UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549








(Mark
One)





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


For the
fiscal year ended December 31, 2008


Or





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


For the
transition period from ____________ to ______________





Commission
file number 333-140257





Phoenix
      International Ventures, Inc(Exact
      name of registrant as specified in its
charter)








Nevada
            
            20-8018146(State
      or other jurisdiction of
              incorporation
      or organization)
            
            (I.R.S.
      Employer
              Identification
      No.)





61B
Industrial Parkway


Carson
City, NV 89706


(Address
of principal executive offices) (Zip Code)




(775)
882 9700


(Registrant’s
telephone number, including area code)




Securities
registered under Section 12(b) of the Act:




None.





Securities
registered under Section 12(g) of the Act:


Common
Stock, par value $0.001


(Title of
class)




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes o No þ





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes o No þ





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or 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 þ No o





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not
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-K
or any amendment to this Form 10-K. o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





Large
      accelerated filer     o
              Accelerated
      filer        oNon-accelerated
      filero
                (Do
      not check if smaller reporting company)
              Smaller
      reporting company þ


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





As of
June 30, 2008, 7,749,893 shares of common stock were outstanding. The aggregate
market value of the common stock held by non-affiliates of the registrant, as of
June 30, 2008, the last business day of the 2nd fiscal
quarter, was approximately $6,621,921 based on the close price for the
registrant’s common stock as quoted on the Over-the-Counter Bulletin Board on
that date. Shares of common stock held by each director, each officer and each
person who owns 10% or more of the outstanding common stock have been excluded
from this calculation in that such persons may be deemed to be affiliates. The
determination of affiliate status is not necessarily conclusive.





As of
March 31, 2009, there were 8,046,718 shares of our common stock issued and
outstanding.





DOCUMENTS
INCORPORATED BY REFERENCE





None.


-1-








TABLE
OF CONTENTS




Part
      IItem 1.
                    Business
                    3Item 1A.
                    Risk Factors
                    12Item 1B.
                    Unresolved Staff Comments
                    18Item 2.
                    Properties
                    18Item 3.
                    Legal Proceedings
                    18Item 4.
                    Submission of Matters to a Vote of Security
      Holders
                    18Part
      IIItem 5.
                    Market for Registrant’s Common Equity, Related Stockholder
      Matters and Issuer Purchases of Equity Securities
                    19Item 6.
                    Selected Financial Data
                    21Item 7.
                    Management’s Discussion and Analysis of Financial Condition and
      Results of Operations
                    22Item 7A.
                    Quantitative and Qualitative Disclosures About Market
      Risk
                    27Item 8.
                    Financial Statements and Supplementary Data
                    28Item 9.
                    Changes In and Disagreements with Accountants on Accounting and
      Financial Disclosure
                    44Item 9A[T].
                    Controls and Procedures
                    44Item 9B.
                    Other Information
                    45Part
      IIIItem 10.
                    Directors, Executive Officers,
      and Corporate Governance
                    46Item 11.
                    Executive Compensation
                    48Item 12.
                    Security Ownership of Certain Beneficial Owners and Management
      and Related Stockholder Matters
                    52Item 13.
                    Certain Relationships and Related Transactions, and Director
    Independence
                    54Item 14.
                    Principal Accounting Fees and Services
                    55Part
      IVItem 15
                    Exhibits, Financial Statement Schedules
                    56Signatures
                    
                    57


-2-


PART
I





ITEM
1.   BUSINESS





Corporate
Information





Phoenix
International ventures, Inc. (“we,” “us,” “our” or the “Company”) was
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. 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.’s
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.





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. We remanufacture some of the existing support equipment, and
also manufacture 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.





We
also design and manufacture new ground support equipment.  In this
process, we generally bid on a government contract after conducting an internal
cost analysis and pricing plan. We then submit a formal proposal based on our
estimated budget.  Once the contract has been awarded, we would design
the requested unit and test a prototype before producing the units.





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 (the “USAF”) and the U.S.
Navy-and a number of contractors who have extensive business relationships with
branches of the U.S. military.


-3-




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 remain the same or decrease 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





Our 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, we entered into several cost
plus contracts. This means that under the applicable agreement, we are entitled
to be reimbursed for our costs and are 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 we furnished the
U.S. government with complete, accurate and current cost or pricing data as
defined by the Negotiations Act. If we fail 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 we fail 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, we could be
entitled to reimbursement of all allowable and allocable costs incurred in
making the change plus a reasonable profit.




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 and/or
an agreed payment timetable.





Ordinarily,
a prospective vendor seeking to do business with the U.S. Department of Defense
or with U.S. defense contractors is required to prepare the company to be
International Standard Organization (“ISO”) 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.


-4-





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 which it follows when conducting its day-to-day
business.





Obtaining
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. Our subsidiary, PAI, received this certification in
2003.  Our certification was 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
are 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.




We are
currently designing and manufacturing for the USAF, two aircraft engine trailers
applicable to multi-platform aircrafts, including the F-16, from a $2,450,450
contract awarded to us in September 2008.  Under this contract, we
will be designing and producing two new types of aircraft engine trailers and
manufacturing several units.  This contract also has an awarded, but
not yet exercised, option to purchase an additional 25 trailers, for a price of
$2,900,000.  We are also currently designing and remanufacturing
certain test boxes for the U.S. Navy, and Air Condition units for Astro
Tek.


On
occasion during fiscal 2007, 2008 and through the date of this report, we have
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 we 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.


-5-




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 – we were contracted by the
      U.S. Air Force to design new engine trailers that can replace aging
      support equipment still in use;·
            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. We do not intend to compete with these large defense contractors, rather we
seek 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 our designation as 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 our 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.




Supply
and Manufacturing




Our
design, engineering and assembly facilities are located in our 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 we have qualified our facility in order to meet the quality management
and assurance standards (ISO-9001)/2000) of the International Organization for
Standardization.




In the
course of our remanufacturing process for a particular product, we 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. We 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.


-6-




We rely
on suppliers located in the United States and Europe. Certain components used in
our 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 we secure a contract, which
involves parts that are generally more difficult to obtain, we may obtain the
parts and keep them in inventory. However, any interruption, suspension or
termination of component deliveries from our suppliers could have a material
adverse effect on our business.




Ordinarily,
we 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, we may have to curtail the production
and sale of the affected products for an indefinite period.




We
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. We are required to pay royalties related to sales of the support
equipment 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.




Warranty
and Customer Service




We
generally provide one-year warranties on all of our products covering both parts
and labor, although extended warranties may be purchased by customers. At our
option, we repair or replace products that are defective during the warranty
period if the proper usage and preventive maintenance procedures have been
followed by our customers. Repairs that are necessitated by misuse of such
products or are required beyond the warranty period are not covered by our
normal warranty.





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




Marketing
and Sales





We market
our products and services through direct contact with officials of branches of
the U.S. military and officials of various major defense contractors. In
addition, we promote our products and services through the dissemination of
product literature to potential customers and the attendance and exhibition at
trade shows and seminars. We do not have an internal sales force specifically
dedicated to the sales and marketing of our products and services. We do not
advertise in trade periodicals. Management believes that most of our sales leads
are generated by word-of-mouth referrals.





In the
military market, the sales cycle for our 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.


-7-





Customers





We sell
our products, directly or indirectly, primarily to the U.S. military market and
large aerospace and military contractors. We also sell to various European
customers.




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




Name
                Fiscal
      Period
                %
      of Total SalesTwelve
      Months Ended:2008U.S.
      Air Force
                
                34MSI
      GMBH
                
                27Northrop
      Grumman
                
                17U.S.
      Navy
                
                9Langa
                
                82007U.S.
      Navy
                
                35Northrop
      Grumman
                
                34MSI
      GMBH
                
                13U.S.
      Air Force
                
                8Camar
                
                4




The loss
of any of these customers could have a material adverse impact on our
business.




Competition





We
compete in our market against other concerns, most of which are larger and have
greater financial, technical, marketing, distribution and other resources than
we do. We compete on the basis of service, performance, reliability, price, and
deliveries.


-8-





We
encounter 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.




In the
military and government markets, we 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 we may have difficulty
complying. However, we are 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 we have the
following competitive advantages over would-be entrants into the U.S. military
markets. We are 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;




·
            U.S.
      Army Prime Contractor·
            Honeywell
      Aerospace GmbH approved vendor;




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




-9-


Backlog




As of
December 31, 2008, our backlog was approximately $5,693,160 as compared with a
backlog of approximately $3,644,905 as of December 31, 2007. Four customers
accounted for approximately 39%, 18%, 12%, and 12% of such backlog as of
December 31, 2008. We presently expect to manufacture and deliver most of the
products in our backlog within the next 12 months.




Substantially
all of our 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, we are generally entitled to
reimbursement of our cost and negotiated profits; provided that such contracts
would have been profitable.




Research
and Development Activities




We do not
devote a material amount of time to separate research and development
activities.





Intellectual
Property





To date,
our generated proprietary information and know-how are an important aspect of
our commercial success. Although we do not have a separate research and
development department, we nevertheless obtain important proprietary information
and know-how in connection with the fulfillment of our obligations under our
agreements with the U.S government and defense contractors. We have 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. We hold
no patents or copyrights and do not have trademark protection for the Phoenix
International Ventures or Phoenix Aerospace names. We require each of our
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 us.




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





Subsidiaries





We have
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 we design, manufacture and sell for military
applications, we are 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. We have no material Department of Defense
contracts that are subject to renegotiation in the foreseeable future and are
not aware of any proceeding to terminate material Department of Defense
contracts in which we may be indirectly involved. In addition, many of our
contracts provide for customer rights to audit our cost records and are subject
to regulations providing for price reductions if we submitted inaccurate cost
information.


-10-





Government
contracts governing our 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 we sell 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 our business.
Currently, we do not have any contracts so conditioned.





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





Under
certain circumstances, we are 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, we, in the event we engage 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.





We and
our 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. We have
required our foreign distributors to comply with the requirements of FCPA All
these restrictions may hamper us in our marketing efforts abroad.




Our
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. We are
not involved in any pending or threatened proceedings which would require
curtailment of, or otherwise restrict our operations because of such
regulations, and compliance with applicable environmental laws has not had a
material effect upon our capital expenditures, financial condition or results of
operations.





Management
believes that although we are required to implement certain additional
procedures that would not otherwise be required in order to comply with
applicable federal laws and regulations, such compliance has not generally
inhibited or limited our ability to enter into material contracts.




Employees





As of
December 31, 2008, we had six full time employees, including two officers, and
also had two 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
our employees are covered by a collective bargaining agreement or are
represented by a labor union. We consider our relationships with our employees
to be satisfactory.





