UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, ~~2009~~ 2010

Oror

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 þx

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 þx

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 ox

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o 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 o Non-accelerated filer o (Do not check if smaller reporting company) Smaller reporting company þx

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~~December 3031, ~~2009,~~2010 8,~~052~~142,~~040~~658 shares of common stock were outstanding. The aggregate market value of the common stock held by non-affiliates of the registrant, as of ~~June~~December 3031, ~~2009~~2010, the last business day of the ~~2nd~~ fiscal ~~quarter~~year, was approximately $21,~~996~~058,~~284~~546 based on the close price of thirteen-cents ($.13) 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~~May 3112, ~~2010~~2011, there were 816,~~137~~879,~~947~~818 shares of our common stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

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TABLE OF CONTENTS

Part I
Item 1.	Business	3
Item 1A.	Risk Factors	116
Item 1B.	Unresolved Staff Comments	169
Item 2.	Properties	169
Item 3.	Legal Proceedings	169
Item 4.	(Removed and Reserved)	169
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	1710
Item 6.	Selected Financial Data	1912
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1912
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	2516
Item 8.	Financial Statements and Supplementary Data	2617
Item 9.	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	4331
Item 9A[T].	Controls and Procedures	4331
Item 9B.	Other Information	4432
Part III
Item 10.	Directors, Executive Officers, and Corporate Governance	4533
Item 11.	Executive Compensation	4736
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	5038
Item 13.	Certain Relationships and Related Transactions, and Director Independence	5139
Item 14.	Principal Accounting Fees and Services	5241
Part IV
Item 15	Exhibits, Financial Statement Schedules	5442
Signatures		5543

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PART I

ITEM 1. BUSINESS

Corporate Information

Phoenix International ~~ventures~~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~~The ~~International~~Company ~~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. (ISO-Certified), design, 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 the F-16 fighter, which are in current production; and 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 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, addressing component obsolescence issues, 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 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.

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 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.

Independent to the US Defense Department Budget, much of the Legacy Support Equipment in service today are facing obsolescence and maintainability issues which may require some equipment to be replaced with new equipment or be remanufactured. The US Armed Forces maintains a significant inventory of Ground Support Equipment that has been deployed in a harsh environment. When this equipment returns to the US, it will require major overhaul and maintenance. The Company has positioned itself to be at the forefront within this sector with its technical skills and license agreements to generate future revenues even though there should be no assurance.

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

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 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.

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~~ Under oncertain ~~the size~~circumstances, ~~complexity,~~we ~~and~~are ~~duration~~also ofsubject ~~the~~to ~~particular~~certain ~~agreement,~~U.S. ~~the~~State Department and U.S. ~~government~~Department ~~may~~of ~~either~~Commerce ~~pay~~requirements ~~for~~involving prior clearance of foreign sales. Such export control laws and regulations either ban the ~~manufactured~~sale of certain equipment to specified countries or ~~remanufactured~~require ~~product~~U.S. ~~upon~~manufacturers ~~delivery~~and others to obtain necessary federal government approvals and ~~acceptance~~licenses ~~thereof~~prior orto ~~pay~~export. ~~for~~As ~~the~~a ~~manufactured~~part orof ~~remanufactured~~this ~~product~~process, we, in ~~installments~~the ~~upon~~event we engage foreign distributors, would generally require such foreign distributors to provide documents which indicate that the ~~accomplishment~~equipment ofis ~~specified~~not ~~milestones~~being ~~and/~~transferred to, or anused ~~agreed~~by, ~~payment~~unauthorized ~~timetable~~parties abroad.

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.

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, Phoenix Aerospace Inc. (PAI), received this certification in 2003. Our certification was renewed effective June 12, 2008 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.

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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

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 nine units in total. 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 Start Carts units for a major Defense company.

On occasion over the past three years, 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.

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.

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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. 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 purchase 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.

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.

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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 currently 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.

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 which to date has not been a material part of our business.

~~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~~-4-

Name	Fiscal Period	% of Total Sales
	Twelve Months Ended:
	2009
U.S. Air Force		32
Northrop Grumman		16
APV		11
Astrotek		11
US Navy		11
	2008
U.S. Air Force		34
Northrop Grumman		17
MSI GMBH		27
U.S. Navy		9
Langa		8

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

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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 competency, service, performance, reliability, price and deliveries. We believe that we have well positioned ourselves to remain competitive in our target markets as demonstrated by the following examples:

