teja, and Phoenix Aerospace, Inc. had entered into
a Share Exchange Agreement dated as of December 1, 2006. Under the Share
Exchange Agreement, Mr. Teja, the sole owner and principal of Phoenix Aerospace,
Inc. exchanged all the issued and outstanding shares of Phoenix Aerospace, Inc.
common stock for 3,000,000 shares of the common stock of the Company. As a
result of this transaction, Phoenix Aerospace, Inc. became a wholly owned
subsidiary of the Company, and Mr. Teja became a principal stockholder of and
continued to be a principal of the Company. The effective date of this
transaction was January 1, 2007. The foregoing transaction has been treated for
accounting purposes as a “reverse merger.”





The
principal business reason for the share exchange was to establish a holding
company structure.  This structure, the Company believes, facilitates
future acquisitions and the opening up of new lines of business.  Of
course, there can be no assurance that the Company will make any such
acquisitions or open up any such new lines of business.





General





Phoenix
International Ventures, Inc. was formed to invest and develop business in the
fields of aerospace and defense. We, through our wholly owned subsidiary,
Phoenix Aerospace, Inc., manufacture, upgrade and remanufacture electrical,
hydraulic and mechanical support equipment primarily for the United States Air
Force and Navy and the United States defense-aerospace industry. Currently our
support equipment is used to maintain or operate various aircrafts or aircraft
systems, such as the F-22 fighter and F-16 fighter, which are in current
production; the P-3 surveillance plane and various other `legacy' aircraft which
are no longer in production.




Some of
the support equipment for a number of weapon systems in current production, as
well as `legacy' weapon systems are in need of overhaul or are obsolete and need
to be replaced. The Company remanufactures some of the existing support
equipment, and also manufactures new support equipment.  Frequently
new support equipment is often not available, has long delivery lead times, or
is very expensive to purchase. Upgrading and remanufacturing of existing support
equipment thus becomes an alternative. Our remanufacturing process for existing
support equipment is designed to respond to this market.





Our
remanufacturing process involves breaking down the support equipment for
analysis, replacing or refurbishing broken or defective components, rebuilding
the support equipment, and finally testing the support equipment so that it has
the same form, fit and function of the original support equipment in accordance
with the original manufacturer's specifications.   -3-





The
Military Market




The U.S.
military market which we contract with and seek to contract with includes two
branches of the U.S. military-the U.S. Air Force and the U.S. Navy-and a number
of contractors who have extensive business relationships with branches of the
U.S. military.




The U.S.
military market is largely dependent upon government budgets, particularly the
defense budget. The funding of government programs is subject to Congressional
appropriation. While U.S. defense contractors have benefited from an upward
trend in overall defense spending in the last few years, the ultimate size of
future defense budgets remains uncertain. Current indications are that the total
defense budget will increase over the next few years. However, Department of
Defense programs in which we participate, or in which we may seek to participate
in the future, must compete with other programs for consideration during our
nation's budget formulation and appropriation processes. Budget decisions made
in this environment may have long-term consequences for our size and structure
and that of the defense industry. While we believe that our programs are a high
priority for national defense, there remains the possibility that one or more of
our programs will be reduced, extended, or terminated. Reductions in our
existing programs, unless offset by other programs and opportunities, could
adversely affect our ability to grow our revenues and profitability. Although
multi-year contracts may be authorized in connection with major procurements,
Congress generally appropriates funds on a fiscal year basis even though a
program may be expected to continue for several years. Consequently, programs
are often only partially funded and additional funds are committed only as
Congress makes further appropriations.




The
U.S. Government and U.S. Defense Contractors Contracting Process





The
Company's U.S. government contracts are obtained through the Department of
Defense procurement process as governed by the Federal Acquisition Regulations
and related regulations and agency supplements, and are historically fixed-price
contracts. This means that the price is agreed upon before the contract is
awarded and we assume complete responsibility for any difference between
estimated and actual costs Subsequent to September 30, 2006, the Company has
entered into several cost plus contracts. This means that under the applicable
agreement, the Company is entitled to be reimbursed for its costs and is
entitled to be paid a fixed rate of return. What constitutes reimbursable costs
and the prescribed rate of return is ordinarily subject to
negotiation.




Under the
Truth in Negotiations Act of 1962 (the “Negotiations Act”), the U.S. government
has the right for three years after final payment on certain negotiated
contracts, subcontracts and modifications, to determine whether the Company
furnished the U.S. government with complete, accurate and current cost or
pricing data as defined by the Negotiations Act. If the Company fails to satisfy
this requirement, the U.S. government has the right to adjust a contract or
subcontract price by the amount of any overstatement as defined by the
Negotiations Act.




U.S.
government contracts permit the U.S. government to unilaterally terminate these
contracts at its convenience. In the event of such termination, we are entitled
to reimbursement for certain expenditures and overhead as provided for in
applicable U.S. government procurement regulations. Generally, this results in
the contractor being reasonably compensated for work actually done, but not for
anticipated profits. The U.S. government also may terminate contracts for cause
if the Company fails to perform in strict accordance with contract terms.
Termination of, or elimination of appropriation for, a significant government
contract could have a material adverse effect on our business, financial
condition and results of operations in subsequent periods. Similarly, U.S.
government contracts typically permit the U.S. government to change, alter or
modify the contract at its discretion. If the U.S. government were to exercise
this right, the Company could be entitled to reimbursement of all allowable and
allocable costs incurred in making the change plus a reasonable profit.   -4-





Depending
on the size, complexity, and duration of the particular agreement, the U.S.
government may either pay for the manufactured or remanufactured product upon
delivery and acceptance thereof or pay for the manufactured or remanufactured
product in installments upon the accomplishment of specified
milestones.





Ordinarily,
a prospective vendor looking to do business with the U.S. Department of Defense
or with U.S. defense contractors has to prepare the company to be ISO
(International Standard Organization) certified. This means that it has to have
proper written management procedures on all facets of its business including but
not limited to, quoting to a customer, receiving purchase orders, issuing
purchase orders, issuing work orders, tracking work orders, quality control for
incoming materials and outgoing finished goods and inspections and acceptance,
etc. and that the vendor is operating its business following these
procedures.





Once a
vendor has these management procedures in place, it has to engage the services
of an independent certified company that is qualified to audit these procedures
and confirm that the vendor is following them in its day-to-day operations. This
will result in a vendor being ISO certified. This certification does not mean
that the vendor has technical capabilities or the ability to perform on a
contract. This certification informs a potential customer that the company has
written procedures and that it follows them to conduct its day-to-day
business.





To obtain
this certification is burdensome and time consuming because the vendor has to
have a full complement of personnel in different departments who are able to
perform tasks per the written procedures; all the while no revenues are
generated. The Company has already received this certification in 2003, which
certification was recently renewed, effective April 26, 2007, for an additional
three year period.




Once a
vendor is ISO certified, a vendor is in a position to solicit business from a
defense contractor (customer), who frequently has its own quality assurance
program. Typically, for the first contract/purchase order, if the customer
decides it wants to procure goods and services from a vendor, then the customer
prior to issuing a contract/purchase order would schedule to send (generally at
its own expense), an inspector or team of inspectors to go to the vendor
facility and determine for itself, using its own criteria: the technical
capabilities, facilities, quality assurance procedures etc. Once satisfied, then
and only then they will issue a purchase order. This is done at the expense of
the customer and the customer will only spend money for this expense, if it
determines that the vendor has the possibility to supply goods and services that
is beneficial to the customer.





This
appraisal of the vendor by a customer prior to issuing a contract/purchase order
to the vendor gives the customer reasonable assurance that the goods and
services it is procuring from a vendor will be delivered to them in the manner
prescribed in the contract/purchase order.




Products
and Services




Our
support equipment is used to maintain or operate various aircrafts or aircraft
systems, such as the F-22 fighter and F16 fighter, each of which is in current
production and the P-3 surveillance plane and various other `legacy' aircraft
which are no longer in production.




We have
remanufactured or are currently remanufacturing (a) for the U.S. Navy, BR-61
electrical/electronic Test Sets, used to test aircraft environmental systems for
the P-3 surveillance plane, (b) for Lockheed Martin, MJ1A Weapons loaders
(multi-platform) for use by the U.S. Air Force, and (c) for Lockheed Martin,
A/M32A-95 Air Start Carts (multi-platform) for the U. S. Air Force's F-22
fighter.  With
respect to each of the previously described programs, we break down the support
equipment for analysis, replacing or refurbishing broken or defective
components, rebuilding the support equipment, and finally testing the support
equipment so that it has the same form, fit and function of the original support
equipment in accordance with the original manufacturer's specifications.   -5-




We are
currently manufacturing (a) for Northrop Grumman Corporation, new RST-184 Air
Start Carts (multi-platform), (b) for the U.S. Navy, new test set adaptors (Time
Domain Reflectometer Adaptors), and (c) for the U.S. Air Force, new Pitot
Adaptor Sets, used to check air speed systems.




On
occasion, the Company has been engaged by a branch of the U.S. military, to
perform a feasibility study for various different items of support equipment to
address obsolescence issues and recommend solutions to extend service life for
the item of support equipment analyzed. Once the recommended solution is
approved by the branch of the U.S. military, then the Company would be requested
to manufacture several units of each item as proof of concept.




One of
the outgrowths of such a study is the potential to be awarded a contract to
implement the study's recommendations.




Market
Opportunity and Strategy




Management
believes that the scope of the market opportunity for manufacturing and
remanufacturing/refurbishing support equipment for the U.S. military market is
viable. The viability of the business opportunity is supported by the following
market characteristics:




·
            the
      aging support equipment in the field at large;·
            the
      growing demand for U.S. military preparedness given the current global
      political climate;·
            the
      surge in defense spending from a little over $300 billion before the
      September 11, 2001 attacks on the United States to over $400 billion
      annually; and





·
            the
      U.S. military's insistence that defense contractors operate efficiently
      and timely to deliver the much needed military
  equipment.




It is
difficult to determine what portion of the above referenced defense spending
will be allocated to manufacturing, remanufacturing, and refurbishing of support
equipment. Moreover, there is no assurance that the previously set forth market
characteristics will not change. See additional discussion in Item 1A - “Risk
Factors”.




The
military market is currently dominated by major players such as Lockheed Martin
Corporation, Honeywell International Inc, Northrop Grumman Corporation, and DRS,
Inc. The Company has no intention to compete with these large defense
contractors, rather it seeks to establish approved contractor, licensing, and
teaming relationships with defense contractors such as Lockheed Martin and
Honeywell. Management believes that these contractual relationships, coupled
with the Company being designated a U.S. Navy and U.S. Air Force “Prime
Contractor” and a U.S. Navy Designated Repair Depot for certain support
equipment, will facilitate the Company's ability to successfully bid on and
timely complete contracts with branches of the U.S. military.




Customization




Customization
of our products is not a material aspect of our business.






-6-





Supply
and Manufacturing




The
Company's design, engineering and assembly facilities are located in its Carson
City, Nevada headquarters. These facilities comply with certain U.S. military
requirements necessary for the manufacture and assembly of products supplied to
it and the Company has qualified its facility in order to meet the quality
management and assurance standards (ISO-9001)/2000) of the International
Organization for Standardization.




In the
course of its remanufacturing process for a particular product, the Company must
obtain replacement parts for worn out or defective components. In this
circumstance, we may seek to purchase the replacement component from the
original manufacturer or a distributor. Except as described below, we are not
ordinarily a party to any formal written contract regarding the deliveries of
supplies and components or their fabrication. The Company usually purchases such
items pursuant to written purchase orders of both individual and blanket
variety. Blanket purchase orders usually entail the purchase of a larger amount
of items at fixed prices for delivery and payment on specific
dates.




The
Company relies on suppliers located in the United States and Europe. Certain
components used in its products are obtained from sole sources. We have
occasionally experienced delays in deliveries of components and may experience
similar problems in the future. In an attempt to minimize such problems when the
Company secures a contract, which involves parts that are generally more
difficult to obtain, the Company may obtain the parts and keep them in
inventory. However, any interruption, suspension or termination of component
deliveries from the Company's suppliers could have a material adverse effect on
its business.




Ordinarily,
the Company will not agree to remanufacture a particular support unit unless
Management believes that there are readily available sources of supply. Although
Management believes that in nearly every case alternate sources of supply can be
located, inevitably a certain amount of time would be required to find
substitutes. During any such interruption in supplies, the Company may have to
curtail the production and sale of the affected products for an indefinite
period.




The
Company entered into an arrangement with a defense equipment manufacturer in
October, 2003 concerning licensing such manufacturer's technical data in
connection with the repair/refurbishment of P-3 support equipment for sale to
the U.S. government. This agreement is a non-transferable, non-exclusive royalty
bearing license. Royalties related to sales of the support equipment are to be
paid by the Company to the particular licensor for a term of five years. The
respective parties' performance is subject to other terms, conditions and
restrictions, including, without limitation, the maintenance of certain quality
standards.




The
Company entered into a purchase agreement and related license and technical
assistance agreements dated June, 2005 with a defense equipment manufacturer
concerning the assembly and sale of a ground power unit comprised of a cart, a
control panel, a turbine engine, an electrical generator, and other components.
Under the agreement, the Company is the designated supplier of this ground power
unit for North America and for any other foreign military sales customer
requirements through North American defense contractors. The defense
manufacturer is required to provide kits comprised of specified components and
the Company procures certain other components of the ground power units. The
term of the agreement is three years subject to the Company's compliance with
various terms and conditions.




Warranty
and Customer Service




The
Company usually provides one-year warranties on all its products covering both
parts and labor although extended warranties may be purchased by customers. At
its option, the Company repairs or replaces products that are defective during
the warranty period if the proper usage and preventive maintenance procedures
have been followed by its customers. Repairs that are necessitated by misuse of
such products or are required beyond the warranty period are not covered by its
normal warranty.


-7-





In cases
of defective products, the customer typically returns them to the Company's
Carson City, Nevada facility. Its service personnel then replace or repair the
defective items and ship them back to the customer. Generally, all servicing is
done at the Company's plant, and it charges its customers a fee for those
service items that are not covered by warranty. Except for its extended
warranties, it does not offer its customers any formal written service
contracts.




Marketing
and Sales





The
Company markets its products and services through direct contact with officials
of branches of the U.S. military and officials of various major defense
contractors. In addition the Company promotes its products and services through
the dissemination of product literature to potential customers and the
attendance and exhibition at trade shows and seminars. The Company does not have
an internal sales force specifically dedicated to the sales and marketing of the
Company's products and services. The Company does not advertise in trade
periodicals. Management believes that most of the Company's sales leads are
generated by word-of-mouth referrals.





In the
military market, the sales cycle for the Company's products usually entails a
number of complicated steps and can take from six months to two years. The sales
cycle in the commercial markets is generally not as complex or time consuming,
but still may take as long as two years. Sales to the military and government
markets are greatly influenced by special budgetary and spending factors
pertinent to these organizations.





Customers





The
Company sells its products, directly or indirectly, primarily to the U.S.
military market and large aerospace and military contractors. The Company also
sells to various European customers.




The
following chart sets forth for the fiscal period indicated the names of the
Company's five largest customers and their respective percentages of the
Company's total sales




Name
            Fiscal
      Period
            %
      of Total SalesTwelve
      Months Ended:2007U.S.
      Navy
            
            35Northrop
      Grumman
            
            34MSI
      GMBH
            
            13U.S.
      Air Force
            
            8Camar
            
            42006Lockheed
      Martin
            
            36U.S.
      Air Force
            
            24Kellstrom
            
            11U.S.
      Navy
            
            10Honeywell
      Aerospace
            
            6




The loss
of any of these customers could have a material adverse impact on the Company's
business. -8-






Competition





The
Company competes in its market against other concerns, most of which are larger
and have greater financial, technical, marketing, distribution and other
resources than the Company. It competes on the basis of service, performance,
reliability, price, and deliveries.