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


-11-




ITEM1A.   RISKFACTORS





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 on Form 10-K, 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 occur, 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





We have a limited operating history
and therefore it may be difficult to evaluate our Company and our
prospects.





We were
recently organized and our principal operating subsidiary, founded in April,
2003, has only a limited operating history upon which an evaluation of our
Company and our prospects can be based. Our 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.





We
have incurred losses and have a working capital deficit and there can be no
assurance that such losses will not continue in the future.





For the
fiscal year ended December 31, 2008, we had a net income of $360,774 and for the
fiscal year ended December 31, 2007, we incurred a loss of
$1,221,539.  As of December 31, 2008, we had a working capital deficit
of $1,182,804 and accumulated stockholders' deficit of
$1,529,047.  Our capital needs have been met by the cash flow from
operations, private placements, salary deferral by Company principals, loans and
by issuing promissory note arrangements.  However, there can be no
assurance that such losses will not continue in the future.





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





We have
historically operated at a loss and may continue to do, however, the recent
receipt of additional orders, our current backlog, and other factors indicate we
will be able to continue as a going concern for at least the next twelve
months.  Failure to properly execute our current business plan may result
in our inability to continue as a going concern.








We may be unable to manage our growth
or implement our business strategy.





Although
we have experienced significant growth in a relatively short period of time, we
cannot assure you that our growth will continue, nor can we assure you that we
will be able to expand our facilities, our client base and markets or implement
the other features of our business strategy at the rate or to the extent
presently planned. Our rapid growth to date has placed, and in the future will
continue to place, a significant strain on our 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
      we act 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; and·
            Government
      contract awards can be contested by other contractors.





We
are dependent on major customers and any loss of these customers could have a
substantial adverse effect on our business, results of operations or financial
condition.





Our
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, 2008, our five largest customers in terms of sales accounted
for an aggregate of 95% of total sales. During 2007, our five largest customers
in terms of sales accounted for an aggregate of 94% of total sales. The loss of
any of the foregoing businesses as a customer could have a material adverse
effect on our results of operations or financial condition.


-13-





As of
December 31, 2008, our backlog was approximately $5,693,160 as compared with
backlog of approximately $3,644,905 as of December 31, 2007. Four customers
accounted for approximately 39%, 18%, 12%, and 12% of such backlog as of
December 31, 2008. We presently expect 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 our business and prospects. See "Item 1- Business -
Backlog".


Demand
for our defense-related products depends on government spending and any
re-allocation or reduction in such spending could have a material adverse effect
on our business and results of operations.





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 our  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.





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.


-14-





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 our support equipment may malfunction and cause loss of man hours, damage
to, or destruction of, equipment or delays is significant. Consequently, we, as
a manufacturer or remanufacturer of such support equipment, may be subject to
claims if such malfunctions or breakdowns occur. In remanufacturing activities,
we deal with obsolete and old equipment which increases the chance of product
malfunctions or breakdowns. We do not presently maintain product liability
insurance.





If
we are unable to attract and retain qualified engineering personnel, our ability
to continue our business could be impaired.





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 because of his experience and
his contacts in this industry. 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 and resources, 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.  Many of these competitors have greater financial,
technical, marketing, distribution and other resources than we
do.  Our relative lack of capital and resources may continue to place
us in a competitive disadvantage.  If we are unable to compete
successfully, our business may fail.





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. As of December 31, 2008 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, approximately $1,173,913. The Company does not currently
have the financial resources to pay off the total unpaid balance of the final
judgment.


-15-




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 and 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
requirements under Section 404 of the Sarbanes-Oxley Act of
2002.





Pursuant
to Section 404 of the Sarbanes-Oxley Act of 2002, we are required,
beginning with this fiscal year ending December 31, 2008, to include in our
Annual Report on Form 10-K our assessment of the effectiveness of our internal
control over financial reporting as of the end of fiscal 2008. Furthermore, we
expect that 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 certification
requirements.





We have
identified certain deficiencies in our internal control over financial
reporting.  See Item 9AT – Controls and Procedures.  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. Although
management believes that the material weakness did not have an effect on our
financial reports, 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.




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 56% of
the outstanding shares of our common stock. Accordingly, they have and 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 Over-the-Counter
Bulletin Board; 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.


-16-





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, 2008 we had
8,046,718 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 4,277,968
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 2,896,000
shares. Our Vice President, Neev Nissenson, and his affiliates own approximately
1,631,000 shares.




Because we may be subject to “Penny
Stock” rules, 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). 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.




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




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 provide 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.





-17-


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.




ITEM
1B.   UNRESOLVED STAFF COMMENTS





Not
applicable.





ITEM
2.  PROPERTIES





On August
17, 2007, we entered into a commercial lease agreement (the “Lease”) with Carry
Way LLC.  Under the Lease, we leased the approximately 7,500 square
feet of a building, housing our former corporate headquarters and
manufacturing plant, located at 42 Carry Way, Carson City, NV 89706, for an
initial period of 12 months, commencing September 10, 2007 and ending September
30, 2008.  We extended this term on September 30, 2008, for an
additional 12 month period which will end on September 30, 2009. The base
monthly rent is $3,000, and the security deposit is $2,100.  Mr. Zahir
Teja, president of the Company, guaranteed our performance under the Lease. In
accordance with extension option exercised September 30, 2008 the monthly rent
increased to $3,150.








On
January 29, 2009, we leased a new production facility located at 61B Industrial
PKWY, Carson City, NV 89706, under a lease commencing March 1, 2009 through
February 28, 2011, at a monthly rent of $4,120. Minimum payments on this lease
for the next 12 months will be $41,200.  Our principal executive
offices were moved to this location effective as of March 19, 2009.





Management
believes that these facilities will meet our operational needs for the
foreseeable future.




ITEM
3.   LEGALPROCEEDINGS





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, 2008, the remaining balance of the trade
credits is approximately $384,000.





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




ITEM
4.   SUBMISSION OF MATTERSTO 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, 2008.








-18-


PART
II





ITEM
5.   MARKET FOR REGISTRANT’S COMMON EQUITY,
RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES





Market
Information





Our
common stock is quoted on the Over-the-Counter Bulletin Board (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 of 2008 and the last two quarters
of 2007.


Fiscal
      Quarter End
                
                Low
      Bid
                
                
                High
      BidMarch
      31, 2008
                
                $
                0.85
                
                
                $
                1.75June
      30, 2008
                
                $
                1.76
                
                
                $
                2.60September
      30, 2008
                
                $
                1.98
                
                
                $
                2.62December
      31, 2008
                
                $
                1.35
                
                
                $
                2.30March
      31, 2007
                
                
                N/A
                
                
                
                N/AJune
      30, 2007
                
                
                N/A
                
                
                
                N/ASeptember
      30, 2007
                
                $
                .40
                
                
                $
                .85December
      31, 2007
                
                $
                .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, 2008, we had 71 stockholders of record.





-19-


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.





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





Equity
Compensation Plan Information as of December 31, 2008





The
Company does not currently have a formal equity compensation plan.







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
                      1,216,000
                      
                      
                      --
                      
                      --Total
                      1,216,000
                      
                      $
                      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
                  1,046,000
                  2.0
                  $0.50$1.00
                  170,000
                  1.7
                  1.00





-20-





Recent
Sales of Unregistered Securities





Between June
and August 2008, we entered into promissory note arrangements with an
aggregate of five Israeli investors and two Israeli corporations, pursuant to
which we issued promissory notes for an aggregate of $236,536 in principal
amount received.  The notes mature between June 21, 2009 and
August 19, 2009 and bear 15% interest per annum.  Interest accrues on
a monthly basis and is payable quarterly in an amount equal to the interest
accrued on the balance of the Note. The interest payments commence on the third
month following the issuance date for such note and shall continue every three
months until the applicable maturity date.


There
will be no penalties for early repayment of the notes.





In
connection with the issuance of the promissory notes, we issued to the investors
an aggregate of 13,575 shares of common stock, as well as warrants to purchase
an aggregate of 33,950 shares at prices ranging from $2.40 to $2.60 per share
for a period of 2 years.





Notes for
the aggregate principal amount of $99,465 were collateralized by shares of our
common stock put forward by one of our shareholders.  One note in the
aggregate principal amount of $20,115 was collateralized by shares put
forward by our CEO, Zahir Teja.  The remaining notes were not
collateralized.


The
offering of the promissory notes, the shares of common stock and the warrants
was not registered under the Securities Act of 1933, as amended (the “Securities
Act”), in reliance upon the exemptions from the registration requirements of the
Securities Act set forth in Section 4(2) thereof as a transaction by the Company
not involving any public offering, the investors met the “accredited investor”
criteria required by the rules and regulations promulgated under the Securities
Act, there was no underwriter and no general solicitation related to the
offering.




On
September 30, 2008, Anney Business Corp, a consultant, exercised an option to
purchase 274,000 shares in redemption of $137,000 of accrued expenses in
accordance with a consulting agreement.





On
September 30, 2008, an investor exercised an option to purchase 1,900 shares for
$1,900 in accordance with a subscription agreement.





On
October 27, 2008, an investor exercised an option to purchase 2,100 shares for
$2,100 in accordance with a subscription agreement





On
October 27, 2008, we issued to our legal counsel 9,000 shares in payment of
$20,000 accrued expenses.





ITEM
6.   SELECTED FINANCIALDATA





Not
applicable.





-21-





ITEM
7.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS





Forward-Looking
Statements





The
information set forth in Management's Discussion and Analysis or Plan of
Operations ("MD&A") may contains certain "forward-looking statements"
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, among other things, the use of
forward-looking terminology such as “believes,” “estimates,” “intends,” “plan”
“expects,” “may,” “will,” “should,” “predicts,” “anticipates,” “continues,” or
“potential,” or the negative thereof or other variations thereon or comparable
terminology, and similar expressions are intended to identify forward-looking
statements.  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-K 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 on Form 10-K..