We● ~~encounter competition from~~ Lockheed Martin ~~Corporation,~~Aeronautics ~~Boeing~~Company ~~Corporation,~~- ~~Honeywell~~licensee; ~~Aerospace~~● ~~GmbH,~~DRS ~~United~~Environmental ~~Technologies Corporation~~Systems, ~~Northrop Grumman Corporation, and DRS,~~ Inc. as– ~~well~~licensee; as● ~~from~~Lockheed ~~Engineered~~Martin ~~Support Systems~~Simulation, ~~Inc.~~Training and ~~Logistical~~ Support, ~~Inc.~~ - approved vendor;

In● ~~the~~Lockheed ~~military~~Martin ~~and~~Air ~~government~~Logistics ~~markets,~~Center we- ~~will~~approved ~~often~~vendor; be● ~~engaged,~~U.S. ~~directly~~Navy orPrime ~~indirectly,~~Contractor; in● ~~the process of seeking competitive bid or negotiated contracts with government departments and agencies~~U.S. ~~These~~Navy ~~government~~Designated ~~contracts~~Depot ~~are~~Repair ~~subject~~Center tofor ~~the~~Certain ~~Federal~~Support ~~Acquisition~~Equipment; ~~Regulations~~● ~~with which we may have difficulty complying~~U.S. ~~However,~~Air weForce ~~are~~Prime ~~often one of only a few companies whose products meet the required specifications designated by such customers.~~Contractor;

~~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~~Army ~~industry~~Prime ~~and~~Contractor ~~U.S.~~● ~~government~~Honeywell ~~departments~~Aerospace ~~would~~GmbH 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~~Northrop ~~Martin~~Grumman ~~Aeronautics~~approved ~~Company Licensee~~vendor; ·● ~~Lockheed~~Boeing ~~Martin~~approved ~~Aeronautics~~vendor ~~Company~~● ~~approved~~ISO ~~vendor~~9001/2008 Certified; ·and ~~Lockheed~~● ~~Martin~~Experienced ~~Simulation,~~with ~~Training~~the ~~and~~U.S. ~~Support~~government ~~approved~~contracting ~~vendor;~~process.

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

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Backlog

As of December 31, 2009, our backlog was approximately $8,303,245, as compared with a backlog of approximately $5,693,160 as of December 31, 2008. Four customers accounted for approximately 53%, 12%, 8%, and 7% of such backlog as of December 31, 2009. We presently expect to manufacture and deliver a significant portion 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.

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Government contracts 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

During our fiscal year ended December 31, ~~2009~~2010, we ~~hired~~had ~~five~~eight ~~new~~(8) ~~employees, bringing the total number of~~ full time employees ~~to eleven at December 31~~, ~~2009,~~ including two officers, we also had ~~two~~ one (1) part time ~~employees~~employee. ~~Nine~~As of ~~these~~the ~~full~~date ~~time~~of ~~employees~~this ~~were~~report ~~engaged~~we inhave ~~operations~~five ~~and~~(5) ~~three~~employees. None of ~~the~~our ~~full time~~ employees ~~were~~are ~~engaged~~covered inby ~~administration,~~a ~~marketing,~~collective ~~and~~bargaining ~~business~~agreement ~~development.~~or ~~The~~are ~~increase~~represented inby ~~our~~a ~~revenues~~labor ~~during~~union. ~~2009~~We ~~required~~consider usour torelationships ~~increase~~with our ~~work~~employees ~~force~~to be satisfactory.

~~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.~~-5-

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.

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ITEM 1A. RISK FACTORS

Investing in our common stock involves a high degree of risk and should only be considered by investors who can afford a total loss of their investment in our shares. 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

WeOur auditors have issued a ~~limited~~going ~~operating~~concern ~~history~~opinion ~~and~~on ~~therefore it may be difficult to evaluate~~ our ~~Company~~financial ~~and our prospects.~~statements

WeAs ~~were~~a ~~organized~~result inof ~~2006, and~~ our ~~principal~~loss ~~operating~~from ~~subsidiary,~~operations ~~founded~~and inworking ~~April,~~capital ~~2003,~~deficit ~~has~~as ~~only~~at aDecember ~~limited~~31, ~~operating~~2010, ~~history~~our ~~upon~~independent ~~which~~accountants anhave ~~evaluation~~expressed ofdoubt ~~our~~as ~~Company~~to ~~and~~ our ~~prospects~~ability ~~can~~to becontinue ~~based.~~as ~~Our~~a ~~prospects~~going ~~for~~concern ~~financial success must be considered~~ in ~~light~~their ofopinion ~~the risks, expenses~~ and ~~difficulties~~audit ~~frequently~~of ~~encountered~~our byfinancial ~~companies~~statements inas ~~highly~~at ~~competitive~~December ~~and evolving markets~~31, ~~such~~2010 asand for the ~~defense-aerospace~~fiscal ~~industry~~year ~~market~~then ended.