The
Company encounters competition from Lockheed Martin Corporation, Boeing
Corporation, Honeywell Aerospace GmbH, United Technologies Corporation, Northrop
Grumman Corporation, and DRS, Inc. as well as from Engineered Support Systems,
Inc. and Logistical Support, Inc. See "Risk
Factors-Competition".




In the
military and government markets, the Company will often be engaged, directly or
indirectly, in the process of seeking competitive bid or negotiated contracts
with government departments and agencies. These government contracts are subject
to the Federal Acquisition Regulations with which the Company may have
difficulty complying. However, the Company is often one of only a few companies
whose products meet the required specifications designated by such
customers.





Management
believes that there are a number of barriers to entry into the military market.
A would-be entrant would ordinarily, first need to obtain ISO9000 or applicable
ISO certification. Then, customers in the U.S. defense industry and U.S.
government departments would then certify such entrant's facilities, technical
capabilities, and quality assurance program before such entrant can qualify to
do business. The startup costs, Management believes, to get certified and to
become an approved vendor are substantial. In addition, the would-be entrant
must become familiar with and be willing to accept the risks of the U.S.
government military procurement system. Management believes that the Company has
the following competitive advantages over would-be entrants into the U.S.
military markets. It is a:





            Lockheed
      Martin Aeronautics Company Licensee;
            Lockheed
      Martin Aeronautics Company approved vendor;
            Lockheed
      Martin Simulation, Training and Support approved
  vendor;





            Lockheed
      Martin Air Logistics Center approved vendor;
            U.S.
      Navy Prime Contractor;
            U.S.
      Navy Designated Depot Repair Center for Certain Support
      Equipment;





            U.S.
      Air Force Prime Contractor;
            Honeywell
      Aerospace GmbH approved vendor;
            Honeywell
      Aerospace GmbH Licensee;





            Northrop
      Grumman approved vendor;
            ISO
      9001/2000 Certified; and
            Experienced
      with the U.S. government contracting
process.


-9-




Backlog




As of
December 31, 2007, the Company's backlog was approximately $3,644,905 as
compared with a backlog of approximately $2,600,000 as of December 31, 2006.
Four customers accounted for approximately 23%, 18%, 16%, and 13% of such
backlog as of December 31, 2007. The Company presently expects to manufacture
and deliver most of the products in its backlog within the next 12
months.




Substantially
all the Company's backlog figures are based on written purchase orders or
contracts executed by the customer and involve product deliveries. All orders
are subject to cancellation. However, in that event, the Company is generally
entitled to reimbursement of its cost and negotiated profits; provided that such
contracts would have been profitable.




Research
and Development Activities




The
Company does not devote a material amount of time to separate research and
development activities.





Intellectual
Property





To date,
Company generated proprietary information and know-how are an important aspect
to the Company's commercial success. Although the Company does not have a
separate research and development department, the Company nevertheless obtains
important proprietary information and know-how in connection with the
fulfillment of its obligations under its agreements with the U.S government and
defense contractors. The Company has entered into two licensing arrangements
whereby the specified U.S. defense contractor has agreed to share its technical
data under licensing agreements concerning the sale of particular support
equipment to a branch of the U.S. military. The Company holds no patents or
copyrights and does not have trademark protection for the Phoenix International
Ventures or Phoenix Aerospace names. The Company requires each of its employees
to sign confidential information agreements. There can be no assurance that
others will not either develop independently the same or similar information or
obtain and use proprietary information used by the Company.




Management
believes that its products do not infringe the proprietary rights of third
parties. In this regard, the Company seeks to obtain representations and
warranties of non-infringement from persons with respect to whom the Company
enters into technical data licensing agreements. There can be no assurance,
however, that third parties will not assert infringement claims against it in
the future or be successful in asserting such claims.





Subsidiaries





The
Company has two wholly owned subsidiaries: Phoenix Aerospace, Inc., a Nevada
corporation, and Phoenix Europe Ventures, Ltd., an Israeli
corporation.




Government
Regulations and Contracts; Compliance with Government Regulation





Due to
the nature of the products designed, manufactured and sold by the Company for
military applications, it is subject to certain U.S. Department of Defense
regulations. In addition, commercial enterprises engaged primarily in supplying
equipment and services, directly or indirectly, to the United States government
are subject to special risks such as dependence on government appropriations,
termination without cause, contract renegotiation and competition for the
available Department of Defense business. The Company has no material Department
of Defense contracts that are subject to renegotiation in the foreseeable future
and is not aware of any proceeding to terminate material Department of Defense
contracts in which it may be indirectly involved. In addition, many of the
Company's contracts provide for customer rights to audit its cost records and
are subject to regulations providing for price reductions if inaccurate cost
information was submitted by the Company. -10-





Government
contracts governing the Company's products are often subject to termination,
negotiation or modification in the event of changes in the government's
requirements or budgetary constraints. A majority of the products sold by the
Company for government applications are sold to companies acting as contractors
or subcontractors and not directly to government entities. Agreements with such
contractors or subcontractors generally are not conditioned upon completion of
the contract by the prime contractor. To the extent that such contracts are so
conditioned, a failure of completion may have a material adverse effect on the
Company's business. Currently, it does not have any contracts so
conditioned.





The
contracts for sale of its products are generally fixed-priced contracts. This
means that the price is set in advance and generally may not be varied. Such
contracts require the Company to properly estimate its costs and other factors
prior to commitment in order to achieve profitability and compliance. The
Company's failure to do so may result in unreimbursable cost overruns, late
deliveries or other events of non-compliance.





Under
certain circumstances, the Company is also subject to certain U.S. State
Department and U.S. Department of Commerce requirements involving prior
clearance of foreign sales. Such export control laws and regulations either ban
the sale of certain equipment to specified countries or require U.S.
manufacturers and others to obtain necessary federal government approvals and
licenses prior to export. As a part of this process, the Company, in the event
it engages foreign distributors, would generally require such foreign
distributors to provide documents which indicate that the equipment is not being
transferred to, or used by, unauthorized parties abroad.





The
Company and its agents are also governed by the restrictions of the Foreign
Corrupt Practices Act of 1977, as amended, ("FCPA") which prohibits the promise
or payments of any money, remuneration or other items of value to foreign
government officials, public office holder, political parties and others with
regard to the obtaining or preserving commercial contracts or orders. The
Company has required its foreign distributors to comply with the requirements of
FCPA All these restrictions may hamper the Company in its marketing efforts
abroad.




The
Company's manufacturing operations are subject to various federal, state and
local laws, including those restricting or regulating the discharge of materials
into the environment, or otherwise relating to the protection of the
environment. The Company is not involved in any pending or threatened
proceedings which would require curtailment of, or otherwise restrict its
operations because of such regulations, and compliance with applicable
environmental laws has not had a material effect upon its capital expenditures,
financial condition or results of operations.





Management
believes that although compliance with applicable federal laws and regulations
involves certain additional procedures by the Company that would not otherwise
be required, such compliance has not generally inhibited or limited the
Company's ability to enter into material contracts.


Employees





As of
December 31, 2007, the Company had five full time employees, including two
officers, and also had three part time employees, including one officer. Five of
these employees were engaged in operations and three were engaged in
administration, marketing, and business development.





None of
its employees are covered by a collective bargaining agreement or are
represented by a labor union. The Company considers its relationship with its
employees to be satisfactory. -11-





The
design and manufacture of the Company's equipment requires substantial technical
capabilities in many disparate disciplines from engineering, mechanics and
electronics. While management believes that the capability and experience of its
technical employees compares favorably with other similar manufacturers, there
can be no assurance that it can retain existing employees or attract and hire
the highly capable technical employees necessary in the future on terms deemed
favorable to it, if at all.




Item1A.  Risk Factors





Investing in our common stock involves
a high degree of risk. Prospective investors should carefully consider the risks
described below, together with all of the other information included or referred
to in this Annual Report onForm 10-KSB, before purchasing shares of our
common stock. There are numerous and varied risks, known and unknown, that may
prevent us from achieving our goals. The risks described below are not the only
ones we will face. If any of these risks actually occurs, our business,
financial condition or results of operation may be materially adversely
affected. In such case, the trading price of our common stock could decline and
investors in our common stock could lose all or part of their
investment.





Risks
Related To Our Business





The Company has a limited operating
history.





The
Company is recently organized and the Company's principal operating subsidiary,
founded in April, 2003, has only a limited operating history upon which an
evaluation of the Company and its prospects can be based. The Company's
prospects for financial success must be considered in light of the risks,
expenses and difficulties frequently encountered by companies in highly
competitive and evolving markets, such as the defense-aerospace industry
market.





The
Company has incurred losses and has a working capital deficit.





For the
fiscal year ended December 31, 2007, Phoenix International Ventures , Inc.
("PIV") incurred a loss of $1,221,539 and for the fiscal year ended December 31,
2006, Phoenix Aerospace, Inc incurred a loss of $131,017.  As of
December 31, 2007, PIV had a working capital deficit of $1,855,493 and an
accumulated stockholders' deficit of $3,286,370.  The Company's
working capital needs have been met by the cash flow from operations, private
placements, salary deferral by Company principals, and loans.





We may fail to continue as a going
concern, in which event you may lose your entire investment in our
shares.





Our
audited financial statements have been prepared on the assumption that we will
continue as a going concern. Our independent registered public accountants have
indicated that in their respective reports relative to PIV’s financial
statements as of December 31, 2007 that (a) as discussed in Note 3 to its
financial statements, PIV has working capital and stockholder deficits. These
factors raise substantial doubt about the Company's ability to continue as a
going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.





The Company may be unable to manage
its growth or implement its business strategy.





Although
the Company has experienced significant growth in a relatively short period of
time, it cannot assure you that the growth the Company has experienced will
continue, nor can the Company assure you that it will be able to expand its
facilities, its client base and markets or implement the other features of the
Company's business strategy at the rate or to the extent presently planned. The
Company's rapid growth to date has placed, and in the future will continue to
place, a significant strain on its administrative, operational and financial
resources. -12-




Our
ability to generate revenue is dependent upon our success in obtaining awards
for a very narrow category of contracts.




Our
ability to generate all of our revenues is dependent upon our success in
obtaining awards for a very narrow category of aerospace and defense contracts.
If we are not successful in receiving contracts from the U.S. government and/or
U.S. defense industry contractors for any reason, including our failure to meet
eligibility requirements, competition, our failure to perform under prior
contracts, and/or changes in government and/or defense industry contracting
policies, we would not generate sufficient revenue to continue in
business.




In
addition to the foregoing, we are subject to the following risks in connection
with government contracts:




The frequent need to
      bid on programs prior to completing the necessary design, which may result
      in unforeseen technological difficulties and/or cost
overruns;The difficulty in
      forecasting long-term costs and schedules and the potential obsolescence
      of products related to long term fixed-price contracts;The risk of
      fluctuations or a decline in government expenditure due to any changes in
      the US Department of Defense budget or appropriation of
funds;When the Company
      acts as a subcontractor, the failure or inability of the primary
      contractor to perform its price contract may result in an inability to
      obtain payment of fees and contract costs;Restriction or
      potential prohibition on the export of products based on licensing
      requirements; andGovernment contract
      awards can be contested by other contractors.


We
are dependent on major customers.





The
Company's business is also substantially dependent on a relatively small number
of customers and United States Department of Defense programs. In the twelve
months ended December 31, 2007, the Company's five largest customers in terms of
sales, U.S. Navy (23%), GeCon (18%), U.S. Air Force (16%), MSI (13%), Kellstrom
(11%) and Northrop Grumman (9%), accounted for an aggregate of 90% of total
Company sales. The loss of any of the foregoing businesses as a customer could
have a material adverse effect on the Company's results of operations or
financial condition. In fiscal year 2007, Company's five largest customers in
terms of sales, U.S. Navy (35%), Northrop Grumman (34%),MSI (13%), U.S. Air
Force (8%), and Camar (4%) accounted for an aggregate of 94% of total Company
sales -13-





As of
December 31, 2007, the Company's backlog was approximately $3,644,905 as
compared with backlog of approximately $2,600,000 as of December 31, 2006. Four
customers accounted for approximately 23%, 18%, 16%, and 13% of such backlog as
of December 31, 2007. The Company presently expects to manufacture and deliver
most of the products in backlog within the next 12 months. The loss or
diminution of orders from any large customer or group of customers could have a
substantial adverse effect on the Company's business and prospects. See
"Description of Business-Backlog".





Demand
for our defense-related products depends on government spending.





The U.S.
military market is largely dependent upon government budgets, particularly the
defense budget. The funding of government programs is subject to Congressional
appropriation. Although multi-year contracts may be authorized in connection
with major procurements, Congress generally appropriates funds on a fiscal year
basis even though a program may be expected to continue for several years.
Consequently, programs are often only partially funded and additional funds are
committed only as Congress makes further appropriations. We cannot assure you
that an increase in defense spending will be allocated to programs that would
benefit our business. A decrease in levels of defense spending or the
government's termination of, or failure to fully fund, one or more of the
contracts for the programs in which we participate could have a material adverse
effect on our financial position and results of operations.









The risk
that governmental purchases of products may decline stems from the nature of the
Company's business with the U.S. government, in which the U.S. government
may:




·
            terminate
      contracts at its convenience;·
            terminate,
      reduce or modify contracts or subcontracts if its requirements or
      budgetary constraints change;·
            cancel
      multi-year contracts and related orders if funds become
      unavailable;·
            shift
      its spending priorities;·
            adjust
      contract costs and fees on the basis of audits done by its agencies;
      and·
            inquire
      about and investigate business practices and audit compliance with
      applicable rules and regulations.




Our
failure to obtain and maintain required certifications could impair our ability
to bid on aerospace and defense contracts.





We are
required to maintain quality certification and to meet production standards in
order to be eligible to bid on government contracts. If we fail to maintain
these certifications or any additional certification which may be required, we
will be ineligible to bid for contracts which would impair our ability to
continue in business. -14-





Because
many of our contracts provide for a fixed price, our failure to accurately
estimate costs could result in losses on the contracts.





In
bidding on fixed price contracts, we must accurately estimate the cost of
performance. To the extent that our costs exceed our estimate, we will lose
money on the contracts. Such cost overruns could result from a number of factors
including increases in costs of materials, an underestimation of the amount of
labor required and design or production problems.





To
the extent that we subcontract work under our contracts, any failures by our
subcontractors could impair our relations with the contracting
agencies.





We
frequently use subcontractors to perform work or provide materials for our
contracts. We are dependent upon the subcontractors to meet the quality and
delivery requirements of the contracting agency. To the extent that the products
or services provided by the subcontractors do not meet the required
specifications or are delivered late, the contract may be terminated by the U.S.
government for default. Such a default could result in our disqualification from
bidding on contracts.




Product
malfunctions or breakdowns could expose us to liability, particularly in
connection with our remanufacturing of obsolete and old support
equipment.





The risk
that the Company's support equipment may malfunction and cause loss of man
hours, damage to, or destruction of, equipment or delays is significant.
Consequently, the Company, as a manufacturer or remanufacturer of such support
equipment, may be subject to claims if such malfunctions or breakdowns occur. In
remanufacturing activities, the Company deals with obsolete and old equipment
which increases the chance of product malfunctions or breakdowns. The Company
does not presently maintain product liability insurance. The Company is not
aware of any past or present claims against it.





Our
inability to attract and retain qualified engineering personnel could impair our
ability to continue our business.