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. (“we,” “us,” “our,” “PIV” or the “Company”) was
incorporated on August 7, 2006. The financial statements are consolidated with
those of our wholly owned subsidiaries, Phoenix Aerospace, Inc. (“PAI”) and
Phoenix Europe Ventures Ltd. (“PEV”)





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, we believe, facilitates future
acquisitions and the opening up of new lines of business.  Of course,
there can be no assurance that we 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. We recently renewed the process and extended the 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, 2008 AND DECEMBER 31, 2007





Financial
      Information - Percentage of Revenue12
      Months ended December 31, 20082008
                          
                          
                          2007Sales
                          
                          
                          100
                          %
                          
                          
                          100
                          %Cost
      of sales
                          
                          
                          -61
                          %
                          
                          
                          -84
                          %Gross
      profit
                          
                          
                          39
                          %
                          
                          
                          16
                          %Operating
      expenses:Research
      and Development
                          
                          
                          0
                          %
                          
                          
                          0
                          %Marketing
      & Selling
                          
                          
                          0
                          %
                          
                          
                          0
                          %General
      and administrative expenses
                          
                          
                          -45
                          %
                          
                          
                          -142
                          %Total
      operating expenses
                          
                          
                          -45
                          %
                          
                          
                          -142
                          %Other
      income (expense)
                          
                          
                          23
                          %
                          
                          
                          -3
                          %Net
      Income (loss)
                          
                          
                          17
                          %
                          
                          
                          -129
                          %







Revenues.  Revenues
increased 130% to $2,180,804 for the twelve months ended December 31, 2008,
compared to $948,775 for the twelve months ended December 31, 2007. The increase
in revenues is primarily attributable to an increase in sales order and
deliveries. For the twelve months ended December 31, 2008, remanufacturing
contracts accounted for 9% of our revenues, manufacturing and parts trading were
64%, and study contracts were 27% of product sales. This compares to
manufacturing and remanufacturing accounted for 10% of our revenues, study
contracts 36% and product sales 54% for the twelve months ended December
31, 2007.





US Navy
and Air Force represented 43% of the Company’s revenues for the year ended
December 31, 2008.  The remaining 57% of sales was to aerospace
companies and military contractors. Two customers represented 61% of the
Company’s revenues for the year ended December 31, 2008.





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 $1,334,162  for the twelve months ended December 31,
2008, compared to $792,264 for the twelve months ended December 31, 2007,
representing 61% and 84% of the total revenues for the twelve months ended
December 31, 2008 and December 31, 2007 respectively. The decrease in costs of
sales as percentage of total sales is primarily attributable to the increase in
high margin orders being delivered.




General and Administrative
Expenses. General and administrative expenses decreased by 28% from
$1,347,730 for the twelve months ended December 31, 2007 to $989,030 for the
twelve months ended December 31 2008.  The decrease in general and
administrative costs is primarily attributable to an approximate $460,000 option
expense during the twelve months ended December 31, 2007 which did not re-occur
during the twelve months ended December 31, 2008. As a percentage of revenues,
general and administrative expenses decreased to 45% for the twelve months ended
December 31, 2008, as compared to 142% for the twelve months ended December 31,
2007.


-23-





Interest Expense. Interest
expense increased to $62,992 for the twelve months ended December 31, 2008, as
compared to $30,320 for the twelve months ended December 31, 2006. The increase
in interest expense is primarily attributed to expenses associated with the
promissory note arrangement the company entered into in the twelve months ended
December 31, 2008.





Income before Taxes. Net
income before taxes for the twelve months ended December 31, 2008 amounted to
$360,774, as compared to a net loss of $1,221,539 for the twelve months ended
December 31, 2007.  The increase in income is primarily attributed
with additional revenues from manufacturing contracts as well as a recovery of
contingency in the amount of $566,154 the twelve months ended December 31,
2008.








Taxes on Income The Company
had no tax liabilities for the twelve months ended December 31, 2007 or
2008.





Net Income  Net
income for the twelve months ended December 31, 2008 amounted to
$360,774.  as compared to a net loss of $1,221,539 for the twelve
months ended December 31, 2007. The increase in income is primarily attributed
with additional revenues from manufacturing contracts as well as a recovery of
contingency in the amount of $566,154 the twelve months ended December 31,
2008.





Earnings (Loss) Per
Share.  The earnings per share for the twelve months ended
December 31, 2008 was 0.046 basic and 0.036 for fully diluted shares.  The
loss per share of common stock for the twelve months ended December 31, 2007 was
(0.170) (basic and diluted shares).




LIQUIDITY
AND CAPITAL RESOURCES





Cash as ofDecember 31, 2008, amounted to $225,767 as
compared with $70,314 as ofDecember 31, 2007, an increase of $155,453.
Net cash used in operating activities for the twelve months ended December 31,
2008, was $67,842. Net cash provided by financing activities for the twelve
months ended December 31, 2008 was $232,254.





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. There is no need for material capital investments in order
to execute the current backlog. Although this may change, we currently do not
expect to obtain any material capital investments in the next twelve
months.




The
Company leases its 7,500 square foot operating facility under a lease expiring
September 30, 2009. The lease contains one-year renewal options. Minimum lease
payments through September 30, 2009 are $28,350.





On
January 29, 2009 the Company entered into an agreement to lease a new production
facility starting from March 1, 2009 until February 28, 2011 at a monthly rent
of $4,120. Minimum payments on this lease for the next 12 months will be
$41,200.





We
borrowed $236,536 as part of a promissory note arrangement.  These
notes are to mature at intervals between June 21, 2009 and August 19, 2009. We
expect to repay these obligations primarily from cash generated by our operating
activities.





We shall
continue to finance our operations mainly from the cash provided from operating
activities. As of December 31, 2008, the Company had a backlog of approximately
$5,693,160. One of the orders is for the design and manufacturing of new
aircraft engine trailers for the approximate amount of $2,227,386 this order
contains a progress billing arrangement in it. In addition, two of the orders
are from two customers for the approximate amount of $833,762 these orders are
for time, material and an agreed profit. We collect 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 our backlog, there is no need for
us to finance materials and labor. Additionally, management is expecting,
although there can be no assurance, that additional orders will come in. Since
December 31, 2008 we have announced an additional $629,000 of new orders. These
orders are expected to be delivered in 2009. A consultant has exercised an
option to purchase 274,000 shares in redemption of $137,000.  In the
past twelve months, we experienced a significant improvement in our financial
situation. This improvement is mainly attributable to a $566,154 recovery of a
contingency. Senior management is also willing to defer salary payments if
necessary. As a result, we believe we will have enough funds from our operations
to support our operations for fiscal 2009.


-24-





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





Recent
Issued Accounting Pronouncements




Please
refer to note 1 of the 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.




Stock
Based Compensation.





We
account for stock option grants in accordance with SFAS No. 123(R), Share-Based Payment. We
record 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 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





We
account 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.  Accounting for these contracts involves management
judgment in estimating total contract revenue and cost. Significant factors
that influence these estimates includeinternal
and external engineering performance and business volume assumptions.Revenue
and cost estimates are regularly monitored and revised based on changes in
circumstances. Anticipated losses on long-term contracts are recognized when
such losses become evident.





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 2008 and 2007.




Income
Taxes
 
 Deferred
tax assets and liabilities are determined based on the difference between the
financial statements and tax basis of assets and liabilities using enacted tax
rates in effect for the year in which the differences are expected to reverse.
Our provision for income taxes is based on current statutory income tax rates.
Significant judgment is required in determining income tax provisions as well as
deferred tax asset and liability balances, including the estimation of valuation
allowances and the evaluation of tax positions.




ITEM
7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK





Not
applicable.


-27-


ITEM
8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA




REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




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. as of December 31, 2008 and 2007, and the related consolidated
statements of income, stockholders’ equity  and cash flows for the
years ended December 31, 2008 and 2007. 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 audits.




We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits 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 consolidated 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 audits provide a
reasonable basis for our opinion.






In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Phoenix
International Ventures, Inc. as of December 31, 2008 and 2007, and the
consolidated results of its operations and its cash flows for each of the years
then ended in conformity with accounting principles generally accepted in the
United States of America.




/s/
      Mark Bailey & Company, Ltd
              Reno,
      NevadaMarch
      31, 2009





-28-


Phoenix
      International Ventures, Inc.Consolidated
      Balance SheetsDecember
      31,Assets
                                        
                                        2008
                                        
                                        
                                        2007Current
      assetsCash
                                        
                                        
                                        225,767
                                        
                                        
                                        
                                        70,314Accounts
      receivable
                                        
                                        
                                        367,074
                                        
                                        
                                        
                                        86,929Inventory
                                        
                                        
                                        186,516
                                        
                                        
                                        
                                        164,248Prepaid
      and other current assets
                                        
                                        
                                        17,650
                                        
                                        
                                        
                                        530Total
      current assets
                                        
                                        
                                        797,007
                                        
                                        
                                        
                                        322,021Property
      and equipment, net
                                        
                                        
                                        47,943
                                        
                                        
                                        
                                        61,581Other
      assets
                                        
                                        
                                        
                                        
                                        
                                        
                                        4,000Total
      assets
                                        
                                        
                                        844,950
                                        
                                        
                                        
                                        387,602Liabilities and Stockholders'
      (Deficit)Current
      liabilitiesLine
      of credit
                                        
                                        
                                        48,340
                                        
                                        
                                        
                                        35,000Accounts
      payable
                                        
                                        
                                        379,693
                                        
                                        
                                        
                                        508,243Other
      accrued expenses
                                        
                                        
                                        236,060Customer
      deposits
                                        
                                        
                                        447,202
                                        
                                        
                                        
                                        307,106Notes
      payable
                                        
                                        
                                        212,751
                                        
                                        
                                        
                                        87,526Legal
      settlement
                                        
                                        
                                        384,000
                                        
                                        
                                        
                                        950,154Due
      to related party
                                        
                                        
                                        232,304
                                        
                                        
                                        
                                        240,875Officer
      loans
                                        
                                        
                                        39,461
                                        
                                        
                                        
                                        48,610Total
      current liabilities
                                        
                                        
                                        1,979,811
                                        
                                        
                                        
                                        2,177,514Commitments
      and ContingenciesLong
      term liabilitiesNotes
      payable
                                        
                                        
                                        24,811
                                        
                                        
                                        
                                        36,960Officer
      advances
                                        
                                        
                                        369,375
                                        
                                        
                                        
                                        369,375Total
      liabilities
                                        
                                        
                                        2,373,997
                                        
                                        
                                        
                                        2,583,849Stockholders'
      (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;
      8,046,718 shares issued and outstanding
                                        
                                        
                                        8,046
                                        
                                        
                                        
                                        7,746Paid
      in capital
                                        
                                        
                                        1,388,503
                                        
                                        
                                        
                                        1,145,397Subscription
      receivable
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (63,020
                                        )Accumulated
      deficit
                                        
                                        
                                        (2,925,596
                                        )
                                        
                                        
                                        (3,286,370
                                        )(1,529,047
                                        )
                                        
                                        
                                        (2,196,247
                                        )Total
      liabilities and stockholders' (deficit)
                                        
                                        
                                        844,950
                                        
                                        
                                        
                                        387,602The
      accompanying notes are an integral part of the financial
      statements








-29-





Phoenix
      International Ventures, Inc.Consolidated
      Income StatementsTwelve
      Months EndedDecember
      31,2008
                  
                  
                  2007Sales
                  
                  $
                  2,180,804
                  
                  
                  $
                  948,775Cost
      of sales
                  
                  
                  1,334,162
                  
                  
                  
                  792,264Gross
      margin
                  
                  
                  846,642
                  
                  
                  
                  156,511Operating
      expensesGeneral
      and administrative expenses
                  
                  
                  989,030
                  
                  
                  
                  1,347,730Total
      operating expenses
                  
                  
                  976,816
                  
                  
                  
                  1,347,730Income
      (Loss) from operations
                  
                  
                  (142,388
                  )
                  
                  
                  (1,191,219
                  )Recovery
      of contingency
                  
                  
                  566,154
                  
                  
                  
                  -Interest
      expense
                  
                  
                  (62,992
                  )
                  
                  
                  (30,320
                  )Net
      (loss) before taxes
                  
                  
                  360,774
                  
                  
                  
                  (1,221,539
                  )Taxes
      on income
                  
                  
                  -
                  
                  
                  
                  -Net
      income (loss)
                  
                  
                  360,774
                  
                  
                  $
                  (1,221,539
                  )Net
      Income (loss) per common share:Basic
                  
                  $
                  0.05
                  
                  
                  $
                  (0.17
                  )Diluted
                  
                  $
                  0.04
                  
                  
                  $
                  (0.17
                  )Weighted
      average shares outstanding:Basic
                  
                  
                  7,823,549
                  
                  
                  
                  7,028,252Diluted
                  
                  
                  9,809,149
                  
                  
                  
                  7,028,252The
      accompanying notes are an integral part of the financial
      statements





-30-





Phoenix
      International Ventures, IncConsolidated
      Statements of Stockholders' DeficitFor
      the years December 31, 2008 and 2007AdditionalAdditional
      Paid In
                      
                      
                      SubscriptionAmount
                      
                      
                      Capital
                      
                      
                      Receivable
                      
                      
                      (Deficit)
                      
                      
                      TotalBalance
      - 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, 2006 in 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
                      )Payment
      of $50,000 towards subscription receivable at January 4,
    2008
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      50,000
                      
                      
                      
                      
                      
                      
                      
                      50,000Payment
      of $13,020 towards subscription receivable at January 18,
    2008
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      13,020
                      
                      
                      
                      
                      
                      
                      
                      13,020Issuance
      of 3,750 shares and warrant to purchase 15,000 shares at $2.47 for two
      years as part of a note agreement at June 22, 2008
                      
                      
                      3,750
                      
                      
                      
                      4
                      
                      
                      
                      30,409
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      30,413Issuance
      of 1,200 shares and warrant to purchase 4,800 shares at $2.58 per share as
      part of a note agreement at July 2, 2008
                      
                      
                      1,200
                      
                      
                      
                      1
                      
                      
                      
                      10,055
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      10,056Issuance
      of 2,500 shares and warrant to purchase 10,000 at $2.60 as part of a note
      agreement at July 21, 2008
                      
                      
                      2,500
                      
                      
                      
                      3
                      
                      
                      
                      21,098
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      21,100Issuance
      of 1,050 shares and warrant to purchase 4,150 at $2.40 as part of a note
      agreement at July 24, 2008
                      
                      
                      1,050
                      
                      
                      
                      1
                      
                      
                      
                      8,122
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      8,123Issuance
      of 1,875 shares as part of a note agreement at August 8,
    2008
                      
                      
                      1,875
                      
                      
                      
                      2
                      
                      
                      
                      4,648
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      4,650Issuance
      of 3,200 shares as part of a note agreement at August 18,
    2008
                      
                      
                      3,200
                      
                      
                      
                      3
                      
                      
                      
                      8,061
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      8,064Exercise
      of warrant to purchase 1,900 shares at $1.00 per share at September
      29, 2008
                      
                      
                      1,900
                      
                      
                      
                      2
                      
                      
                      
                      1,898
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      1,900Exercise
      of option to purchase 274,000 shares at $0.50 per share at September 30,
      2008
                      
                      
                      274,000
                      
                      
                      
                      274
                      
                      
                      
                      136,726
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      137,000Exercise
      of warrant to purchase 2,100 shares at $1.00 per share at October 27,
      2008
                      
                      
                      2,100
                      
                      
                      
                      2
                      
                      
                      
                      2,098
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      2,100Issuance
      of 9,000 shares at $2.22 for debt reduction in October 27,
      2008
                      
                      
                      9,000
                      
                      
                      
                      9
                      
                      
                      
                      19,991
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      20,000Net
      Income (Loss)
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      360,774
                      
                      
                      
                      360,774Balance
      December 31, 2008
                      
                      
                      8,046,718
                      
                      
                      $
                      8,047
                      
                      
                      $
                      1,388,503
                      
                      
                      $
                      -
                      
                      
                      $
                      (2,925,596
                      )
                      
                      $
                      (1,529,047
                      )The
      accompanying notes are an integral part of the financial
      statements








-31-








Phoenix
      International Ventures, Inc.Consolidated
      Statements of Cash FlowsFor
      the Twelve Months Ended December 31, 2008 and 20072008
                  
                  
                  2007Cash
      flows from operating activitiesNet
      income (loss)
                  
                  
                  $
                  360,774
                  
                  
                  
                  (1,221,539
                  )Adjustments
      to reconcile net income (loss) to net cash used in operating
      activatesDepreciation
                  
                  
                  13,638
                  
                  
                  
                  13,638Amortization
      of debt discount
                  
                  
                  43,397
                  
                  
                  
                  -Recovery
      of contingent liability
                  
                  
                  (566,154
                  )Stock
      and options issued for services
                  
                  
                  -
                  
                  
                  
                  131,102Stock
      option expense
                  
                  
                  -
                  
                  
                  
                  388,118Accrued
      interest
                  
                  
                  -
                  
                  
                  
                  9,646Change
      in accounts receivable
                  
                  
                  (280,145
                  )
                  
                  
                  16,713Change
      in inventory
                  
                  
                  (22,268
                  )
                  
                  
                  (50,248
                  )Changes
      in prepaid expenses
                  
                  
                  (13,120
                  )
                  
                  
                  (530
                  )Change
      in amounts due to related party
                  
                  
                  (8,571
                  )
                  
                  
                  172,448Change
      in customer deposits
                  
                  
                  140,096
                  
                  
                  
                  307,106Change
      in accounts payable andaccrued
      expenses
                  
                  
                  264,511
                  
                  
                  
                  99,187Change
      in legal settlement
                  
                  
                  -
                  
                  
                  
                  (75,000
                  )Net
      cash used in operating activities
                  
                  
                  (67,842
                  )
                  
                  
                  (209,359
                  )Cash
      flows from investing activitiesPurchase
      of property and equipment
                  
                  
                  -
                  
                  
                  
                  (50,055
                  )Cash
      purchased in acquisition of subsidiary
                  
                  
                  -
                  
                  
                  
                  3,334Net
      cash used in investing activities
                  
                  
                  -
                  
                  
                  
                  (46,721
                  )Cash
      flows from financing activitiesProceeds
      from subscription receivable
                  
                  
                  63,020
                  
                  
                  
                  -Proceeds
      from notes payable
                  
                  
                  236,536
                  
                  
                  
                  57,903Proceeds
      from line of credit
                  
                  
                  13,340Repayment
      of notes payable
                  
                  
                  (75,492
                  )
                  
                  
                  -Repayments
      related party notes
                  
                  
                  (9,149
                  )
                  
                  
                  -Issuance
      of common stock
                  
                  
                  3,999
                  
                  
                  
                  252,148Net
      cash provided by financing activities
                  
                  
                  232,254
                  
                  
                  
                  310,051Foreign
      exchange rates effect on cash
                  
                  
                  (8,959
                  )Increase
      in cash
                  
                  
                  
                  155,453
                  
                  
                  
                  53,971Cash,
      beginning of year
                  
                  
                  70,314
                  
                  
                  
                  16,343Cash,
      end of year
                  
                  
                  $
                  225,767
                  
                  
                  
                  70,314Cash
      paid forInterest
                  
                  
                  $
                  8,098
                  
                  
                  
                  11,066Income
      taxes
                  
                  
                  $
                  -
                  
                  
                  
                  -Non-cash
      investing and financing activities:Notes
      payable converted to 396,000 share of common stock
                  
                  
                  
                  
                  
                  
                  198,000100,00
      shares of common stock issued as bonus to legal counsel
                  
                  
                  
                  85,000Issuance
      of 200,000 shares of common stock in exchange for related party debt
      cancellation
                  
                  
                  
                  140,000Issuance
      of 274,000 shares of common stock in redemption of accrued
      expenses
                  
                  
                  137,000Issuance
      of 9,000 share of common stock in redemption of accrued
      expenses
                  
                  
                  20,000Issuance
      of 13,575 shares of common stock with promissory notes
                  
                  
                  34,093Issuance
      of 33,950 warrants with promissory notes
                  
                  
                  44,313The
      accompanying notes are an integral part of the financial
      statements




-32-





Phoenix
International Ventures, Inc.


Notes
to Consolidated Financial Statements


December
31, 2008





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).




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.


-33-





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. This amount is included in the general and administrative
expenses.During 2008,
the Company sold trade receivables for an aggregate loss of $32,047. 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, 2008, 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, 2008 or
2007.





Inventory





Inventory
is stated at the lower of cost or market, based on the specific identification
method of inventory valuation. The Company periodically reviews inventory for
obsolescence based on an assessment as to continued use of such equipment by the
Company’s customers and potential customers.


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.


-34-





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





US Navy
and Air Force represented 43% of the Company’s revenues for the year ended
December 31, 2008.  The remaining 57% of sales was to aerospace
companies and military contractors. Two customers represented 69% of the
Company’s revenues for the year ended December 31, 2007.





Financial
Instruments





Financial
instruments, including cash equivalents, marketable securities, accounts
receivable and accounts payable are carried in the consolidated financial
statements at amounts that approximate fair value at December 31, 2008 and
2007. Fair values are based on market prices and assumptions concerning the
amount and timing of estimated future cash flows and assumed discount rates,
reflecting varying degrees of perceived risk. In April 2007, the Financial
Accounting Standards Board ("FASB") issued Statement of Financial Accounting
Standards No. 159, “The Fair Value Option for Financial Assets and Financial
Liabilities” (“SFAS 159”). This statement permits entities to choose to measure
many financial instruments and certain other items at fair value that are not
currently required to be measured at fair value. We did not elect the fair value
option for any of our financial assets or liabilities.





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. The
Company does not have sufficient trading history to estimate its volatility so
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 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.


-35-





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.