Our
business is dependent upon our engaging and retaining engineering personnel with
experience in the aerospace and defense industries. To the extent that we are
unable to hire and retain these engineers, our ability to bid on and perform
contracts will be impaired.





We
rely on our senior executive officer, the loss of whom would materially impair
our operations.





We are
dependent upon the continued employment of certain key employees, including our
President and Chief Executive Officer, Zahir Teja. We have entered into an
employment agreement with Mr. Teja; however, the agreement does not assure us
that he will continue to work for us since he may terminate his employment
agreement on 90 days' notice. The loss of Mr. Teja would materially impair our
operations.





Because
of our small size and our relative lack of capital, we may have difficulty
competing for business.





We
compete for contract awards directly with a number of large and small domestic
and foreign defense contractors, including some of the largest national and
international defense companies, as well as a large number of smaller companies.
In addition, our relative lack of capital may continue to place us in a
competitive disadvantage. -15-





A
default under the Kellstrom Settlement Agreement could have an adverse effect on
our business.





As
described in more detail under the heading “Legal Proceedings”, the Company and
Mr. Teja have entered into a settlement agreement with Kellstrom Defense
Aerospace, Inc. This settlement agreement compromises a final judgment in the
amount of $1,173,913.25 entered into in connection with an action brought by
Kellstrom against the Company in the United States District Court for the
Southern District of Florida. Under this agreement, the Company has agreed to
make a number of installment payments to Kellstrom, issue Kellstrom a $500,000
purchase credit to be applied towards the purchase of materials and services
from the Company, and commit to making a further payment contingent upon the
Company being awarded a U.S. Air Force contract. As of December 31, 2007 the
Company has paid up all the cash part of the agreement, the balance of the trade
credits stands at approximately $384,000. If the Company fails to make the
required trade credits deliveries, Kellstrom may seek to collect the total
unpaid balance of the final judgment. The Company does not currently have the
financial resources to pay off the total unpaid balance of the final
judgment.




Risks
Relating To Our Common Stock





Any additional funding we arrange
through the sale of our common stock will result in dilution to existing
stockholders.





We may
raise additional capital in order to effectuate our business plan. Our most
likely source of additional capital will be through the sale of additional
shares of common stock. Such stock issuances will cause stockholders' interests
in our company to be diluted. Such dilution will negatively affect the value of
an investor's shares.




Because
of our small size, we may be exposed to potential risks resulting from new
requirements under Section 404 of the Sarbanes-Oxley Act of
2002.





Pursuant
to Section 404 of the Sarbanes-Oxley Act of 2002, we will be required,
beginning with our fiscal year ending December 31, 2008, to include in our
Annual Report on Form 10-KSB our assessment of the effectiveness of our internal
control over financial reporting as of the end of fiscal 2008. Furthermore, our
independent registered public accounting firm will be required to attest to
whether our assessment of the effectiveness of our internal control over
financial reporting is fairly stated in all material respects and separately
report on whether it believes we have maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2009. We
expect to incur additional expenses and diversion of management's time as a
result of performing the system and process evaluation, testing and remediation
required in order to comply with the management certification and auditor
attestation requirements.





We do not
have a sufficient number of employees to segregate responsibilities and may be
unable to afford increasing our staff or engaging outside consultants or
professionals to overcome our lack of employees. During the course of our
testing, we may identify other deficiencies that we may not be able to remediate
in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance
with the requirements of Section 404. In addition, if we fail to achieve and
maintain the adequacy of our internal controls, as such standards are modified,
supplemented or amended from time to time, we may not be able to ensure that we
can conclude on an ongoing basis that we have effective internal controls over
financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act.
Moreover, effective internal controls, particularly those related to revenue
recognition, are necessary for us to produce reliable financial reports and are
important to help prevent financial fraud. If we cannot provide reliable
financial reports or prevent fraud, our business and operating results could be
harmed, investors could lose confidence in our reported financial information,
and the trading price of our common stock, if a market ever develops, could drop
significantly.


-16-


Members
of the Teja family and the Nissenson family make and control corporate decisions
that may be disadvantageous to the minority stockholders.





Mr. Zahir
Teja, our President, Chief Executive Officer and Director, and Neev Nissenson,
our Vice President, Secretary, and Director, directly or through their
respective members of their families, own an aggregate of approximately 70% of
the outstanding shares of our common stock. Accordingly, they will have
significant influence in determining the outcome of all corporate transactions
or other matters, including the election of directors, mergers, consolidations
and the sale of all or substantially all of our assets, and a change in control.
The interests of Mr. Teja and/or Mr. Nissenson may differ from the interests of
the other stockholders and thus result in corporate decisions that are
disadvantageous to other stockholders.





Currently,
there is a limited public market for our securities, and there can be no
assurances that any substantial public market will ever develop.





Currently,
our stock is admitted for quotation of our common stock on the OTCBB, however,
there is presently no substantial public market for our common
stock.  We cannot predict the extent to which investor interest in us
will lead to the development of an active, liquid trading market. Active trading
markets generally result in lower price volatility and more efficient execution
of buy and sell orders for investors. Even if we are successful in developing a
public market, there may not be enough liquidity in such market to enable
stockholders to sell their stock. If an active public market for our common
stock does not develop, investors may not be able to re-sell the shares of our
common stock that they have purchased, rendering their shares effectively
worthless and resulting in a complete loss of their investment.





In
addition, our common stock is initially unlikely to be followed by any market
analysts, and there may be few institutions acting as market makers for the
common stock. Either of these factors could adversely affect the liquidity and
trading price of our common stock. Until our common stock is fully distributed
and an orderly market develops in our common stock, if ever, the price at which
it trades is likely to fluctuate significantly. Prices for our common stock will
be determined in the marketplace and may be influenced by many factors,
including the depth and liquidity of the market for shares of our common stock,
developments affecting our business, including the impact of the factors
referred to elsewhere in these Risk Factors, investor perception of our company,
and general economic and market conditions. No assurances can be given that an
orderly or liquid market will ever develop for the shares of our common
stock.




Because
many of our shares are eligible for future sale, the selling of a substantial
amount might adversely affect the market price of the shares





Sales of
a substantial number of shares of common stock in the public market could
adversely affect the market price of such shares. As of December 31, 2007 we had
7,746,143 shares of common stock outstanding, of which the 3,768,750 shares of
common stock free trading without restriction pursuant to registration statement
that was declared effective in August, 2007. All of the remaining 4,518,893
shares of common stock outstanding are "restricted securities," as that term is
defined under Rule 144 promulgated under the Securities Act, and in the future
may only be sold pursuant to a registration statement under the Securities Act,
in compliance with the exemption provisions of Rule 144 (including, without
limitation, certain volume limitations and holding period requirements thereof)
or pursuant to another exemption under the Securities Act. Our CEO, Zahir Teja,
and his family and affiliates own an aggregate of approximately 3,946,000
shares. Our Vice President, Neev Nissenson, and his affiliates own approximately
1,457,000 shares.




Because we may be subject to “Penny
Stock” the level of trading activity in our stock may be
reduced.





Broker-dealer
practices in connection with transactions in "penny stocks" are regulated by
penny stock rules adopted by the Securities and Exchange Commission. Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on some national securities exchanges or quoted on
Nasdaq). The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document that provides information about penny stocks and the
nature and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction,
and, if the broker-dealer is the sole market maker, the broker-dealer must
disclose this fact and the broker-dealer's presumed control over the market, and
monthly account statements showing the market value of each penny stock held in
the customer's account. In addition, broker-dealers who sell these securities to
persons other than established customers and "accredited investors" must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written agreement to the transaction.
Consequently, these requirements may have the effect of reducing the level of
trading activity, if any, in the secondary market for a security subject to the
penny stock rules, and investors in our common stock may find it difficult to
sell their shares. -17-




Our
stock price may be volatile because of factors beyond our control. As a result,
the value of your shares may decrease significantly.


Our
securities have not previously been publicly traded. The Company arbitrarily
valued its offering price. Following the offering, the market price of our
securities may decline substantially. In addition, the market price of our
securities may fluctuate significantly in response to a number of factors, many
of which are beyond our control, including, but not limited to, the
following:




·
            our
      ability to obtain securities analyst coverage;·
            changes
      in securities analysts' recommendations or estimates of our financial
      performance;·
            changes
      in market valuations of companies similar to us; and announcements by us
      or our competitors of significant contracts, new offerings, acquisitions,
      commercial relationships, joint ventures or capital commitments;
      and·
            the
      failure to meet analysts' expectations regarding financial
      performances.




Furthermore,
in the past, companies that have experienced volatility in the market price of
their stock have been subject to securities class action litigation. A
securities class action lawsuit against us, regardless of its merit, could
result in substantial costs and divert the attention of our management from
other business concerns, which in turn could harm our business.





The
provisions of our charter documents and Nevada law may inhibit potential
acquisition bids that a stockholder may believe are desirable, and the market
price of our common stock may be lower as a result.





Our
articles of incorporation provides us with the ability to issue "blank check"
preferred stock enabling our Board of Directors to fix the price, rights,
preferences, privileges and restrictions of preferred stock without any further
action or vote by our stockholders. The issuance of preferred stock may delay or
prevent a change in control transaction. As a result, the market price of our
common stock and the voting and other rights of our stockholders may be
adversely affected. The issuance of preferred stock may result in the loss of
voting control to other stockholders.





The
Nevada Business Corporation Law contains a provision governing “Acquisition of
Controlling Interest.” This law provides generally that any person or entity
that acquires 20% or more of the outstanding voting shares of a publicly-held
Nevada corporation in the secondary public or private market may be denied
voting rights with respect to the acquired shares, unless a majority of the
disinterested stockholders of the corporation elects to restore such voting
rights in whole or in part. The provisions of the control share acquisition act
may discourage companies or persons interested in acquiring a significant
interest in or control of the Company, regardless of whether such acquisition
may be in the interest of our stockholders.





Item2.  Description of Property





On August
17, 2007, we entered into a commercial lease agreement with Carry Way
LLC.  Under the Lease, we leased the approximately 7,500 square feet
of a building, housing our corporate headquarters and manufacturing plant,
located at 42 Carry Way, Carson City, NV 89706 for a period of 12 months
commencing September 10, 2007 and ending September 30, 2008. The base monthly
rent is $3,000, and the security deposit is $2,100.  Mr. Zahir Teja,
president of the Company, has guaranteed our performance under the
Lease.  So long as the Company is not in default under the Lease, the
Company has the option, on 60 days’ notice to lessor, to renew the Lease for an
additional 12-month period at a base monthly rent of $3,150.





Management
believes that this facility will meet its operational needs for the foreseeable
future. -18-





Item3.  Legal Proceedings





The
Company and Mr. Teja have entered into a settlement agreement with Kellstrom
Defense Aerospace, Inc. This settlement agreement compromises a final judgment
in the amount of $1,173,913 entered in connection with an action brought by
Kellstrom against the Company in the United States District Court for the
Southern District of Florida. Under this agreement, the Company has paid
Kellstom $150,000 in cash. The Company has also issued Kellstrom a $500,000
purchase credit to be applied towards the purchase of materials and services
from the Company. As of December 31, 2007 the remaining balance of the trade
credits is approximately $384,000. Upon the Company's making of the previously
described payment and Kellstrom's utilization of the previously described
purchase credit, Kellstrom will forgive certain of the Company's obligations
under an agreement previously entered into between the Company and Kellstrom. If
the Company fails to make the required settlement payments, then Kellstrom may
seek to collect the total unpaid balance of the final judgment. The Company does
not currently have the financial resources to pay off the total unpaid balance
of the final judgment.





Under a
Stipulation for Entry of Judgment, effective December 1, 2004, Mike Davidov
d/b/a Mike Davidov Investments, obtained a judgment in Superior Court of
California, County of Los Angeles, Central District in the aggregate amount of
$91,343 against Phoenix Aerospace, Inc. and Mr. Teja. In the underlying action,
Mr. Davidov sought to collect on a promissory note issued by Phoenix Aerospace,
Inc. and Mr. Teja in the original principal amount of $84,617 and accrued
interest thereon of $25,385. The Stipulation provided for monthly payments of
$10,000 each before the tenth day of the applicable month until the outstanding
balance is paid in full. Upon a payment default, Mr. Davidov has the right to
seek a Writ of Execution. The Company did not live up to the stipulation and
Davidov filed with a Nevada court to seize assets of Mr. Teja. In November,
2007, the Company and Mr. Teja entered into an agreement with Mr. Davidov
pursuant to which Mr. Davidov would be paid $20,000 a month until the
outstanding balance was paid off. Payments of $40,000 were made under this
agreement in 2007 and as of December 31, 2007 the outstanding balance due under
the agreement was approximately $59,407.





The
Company knows of no other material litigation or proceeding, pending or
threatened, to which it is or may become a party.





Item4.  Submission of Matters to a Vote of Security
Holders





No matters have been submitted to our
security holders for a vote, through the solicitation of proxies or otherwise,
during the fourth quarter of the fiscal year ended December 31, 2007. -19-


PARTII





Item5.  Market for Common Equity, Related Stockholder
Matters, and Small Business Issuer Purchases of Equity Securities.





Market
Information





Our
common stock is quoted on the OTC Bulletin Board under the symbol, PIVN.OB.” Our
shares of common stock began being quoted on the OTC Bulletin Board effective
September 21, 2007.




The
following table contains information about the range of high and low bid prices
for our common stock for each quarterly period indicated since our common stock
began trading based upon reports of transactions on the OTC Bulletin Board.




Fiscal
      Quarter End
            
            
            
            Low
      Bid
            
            
            
            High
      BidSeptember
      30, 2007
            
            $
            
            
            0.40__
            
            $
            
            
            0.85___December
      31, 2007
            
            $
            
            
            0.55__
            
            $
            
            
            1.28___




The
source of these high and low prices was Yahoo.com. These quotations reflect
inter-dealer prices, without retail mark-up, markdown or commissions and may not
represent actual transactions. The high and low prices listed have been rounded
up to the next highest two decimal places.




It is
anticipated that the market price of our common stock will be subject to
significant fluctuations in response to variations in our quarterly operating
results, general trends in the market for the products we distribute, and other
factors, over many of which we have little or no control. In addition, broad
market fluctuations, as well as general economic, business and political
conditions, may adversely affect the market for our common stock, regardless of
our actual or projected performance.




Holders
of Our Common Stock





As of
December 31, 2007, we had 75 stockholders of record.





Dividends





There are
no restrictions in our articles of incorporation or by-laws that prevent us from
declaring dividends. The Nevada Revised Statutes, however, do prohibit us from
declaring dividends where, after giving effect to the distribution of the
dividend:





·
            we
      would not be able to pay our debts as they become due in the usual course
      of business; or·
            our
      total assets would be less than the sum of our total liabilities plus the
      amount that would be needed to satisfy the rights of stockholders who have
      preferential rights superior to those receiving the
      distribution.


-20-


We have
not paid any dividends on our common stock. We currently intend to retain any
earnings for use in our business, and therefore do not anticipate paying cash
dividends in the foreseeable future.




Securities
Authorized for Issuance under Equity Compensation Plans





We have
no securities authorized for issuance under Equity Compensation
Plans.





Recent
Sales of Unregistered Securities





On
January l, 2007, the Company issued 3,000,000 shares of common stock in exchange
for all of the issued and outstanding stock of Phoenix Aerospace, Inc. as part
of a share exchange agreement.




On
January 1, 2007, the Company issued 396,000 shares of common stock in exchange
for notes payable in the amount of $198,000.