Earnings (loss) per Common
Share


The
Company calculates its basic earnings (loss) per share based on the
weighted-average effect of all common shares issued and outstanding. Net
earnings (loss) is divided by the weighted average common shares outstanding
during the period to arrive at the basic earnings (loss) per share. Diluted
earnings (loss) per share is calculated by dividing net earnings (loss) by the
sum of the weighted average number of common shares used in the basic earnings
(loss) per share calculation and the weighted average number of common shares
that would be issued assuming exercise or conversion of all potentially dilutive
securities, excluding those securities that would be anti-dilutive to the
earnings (loss) per share calculation. Both basic and diluted earnings (loss)
per share amounts are calculated for earnings (loss) from continuing operations
and net earnings (loss) for all periods presented.





Recent Issued Accounting
Pronouncements




In
June 2008, the FASB ratified EITF Issue No. 07-5, “Determining Whether an
Instrument (or an Embedded Feature) Is Indexed to an Entity’s Own Stock” (EITF
07-5). EITF 07-5 provides that an entity should use a two step approach to
evaluate whether an equity-linked financial instrument (or embedded feature) is
indexed to its own stock, including evaluating the instrument’s contingent
exercise and settlement provisions. It also clarifies on the impact of foreign
currency denominated strike prices and market-based employee stock option
valuation instruments on the evaluation. EITF 07-5 is effective for fiscal years
beginning after December 15, 2008. The Company is currently assessing the impact
of EITF 07-5 on its consolidated financial position and results of
operations.





In
September 2008, the FASB ratified EITF Issue No. 08-5, “Issuer’s Accounting for
Liabilities Measured at Fair Value With a Third-Party Credit Enhancement” (EITF
08-5). EITF 08-5 provides guidance for measuring liabilities issued with an
attached third-party credit enhancement (such as a guarantee). It clarifies that
the issuer of a liability with a third-party credit enhancement (such as a
guarantee) should not include the effect of the credit enhancement in the fair
value measurement of the liability. EITF 08-5 is effective for the first
reporting period beginning after December 15, 2008. The Company is currently
assessing the impact of EITF 08-5 on its consolidated financial position and
results of operations.


.


In
January 2009, the FASB issued FSP EITF 99-20-1, “Amendments to the Impairment
Guidance of EITF Issue No. 99-20” (FSP 99-20-1). FSP 99-20-1 amends the
impairment guidance in EITF Issue No. 99-20, “Recognition of Interest Income and
Impairment on Purchased Beneficial Interests and Beneficial Interests That
Continue to Be Held by a Transferor in Securitized Financial Assets,” to achieve
more consistent determination of whether an other-than-temporary impairment has
occurred. FSP 99-20-1 is effective, on a prospective basis, for interim and
annual reporting periods ending after December 15, 2008. The Company is
currently assessing the impact of FSP EITF 99-20-1 on its consolidated financial
position and results of operations.




Note
2 - Financial Condition, Liquidity, and Going Concern





At
December 31, 2008, we assessed our ability to continue as a going concern. The
Company has a working capital deficit of $1,118,804 and accumulated deficit of
$2,925,964. However, factors that support our viability include the procurement
of new contracts and sales orders, as well as consistent revenue growth. 
To date, the Company has been dependent upon officer advances to finance
operations. The Company has developed a plan to address its 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 2009 without
raising additional funds.


-36-





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.




Note
3 - 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:
                          
                          
                          2008
                          
                          
                          
                          2007United
      States
                          
                          
                          65
                          %
                          
                          
                          87
                          %Europe
                          
                          
                          35
                          %
                          
                          
                          13
                          %Total:
                          
                          
                          100
                          %
                          
                          
                          100
                          %




Note
4 - Inventory





Inventory
consists of used equipment that can be re-manufactured for re-sale and spare
parts. At December 31, 2008 and 2007 inventory consisted of the
following:





2008
                
                
                2007Raw
      materials
                
                $
                114,000
                
                
                $
                114,000Work
      in process
                
                
                72,516
                
                
                
                50,248$
                186,516
                
                
                $
                164,248




Note
5 – Long-Term Contracts





The
company recognizes revenues and reports profits from long-term construction
contracts under the percentage of completion method of accounting. During 2008,
the Company secured a long-term fixed price agreement to design and manufacture
two aircraft trailers for the USAF.





-37-


The
billings in excess of costs have been included in other accrued expenses for
balance sheet purposes. Cost and estimated earnings on this contract for the
years ended December 31, 2008 and 2007 were as
follows:


2008
                
                
                2007Costs
      incurred to date
                
                $
                171,810
                
                
                
                -Estimated
      contract profit
                
                
                51,254
                
                
                
                -Less:
      billings to date
                
                
                (234,274
                )
                
                
                -Billings
      in excess of costs and recognized profit
                
                $
                (11,210
                )
                
                
                -




Note
6 - Property and Equipment




At
December 31, 2008 and 2007 property and equipment consisted of the
following:





2008
                
                
                2007Equipment
                
                $
                5,200
                
                
                $
                5,200Office
      equipment
                
                
                14,205
                
                
                
                14,205Auto
                
                
                45,355
                
                
                
                45,355Trailer
                
                
                2,500
                
                
                
                2,500Software
      system
                
                
                19,381
                
                
                
                19,83186,641
                
                
                
                86,641Less
      accumulated depreciation
                
                
                (38,698
                )
                
                
                (25,060
                )Total
                
                $
                47,943
                
                
                $
                61,581




Depreciation
for the years ended December 31, 2008 and 2007 was $13,638 and $13,638,
respectively.





Note
7 - Notes Payable





The
Company has a revolving line of credit from a financial institution totaling
$35,000.  At December 31, 2008 the line of credit was fully extended
and the Company is required to make 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.
 
 The
Company has a revolving line of credit from a foreign financial institution
totaling 14,210.  At December 31, 2008, $13,340 of  the line
of credit was extended to the Company. The line of credit bears a monthly
interest ranging from 10%-13% based upon the amount extended.
 
 In June,
July, August and September 2008, the Company entered into promissory note
agreements with five Israeli investors and two Israeli corporations for the
aggregate amount of $236,536. Some of these notes were in New Israeli Shekels
and some in U.S. Dollars. These notes are to be paid in full at various
dates between June 22 and August 18, 2009 and bear 15% interest per annum. In
addition, these notes were discounted by shares and warrants. In total the
Company issued  an aggregate of 13,575 shares, and warrants to
purchase an aggregate of  33,950 shares at a price per shares that
varies between $2.40 and $2.60 per share for 2 years. Some of these notes have
been collateralized by a fixed number of shares of the Company’s common
stock.


-38-




At
December 31, 2008 and 2007 notes payable consist of the following:





2008
                
                
                2007Unsecured
      note payable to a financial institution in a foreign country; 12.4% per
      annum; monthly payments of $242
                
                $
                1,736
                
                
                $
                5,089Secured
      note payable to a financial institution; 10% interest per annum; monthly
      payments of $756 to 2012; collateralized by an automobile
                
                
                34,638
                
                
                
                44,599Unsecured
      note payable to an individual; interest at 10% per annum; matures March
      24, 2008
                
                
                -
                
                
                
                59,407Unsecured
      promissory note agreements, less unamortized discount of $39,009 in 2008;
      effective interest rates range approximately 2.99% - 6.24%
                
                
                188,568
                
                
                
                -Unsecured
      note payable to an individual;  interest at 7%
                
                
                12,620
                
                
                
                15,391$
                237,562
                
                
                $
                124,486




Following
      are maturities of long-term debt for each of the next five
      years:2009
                
                $
                251,0042010
                
                
                9,0722011
                
                
                9,0722012
                
                
                7,4232013
                
                
                -Total principal
      payments
                
                $
                276,571Less current portion of notes
                
                
                (251,004
                )Non-current portion of notes
                
                $
                25,567




Note
8 - Related Party Transactions





As of
December 31, 2008 the Company owed an officer for his advances the total balance
of $408,836 of which $39,461 is current. These advances are non-interest bearing
and the officer has agreed not to demand payment of the long term portion during
2009. In the twelve months ended December 31, 2008, the Company paid the officer
$9,149 towards the debt.





On April
26, 2007, the Company entered into a consulting agreement with a related party
to assist the Company with its business development.  Consulting fees
under the agreement require a minimum annual payment of $120,000. At September
30, 2008, the Consultant exercised an option to purchase 274,000 shares of the
Company’s common stock for $137,000 for previously accrued fees. At December 31,
2008 the Company has accrued $30,311 due to the related party. For the year
ended December 31, 2008 the Company recognized $120,177 related to this
agreement that has been included in general and administrative
expense.


Note
9- Share Capital




In
June, July, August and September 2008, the Company issued an aggregate of 13,575
shares as part of a note agreement.





In
October 2008 the Company issued to its legal counsel  9,000 shares in
redemption of $20,000 accrued expense.
  In
September 2008 and October 2008, the Company issued a total of 4,000 shares of
common stock at $1.00 per share for warrant
exercises.
 In
September 2008, the Company issued 274,000 shares of common stock $0.50 per
share for option exercises. In exchange for the shares, $137,000 of accrued
liabilities were extinguished.


-39-




Note
10 Stock Based Compensation and Warrants




The
Company does not have a formally approved stock based compensation plan. 
The Company’s Board periodically compensates officers, employees, and certain
service providers with stock options.  These option issuances are not
required to be approved by shareholders.  The Company did not issue any
stock option during the twelve months ended December 31, 2008.
  The grant
date fair value of stock options is estimated  using a Black- Scholes
model.  The exercise price of option grants approximates the closing price
of the Company’s common stock on the date of the grant.
  Since the
Company does not have a trading history equal to the expected term of option
grants, the estimated volatility was based on the volatility of several
companies which are from similar industry and share certain characteristics. For
awards granted in 2007 the estimated volatility was 107%.
  The
Company estimated the expected term of option awards using the simplified method
for “plain vanilla” issuances to employees while the expected term for
non-employees approximates the contractual term.  The expected term under
the simplified method is the average of the contractual term and vesting
period.  For awards issued in 2007 the expected term for employees and
non-employees was 1.8 and 3.6 years, respectively.




The
Company has not paid dividends nor do we expect to pay dividends in the
foreseeable future.  The risk free interest rate used to estimate the fair
value of the 2007 option issuances was  4.5%.




The
following table illustrates the option activity as of December 31,
2008:




Shares
                    
                    
                    Weighted
      Average Exercise PriceOutstanding
      at January 1, 2007
                    
                    
                    –
                    
                    
                    
                    –Granted
                    
                    
                    1,490,000
                    
                    
                    $
                    0.5Exercised
                    
                    
                    –
                    
                    
                    
                    –Forfeited/Expired
                    
                    
                    –
                    
                    
                    
                    –Outstanding
      at December 31, 2007
                    
                    
                    1,490,000
                    
                    
                    
                    0.55Granted
                    
                    
                    –
                    
                    
                    
                    –Exercised
                    
                    
                    (274,000
                    )
                    
                    
                    0.5Forfeited/Expired
                    
                    
                    –
                    
                    
                    
                    –Outstanding
      at December 31, 2008
                    
                    
                    1,216,000
                    
                    
                    
                    0.57


-40-


The
following table summarizes information about options outstanding and exercisable
at December 31, 2008




Options
      OutstandingRange
      price ($)
                  Number
      of Options
                  Weighted
      Average Remaining Life
                  Weighted
      Average Exercise Price$0.50
                  1,046,000
                  2.0
      years
                  $0.50$1.00
                  170,000
                  1.7
      years
                  $1.00




The
intrinsic value of the outstanding options was $1,338,880.