On
September 24, 2007, the Company issued 100,000 shares of its common stock to our
legal counsel as partial compensation for services rendered.  The fair
market value of the common stock at the time of issuance was $85,000. These
shares were issued pursuant to Section 4(2) of the Securities as a transaction
not involving a public offering of securities. These shares of common stock are
restricted shares as defined in the Securities Act.





On
November 28, 2007 The Company issued to two investors 58,000 shares as part of a
subscription agreement. In accordance with the subscription agreement the
company granted these investors a warrant to purchase up to 29,000 shares for $1
per shares expiring December 31, 2009.





On
December 31, 2007 The Company issued to 14 investors and 1 affiliated investor
592,143 shares as part of a subscription agreement In accordance with the
subscription agreement the company granted these investors a warrant to purchase
up to 296,072 shares for $1 per shares expiring December 31, 2009.





Option
grants




On
December 14, 2006, the Company entered into employment agreements with three key
officers. In connection with these agreements, the Company agreed to grant
990,000 options to purchase common stock at a price of $0.50 per share. The
employment agreements became effective on April 26, 2007. The above-mentioned
options have been granted accordingly on April 26, 2007.




On
October 2, 2006, the Company entered into a consulting agreement with a related
party. In connection with this agreement, the Company agreed to grant 330,000
options to purchase common stock at a price of $0.50 per share. The consulting
agreement became effective on April 26, 2007. The above-mentioned options have
been granted accordingly on April 26, 2007.




On July
27, 2006, the Company entered into a retention agreement with a law firm. As
part of this agreement, the Company agreed to grant warrants to purchase 170,000
shares of common stock at $1.00 per share. The warrants were to be granted
immediately prior to the effective date of the SB-2 registration statement filed
with the Securities and Exchange Commission.  The above-mentioned
options have been granted accordingly on August 6, 2007. -21-


Item6.  Management’s Discussion and Analysis or Plan of
Operation





Forward-Looking
Statements





The
information set forth in Management's Discussion and Analysis or Plan of
Operations ("MD&A") contains certain "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of
the Securities Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995, including, among others (i) expected changes in
the Company's revenues and profitability, (ii) prospective business
opportunities and (iii) the Company's strategy for financing its business.
Forward-looking statements are statements other than historical information or
statements of current condition. Some forward-looking statements may be
identified by use of terms such as "believes", "anticipates", "intends" or
"expects". These forward-looking statements relate to the plans, objectives and
expectations of the Company for future operations. Although the Company believes
that its expectations with respect to the forward-looking statements are based
upon reasonable assumptions within the bounds of its knowledge of its business
and operations, in light of the risks and uncertainties inherent in all future
projections, the inclusion of forward-looking statements in this Annual Report
on Form 10-KSB should not be regarded as a representation by the Company or any
other person that the objectives or plans of the Company will be
achieved.





You
should read the following discussion and analysis in conjunction with the
Financial Statements and Notes attached hereto, and the other financial data
appearing elsewhere in this Annual Report on10-KSB .





The
Company's revenues and results of operations could differ materially from those
projected in the forward-looking statements as a result of numerous factors,
including, but not limited to, the following: the risk of significant natural
disaster, the inability of the Company to insure against certain risks,
inflationary and deflationary conditions and cycles, currency exchange rates,
changing government regulations domestically and internationally affecting our
products and businesses.





Overview




Phoenix
International Ventures, Inc. (“PIV” or the “Company”) was incorporated on August
7, 2006. The financial statements are consolidated with the Company's wholly
owned subsidiaries, Phoenix Aerospace, Inc and Phoenix Europe Ventures
Ltd.





Phoenix Aerospace, Inc (PAI) was incorporated on April 18, 2003. The Company,
Zahir Teja, and Phoenix Aerospace, Inc. entered into a Share Exchange Agreement
dated as of December 1, 2006. As a result of this transaction, PAI became a
wholly owned subsidiary of the Company. The effective date of this transaction
was January 1, 2007. The foregoing transaction has been treated for accounting
purposes as a “reverse merger.”




The
principal business reason for the share exchange was to establish a holding
company structure.  This structure, the Company believes, facilitates
future acquisitions and the opening up of new lines of business.  Of
course, there can be no assurance that the Company will make any such
acquisitions or open up any such new lines of business.





PAI
manufactures support equipment for military aircraft which are used for
maintaining, operating or testing aircraft sub-systems. It manufactures some of
the existing support equipment which is in need of overhaul or facing
maintainability and components obsolescence issues and it also manufactures new
support equipment.





PAI is
ISO 9001/2000 certified. The Company has recently renewed the process and
extended its ISO 9001/2000 certificate until April 26, 2010. PAI has a licensing
agreement with Lockheed Martin Aeronautics Company to re-manufacture several
types of Support Equipment for P-3 Orion surveillance aircraft. PAI has a
marketing, sales and manufacturing agreement with Honeywell Aerospace GmbH for
Air Start Cart, RST-184 which is used on various aircraft.




The main
users of the equipment are the United States Air Force, US Navy and
defense-aerospace companies. -22-


COMPARISON
OF THE PERIOD ENDED DECEMBER 31, 2007 AND DECEMBER 31, 2006





The comparative information for the
year ended December 31, 2006 is that of our predecessor entity and currently
wholly owned subsidiary, Phoenix Aerospace, Inc.





Financial
      Information - Percentage of Revenue12
      Months ended December 31,2007
            
            
            2006Sales
            
            
            100
            %
            
            100
            %Cost
      of sales
            
            
            -84
            %
            
            -67
            %Gross
      profit
            
            
            16
            %
            
            32
            %Operating
      expenses:Research
      and Development
            
            
            0
            %
            
            0
            %Marketing
      & Selling
            
            
            0
            %
            
            0
            %General
      and administrative expenses
            
            
            -142
            %
            
            -37
            %Total
      operating expenses
            
            
            -142
            %
            
            -37
            %Other
      income (expense)
            
            
            -3
            %
            
            -7
            %Net
      Income (loss)
            
            
            -129
            %
            
            -11
            %







Revenues.  Revenues
decreased 18% to $948,775 for the twelve months ended December 31, 2007,
compared to $1,160,455 for the twelve months ended December 31, 2006. The
decrease in revenues is primarily attributable to the low revenues in the three
months ended September 30, 2007 due to Company’s relocation and low deliveries
of products. For the twelve months ended December 31, 2007, manufacturing and
remanufacturing accounted for 10% of our revenues, study contracts 36% and
product sales 54% in comparison to 66% manufacturing and remanufacturing
revenues, 29% study contracts and 5% product sales   for
the  twelve months ended December 31, 2006.





For the
twelve months ended December 31, 2007, two customers represented 69% of our
revenues. As of December 31, 2006, all of our revenues were derived from our
operations in the US.





Cost of Sales. Cost of
revenues consists primarily of sub contractors and raw materials used in the
manufacturing process, along with labor and other related charges. Cost of sales
increased to $792,746 for the twelve months ended December 31, 2007, compared to
$780,709 for the twelve months ended December 31, 2006, representing 84% and 67%
of the total revenues for the twelve months ended December 31, 2007 and December
31, 2006 respectively. The increase in costs of sales as percentage of total
sales is primarily due to an increase in revenues from product sales which have
slimmer margins.




General and Administrative
Expenses. General and administrative expenses increased by 311% to
$1,347,730 for the twelve months ended December 31, 2007, from $432,123 for the
twelve months ended December 31, 2006. As a percentage of revenues, general and
administrative expenses increased to 142% for the twelve months ended December
31, 2007, as compared to 37% for the twelve months ended December 31, 2006. The
increase in our general and administrative expenses is mainly attributable to a
non recurring options expensing of approx $460,000, and a $170,000 increase
in salaries and consulting fees. The company also incurred legal and accounting
expenses related to its going public process approximating $180,000 for the
twelve months ended December 31, 2007 of which approximately $110,000 is not
expected to recur in the next twelve months. -23-


Interest Expense. Interest
expense decreased to $30,320 for the twelve months ended December 31, 2007, as
compared to $85,640 for the twelve months ended December 31, 2006.





Income before Taxes. Net loss
before taxes for the twelve months ended December 31, 2007 amounted to
$1,221,539, as compared to a net loss of $131,017 for the twelve months ended
December 31, 2006. The decrease in our net loss is primarily attributed to a
$915,548 increase in our general and administrative expenses.





Taxes on Income The Company
had no tax liabilities for the twelve months ended December 31, 2007 or 2006
since it incurred net losses in both years.





Net Loss. Net loss for the
twelve months ended December 31, 2007 amounted to $1,221,539, as compared to a
net loss of $131,017 for the twelve months ended December 31, 2006. The increase
in our net loss is primarily attributed to a 915,548 increase in our general and
administrative expenses.





Earnings (Loss) Per Share. The
loss per share of common stock for the twelve months ended December 31, 2007 was
(0.174) (basic and diluted shares). The loss per share of common stock for the
twelve months ended December 31, 2006 was ($6.55) (basic and diluted
shares).




COMPARISON
OF THE BALANCE SHEET AS OF DECEMBER 31, 2007 AND DECEMBER 31, 2006





Current Assets. Current assets
amounted to $322,021 as of December 31, 2007 as compared with $258,485 as of
December 31, 2006.





Fixed Assets. Fixed assets
after accumulated depreciation increased to $61,581 as of December 31, 2007, as
compared with $25,164 as of December 31, 2006. The increase is primarily
attributable to purchase of a vehicle.





Current Liabilities. As of
December 31, 2007, current liabilities increased to $2,177,514 as compared with
$1,252,932 as of December 31, 2006. This increase in our current liabilities is
mainly attributable to a $566,174 long term liability which became a current
liability.





Long-term Liabilities. Long
term liabilities decreased to $406,335 as of December 31, 2007 compared to
$1,075,549 as of December 31, 2006. This decrease in liabilities is primarily
due to  a $566,174 liability becoming current.





Officer Advances. The Company
had advances from a shareholder, Mr. Zahir Teja who is also our CEO, of $417,985
as of December 31, 2007. These advances are non-interest bearing. Of the
outstanding balance, $48,610 is due on demand, and $369,375 is due September 30,
2009.




LIQUIDITY
AND CAPITAL RESOURCES





Cash as ofDecember 31, 2007, amounted to $70,314 as
compared with $16,343 as ofDecember 31, 2006, an increase of $62,885. Net
cash used in operating activities for the three months endedDecember 31, 2007, was $209,359. Net
cash provided by financing activities for the twelve months endedDecember 31,
2007was
$310,051. -24-





Our
capital investments are primarily for the purchase of equipment for services
that we provide or intend to provide. This equipment includes truck, shop tools,
and shop machinery.




The
Company leases its 7,500 square foot operating facility under a lease expiring
September 30, 2008. The lease contains one-year renewal options. Minimum lease
payments through September 30, 2008 are $27,000.





We shall
continue to finance our operations mainly from the cash provided from operating
activities. As of December 31, 2007, the Company had a backlog of approximately
$3,644,905. Two of the orders are from two customers for the approximate amount
of $1,423,565 these orders are for time, material and agreed profit. The Company
collects a significant amount of these revenues on a monthly basis and progress
towards milestone billing. For these types of orders, which make up most of the
Company's backlog, there is no need for the Company to finance materials and
labor. Additionally, management is expecting, although there can be no
assurance, that additional orders will come in. The company has raised
$455,101as part of a subscription agreement closed December 31,
2007.  $63,000 of the $455,101 raised was still outstanding as of
December 31, 2007 and $140,000 was debt that was converted in to equity. The
senior management is also willing to defer salary payments if necessary. As a
result, the Company believes it will have enough funds from its operations to
support its operations for the Year 2007.


We may
consider raising additional capital through private and/or public placements to
fund possible acquisitions and business development activities and for working
capital.





SEGMENTS





The
Company is active only in the segment of manufacturing, upgrading and
remanufacturing electrical, hydraulic and mechanical support equipment primarily
for government and defense aerospace companies. The Company is active in 2
geographical areas, the United States and Europe.





IMPACT
OF INFLATION AND CURRENCY FLUCTUATIONS





All of the Company's business is done
in the US dollar. The Company does have exposure to the New Israeli Shekel
through its wholly owned Israeli subsidiary although the company has not
experienced significant losses to date and does not expect losses in the
foreseeable future. Costs of sales are mainly in US dollars for the period
ending December 31, 2007.





Inflation
in the US where we operate would affect our operational results if we are not
able to match our revenues with growing expenses caused by
inflation.





Recent
Accounting Pronouncements




We
adopted Financial Accounting Standards Board (FASB) Interpretation Number (FIN)
48, Accounting for Uncertainty
in Income Taxes, effective January 1, 2007 (see Note 8). FIN 48
clarifies and sets forth consistent rules for accounting for uncertain income
tax positions in accordance with SFAS No. 109, Accounting for Income Taxes. -25-




In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations, which
will become effective January 1, 2009. The new standard will replace
existing guidance and significantly change accounting and reporting relative to
business combinations in consolidated financial statements, including
requirements to recognize acquisition-related transaction and post acquisition
restructuring costs in our results of operations as
incurred.   This statement will be effective for businesses
acquired after the effective date.




In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities – Including an Amendment of FASB Statement
No. 115, which also becomes effective January 1, 2008. Under
FAS 159, a company may choose to measure certain financial instruments (e.g., assets and liabilities)
and certain other items not currently subject to fair value measurement at fair
value. If so elected, any unrealized gains and losses from marking those items
to market will be included in earnings in each subsequent reporting period. The
fair value option may be elected on an instrument-by-instrument basis, with few
exceptions. We do not plan to elect the fair value option.




In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements,
which is effective January 1, 2008 with the exception of leases and certain
non financial assets and liabilities. SFAS No. 157 defines fair value,
establishes a market-based framework or hierarchy for measuring fair value and
expands disclosures about fair value measurements. The new standard generally is
applicable whenever another accounting pronouncement requires or permits assets
and liabilities to be measured at fair value. We currently do not expect that
the adoption of SFAS No. 157 will have a material impact on our results of
operations, financial position or cash flows.




In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests
in Consolidated Financial Statements — an amendment of ARB No. 51”.
This Statement is effective for fiscal years, and interim periods within those
fiscal years, beginning on or after December 15, 2008, which for us is the
year ending December 31, 2009, and the interim periods within that fiscal
year. The objective of this Statement is to improve the relevance,
comparability, and transparency of the financial information that a reporting
entity provides in its consolidated financial statements. We are currently
evaluating the potential impact, if any, of the adoption of
SFAS No. 160 on our consolidated financial
statements.




Critical
Accounting Policies


Our
discussion and analysis of our financial condition and results of operation
are based on our financial statements, which have been prepared
in accordance with accounting principles generally accepted in the
United States of America. The preparation
of the financial statements
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. Since these estimates are inherently uncertain,
actual results may materially differ.
  The
following is a discussion of our accounting policies that are both most
important to the portrayal of our financial condition and results, and that
require managements most difficult, subjective, or complex judgments.


-26-





Stock
Based Compensation.





The
Company accounts for stock option grants in accordance with SFAS
No. 123(R), Share-Based
Payment. The Company records the cost of employee and non-employee
services received in exchange for an award of equity instruments based on the
grant-date fair value of the award. That cost is recognized over the period
during which an employee is required to provide service in exchange for the
award—the requisite service period (usually the vesting period). No compensation
cost is recognized for equity instruments for which employees do not render the
requisite service. The grant-date fair value of employee share options and
similar instruments is estimated using a Black-Scholes option-pricing model. In
the event that the Company does not have sufficient trading history to estimate
its volatility the company uses a surgate in order to calculate implied
volatility. In the event that there is insufficient history regarding exercise
practice of the employees the Company applies the “plain vanilla” expected term
as allowed by SEC Staff Accounting Bulletin No. 107. If an equity award is
modified after the grant date, incremental compensation cost will be recognized
in an amount equal to the excess of the fair value of the modified award, if
any, over the fair value of the original award.