Warrants




In June,
July, August and September 2008, the Company issued an aggregate of 33,950
warrants to purchase shares of common stock at prices per share ranging from
$2.40 to $2.60 per share for a period of 2 years, as part of a note
agreement.




The
Company estimated the fair value of the warrants issued during the year
ended December 31, 2008 using a Black- Scholes model.  The Company used an
estimated volatility of 107%.  The Company does not have a sufficient
history of warrant exercises, therefore, the expected term is the contractual
term, 1 year.  Risk free interest rate was determined to be 4.5%, and
no dividends are expected to be paid over the term of the
warrants.




The
following table illustrates the warrant activity as of December 31,
2008:




Warrants
                      
                      
                      Weighted
      Average Exercise PriceOutstanding
      at January 1, 2007Granted
                      
                      
                      325,072
                      
                      
                      $
                      1Exercised
                      
                      
                      –
                      
                      
                      
                      –Forfeited/Expired
                      
                      
                      –
                      
                      
                      
                      –Outstanding
      at December 31, 2007
                      
                      
                      325,072
                      
                      
                      
                      1Granted
                      
                      
                      33,950
                      
                      
                      
                      2.5Exercised
                      
                      
                      (4,000
                      )
                      
                      
                      1Forfeited/Expired
                      
                      
                      –
                      
                      
                      
                      –Outstanding
      at December 31, 2008
                      
                      
                      355,022
                      
                      
                      
                      1.2







-41-




The
following table summarizes information about warrants outstanding and
exercisable at December 31, 2008




Price
              Number
              Weighted
      Average Remaining Life
              Weighted
      Average Exercise Price$1.00
              321,072
              1.00
      years
              $1.002.47
              15,000
              1.50
      years
              2.472.58
              4,800
              1.50
      years
              2.582.60
              10,000
              1.58
      years
              2.602.40
              4,150
              1.58
      years
              2.40





Note
11- Income Taxes





Significant
components of the Company’s net deferred tax asset as of December 31, 2008 and
2007 were as follows:


2008
                
                
                2007Deferred
      tax assets:Net
      operating loss carryforwards
                
                $
                742,000
                
                
                $
                533,000Uniform capitalization
                
                
                8,000
                
                
                
                7,000Accrued
      vacation pay
                
                
                19,000
                
                
                
                9,000Non qualified stock options
                
                
                102,000
                
                
                
                136,000Contingent
      liability
                
                
                
                
                
                
                183,000Subpart
      F losses
                
                
                4,000
                
                
                
                15,000Related
      party accrued expenses
                
                
                220,000
                
                
                
                199,000Property
      plant & equipment
                
                
                (7,000
                )
                
                
                (5,000
                )Net
      deferred tax asset (liability)
                
                
                1,088,000
                
                
                
                1,097,000Less: Current Portion
                
                
                (27,000
                )
                
                
                16,000Non-current
      Portion
                
                
                1,077,000
                
                
                
                1,081,000Less valuation allowance
                
                
                (1,088,000
                )
                
                
                (1,097,000
                )Deferred
      tax asset after valuation allowance
                
                $
                -
                
                
                $
                -






-42-


As of
December 31, 2008 and 2007, the Company had federal net operating loss
carryforwards of approximately $2,100,000 and $1,600,000, 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:


2008
                
                
                2007Computed
      at the expected statutory rate
                
                
                35
                %
                
                
                35
                %Permanent
      differences
                
                
                (36.11
                )
                
                
                (4.70
                )Property
      and equipment
                
                
                (0.59
                )
                
                
                (0.23
                )Reversal
      of contingent liability
                
                
                50.51
                
                
                
                -Other
      temporary differences
                
                
                (97.16
                )
                
                
                (16.26
                )NOL
      carryforward
                
                
                48.35
                
                
                
                (13.81
                )Income
      tax expense – effective rate
                
                
                0
                %
                
                
                0
                %




The
Company has considered the implication of FIN 48 Uncertain Tax Positions and
believes that all of its positions taken in tax filings will more
likely than not to be sustained on examination by tax authorities. Interest
expense and penalties related to the Company’s uncertain tax positions have been
reflected as a component of general and administrative expense in the Company’s
Consolidated Statements of Operations. As of December 31, 2008, the Company
had no interest and penalties related to uncertain tax positions. The Company is
open to audit for 2005 (subsidiary only), 2006 and 2007.


Note
12 – Commitments and Contingencies





The
Company leases a 7,500 square foot operating facility under a non cancelable
lease expiring September 30, 2009. Minimum lease payments through September 30,
2009 are $28,350. Lease expenses for the years ended December 31, 2008 and 2007
totaled $36,450 and $65,155 respectively.


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 $566,154,
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. This one-time specific contract was not received. If the Company
does not default on the remaining purchase credits, no further obligation will
be due.  Therefore, the contingent sum of $566,154 that was previously
expensed has been recovered. At December 31, 2008, the remaining balance of the
legal settlement was $384,000 in trade credits.




Note
13 - Subsequent Events





On
January 22, 2009, the Board of Directors decided not to extend the employment
agreement with Teja Shariff as CFO following its expiration on April 26, 2009.
The Company anticipates that following the expiration of the agreement, Neev
Nissenson will take the place as CFO, in addition to his role as Vice President.
The Board intends to retain Mr. Shariff as a consultant to the
Company.
  On
January 29, 2009 the Company entered into an agreement to lease a new production
facility starting from March 1, 2009 until February 28, 2011 at a monthly rent
of $4,120.


-43-


ITEM
9.   CHANGES IN AND DISAGREEMENTS WITHACCOUNTANTS
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
9A[T].   CONTROLS ANDPROCEDURES




(a)           Management’s
Evaluation of Disclosure Controls and Procedures




As of the
end of the period covered by this Annual Report, we carried out an evaluation of
the effectiveness of the design and operation of our disclosure controls and
procedures. Disclosure controls and procedures are designed to ensure that
information required to be disclosed is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission’s rules and forms, and is accumulated and communicated to management,
including our Chief Executive Officer and Chief Financial Officer, to allow for
timely decisions regarding required disclosure of material information required
to be disclosed in the reports that we file or submit under the Securities
Exchange Act of 1934 as amended (the “Exchange Act”). Our disclosure controls
and procedures are designed to provide reasonable assurance of achieving these
objectives. Based upon this evaluation, our Chief Executive Officer and Chief
Financial Officer have concluded that our disclosure controls and procedures are
not effective to a reasonable assurance level of achieving such
objectives.


(b)           Management’s
Report on Internal Control over Financial Reporting




Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting.  Internal control over financial
reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the
Exchange Act as a process designed by, or under the supervision of, the
Company’s Chief Executive Officer and Chief Financial Officer and effected by
the Company’s board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of America and
includes those policies and procedures that:


-
              Pertain
      to the maintenance of records that in reasonable detail accurately and
      fairly reflect the transactions and dispositions of the assets of the
      Company;
  -44-


-
            Provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with accounting
      principles generally accepted in the United States of America and that
      receipts and expenditures of the Company are being made only in accordance
      with authorizations of management and directors of the Company;
      and





-
            Provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of the Company’s assets that
      could have a material effect on the financial
  statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements.  Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.  All internal control
systems, no matter how well designed, have inherent
limitations.  Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement
preparation and presentation.  Because of the inherent limitations of
internal control, there is a risk that material misstatements may not be
prevented or detected on a timely basis by internal control over financial
reporting. However, these inherent limitations are known features of the
financial reporting process.  Therefore, it is possible to design into
the process safeguards to reduce, though not eliminate, this risk.





As of
December 31, 2008, management assessed the effectiveness of our internal control
over financial reporting based on the criteria for effective internal control
over financial reporting established in Internal Control--Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission
("COSO") and SEC guidance on conducting such assessments.  Based on
that evaluation, they concluded that, during the period covered by this report,
such internal controls and procedures were not effective to detect the
inappropriate application of US GAAP.  This was due to deficiencies
that existed in the design or operation of our internal controls over financial
reporting that adversely affected our internal controls and that may be
considered to be material weaknesses.





The
matters involving internal controls and procedures that our management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) inadequate segregation of duties consistent
with control objectives; and (2) ineffective controls over period end financial
disclosure and reporting processes.





Management
believes that the material weaknesses set forth in items (1) and (2) above did
not have an effect on our financial results.





This
annual report does not include an attestation report of the Company's registered
public accounting firm regarding internal control over financial
reporting.  Management's report was not subject to attestation by the
Company's registered public accounting firm pursuant to temporary rules of the
SEC that permit the Company to provide only the management's report in this
annual report.





Management’s
Remediation Initiatives





In an
effort to remediate the identified material weaknesses and other deficiencies
and enhance our internal controls, we have initiated, or plan to initiate, the
following series of measures:





We intend
to create additional positions to segregate duties consistent with control
objectives and will increase our personnel resources and technical accounting
expertise within the accounting function as resources permit. In addition, we
will review our current procedures and update them in order to better address
the material weaknesses.





We
anticipate that these initiatives will be at least partially, if not fully,
implemented by December 31, 2009.  Additionally, we plan to test our
updated controls in order to remediate our deficiencies by December 31,
2009.




(c)           Changes
in Internal Control over Financial Reporting




Aside
from adding additional procedures there were no changes in our internal control
over financial reporting during our twelve months ended December 31, 2008 that
have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.





ITEM
9B.   OTHER INFORMATION





None.





-45-


PART
III





ITEM
10.   DIRECTORS, EXECUTIVEOFFICERS, AND CORPORATE GOVERNANCE





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





Name
                      Age
                      PositionZahir
      Teja
                      54
                      President,
      Chief Executive Officer, DirectorNeev
      Nissenson
                      30
                      Vice
      President, Secretary, DirectorTeja
      N. Shariff
                      53
                      Treasurer,
      Chief Financial Officer, Chief Accounting
  Officer





Zahir
Teja - President, Chief Executive Officer, Director





Zahir
Teja, age 54, has served as our President and Chief Executive Officer since our
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 our 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 (the “October 2006
Consulting Agreement”), among the Company, Mr. Teja, and Anney Business Corp., a
British Virgin Islands corporation (“Anney”), 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 “Item 13 - Certain Relationships And Related Transactions, And DirectorIndependence-
Consulting Agreement” below.





Neev
Nissenson - Vice President, Secretary, Director





Neev
Nissenson, age 30, has served as our Vice President since our 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 our 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. For at least the past five years,
Mr. Nissenson currently serves as a director for Dionysos Investments Ltd., a
privately owned consulting company.  Until November 2006, Mr. Nissenson was
also a consultant with Dionysos Investments Ltd., where 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 from
the Hebrew University of Jerusalem and a bachelor of the arts degree in General
History and Political Science from Tel Aviv University.





Under the
October 2006 Consulting Agreement, 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 “Item 13
- Certain Relationships And Related Transactions,
And DirectorIndependence- Consulting Agreement” below.





-46-


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





Teja N.
Shariff, age 53, has served as our Chief Financial Officer and Chief Accounting
Officer since our 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.





On
January 22, 2009, the Board of Directors decided not to extend the employment
agreement with Teja Shariff as CFO following its expiration in April 26, 2009.
The Company anticipates that following the expiration of the agreement, Neev
Nissenson will take the place as CFO, in addition to his role as Vice President.
The Board intends to retain Mr. Shariff as a consultant to the
Company.




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 our
equity securities to file with the SEC initial reports of ownership and reports
of changes in ownership of common stock and our other equity securities.
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. Based solely on copies of such reports provided to us, there was one
Form 4 report filed late by Mr. Teja.





Code
of Ethics





We have
adopted a Code of Ethics within the meaning of Item 406 of Regulation S-K. 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.





-47-


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





We do not
have a nominating, compensation or audit committee, nor do we have an audit
committee financial expert. As such, our entire Board of Directors acts as our
audit committee and handles matters related to compensation and nominations of
directors.


Compensation
of the Board of Directors





Directors
are not paid any fees or compensation for services as members of our Board of
Directors.


Audit
Committee





We do not
have a separately-designated standing audit committee, and none of our Board
members are “independent.”  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, 2008, 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, 2008 to be included in this Annual Report on Form
10-K and filed with the Securities and Exchange
Commission.


ITEM
11.   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.


-48-




Summary
Compensation Table




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
                        2008
                        160,000
                        
                        
                        
                        
                        
                        
                        160,0002007
                        120,000
                        
                        
                        (4)
      $178,200
                        
                        
                        
                        298,2002006
                        120,000
                        
                        
                        
                        
                        
                        
                        120,000Neev
      Nissenson(2)
                          VP,
      Secretary, Director
                        2008
                        109,000
                        
                        
                        
                        
                        
                        
                        109,0002007
                        50,000
                        
                        
                        (5)
      $89,100
                        
                        
                        
                        139,10020062008
                        60,000
                        
                        
                        
                        
                        
                        
                        60,000Teja
      N. Shariff(3)
                          CFO,
      Treasurer, CAO
                        2007
                        40,000
                        
                        
                        
                        
                        
                        
                        40,0002006








(1) Pursuant
to Mr. Teja's employment agreement with the Company (described below), Mr. Teja
is due an annual salary of $180,000 per year starting from April 26,
2008,  (1) In 2008, his salary totaled approximately $127,500 actually
received in 2008 and $32,500 was deferred or accrued.





(2) Mr.
Nissenson's employment agreement with the Company (described below) Mr.
Nissenson is due an annual salary of $126,000 per year starting from April 26,
2008. In 2008, his salary totaled approximately $109,000, with $82,625 received
in 2008 and $26,375 deferred or accrued.





(3) Mr.
Shariff's employment agreement with the Company (described below), Mr. Shariff
is due an annual salary of $60,000. In 2008 Mr.Shariff actually received $55,000
and $5,000 was deferred or accrued.





(4) The
amount shown in the “Option Awards” column reflects the dollar amount recognized
for fiscal 2007 financial statement reporting purposes of the outstanding stock
awards held by Mr. Teja in accordance with SFAS 123R. The amount represents an
option award to purchase 660,000 shares of the Company's common stock for an
exercise price of $.50 per share, granted on April 26, 2007 pursuant to Mr.
Teja’s employment agreement.  The options expire on December 31,
2010.  The "fair value" of these options was estimated to be $0.27 per
option on the grant date.  Refer to the Company’s Consolidated
Financial Statements for the Fiscal Years Ended December 31, 2008 and 2007, Note
11 included in Item 8 of this Annual Report on Form 10-K, with respect to
valuation assumptions for this option grant. Mr. Teja held no other stock or
option awards at December 31, 2008.


-49-


(5) The
amount shown in the “Option Awards” column reflects the dollar amount recognized
for fiscal 2008 and 2007 financial statement reporting purposes of the
outstanding stock awards held by Mr. Nissenson in accordance with FAS 123R. This
amount   represents an option award to purchase 330,000 shares of
the Company's common stock for an exercise price of $.50 per share, granted on
April 26, 2007 pursuant to Mr. Nissenson’s employment agreement.  The
options expire on December 31, 2010.  The "fair value" of these
options was estimated to be $0.27 per option on the grant date. Refer to the
Company’s Consolidated Financial Statements for the Fiscal Years Ended December
31, 2008 and 2007, Note 11 included in Item 8 of this Annual Report on Form
10-K, with respect to valuation assumptions for this option grant. Mr. Teja held
no other stock or option awards at December 31, 2008.


Employment
Agreements





Zahir Teja Employment
Agreement





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 options terminate December 31, 2010.


Neev Nissenson Employment
Agreement





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.





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 options terminate December 31, 2010.


Teja N. Sharriff Employment
Agreement





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.





-50-


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.





On
January 22, 2009, the Board of Directors resolved not to extend the employment
agreement with Teja Shariff as CFO. Neev Nissenson will take the place as CFO,
in addition to his role as Vice President. The Board intends to retain Mr.
Shariff as a consultant to the Company.








Outstanding
Equity Awards at 2008 Fiscal Year End




The
following table sets forth the stock options held by the named executives as of
December 31, 2008.




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
              
              
              660,000(1)
              
              
              
              
              
              
              
              
              0.50
              
              
              12/31/10Neev
      Nissenson
              
              
              330,000(1)
              
              
              
              
              
              
              
              
              0.50
              
              
              12/31/10Teja
      N. Shariff




(1)           All
options vested immediately upon grant on April 26, 2007.





Stock Options




Other
than 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 and an
option to purchase an aggregate of 330,000 of our common stock at an option
price of $0.50 granted under a consulting agreement, there were no other options
granted in the last two fiscal years.


-51-


Compensation
to Directors





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




ITEM
12.  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-K, 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
              6,715,000
              76%Common
      Stock
              Neev
      Nissenson(4)
              Vice
      President, Secretary, Director
              3,268,000
              39%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
              5,675,000
              70%Common
      Stock
              All
      Officers and Directors as a group that consists of 3
    persons
              
              7,445,000
              81%


______________________________


(1)
Unless otherwise indicated, the address is care of Phoenix International
Ventures, Inc., 61B Industrial Parkway, 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.





-52-


(3) Mr.
Teja's share holdings consist of 2,450,000 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 is currently exercisable and
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 631,000 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.





(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 631,000 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 56,000 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 2,450,000 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 8,046,718 shares of common stock issued and
outstanding as of the date of this Annual Report on Form 10-K.





Equity
Compensation Plans




The
information with respect to our equity compensation plan is incorporated herein
by reference to Item 5 of Part II of this Annual Report.





-53-


ITEM
13.   CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTORINDEPENDENCE





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
      stock·
            Any
      of our promoters; and·
            Any
      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” in Item 11 above,
the Company has entered into employment agreements with its three executive
officers.





Consulting
Agreement





The
Company has entered into a Consulting Agreement dated October 2, 2006 with Mr.
Teja, and Anney Business Corp., a British Virgin Islands company (“Anney”),
which is wholly owned and controlled by the Nissenson family. Haim Nissenson,
who is the father of Neev Nissenson, is the Chairman of Anney. The term of the
Agreement shall run so long as Mr. Teja and the Nissenson family are
stockholders of the Company. The Agreement's effective date was April 26, 2007
(“Effective Date”). Under the Agreement, Anney has agreed to provide consulting
services to the Company. For providing these services, Anney will receive a fee
of $10,000 per month. Anney is also 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. The Company has granted Anney 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.In September 30, 2009 Anney has elected to
partially exercise their option to purchase 274,000 shares in redemption of
$138,000 of
previously accrued fees.


-54-





The
parties have also agreed to vote their shares to nominate Zahir Teja and Neev
Nissenson as directors and to appoint Mr. Teja as President and Mr. Nissenson as
Vice President. Each of Mr. Teja and Anney has further agreed to give the other
the right of first refusal if he wants to sell any of his shares. The Agreement
contains other terms and conditions.




Director
Independence





Our
determination of independence of directors is made using the definition of
“independent director” contained in the rules of the NYSE Alternext US LLC (the
“NYSE Alternext”), even though such definitions do not currently apply to us
because we are not listed on the NYSE Alternext. We have determined that none of
our directors currently meet the definition of “independent” as within the
meaning of such rules as a result of their current positions as our executive
officers.




ITEM
14.   PRINCIPAL ACCOUNTING FEES AND
SERVICES





Mark
Bailey & Company, Ltd. (“MBC”) is our independent public
accountants.  MBC audited our financial statements for the twelve
months ended December 31, 2007 and 2008, and reviewed our quarterly reports for
the fiscal quarters ended March 31, 2008, June 30, 2008 and September 30,
2008.  Stark Winter and Shenkein (“SWS”) reviewed our quarterly
reports for the fiscal quarters ended March 31, 2007, June 30, 2007, and
September 30, 2007,





Audit
and Non-Audit Fees





Aggregate
fees for professional services rendered to the Company by MBC and SWS as of or
for the two fiscal years ended December 31, 2008 and 2007 are set forth
below. Of the fees for 2007, we paid SWS $106,000 in connection with the
quarterly reviews included in Audit fees, with the remainder paid to MBC. During
2008, we paid SWS $5,000 in connection with consent procedures included in Audit
fees.


Fiscal
      Year2008
                
                
                2007Audit
      Fees
                
                $
                49,500
                
                
                $
                68,000Audit-Related
      Fees
                
                
                0
                
                
                
                0Tax
      Fees
                
                
                15,000
                
                
                
                0All
      Other
                
                
                
                
                
                
                38,000Total
                
                $
                64,500
                
                
                $
                106,000





Audit
Fees 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-Q and the audit of our annual consolidated
financial statements for the fiscal years ended December 31, 2008 and December
31, 2007.





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 Aggregate fees billed by our auditors for professional services
for tax compliance, tax advice, and tax planning, and related
filings.