Revenue
Recognition





The
Company accounts for sales derived from long-term study and production contracts
in conformity with the American Institute of Certified Public Accountants
(AICPA) Statement of Position No. 81-1 (SOP 81-1), Accounting for the Performance of
Construction-Type and Certain Production-Type
Contracts.   Sales are recognized using various measures
of progress, as allowed by SOP 81-1, depending on the contractual terms and
scope of work of the contract.





Revenue
that is not derived from long-term contracts is recognized when persuasive
evidence of a final agreement exists, delivery has occurred, the selling price
is fixed or determinable and payment from the customer is reasonably
assured.  The majority of customer sales terms are F.O.B. origin,
where revenue is recognized upon shipment.





Sales are
subject to a limited warranty that provides for repair or replacement of
defective parts.  In accordance with SFAS 48, Revenue Recognition When Right of
Return Exists management has evaluated the Company’s experience with
sales returns.   Historically, the Company has not experienced
any costs for warranty claims.  As such, the warranty reserve was zero
at the end of 2007.






-27-


Item 7.   Financial
Statements
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
   March 31,
2008
  To the
Board of Directors and
 Stockholders
of Phoenix International Ventures, Inc.
  We have
audited the accompanying consolidated balance sheet of Phoenix International
Ventures, Inc. and subsidiaries as of December 31, 2007, and the related
consolidated statements of income, stockholders' equity, and cash flows for the
year then ended. Phoenix International Ventures, Inc.'s management is
responsible for these consolidated financial statements. Our responsibility is
to express an opinion on these consolidated financial statements based on our
audit.
  We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
  In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Phoenix
International Ventures, Inc. and subsidiaries as of December 31, 2007, and the
consolidated results of its operations and its cash flows for the year then
ended in conformity with accounting principles generally accepted in the United
States of America.
  The
accompanying consolidated financial statements have been prepared assuming that
Phoenix International Ventures, Inc. and subsidiaries will continue as a going
concern. As discussed in Note 3 to the accompanying consolidated financial
statements, Phoenix International Ventures, Inc. has suffered losses during the
periods presented and had a significant working capital deficit at December 31,
2007 which raises substantial doubt about the Company's ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note 3. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
 /s/ Mark
Bailey & Company, Ltd.
 Mark
Bailey & Company, Ltd.
  Reno,
Nevada
 -28-
  REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 Shareholder
and Board of Directors
 Phoenix
Aerospace, Inc.
 
 We have
audited the accompanying statements of operations, stockholder’s (deficit) and
cash flows of Phoenix Aerospace, Inc. for the year ended December 31,
2006.  These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion on
these financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audit provides a reasonable basis
for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the results of operations and cash flows of Phoenix
Aerospace, Inc. for the year ended December 31, 2006 in conformity with
accounting principles generally accepted in the United States of
America.
 
 
 
 
 Denver,
Colorado
 April 30,
2007
   -29-





Phoenix
      International Ventures, Inc.Consolidated
      Balance SheetDecember
      31, 2007AssetsCurrent
      assetsCash
            
            $
            70,314Accounts
      receivable, net
            
            
            86,929Inventory
            
            
            164,248Prepaid
      expenses
            
            
            530Total
      current assets
            
            
            322,021Property
      and equipment, net
            
            
            61,581Other
      assets
            
            
            4,000Total
      assets
            
            $
            387,602Liabilities and Stockholders'
      (Deficit)Current
      liabilitiesLine
      of credit
            
            
            35,000Accounts
      payable and accrued expenses
            
            
            508,243Customer
      deposits
            
            
            307,106Notes
      payable
            
            
            87,526Legal
      settlement
            
            
            950,154Due
      to related party
            
            
            240,875Officer
      advances
            
            
            48,610Total
      current liabilities
            
            
            2,177,514Long
      term liabilitiesNotes
      payable
            
            
            36,960Officer
      advances
            
            
            369,375Total
      liabilities
            
            
            2,583,849Commitments
      and Contingencies
            
            
            -Stockholders'
      (deficit)Preferred
      stock - $0.001 par value; 1,000,000 sharesauthorized;
      zero shares issued and outstanding
            
            
            -Common
      stock - $0.001 par value; 50,000,000 sharesauthorized;
      7,746,143 shares issued and outstanding
            
            
            7,746Paid
      in capital
            
            
            1,145,397Subscription
      receivable
            
            
            (63,020
            )Accumulated
      (deficit)
            
            
            (3,286,370
            )Total stockholder’s (deficit)
            
            
            (2,196,247
            )Total
      liabilities and stockholders' (deficit)
            
            $
            387,602The
      accompanying notes are an integral part of the financial
      statements





-30-
 Phoenix
      International Ventures, Inc.Consolidated
      Statements of OperationsFor
      the Years Ended December 31, 2007 and 20062007
                
                
                Predecessor
      entity, Phoenix Aerospace Inc.
                  2006Sales
                
                $
                948,775
                
                
                $
                1,160,455Cost
      of sales
                
                
                792,264
                
                
                
                780,709Gross
      margin
                
                
                156,511
                
                
                
                379,746Operating
      expensesGeneral
      and administrative expenses
                
                
                1,334,092
                
                
                
                428,835Depreciation
                
                
                13,638
                
                
                
                3,288Total
      operating expenses
                
                
                1,347,730
                
                
                
                432,123Loss
      from operations
                
                
                (1,191,219
                )
                
                
                (52,377
                )Other
      income (expense)Interest
      expense
                
                
                (30,320
                )
                
                
                (85,640
                )Income
      from cancellation of debt
                
                
                -
                
                
                
                7,000Total other expense
                
                
                (30,320
                )
                
                
                (78,640
                )Loss
      before taxes
                
                
                (1,221,539
                )
                
                
                (131,017
                )Income
      taxes
                
                
                -
                
                
                
                -Net
      loss
                
                $
                (1,221,539
                )
                
                $
                (131,017
                )Net
      loss per common share:Basic
      and diluted
                
                $
                (0.17
                )
                
                $
                (6.55
                )Weighted
      average shares outstanding:Basic
      and diluted
                
                
                7,028,252
                
                
                
                20,000The
      accompanying notes are an integral part of the financial
      statements
 
 -31-





Phoenix
      International Ventures, Inc.Consolidated
      Statement of Stockholders' EquityFor
      the Years December 31, 2007 and 2006AdditionalCommon
      Stock
              
              
              Paid
      In
              
              SubscriptionShares
              
              
              Amount
              
              
              Capital
              
              Receivable
              
              (Deficit)
              
              
              TotalBalance
      –December 31, 2005
              
              
              20,000
              
              
              
              20,000
              
              
              
              
              
              
              
              (1,933,814
              )
              
              
              (1,913,814
              )Net
      loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (131,017
              )
              
              
              (131,017
              )Balance
      - December 31, 2006
              
              
              20,000
              
              
              
              20,000
              
              
              
              
              
              
              
              (2,064,831
              )
              
              
              (2,044,831
              )Recapitalization via
      reverse acquisition of Phoenix International Ventures inclusive of
      3,600,000 outstanding shares of PIV at December 31, 2006in January
      2007
              
              
              6,600,000
              
              
              
              6,600
              
              
              
              17,000
              
              
              
              
              
              
              
              
              23,600Adjustment
      of equity in recapitalization in January 2007
              
              
              
              (20,000
              )
              
              
              (20,000
              )
              
              
              (42,845
              )
              
              
              
              
              
              
              
              (62,845
              )Issuance
      of 396,000 at $0.50 per share for debt cancellation in January ,
      2007
              
              
              396,000
              
              
              
              396
              
              
              
              197,604
              
              
              
              
              
              
              
              
              198,000Issuance
      of stock options in April 2007
              
              
              
              
              
              
              
              
              
              
              388,118
              
              
              
              
              
              
              
              
              388,118Issuance
      of stock options in August  2007 in exchange for
      services
              
              
              
              
              
              
              
              
              
              
              46,102
              
              
              
              
              
              
              
              
              46,102Issuance
      of 100,000 shares for Compensation September 2007
              
              
              100,000
              
              
              
              100
              
              
              
              84,900
              
              
              
              
              
              
              
              
              85,000Issuance
      of shares at $0.70 per share for cash with attached warrants exercisable
      at $1.00 per share in November 2007
              
              
              58,000
              
              
              
              58
              
              
              
              40,542
              
              
              
              
              
              
              
              
              40,600Issuance
      of shares at $0.70 per share for cash and cancellation of $140,000 of debt
      with attached warrants exercisable at $1.00 per share in December
      2007
              
              
              592,143
              
              
              
              592
              
              
              
              413,976
              
              
              
              
              
              
              
              
              414,568Less
      Subscription receivable
              
              
              
              
              
              
              
              
              
              
              
              
              
              (63,020
              )
              
              
              
              
              
              (63,020
              )-Net
      loss
              
              
              -
              
              
              
              -
              
              
              
              
              
              
              
              
              (1,221,539
              )
              
              
              (1,221,539
              )Balance
      - December 31, 2007
              
              
              7,746,143
              
              
              $
              7,746
              
              
              $
              1,145,397
              
              $             
      (63,020
              )
              $
              (3,286,370
              )
              
              $
              (2,196,247
              )





-32-








Phoenix
      International Ventures, Inc.Consolidated
      Statements of Cash FlowsFor
      the Years Ended December 31, 2007 and 20062007
            
            
            Predecessor
      entity, Phoenix Aerospace Inc. 2006Cash
      flows from operating activitiesNet
      income (loss)
            
            $
            (1,221,539
            )
            
            $
            (131,017
            )Adjustments
      to reconcile net loss to net cash(used
      in) operating activities:Depreciation
            
            
            13,638
            
            
            
            3,288Stock
      and options issued for services
            
            
            131,102
            
            
            
            -Stock
      option expense
            
            
            388,118
            
            
            
            -Income
      from cancellation of debt
            
            
            -
            
            
            
            (7,000
            )Accrued
      interest
            
            
            9,646
            
            
            
            60,495Change
      in accounts receivable
            
            
            16,713
            
            
            
            (94,287
            )Change
      in amounts due to related party
            
            
            172,448
            
            
            
            (24,500
            )Change
      in inventory
            
            
            (50,248
            )
            
            
            (14,172
            )Change
      in prepaid expenses
            
            
            (530
            )
            
            
            -Change
      in customer deposits
            
            
            307,106
            
            
            
            -Change
      in accounts payable andaccrued
      expenses
            
            
            99,187
            
            
            
            261,188Change
      in legal settlement
            
            
            (75,000
            )
            
            
            (201,020
            )Net
      cash used in operating activities
            
            
            (209,359
            )
            
            
            (147,025
            )Cash
      flows from investing activitiesPurchase
      of property and equipment
            
            
            (50,055
            )
            
            
            (500
            )Cash
      purchased in acquisition of subsidiary
            
            
            3,334
            
            
            
            -Net
      cash used in investing activities
            
            
            (46,721
            )
            
            
            (500
            )Cash
      flows from financing activitiesIssuance
      of common stock
            
            
            252,148
            
            
            
            -Proceeds
      of line of credit
            
            
            -
            
            
            
            35,000Repayment
      of notes payable
            
            
            -
            
            
            
            (18,000
            )Proceeds
      from notes payable
            
            
            57,903
            
            
            
            137,628Net
      cash provided by financing activities
            
            
            310,051
            
            
            
            154,628Increase
      in cash
            
            
            53,971
            
            
            
            7,103Cash,
      beginning of year
            
            
            16,343
            
            
            
            9,240Cash,
      end of year
            
            $
            70,314
            
            
            $
            16,343Cash
      paid forInterest
            
            $
            11,066
            
            
            $
            25,145Income
      taxes
            
            $
            -
            
            
            $
            -Non-cash
      investing and financing activities:Accounts
      payable converted to notes payable
            
            $
            -
            
            
            $
            69,500Notes
      payable converted to 396,000 shares of common stock
            
            $
            198,000
            
            
            $
            -100,000
      shares of common stock issued as bonus to legal counsel
            
            $
            85,000
            
            
            $
            -Issuance
      of 200,000 shares of common stock in exchange for related party debt
      cancellation
            
            $
            140,000
            
            
            $
            -The
      accompanying notes are an integral part of the financial
      statements





-33-





Phoenix
International Ventures, Inc.


Notes
to Consolidated Financial Statements


December
31, 2007





Note
1 - Summary of Significant Accounting Policies





Nature of
Activities





Phoenix
International Ventures, Inc. (PIV) was organized August 7, 2006 as a Nevada
Corporation to develop business in the market of defense and
aerospace.  Our primary business is manufacturing, re-manufacturing
and upgrading of Ground Support Equipment (GSE) used in military and commercial
aircraft.





Basis of
Presentation





The
consolidated financial statements include the accounts of the Company and its
wholly owned US subsidiary Phoenix Aerospace, Inc. (PAI) and an Israeli
subsidiary, Phoenix Europe Ventures, Ltd. (PEV). Significant intercompany
accounts and transactions have been eliminated in consolidation.The consolidated financial
statements have been prepared in accordance with accounting principles generally
accepted in the United States (US GAAP).





The
Company previously filed as a development stage company under Statements of
Financial Accounting Standards (SFAS) No. 7 Accounting and Reporting by
Development Stage Enterprises.





On
January 1, 2007 Phoenix International Ventures, Inc acquired 100% of Phoenix
Aerospace, Inc. The merger was accounted for as a reverse
acquisition.  The acquired assets and assumed liabilities of Phoenix
Aerospace have been recorded at their historical cost, which approximates the
fair market value, and no goodwill was recognized.  As a result of the
merger, the consolidated Company is no longer considered a development stage
company in accordance with SFAS No. 7.





The
comparative information is that of the predecessor entity and currently wholly
owned subsidiary Phoenix Aerospace, Inc.





Cash and Cash
Equivalents





The
Company considers cash in banks, deposits in transit, as well as all highly
liquid investments purchased with an original maturity from the date of purchase
of three months or less to be cash and cash
equivalents.





From time
to time the Company maintains amounts on deposit with financial institutions
which exceed federally insured limits. The Company has not experienced any
significant losses in such accounts, nor does management believe it is exposed
to any significant credit risk.





Segments





The
Company is active only in the segment of manufacturing, re-manufacturing and
upgrading of Ground Support Equipment (GSE) used in military and commercial
aircraft. -34-





Use of
Estimates





The
preparation of financial statements in conformity with the generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain amounts of assets, liabilities, revenues and expenses during the
period. Actual results could differ from those estimates.




Accounts
Receivable





Accounts
receivable include amounts billed and billable from
customers.  Accounts receivable are recorded at net realizable value
consisting of the carrying amount less an allowance for uncollectible accounts
if applicable. During 2007 the Company sold trade receviables for an aggregate
loss of $29,379. This amount is included in the general and administrative
expenses.





The
Company uses the allowance method to account for uncollectible accounts
receivable balances. Under the allowance method, an estimate of uncollectible
customer balances is made using factors such as the credit quality of the
customer and the economic conditions in the market. Accounts are considered past
due once the unpaid balance is 90 days or more outstanding, unless payment terms
are extended. When an account balance is past due and attempts have been made to
collect the receivable through legal or other means, the amount is considered
uncollectible and is written off against the allowance balance.





As of
December 31, 2007, management believes that all accounts receivable are
collectible, and thus the amount of the allowance for doubtful accounts was
zero. There was no bad debt expense for the years ended December 31, 2007 or
2006.





Inventory





Inventory
is stated at the lower of cost or market, based on the specific identification
method of inventory valuation.





Property, Plant and
Equipment





Property
and equipment are stated at cost, less accumulated depreciation. Acquisitions of
property and equipment in excess of $500 are capitalized. Depreciation is
calculated using the straight-line method over estimated useful lives.
Maintenance, repairs and renewals that do not materially prolong the useful life
of an asset are expensed when incurred.





The
estimated useful lives are as follows:





Equipment
            5-7
      yearsFurniture
      and fixtures
            7
      yearsComputer
      software
            3-5
      years






Income
Taxes





The
Company accounts for income taxes under SFAS No. 109, “Accounting for Income
Taxes”. Deferred tax assets and liabilities are recorded to reflect temporary
differences between the tax basis of assets and liabilities and their reported
amounts in the financial statements that will result in taxable or deductible
amounts in future years. The tax rate used to determine the deferred tax assets
and liabilities is the enacted tax rate for the year in which the differences
are expected to reverse. Valuation allowances are recorded to reduce deferred
tax assets to the amount that will more likely than not be realized. -35-





On
January 1, 2007, the Company adopted FASB Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes” (“FIN 48”) to account for uncertainty in income
taxes recognized in the Company’s financial statements in accordance with SFAS
No. 109, “Accounting for Income Taxes.”




Concentrations





Two
customers represented 69% of the Company’s revenues for the year ended December
31, 2007. Two customers represented 61% of the Company’s revenues for the year
ended December 31, 2006. One customer represented 92% of the Company’s accounts
receivable balance at December 31, 2007.





Financial
Instruments





At
December 31, 2007, the carrying value of certain financial instruments
approximated their fair values. These financial instruments include cash,
accounts receivable, accounts payable and accrued expenses, customer deposits
and notes payable. Fair values are assumed to approximate carrying values for
these financial instruments because they are short term in nature, or are
receivable or payable on demand, and their carrying amounts approximate fair
value. The carrying value of the Company’s notes payable approximates fair
values of similar debt instruments.





Stock
Based Compensation.





The
Company accounts for stock option grants in accordance with SFAS
No. 123(R), Share-Based
Payment. The Company records the cost of employee and non-employee
services received in exchange for an award of equity instruments based on the
grant-date fair value of the award. That cost is recognized over the period
during which an employee is required to provide service in exchange for the
award—the requisite service period (usually the vesting period). No compensation
cost is recognized for equity instruments for which employees do not render the
requisite service. The grant-date fair value of employee share options and
similar instruments is estimated using a Black-Scholes option-pricing model.
In the event that the Company does
not have sufficient trading history to estimate its volatility the company uses
a surrogate in order to calculate implied volatility. In the event that there is
insufficient history regarding exercise practice of the employees the Company
applies the “plain vanilla” expected term as allowed bySECStaff
Accounting Bulletin No. 107. If an equity award is modified after
the grant date, incremental compensation cost will be recognized in an amount
equal to the excess of the fair value of the modified award, if any, over the
fair value of the original award.





Revenue
Recognition





The
Company accounts for sales derived from long-term study and production contracts
in conformity with the American Institute of Certified Public Accountants
(AICPA) Statement of Position No. 81-1 (SOP 81-1), Accounting for the Performance of
Construction-Type and Certain Production-Type
Contracts.   Sales are recognized using various measures
of progress, as allowed by SOP 81-1, depending on the contractual terms and
scope of work of the contract.





Revenue
that is not derived from long-term contracts is recognized when persuasive
evidence of a final agreement exists, delivery has occurred, the selling price
is fixed or determinable and payment from the customer is reasonably
assured.  The majority of customer sales terms are F.O.B. origin,
where revenue is recognized upon shipment.





Sales are
subject to a limited warranty that provides for repair or replacement of
defective parts.  In accordance with SFAS 48, Revenue Recognition When Right of
Return Exists management has evaluated the Company’s experience with
sales returns.   Historically, the Company has not experienced
any costs for warranty claims.  As such, the warranty reserve was zero
at the end of 2007. -36-




Net Loss per Common
Share





Basic
earnings per share is based on the weighted effect of all common shares issued
and outstanding, and is calculated by dividing net loss by the weighted average
shares outstanding during the period.  Diluted earnings per share is
calculated by dividing net income / (loss) by the weighted average number of
common shares used in the basic earnings per share calculation plus the number
of common shares that would be issued assuming exercise or conversion of all
potentially dilutive common shares outstanding. The Company excludes equity
instruments from the calculation of diluted weighted average shares outstanding
if the effect of including such instruments is anti-dilutive to earnings per
share. For the periods presented all equity instruments are considered
anti-dilutive.





Recent Issued Accounting
Pronouncements




We adopted Financial
Accounting Standards Board (FASB) Interpretation Number (FIN) 48, Accounting for Uncertainty in Income
Taxes, effective January 1, 2007 (see Note 8). FIN 48 clarifies and
sets forth consistent rules for accounting for uncertain income tax positions in
accordance with SFAS No. 109, Accounting for Income
Taxes.




In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations, which
will become effective January 1, 2009. The new standard will replace
existing guidance and significantly change accounting and reporting relative to
business combinations in consolidated financial statements, including
requirements to recognize acquisition-related transaction and post acquisition
restructuring costs in our results of operations as
incurred.   This statement will be effective for businesses
acquired after the effective date.




In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities – Including an Amendment of FASB Statement
No. 115, which also becomes effective January 1, 2008. Under
FAS 159, a company may choose to measure certain financial instruments (e.g., assets and liabilities)
and certain other items not currently subject to fair value measurement at fair
value. If so elected, any unrealized gains and losses from marking those items
to market will be included in earnings in each subsequent reporting period. The
fair value option may be elected on an instrument-by-instrument basis, with few
exceptions. We do not plan to elect the fair value option.







In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests
in Consolidated Financial Statements — an amendment of ARB No. 51”.
This Statement is effective for fiscal years, and interim periods within those
fiscal years, beginning on or after December 15, 2008, which for us is the
year ending December 31, 2009, and the interim periods within that fiscal
year. The objective of this Statement is to improve the relevance,
comparability, and transparency of the financial information that a reporting
entity provides in its consolidated financial statements. We are currently
evaluating the potential impact, if any, of the adoption of
SFAS No. 160 on our consolidated financial
statements.





Note
2 - Reclassifications





The
Company reviewed the classification of its operating expenses and other income
items for the period ended December 31, 2006. As a result of the review, certain
amounts have been reclassified to conform to the current presentation. The
reason for the reclassifications was the reallocation of certain departmental
expenses. The reclassifications were all contained in the operating expense
classification of the Consolidated Statement of Operations and the results of
the reclassifications did not impact previously reported financial position,
cash flows, or results of operations. -37-





Twelve
      Months Ended December 31, 2006As
      Reported
            
            
            Change
            
            As
      ReclassifiedReclassified
      items:Cost
      of Sales
            
            $
            551,642
            
            
            $
            229,067
            
            $
            780,709General
      and Administrative
            
            
            657,902
            
            
            
            -229,067
            
            
            428,835Net
      effect of reclassifications
            
            
            -
            
            
            
            -
            
            
            -




Note
3 - Financial Condition, Liquidity, and Going Concern





At
December 31, 2007, the Company has a working capital deficit of $1,855,493 and
accumulated deficit of $3,286,370. These conditions raise substantial doubt
about the Company's ability to continue as a going concern. To date, the Company
has been dependent upon officer advances to finance operations. The Company has
developed a plan to address its precarious financial situation. The plan is
based on the Company’s current financial assets, backlog and expectations
regarding revenues and operating costs. The Company believes it can meet the
financial requirements of the current plan for year end 2008 without raising
additional funds.





On
December 1, 2006, the Company agreed to merge with Phoenix Aerospace, Inc. , a
related entity. Management believes that the merger will allow access to future
financing. The merger was effective January 1, 2007.





The
ability of the Company to achieve its goals is dependent upon future capital
raising efforts, obtaining and maintaining favorable contracts, and the ability
to achieve future operating efficiencies anticipated with increased production
levels. There can be no assurance that the Company’s future efforts and
anticipated operating improvements will be successful.





The
financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.




Note
4 - Geographical Segments





Product
revenues are attributed to regions based on the location of the customer. The
following table summarizes the company’s geographical customer concentration of
total product revenue.





Region:
            
            2006
            2007United
      States
            
            100%
            87%Europe
            
            0%
            13%Total:
            
            100%
            100%


-38-


Note
5 - Inventory





Inventory
consists of used equipment that can be re-manufactured for re-sale and spare
parts. At December 31, inventory consisted of the following:




2007Raw
      materials
            
            $
            114,000Work
      in process
            
            
            50,248$
            164,248





The
company does not have any allowance for its inventory obsolescence; this is
based on a review of our inventory value as of December 31, 2007.




Note
6 - Property and Equipment





During
the twelve months ending December 31, 2007 the company reduced its estimates of
the useful lives of certain machinery, equipment and other assets to reflect its
new expectation on the useful life of these assets. The reduction had the effect
of increasing the depreciation expense by $9,008.





At
December 31, 2007 property and equipment consisted of the
following:





2007Equipment
            
            $
            5,200Office
      equipment
            
            
            14,205Auto
            
            
            45,355Trailer
            
            
            2,500Software
      system
            
            
            19,38186,641Less
      accumulated depreciation
            
            
            (25,060
            )Total
            
            
            61,581





Depreciation
for the years ended December 31, 2007 and 2006 was $13,638 and $3,288,
respectively.


-39-


Note
7 - Notes Payable





The
Company has a revolving line of credit from a financial institution totaling
$35,000.  At December 31, 2007 the line of credit was fully extended
and the Company has required monthly payments of interest at 6.5% above Prime
Rate.  On October 18, 2009, the outstanding balance on the line of
credit converts to an installment note payable of equal installments of interest
and principal until September 30, 2013.




In
November, 2007, the Company and Mr. Teja entered into an agreement with Mr.
Davidov pursuant to which Mr. Davidov would be paid $20,000 a month until the
outstanding balance was paid off. Payments of $40,000 were made under this
agreement in 2007 and as of December 31, 2007 the outstanding balance due under
the agreement was approximately $59,407.




At
December 31, 2007 notes payable consist of the following:





As
      ofDecember
      31, 2007Total
      amount
            
            
            CurrentNote
      payable to a financial institution in a foreign country; 12.4% per annum;
      monthly payments of $242
            
            $
            5,089
            
            
            $
            2,902Note
      payable to a financial institution; 0% interest per annum; monthly
      payments of $756 to 2012; collateralized by an automobile.
            
            
            44,599
            
            
            
            9,826Note
      payable to an individual; interest at 10% per annum; matures March 24,
      2008
            
            
            59,407
            
            
            
            59,407Note
      payable to an individual;  interest at 7%; matures February
      2008.
            
            
            15,391
            
            
            
            15,391$
            124,486
            
            
            $
            87,526




The
following schedule shows future principal payments required for contracts and
notes payable, as of December 31, 2007:


Contracts
      &
              Notes
      Payable2008
            
            $
            87,5262009
            
            
            11,2592010
            
            
            9,0712011
            
            
            9,0712012
            
            
            7,559Total principal payments
            
            $
            124,486Less current portion of notes
            
            $
            (87,526)Non current portion of notes
            
            $
            36,960




-40-


Note
8 - Legal Settlement





On June
10, 2004, the Company entered into a business arrangement with Kellstrom which
contained a covenant not to compete, confidentiality provision, and restrictions
to do business in the Ground Support Equipment with its clients. This business
arrangement failed and a Termination Agreement was signed by the Company on
December 8, 2004 wherein the Company was obligated to pay a sum of
$1,187,275.





On May 26, 2006, the Company entered
into a settlement agreement whereby it agreed to issue purchase credits in the
amount of $500,000 and make cash payments of $150,000. In addition, the Company
agreed to pay an additional sum of $566,174, in the event that (a) the Company
defaulted on purchase credits or (b) if the Company is awarded a one-time
specific contract from a specific customer before May 26, 2008. If the order is
not accepted by May 26, 2008 and we do not default on the remaining purchase
credits no further obligation is due.  At December 31, 2007, the cash
payments of $150,000 had been paid in full, and the balance of the purchase
credits was $384,000.




Note
9 - Related Party Transactions





As of
December 31, 2007 the Company owed an officer for his advances the total balance
of $417,985 of which $48,610 is current. These advances are non-interest bearing
and the officer has agreed not to demand payment of the long term portion during
2008. In the twelve months ended December 31, 2007 the Company paid the officer
$15,980 towards the debt, additionally the officer has participated in a
subscription agreement in which he converted $140,000 of his debt for 200,000
shares with a warrant to purchase 100,000 shares for $1.00 per share for 2
years.





During
the twelve months ended December 31, 2007 the Company accrued salaries to
officers in the aggregate amount of $144,071. The amount of $8,493 was a non
interest bearing advance from a related party and $7,000 was unpaid expenses to
an officer.





On April
26, 2007, the Company entered into a consulting agreement with a related party
to assist the Company with business development.  Consulting fees
under the agreement require a minimum annual payment of $120,000.  At
December 31, 2007, the Company has accrued $81,311 due to the related
party.




Note
10 - Leases





The
Company leases a 7,500 square feet operating facility under a non cancelable
lease expiring September 30, 2008. The lease contains one-year renewal option.
Minimum lease payments through September 30, 2008 are $27,000. Lease
expenses for the year ended December 31, 2007 and 2006 totaled $65,155 and
$60,253 respectively.




Note
11- Share Capital




The
company had 3,600,000 shares outstanding at December 31, 2007.


The
Company is authorized to issue 1,000,000 shares of $0.001 preferred stock and
50,000,000 shares of $0.001 par value common stock.




On
January l, 2007, the Company issued 3,000,000 shares of common stock in exchange
for all of the issued and outstanding stock of Phoenix Aerospace, Inc. as part
of a reverse merger. -41-




On
January 1, 2007, the Company issued 396,000 shares of common stock in exchange
for notes payable in the amount of $198,000.




On
September 24, 2007, the Company issued 100,000 shares of common stock as a bonus
to legal counsel.  The stock was valued at fair market value of
$85,000.





On
November 28, 2007, the Company issued to two investors 58,000 shares as part of
a subscription agreement. In accordance with the subscription agreement, the
Company granted these investors a warrant to purchase up to 29,000 shares of
common stock for $1 per share expiring December 31, 2009.





On
December 31, 2007, the Company issued to 14 investors and 1 affiliated investor
592,143 shares as part of a subscription agreement. In accordance with the
subscription agreement, the Company granted these investors a warrant to
purchase up to 296,072 shares of common stock for $1 per share expiring December
31, 2009. The
warrants are subject to certain piggy-back registration rights in the event the
company registers additional shares. The company currently has no plans to
register additional shares.





The
following table summarizes the outstanding warrants:





Warrants
      OutstandingPrice
      ($)
            Number
            Weighted
      Average Remaining Life
            Weighted
      Average Exercise Price$1.00
            325,072
            2.0
      years
            $1.00




On
January 1, 2007 the Company did not have any warrants outstanding, all warrants
were issued during the year ended December 31, 2007, and none were exercised of
cancelled as of December 31, 2007.




Note
12 Stock Based Compensation





On
December 14, 2006, the Company entered into employment agreements with three key
officers. In connection with these agreements, the Company agreed to grant
990,000 options to purchase common stock at a price of $0.50 per share. The
employment agreements became effective on April 26, 2007. The above-mentioned
options were granted on April 26, 2007.




On
October 2, 2006, the Company entered into a consulting agreement with a related
party. In connection with this agreement, the Company agreed to grant 330,000
options to purchase common stock at a price of $0.50 per share. The consulting
agreement became effective on April 26, 2007. The above-mentioned options were
granted on April 26, 2007.