All OtherAggregate fees billed by our auditors for all other non-audit services,
such as attending meetings and other miscellaneous financial
consulting.








-55-


PART
IV





ITEM
15.  EXHIBITS,FINANCIALSTATEMENT
SCHEDULES





ExhibitNumber
              Description3.1
              Articles
      of Incorporation (incorporated by reference to Exhibit 3.1 of Phoenix
      International Ventures, Inc.’s Registration Statement on Form SB-2 (File
      No. 333-140257)).3.2
              By-Laws
      (incorporated by reference to Exhibit 3.2 of Phoenix International
      Ventures, Inc.’s Registration Statement on Form SB-2 (File No.
      333-140257)).4.1
              Specimen
      Stock Certificate (incorporated by reference to Exhibit 4.1 of
      Phoenix International Ventures, Inc.’s Registration Statement on Form SB-2
      (File No. 333-140257)).4.2
              Form of collateralized Promissory Note
      (incorporated by reference to Exhibit 4.1 of Phoenix International
      Ventures, Inc.’s Current Report on Form 8-K filed September 5,
      2008).4.3
              Form
      of uncollateralized Promissory Note (incorporated by reference to
      Exhibit 4.2 of Phoenix International Ventures, Inc.’s Current Report
      on Form 8-K filed September 5, 2008).4.4
              Form
      of Warrant (incorporated by reference to Exhibit 4.3 of Phoenix
      International Ventures, Inc.’s Current Report on Form 8-K filed September
      5, 2008).10.1
              Share
      Exchange Agreement dated as of December 1, 2006 among Phoenix
      International Ventures, Inc., Phoenix Aerospace, Inc. and Zahir Teja
      (incorporated by reference to Exhibit 10.1 of Phoenix International
      Ventures, Inc.’s Registration Statement on Form SB-2 (File No.
      333-140257)).10.2
              Consulting
      Agreement dated October 2, 2006 among Phoenix International Ventures,
      Inc., Zahir Teja, and Anney Business Corp. (incorporated by reference to
      Exhibit 10.2 of Phoenix International Ventures, Inc.’s Registration
      Statement on Form SB-2 (File No. 333-140257)).10.3
              Debt
      Conversion Agreement dated December 13, 2006 between Phoenix Aerospace,
      Inc. and LeRoy Moser (incorporated by reference to Exhibit 10.3 of
      Phoenix International Ventures, Inc.’s Registration Statement on Form SB-2
      (File No. 333-140257)).10.4
              Debt
      Conversion Agreement dated December 12, 2006 between Phoenix Aerospace,
      Inc. and Erik Kudlis (incorporated by reference to Exhibit 10.4 of
      Phoenix International Ventures, Inc.’s Registration Statement on Form SB-2
      (File No. 333-140257)).10.5
              Debt
      Conversion Agreement dated December 14, 2006 between Phoenix Aerospace,
      Inc. and Teja N. Shariff (incorporated by reference to Exhibit 10.5
      of Phoenix International Ventures, Inc.’s Registration Statement on Form
      SB-2 (File No. 333-140257)).10.6
              Employment
      Agreement dated December 14, 2006 between Phoenix International Ventures,
      Inc. and Zahir Teja (incorporated by reference to Exhibit 10.6 of
      Phoenix International Ventures, Inc.’s Registration Statement on Form SB-2
      (File No. 333-140257)).10.7
              Employment
      Agreement dated December 14, 2006 between Phoenix International Ventures,
      Inc. and Neev Nissenson (incorporated by reference to Exhibit 10.7 of
      Phoenix International Ventures, Inc.’s Registration Statement on Form SB-2
      (File No. 333-140257)).10.8
              Employment
      Agreement dated December 14, 2006 between Phoenix International Ventures,
      Inc. and Teja N. Shariff (incorporated by reference to Exhibit 10.7
      of Phoenix International Ventures, Inc.’s Registration Statement on Form
      SB-2 (File No. 333-140257)).10.9
              Commercial
      Lease and Deposit Receipt (incorporated by reference to Exhibit 10.1
      of Phoenix International Ventures, Inc.’s Current Report on Form 8-K filed
      October 2, 2007).10.10
              Form
      of Subscription Agreement (incorporated by reference to Exhibit 10.1
      of Phoenix International Ventures, Inc.’s Current Report on Form 8-K filed
      January 3, 2008).10.11
              Form
      of Warrant (incorporated by reference to Exhibit 10.2 of Phoenix
      International Ventures, Inc.’s Current Report on Form 8-K filed January 3,
      2008).10.12
              Conversion
      Agreement with Zahir Teja (incorporated by reference to Exhibit 10.4
      of Phoenix International Ventures, Inc.’s Current Report on Form 8-K filed
      January 3, 2008).14.1
              Code
      of Ethics (incorporated by reference to Exhibit 14.1 of Phoenix
      International Ventures, Inc.’s Registration Statement on Form SB-2 (File
      No. 333-140257)).21.1
              Subsidiaries
      of the Small Business Issuer (incorporated by reference to
      Exhibit 21.1 of Phoenix International Ventures, Inc.’s Registration
      Statement on Form SB-2 (File No. 333-140257)).23.1
              Consent
      of Mark Bailey & Company, Ltd.31.1
              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








-56-


SIGNATURES




Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.




PHOENIX
      INTERNATIONAL VENTURES, INC.Date:
      March 30, 2009
              By:
              /s/
      Zahir TejaZahir
      Teja
                President
      and Chief Executive Officer








Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.





March
      31, 2009
                                By:
                                /s/ Zahir
      TejaZahir
      TejaPresident,
      Ceo, DirectorMarch
      31, 2009
                                By:
                                /s/ Neev
      NissensonNeev
      NissensonVice
      President, Director


March
      31, 2009
            By:
            /s/ Teja
      N. ShariffTeja
      N. ShariffCFO,
      Principal Accounting and Financial Officer








-57-





EXHIBIT
INDEX


ExhibitNumber
              Description3.1
              Articles
      of Incorporation (incorporated by reference to Exhibit 3.1 of Phoenix
      International Ventures, Inc.’s Registration Statement on Form SB-2 (File
      No. 333-140257)).3.2
              By-Laws
      (incorporated by reference to Exhibit 3.2 of Phoenix International
      Ventures, Inc.’s Registration Statement on Form SB-2 (File No.
      333-140257)).4.1
              Specimen
      Stock Certificate (incorporated by reference to Exhibit 4.1 of
      Phoenix International Ventures, Inc.’s Registration Statement on Form SB-2
      (File No. 333-140257)).4.2
              Form of collateralized Promissory Note
      (incorporated by reference to Exhibit 4.1 of Phoenix International
      Ventures, Inc.’s Current Report on Form 8-K filed September 5,
      2008).4.3
              Form
      of uncollateralized Promissory Note (incorporated by reference to
      Exhibit 4.2 of Phoenix International Ventures, Inc.’s Current Report
      on Form 8-K filed September 5, 2008).4.4
              Form
      of Warrant (incorporated by reference to Exhibit 4.3 of Phoenix
      International Ventures, Inc.’s Current Report on Form 8-K filed September
      5, 2008).10.1
              Share
      Exchange Agreement dated as of December 1, 2006 among Phoenix
      International Ventures, Inc., Phoenix Aerospace, Inc. and Zahir Teja
      (incorporated by reference to Exhibit 10.1 of Phoenix International
      Ventures, Inc.’s Registration Statement on Form SB-2 (File No.
      333-140257)).10.2
              Consulting
      Agreement dated October 2, 2006 among Phoenix International Ventures,
      Inc., Zahir Teja, and Anney Business Corp. (incorporated by reference to
      Exhibit 10.2 of Phoenix International Ventures, Inc.’s Registration
      Statement on Form SB-2 (File No. 333-140257)).10.3
              Debt
      Conversion Agreement dated December 13, 2006 between Phoenix Aerospace,
      Inc. and LeRoy Moser (incorporated by reference to Exhibit 10.3 of
      Phoenix International Ventures, Inc.’s Registration Statement on Form SB-2
      (File No. 333-140257)).10.4
              Debt
      Conversion Agreement dated December 12, 2006 between Phoenix Aerospace,
      Inc. and Erik Kudlis (incorporated by reference to Exhibit 10.4 of
      Phoenix International Ventures, Inc.’s Registration Statement on Form SB-2
      (File No. 333-140257)).10.5
              Debt
      Conversion Agreement dated December 14, 2006 between Phoenix Aerospace,
      Inc. and Teja N. Shariff (incorporated by reference to Exhibit 10.5
      of Phoenix International Ventures, Inc.’s Registration Statement on Form
      SB-2 (File No. 333-140257)).10.6
              Employment
      Agreement dated December 14, 2006 between Phoenix International Ventures,
      Inc. and Zahir Teja (incorporated by reference to Exhibit 10.6 of
      Phoenix International Ventures, Inc.’s Registration Statement on Form SB-2
      (File No. 333-140257)).10.7
              Employment
      Agreement dated December 14, 2006 between Phoenix International Ventures,
      Inc. and Neev Nissenson (incorporated by reference to Exhibit 10.7 of
      Phoenix International Ventures, Inc.’s Registration Statement on Form SB-2
      (File No. 333-140257)).10.8
              Employment
      Agreement dated December 14, 2006 between Phoenix International Ventures,
      Inc. and Teja N. Shariff (incorporated by reference to Exhibit 10.7
      of Phoenix International Ventures, Inc.’s Registration Statement on Form
      SB-2 (File No. 333-140257)).10.9
              Commercial
      Lease and Deposit Receipt (incorporated by reference to Exhibit 10.1
      of Phoenix International Ventures, Inc.’s Current Report on Form 8-K filed
      October 2, 2007).10.10
              Form
      of Subscription Agreement (incorporated by reference to Exhibit 10.1
      of Phoenix International Ventures, Inc.’s Current Report on Form 8-K filed
      January 3, 2008).10.11
              Form
      of Warrant (incorporated by reference to Exhibit 10.2 of Phoenix
      International Ventures, Inc.’s Current Report on Form 8-K filed January 3,
      2008).10.12
              Conversion
      Agreement with Zahir Teja (incorporated by reference to Exhibit 10.4
      of Phoenix International Ventures, Inc.’s Current Report on Form 8-K filed
      January 3, 2008).14.1
              Code
      of Ethics (incorporated by reference to Exhibit 14.1 of Phoenix
      International Ventures, Inc.’s Registration Statement on Form SB-2 (File
      No. 333-140257)).21.1
              Subsidiaries
      of the Small Business Issuer (incorporated by reference to
      Exhibit 21.1 of Phoenix International Ventures, Inc.’s Registration
      Statement on Form SB-2 (File No. 333-140257)).23.1
              Consent
      of Mark Bailey & Company, Ltd.31.1
              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




-58-