On July 27, 2006, the Company entered
into a retention agreement with a law firm. As part of this agreement, the
Company agreed to grant options to purchase 170,000 shares of common stock at
$1.00 per share. The options were to be granted immediately prior to the
effective date of the SB-2 registration statement filed with the Securities and
Exchange Commission.  The above-mentioned options were granted on
August 6, 2007.





Estimation
of the fair value of the options was calculated using a Black- Scholes model
according to the guidance of SFAS No. 123(R). Value of the shares for the day of
the grant was established based on certain transactions and agreement which
based the price per share at $0.50 per share. Since the company did not have a
trading history, the company calculated an implied volatility based on an
average of the volatility of several companies which are from similar industry
and share certain characteristics. The company's calculations have reached an
implied volatility of 107%. Since there was no exercise history, the Company
applied the “plain vanilla” expected term option as allowed by SEC Staff
Accounting Bulletin No. 107.  Under this option we estimated the
expected term by taking the average of the vesting and the contractual term of
the options for employees.   The expected term for options issued
to non employees was set at the contractual term. Risk free interest rate was
determined to be 4.5%. -42-





Number
      of
            
            
            WeightedOptions
            
            
            AverageExercise
      PriceOptions
      outstanding at the beginning of the period
            
            
            –
            
            
            $
            –Granted
            
            
            1,320,000
            
            
            $
            0.5170,000
            
            
            $
            1.0Options
      outstanding at the end of the period
            
            
            1,490,000
            
            
            $
            0.55Options
      vested and exercisable
            
            
            1,490,000
            
            
            $
            0.55Weighted
      average fair value of options granted
            
            
            
            
            
            $
            0.29





The
following table summarizes information about options and warrants outstanding
and exercisable at December 31, 2007:




Options
      OutstandingRange
      price ($)
            Number
      of Options
            Weighted
      Average Remaining Life
            Weighted
      Average Exercise Price$0.50
            1,320,000
            3.0
      years
            $0.50$1.00
            170,000
            2.7
      years
            $1.00




Note
13- Income Taxes





Significant
components of the Company’s net deferred tax asset as of December 31were as
follows:


2007
              
              
              2006Deferred
      tax assets:Net
      operating loss carryforwards
              
              $
              553,000
              
              
              $
              386,000Uniform
      Capitalization
              
              
              7000Accrued
      vacation pay
              
              
              9,000
              
              
              
              -Stock
      option expense
              
              
              136,000
              
              
              
              -Contingent
      liability
              
              
              183,000
              
              
              
              183,000Subpart
      F losses
              
              
              15,000
              
              
              
              2,000Related
      party accrued expenses
              
              
              199,000
              
              
              
              170,000Property
      plant & equipment
              
              
              (5,000
              )
              
              
              (8,000
              )Total
      deferred tax assets
              
              
              1,097,000
              
              
              
              733,000Valuation
      allowance
              
              
              (1,097,000
              )
              
              
              (733,000
              )Net
      deferred tax assets
              
              $
              -
              
              
              $
              -


-43-


The
Company has analyzed its valuation allowance according to guidance from SFAS 109
and arrived at a 100% allowance based on: (a) the Company’s history of loss from
operations, (b) Company’s lack of earnings in recent history, and (c) due to the
“going concern” opinion. As a result, no deferred tax benefit has been recorded
at the year end December 31, 2007.




As of
December 31, 2007 and 2006, the Company had federal net operating loss
carryforwards of approximately $1,580,332 and $1,102,188, respectively. These
operating losses will be available to reduce future taxable income and begin to
expire in 2023. In addition, the Company also has temporary timing differences
between its book income and tax income that will generate future tax benefits.
Following is a reconciliation of income tax at the statutory rate to the
Company’s effective rate:





2007
            
            
            2006Computed
      at the expected statutory rate
            
            
            35.00
            %
            
            
            35.00
            %Permanent
      differences
            
            
            (4.70
            )
            
            
            (0.99
            )Property
      and equipment
            
            
            (0.23
            )
            
            
            6.06Other
      temporary differences
            
            
            (16.26
            )
            
            
            (33.39
            )NOL
      carryforward
            
            
            (13.81
            )
            
            
            (6.68
            )Income
      tax expense – effective rate
            
            
            0.00
            %
            
            
            0.00
            %








-44-




Item8. Changes In and
Disagreements with Accountants on Accounting and Financial Disclosure





On
December 10, 2007, Phoenix International Ventures, Inc. (the “Company”)
terminated Stark Winter Schenkein & Co., LLP (“SWS”) as its independent
public accountant.  Such termination was recommended and approved by
the Board of Directors of the Company.





The
report issued by SWS on the financial statements of the Company for the past
year contained no adverse opinion or disclaimer of opinion, nor were they
modified as to uncertainty, audit scope or accounting
principles.  However, such report contained an explanatory paragraph
expressing substantial doubt about the Registrant’s ability to continue as a
going concern.





Prior to
and up to the time of termination, the Company had no disagreements with SWS
with regard to any matter of accounting principles or practice, financial
statement disclosure, or auditing scope or procedure.





On
December 10, 2007, the Company engaged the services of Mark Bailey & Co.
Ltd. (“MB”) as its new independent public accountant.  Up to the date
of this filing, the Company has not consulted with MB regarding (i) the
application of accounting principles to a specific completed or contemplated
transaction, (ii) or the type of audit opinion that might be rendered on the
Company’s financial statements.




Item
8A- Controls and Procedures
  In
accordance with SEC release 33-8760 the company is not subject to include either
a managements assessment on the company's internal control over its financial
reporting or their auditor's attestation report until it has filed a report with
the commission for the prior fiscal year. As a result this report does not
contain a management assessment on the Company's its internal
  (a) Evaluation of Disclosure Controls
and Procedures: We strive to maintain disclosure controls and procedures
designed to ensure that information required to be disclosed in reports filed
under the Securities Exchange Act of 1934, as amended, is recorded, processed,
summarized and reported within the specified time periods and that such
information is accumulated and communicated to management to allow timely
decisions on required disclosure. We have concluded that our disclosure
controls and procedures regarding information required to be included in SEC
reports were not adequate.
  (b) Changes in Internal Control over
Financial Reporting: In light of the above, the Company performed
additional analysis and other post-closing procedures to ensure the consolidated
financial statements were prepared in accordance with generally accepted
accounting principles. Accordingly, management believes the consolidated
financial statements included in this report fairly present, in all material
respects, our financial condition, results of operations and cash flows for the
periods presented.


-45-




Item 8B. Other information





None.





Item9.   Directors, Executive Officers, Promoters,
Control Persons and Corporate Governance; Compliance with Section 16(a) of the
Exchange Act





Our
officers and directors and further information concerning them are as
follows:





Name
            Age
            PositionZahir
      Teja
            53
            President,
      Chief Executive Officer, DirectorNeev
      Nissenson
            29
            Vice
      President, Secretary, DirectorTeja
      N. Shariff
            52
            Treasurer,
      Chief Financial Officer, Chief Accounting
  Officer





Zahir
Teja - President, Chief Executive Officer, Director





Zahir
Teja, age 53, has served as the Company's President and Chief Executive Officer
since the Company's inception. He holds this position at the pleasure of the
Board of Directors. He has also been a member of the Board of Directors since
the Company's inception. His term as a board member is one year until the next
meeting of stockholders and until his successor has been duly elected and
qualified. From April, 2003 to the present, Mr. Teja was the founder and sole
owner of Phoenix Aerospace, Inc., a company engaged in the business of design,
modifications and manufacturing of support equipment of military aircraft. Prior
to that engagement, Mr. Teja was engaged from June, 2000 to March, 2003 as a
consultant with American Valley Aviation, Inc., a manufacturer and
remanufacturer of ground support equipment. His primary responsibilities were in
the areas of marketing and sales and business development in ground support
equipment.





Under a
consulting agreement dated October 2, 2006 as amended, among the Company, Mr.
Teja, and Anney Business Corp., a British Virgin Islands corporation, the
parties agreed, among other things, to vote their shares to nominate Zahir Teja
and Neev Nissenson as directors and appoint Mr. Teja as President and Mr.
Nissenson as Vice President. See “Consulting Agreement.”





Neev
Nissenson - Vice President, Secretary, Director





Neev
Nissenson, age 29, has served as the Company's Vice President since the
Company's inception. He holds this position at the pleasure of the Board of
Directors. He has also been a member of the Board of Directors since the
Company's inception. His term as a board member is one year until the next
meeting of stockholders and until his successor has been duly elected and
qualified.





Mr.
Nissenson, for more than the past five years, he has been engaged by Dionysos
Investments Ltd., a consulting company; he was responsible for numerous business
development projects for private and public companies. Mr. Nissenson is an
armored platoon commander in the Israeli Defense Forces (Reserve) Armored Corps
with a rank of Captain. He holds an Executive Master's degree in Business
Administration specializing in Integrative Management at the Hebrew University
of Jerusalem and a bachelor of the arts degree in General History and Political
Science from Tel Aviv University. -46-





Under a
consulting agreement dated October 2, 2006 as amended, among the Company, Mr.
Teja, and Anney Business Corp., the parties agreed, among other things, to vote
their shares to nominate Zahir Teja and Neev Nissenson as directors and appoint
Mr. Teja as President and Mr. Nissenson as Vice President. See “Consulting
Agreement.”





Teja
N. Shariff - Treasurer, Chief Financial Officer, Chief Accounting
Officer





Teja N.
Shariff, age 52, has served as the Company's Chief Financial Officer and Chief
Accounting Officer since the Company's inception. He holds this position at the
pleasure of the Board of Directors. Mr. Shariff is the principal owner of the
Teja N. Shariff, CPA accounting firm. He has held this position for more than
the past five years. Mr. Shariff received a B.Sc. in Accounting from the
California State University at Long Beach.





Significant
Employees





As of
December 31, 2007, the Company believes that almost all employees are important
to the success of the Company but the only significant individuals are the
Company’s’ officers and directors referenced above.





Family
Relationships





Mr. Teja
and Mr. Shariff are brothers. Aside from the foregoing, there are no family
relationships among our directors, executive officers, or persons nominated or
chosen by us to become directors or executive officers.





Involvement
in Certain Legal Proceedings





To the
best of our knowledge, during the past five years, none of the following
occurred with respect to a present or former director, executive officer, or
employee: (1) any bankruptcy petition filed by or against any business of which
such person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time; (2) any conviction in a
criminal proceeding or being subject to a pending criminal proceeding (excluding
traffic violations and other minor offenses); (3) being subject to any order,
judgment or decree, not subsequently reversed, suspended or vacated, of any
court of competent jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his or her involvement in any type of business,
securities or banking activities; and (4) being found by a court of competent
jurisdiction (in a civil action), the SEC or the Commodities Futures Trading
Commission to have violated a federal or state securities or commodities law,
and the judgment has not been reversed, suspended or vacated.





Section
16(a) Beneficial Ownership Reporting Compliance





Section
16(a) of the Exchange Act requires our directors and executive officers and
persons who beneficially own more than ten percent of a registered class of the
Company’s equity securities to file with the SEC initial reports of ownership
and reports of changes in ownership of common stock and other equity securities
of the Company. Officers, directors and greater than ten percent beneficial
shareholders are required by SEC regulations to furnish us with copies of all
Section 16(a) forms they file. To the best of our knowledge based solely on a
review of Forms 3, 4, and 5 (and any amendments thereof) received by us during
or with respect to the year ended December 31, 2007, the following persons have
failed to file, on a timely basis, the identified reports required by Section
16(a) of the Exchange Act during fiscal year ended December 31, 2007: -47-





Name
      and principal position
            
            Number
      of
              late
      reports
            
            Transactions
      not
              timely
      reported
            
            Known
      failures to
              file
      a required formZahir
      Teja
            
            2
            
            1
            
            -Neev
      Nissenson
            
            1
            
            -
            
            -Teja
      N. Shariff
            
            1
            
            -
            
            --
            
            -
            
            -




Code
of Ethics





We have
adopted a Code of Ethics within the meaning of Item 406(b) of Regulation S-B.
This Code of Ethics applies to our principal executive officer, our principal
financial officer, and principal accounting officer, as well as all other
employees, and is filed herewith. If we make substantive amendments to this Code
of Ethics or grant any waiver, including any implicit waiver, we will disclose
the nature of such amendment or waiver on our website or in a report on Form 8-K
within four business days of such amendment or waiver.





Security
Holder Nominating Procedures





We do not have any formal procedures by
which our stockholders may recommend nominees to our board of
directors.





Committees
of the Board of Directors





The
Company does not have a nominating, compensation or audit
committee.





Compensation
of the Board of Directors





Directors
are not paid any fees or compensation for services as members of our board of
directors or any committee thereof.


-48-


Audit
Committee





We do not
have a separately-designated standing audit committee. The entire board of
directors performs the functions of an audit committee, but no written charter
governs the actions of the board of directors when performing the functions of
that would generally be performed by an audit committee. The board of directors
approves the selection of our independent accountants and meets and interacts
with the independent accountants to discuss issues related to financial
reporting. In addition, the board of directors reviews the scope and results of
the audit with the independent accountants, reviews with management and the
independent accountants our annual operating results, considers the adequacy of
our internal accounting procedures and considers other auditing and accounting
matters including fees to be paid to the independent auditor and the performance
of the independent auditor.





For the
year ended December 31, 2007, the board of directors:




1.
            Reviewed
      and discussed the audited financial statements with management,
      and






2.
            Reviewed
      and discussed the written disclosures and the letter from our independent
      auditors on the matters relating to the auditor's
      independence.





Based
upon the board of directors’ review and discussion of the matters above, the
board of directors authorized inclusion of the audited financial statements for
the year ended December 31, 2007 to be included in this Annual Report on Form
10-KSB and filed with the Securities and Exchange Commission.




Item10.  Executive Compensation





The table
below summarizes all compensation awarded to, earned by, or paid to our current
executive officers for each of the last three completed fiscal
years.




Name
      and Principal Position
              Year
              Salary
              Bonus
              Stock
      Awards
              Option
      awards
              Non-Equity
      Incentive Plan Comp.
              Nonqualified
      Deferred Comp. Earnings
              all
      other compensation
              Total($)
              ($)
              ($)
              ($)
              ($)
              ($)
              ($)
              
              ($)Zahir
      Teja(1) President, CEO, Director
              2007
              120,000
              
              
              (4)
      $178,200
              
              
              
              
              
              298,2002006
              120,000
              
              
              
              
              
              
              
              
              120,000Neev
      Nissenson(2)
              2007
              50,000
              
              
              (5)
      $89,100
              
              
              
              
              
              139,100VP,
      Secretary, Director
              2006Teja
      N. Shariff(3)
              2007
              40,000
              
              
              
              
              
              
              
              
              40,000CFO,
      Treasurer, CAO
              2006





-49-





Summary
Compensation Table




(1) Mr.
Teja's employment agreement with the Company described above was declared
effective on April 26, 2007. As per his employment agreement with Phoenix
Aerospace, Inc., Mr. Teja is due an annual salary of $120,000 per year. In 2006,
Mr. Teja, in order to free up cashflow for operations has agreed to defer some
of his annual salary.





(2) Mr.
Nissenson's employment agreement with the Company described above was declared
effective on April 26, 2007. Approximately $23,500 of salary due to Neev
Nissenson has been deferred.





(3) Mr.
Shariff's employment agreement with the Company described above was declared
effective on April 26, 2007.





(4) Under
the employment agreement, the Company has granted Mr. Teja an option to purchase
660,000 shares of the Company's common stock for an exercise price of $.50 per
share. The option terminates December 31, 2010. The "fair value" of these
options was estimated to be $0.27 per option.





(5) Under
the employment agreement, the Company has granted Mr. Nissenson an option to
purchase 330,000 shares of the Company's common stock for an exercise price of
$.50 per share. The option terminates December 31, 2010.  The "fair
value" of these options was estimated to be $0.27 per option




Employment
Agreements





The
Company has entered into an employment agreement with Zahir Teja to serve as the
Company's Chief Executive Officer and President. The term of the Agreement is 36
months commencing on April 26, 2007 (the “Effective Date”). The term shall be
automatically extended for additional one year periods, unless either party
notifies the other in writing at least 90 days prior to the expiration of the
then existing term of its intention not to extend the term.




Mr.
Teja's base compensation is $120,000 for the first 12 months, $180,000 for the
second 12 months, and no less than $180,000 for the third 12 months during the
term. Mr. Teja shall be entitled to receive annually a bonus and success fee
calculated as follows: the product of (A) one percent (1%) and (B) all revenues
from the Company's operations in excess of $4,000,000. The foregoing bonus and
success fee shall not exceed $130,000 during any twelve month period. Mr. Teja
is also entitled to certain fringe benefits and reimbursement of expenses. The
employment agreement may be terminated by the Company for “Cause” and may be
terminated by Mr. Teja for “Good Reason” or on 90 days' notice.





Under the
employment agreement, the Company has granted Mr. Teja an option to purchase
660,000 shares of the Company's common stock for an exercise price of $.50 per
share. The option terminates December 31, 2010.





The
Company has entered into an employment agreement with Neev Nissenson to serve as
the Company's Vice President. The term of the Agreement is 36 months commencing
on the Effective Date. The term shall be automatically extended for additional
one year periods, unless either party notifies the other in writing at least 90
days prior to the expiration of the then existing term of its intention not to
extend the term.





Mr.
Nissenson's base compensation is $75,000 for the first 12 months, $126,000 for
the second 12 months, and no less than $126,000 for the third 12 months during
the term. Mr. Nissenson is also entitled to certain fringe benefits and
reimbursement of expenses. The employment agreement may be terminated by the
Company for “Cause” and may be terminated by Mr. Nissenson for “Good Reason” or
on 90 days' notice. -50-





Under the
employment agreement, the Company has granted Mr. Nissenson an option to
purchase 330,000 shares of the Company's common stock at an exercise price of
$.50 per share. The option terminates December 31, 2010.





The
Company has entered into an employment agreement with Teja N. Shariff to serve
as the Company's Chief Financial Officer. The term of the Agreement is 24 months
commencing on the Effective Date. The term shall be automatically extended for
additional one year periods, unless either party notifies the other in writing
at least 90 days prior to the expiration of the then existing term of its
intention not to extend the term.





Mr.
Shariff's base compensation is $5,000 per month during the term. Mr. Shariff is
also entitled to certain fringe benefits and reimbursement of expenses. The
employment agreement may be terminated by the Company for “Cause” and may be
terminated by Mr. Shariff for “Good Reason” or on 90 days' notice.





Compensation
to Directors





Directors
are not paid any fees or compensation for services as members of our board of
directors or any committee thereof.




Outstanding
Equity Awards at 2007 Fiscal Year End




The
following table sets forth the stock options held by the named executives as of
December 31, 2007.




Options
      Awards
            
            Stock
      AwardsName
            
            Number
      of Securities Underlying Unexercised Options
              (#
      Exercisable)
            
            Number
      of Securities Underlying Unexercised Options
              (#
      Unexercis-able)
            
            Equity
      Incentive Plan Awards: Number of Securities Underlying Unexercised
      Unearned Options
              (#)
            
            Option
      Exercise Price
              ($)
            
            Option
      Expiration Date
            
            Market
      Value of Shares or Units of Stock That Have Not Vested
              ($)
            
            Equity
      Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
      That Have Not Vested
              (#)
            
            Equity
      Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or
      Other Rights that Have Not Vested
              ($)Zahir
      Teja(1)
            
            
            660,000
            
            
            
            
            
            
            
            
            0.50
            
            
            12/10Neev
      Nissenson(2)
            
            
            330,000
            
            
            
            
            
            
            
            
            0.50
            
            
            12/10Teja
      N. Shariff(3)




All
      options vest immediately upon
grant.


-51-


Stock Options




Aside
from the options described above and certain options to purchase an aggregate of
170,000 shares of our common stock at an option price of $1.00 per share granted
under a retainer agreement between the Company and its securities counsel, there
were no other options granted in the last two fiscal years.




Item11.  Security Ownership of Certain Beneficial Owners
and Management and Related


Stockholder Matters





The
following table provides the names and addresses of each person known to us to
own more than 5% of our outstanding common stock as of the date of this annual
report on Form 10-KSB, and by the officers and directors, individually and as a
group. Except as otherwise indicated, all shares are owned
directly.





Title
      Of Class
            Name
      and Address of Beneficial Owner(1)(2)
            Position
      with the Company
            Amount
      Of Beneficial Ownership
            Percent
      Of ClassCommon
      Stock
            Zahir
      Teja(3)
            President,
      CEO, Director
            6,548,000
            83%Common
      Stock
            Neev
      Nissenson(4)
            Vice
      President, Secretary, Director
            3,268,000
            45%Common
      Stock
            Teja
      N. Shariff(5)
            CFO,
      Treasurer
            296,000
            4%Common
      Stock
            Anney
      Business Corp.(6)
              Rue
      Arnold Winkelried 8,
              Case
      postale 1385,
              1211
      Geneve 1, Switzerland
            5%
      Stockholder
            6,675,000
            88%Common
      Stock
            All
      Officers and Directors as a group that consists of 3
    persons
            
            7,374,000
            92%


______________________________


(1)
Unless otherwise indicated, the address is care of Phoenix International
Ventures, Inc., 22 Carry Way, Carson City, Nevada 89706.





(2)
Pursuant to the rules and regulations of the Securities and Exchange Commission,
shares of common stock that an individual or group has a right to acquire within
60 days pursuant to the exercise of options or warrants are deemed to be
outstanding for the purposes of computing the percentage ownership of such
individual or group, but are not deemed to be outstanding for the purposes of
computing the percentage ownership of any other person shown in the
table.





(3) Mr.
Teja's share holdings consist of 3,350,000 shares of the Company's common stock
beneficially owned by him. Under his employment agreement, Mr. Teja owns an
option to purchase up to 660,000 shares of the Company's common stock at an
exercise price of $.50 per share. This option expires December 31, 2010. Under
irrevocable proxies signed by the holders of 2,538,000 shares of the Company's
common stock, Mr. Teja and Neev Nissenson have been appointed, jointly and
severally, as attorneys-in-fact to vote such holders' shares for a period of
seven years. Under the Consulting Agreement among the Company, Anney Business
Corp. and Mr. Teja, Mr. Teja and Anney have an understanding to vote their
shares at shareholders meetings; accordingly, Mr. Teja may be deemed to be the
beneficial owner of the 457,000 shares of the Company's common stock
beneficially owned by Anney. Mr. Teja and Mr. Shariff are brothers. Under a
subscription agreement signed December 31, 2007 Mr. Teja has a warrant to
purchase up to 140,000 shares for $1.00 per share for 2 years.


-52-


(4) Neev
Nissenson's share holdings consist of 395,000 shares of the Company's common
stock beneficially owned by him and 5,000 shares of the Company's common stock
beneficially owned by his wife. Mr. Nissenson disclaims beneficial ownership of
the shares owned by his wife. Under his employment agreement, Mr. Nissenson owns
an option to purchase up to 330,000 shares of the Company's common stock at an
exercise price of $.50 per share. This option expires December 31, 2010. Under
irrevocable proxies signed by the holders of 2,538,000 shares of the Company's
common stock, Mr. Teja and Mr. Nissenson have been appointed, jointly and
severally, as attorneys-in-fact to vote such holders' shares for a period of
seven years.





(5) Mr.
Shariff's share holdings consist of 296,000 shares of the Company's common stock
beneficially owned by him. Under a Debt Conversion Agreement, Mr. Shariff was
issued 96,000 shares of the Company's common stock in consideration of the
cancellation of the Company's Note in the outstanding principal amount of
$48,000. Mr. Shariff and Mr. Teja are brothers.





(6) Anney
Business Corp.'s share holdings consist of 457,000 shares of the Company's
common stock beneficially owned by it. Under its consulting agreement with the
Company, Anney owns an option to purchase up to 330,000 shares of the Company's
common stock at an exercise price of $.50 per share. This option expires
December 31, 2010. Under the same consulting agreement, Anney and Mr. Teja have
an understanding to vote their shares at shareholders meetings; accordingly,
Anney may be deemed to be the beneficial owner of the 3,350,000 shares of the
Company's common stock beneficially owned by Mr. Teja and the 2,538,000 shares
of the Company's common stock with respect to which Mr. Teja has been appointed
an attorney-in-fact.





The percent of class is based on
7,746,143 shares of common stock issued and outstanding as of the date of this
Annual Report on Form 10-KSB.




Equity
Compensation Plan Information as of December 31, 2007




A
            
            B
            
            CPlan
      Category
            Number
      of Securities to Be Issued upon Exercise of Outstanding Options, Warrants
      and Rights
            
            Weighted-Average
      Exercise Price of Outstanding Options, Warrants and Rights
            
            Number
      of Securities Remaining Available for Future Issuance under Equity
      Compensation Plans (Excluding Securities Reflected in Column
      A)Equity
      compensation plans approved by security holders
            
            
            $Equity
      compensation plans not approved by security holders
            1,490,000
            
            
            -
            
            -Total
            1,490,000
            
            $
            0.58
            
            (1)







(1)
            Options
      not issued pursuant to a plan with shares available for future
      issuance.


Options
      OutstandingRange
      price ($)
            Number
      of Options
            Weighted
      Average Remaining Life
            Weighted
      Average Exercise Price$0.50
              $1.00
            1,320,000
              170,000
            3.0
              2.7
            $0.50
              1.00  -53-


Item12.   Certain Relationships and Related
Transactions and Director Independence.





Except as
described below, none of the following parties has, since our date of
incorporation, had any material interest, direct or indirect, in any transaction
with us or in any presently proposed transaction that has or will materially
affect us:




Any of our directors
      or officers;Any person proposed
      as a nominee for election as a director;Any person who
      beneficially owns, directly or indirectly, shares carrying more than 10%
      of the voting rights attached to our outstanding shares of common
      stockAny of our
      promoters; andAny relative or
      spouse of any of the foregoing persons who has the same house as such
      person


The
Company and Phoenix Aerospace, Inc. have entered into a Share Exchange Agreement
dated as of December 1, 2006. Under the Share Exchange Agreement, Zahir Teja,
the sole owner and principal of Phoenix Aerospace, Inc. will exchange all the
issued and outstanding shares of Phoenix Aerospace, Inc. common stock for
3,000,000 shares of the common stock of the Company. As a result of this
transaction, Phoenix Aerospace, Inc. became a wholly owned subsidiary of the
Company, and Mr. Teja became a principal stockholder of and continued to be a
principal of the Company. The effective date of this transaction was January 1,
2007.




In
December, 2006, Phoenix Aerospace, Inc. entered into a Debt Conversion Agreement
with Teja N. Shariff, the Company's CFO and a creditor. Under this agreement,
Phoenix Aerospace, Inc. agreed to cause the Company to issue to Mr. Shariff
96,000 shares of the Company's common stock in consideration of the cancellation
of a Note in the outstanding principal amount of $48,000. Mr. Shariff
represented in the agreement that the common stock was purchased for investment
and that he was an accredited investor under Regulation D. These shares of
common stock are restricted shares as defined in the Securities
Act.





As
described in more detail above under “Employment Agreements” and “Consulting
Agreement”, the Company has entered into employment agreements with its three
executive officers and has entered into a consulting agreement with Anney
Business Corp. and Mr. Teja.





The
parents of the Company are Zahir Teja, Neev Nissenson, and Anney Business Corp.
The respective amounts of voting securities owned by each parent are set forth
under Item 11. Above.





Director
Independence





Using the
independence requirements of the American Stock Exchange, the Company has
determined that none of its directors can be deemed to be
independent.


-54-


Item13.   Exhibits.





ExhibitNumber
            Description3.1
            Articles
      of Incorporation*3.2
            By-Laws*4.1
            Specimen
      Stock Certificate*10.1
            Share
      Exchange Agreement dated as of December 1, 2006 among Phoenix
      International Ventures, Inc., Phoenix Aerospace, Inc. and Zahir
      Teja*10.2
            Consulting
      Agreement dated October 2, 2006 among Phoenix International Ventures,
      Inc., Zahir Teja, and Anney Business Corp.*10.3
            Debt
      Conversion Agreement dated December 13, 2006 between Phoenix Aerospace,
      Inc. and LeRoy Moser*10.4
            Debt
      Conversion Agreement dated December 12, 2006 between Phoenix Aerospace,
      Inc. and Erik Kudlis*10.5
            Debt
      Conversion Agreement dated December 14, 2006 between Phoenix Aerospace,
      Inc. and Teja N. Shariff*10.6
            Employment
      Agreement dated December 14, 2006 between Phoenix International Ventures,
      Inc. and Zahir Teja*10.7
            Employment
      Agreement dated December 14, 2006 between Phoenix International Ventures,
      Inc. and Neev Nissenson*10.8
            Employment
      Agreement dated December 14, 2006 between Phoenix International Ventures,
      Inc. and Teja N. Shariff*14.1
            Code
      of Ethics*21.1
            Subsidiaries
      of the Small Business Issuer*23.1
            Consents of Experts and Counsel**23.2
            Consent
      of Gersten Savage LLP31.1
            Certification
      of Chief Executive Officer pursuant to Securities Exchange Act Rule
      13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200231.2
            Certification
      of Chief Financial Officer pursuant to Securities Exchange Act Rule
      13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200232.1
            Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
    200232.2
            Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002





* Incorporated
by reference from prior filings.


**Filed
herewith.


-55-


Item14.   Principal Accountant Fees and
Services





Audit
Fees





The
aggregate fees billed by our auditors for professional services rendered in
connection with a review of the financial statements included in our quarterly
reports on Form 10-QSB and the audit of our annual consolidated financial
statements for the fiscal years ended December 31, 2007 and December 31, 2006
were approximately $25,000 and $28,000 respectively.





Audit-Related
Fees





Our
auditors did not bill any additional fees for assurance and related services
that are reasonably related to the performance of the audit or review of our
financial statements.





Tax
Fees





The
aggregate fees billed by our auditors for professional services for tax
compliance, tax advice, and tax planning were $0 and $0 for the fiscal years
ended December 31, 2007 and 2006.





All
Other Fees





The
aggregate fees billed by our auditors for all other non-audit services, such as
attending meetings and other miscellaneous financial consulting, for the fiscal
years ended December 31, 2007 and 2006 were $38,000 and $0
respectively.








-56-
 SIGNATURES





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




Phoenix International Ventures,
      Inc.By:
              /s/
      Zahir TejaZahir
      TejaPresident,
      CEO
 By:
              /s/
      Teja N. ShariffTeja
      N. ShariffCFO,
      Principal Accounting and Financial Officer






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




March
      31, 2008
              By:
              /s/ Zahir
      TejaZahir
      TejaPresident,
      Ceo, Director
 March
      31, 2008
              By:
              /s/ Neev
      NissensonNeev
      NissensonVice
      President, Director
 March
      31, 2008
              By:
              /s/
      Teja N. ShariffTeja
      N. ShariffCFO,
      Principal Accounting and Financial Officer
   -57-