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, 2009, we had a net loss of $(246,490) and for the fiscal year ended December 31, 2008, we had a net income of $360,774 which was caused by a non recurring reversal of a contingency in the amount $566,164. As of December 31, 2009, we had a working capital deficit of $1,491,303 and an accumulated deficit of $3,172,086. Our capital needs during 2009 have been met by the cash flow from operations, 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,~~so. ~~the~~Failure ~~recent~~to ~~receipt~~properly ofexecute ~~additional orders,~~ our current ~~backlog,~~business ~~and~~plan ~~other~~may ~~factors~~result ~~indicate~~in weour ~~will~~inability ~~be able~~ to continue as a going concern ~~for at least the next twelve months~~. ~~Failure~~ toWe ~~properly~~require ~~execute~~raising ~~our~~additional ~~current~~capital ~~business plan may result~~ in ~~our~~order ~~inability~~ to ~~continue~~sustain asour aongoing ~~going concern~~operations.

We ~~may~~have behistorically incurred losses, have a working capital deficit, have significant accounts payable and until recently have been unable to ~~manage~~pay our ~~growth~~obligations. A substantial portion of our obligations are owed to key vendors which are critical to the operations in our business. If we are unable to work out terms or ~~implement~~pay in full within the near future it may have a material effect upon our ability to continue operations. We have minimal current assets to meet our outstanding obligations at December 31, 2010 and as of the date of this report. Although we obtained additional equity financing in early 2011 and used a portion of the proceeds to pay certain the above obligations, there can be no assurance that we will be able to pay ongoing obligations in the ordinary course of business ~~strategy~~as they occur in the future.

~~Although~~We wecould ~~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~~liable to ~~expand~~refund ~~our~~certain ~~facilities,~~payments ~~our~~under ~~client base and markets or implement the other features of~~ our ~~business~~government ~~strategy at the rate or to the extent presently planned~~contracts. ~~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.~~

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.

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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.

-6-

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~~We ~~business~~generate 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, 2009, our five largest customers in terms of sales accounted for an aggregate of 8189% of our total sales. ~~During~~from ~~2008, our~~ five ~~largest~~major customers ~~in terms of sales accounted for an aggregate of 95% of total sales~~. ~~Although~~The ~~we are increasing our customer base, the~~ loss of any of ~~the~~these ~~foregoing~~customers ~~businesses as a customer~~ could have a material adverse ~~effect~~impact on our ~~results of operations or financial condition~~business.

~~Demand~~The ~~for~~termination of our ~~defense-related~~ongoing ~~products depends on~~ government ~~spending~~contracts ~~and~~or ~~any~~our ~~re-allocation~~inability orto ~~reduction~~enter ininto ~~such~~additional ~~spending~~government contracts 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. AThe ~~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.

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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.

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.

-7-

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.

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

The Company and Mr. Teja have entered into a settlement agreement with Kellstrom Defense Aerospace, Inc. As of December 31, 2009 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.

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~~are seeking to raise additional capital inthrough ~~order~~the tosale ~~effectuate~~of ~~our~~additional ~~business~~shares ~~plan.~~of ~~Our~~common ~~most~~stock ~~likely~~in ~~source~~order ofto ~~additional~~meet ~~capital~~our ~~will~~working becapital ~~through~~needs ~~the~~and ~~sale~~effectuate ofour ~~additional~~business ~~shares of common stock~~plan. Such stock issuances will cause stockholders' interests in our Company to be diluted and such dilution will negatively affect the value of anthe ~~investor's~~ shares owned by our existing stockholders.

~~Because~~Our ofChief ~~our~~Executive ~~small~~Officer ~~size,~~and weother ~~may~~members beof ~~exposed~~our toBoard ~~potential~~of ~~risks~~Directors ~~resulting~~make ~~from~~and ~~requirements~~control ~~under~~corporate ~~Section 404~~decisions ofthat ~~the~~may ~~Sarbanes-Oxley~~be ~~Act~~disadvantageous ofto ~~2002~~the minority stockholders.

~~Pursuant~~Mr. toZahir ~~Section 404~~Teja, ofour ~~the~~President, ~~Sarbanes-Oxley~~Chief ~~Act~~Executive ofOfficer ~~2002~~and Director, weand ~~are~~other ~~required~~members toof ~~include in~~ our ~~Annual~~board ~~Report~~of ondirectors, ~~Form~~directly ~~10-K~~or ~~our~~through ~~assessment~~their ofrespective ~~the~~members ~~effectiveness~~ of ~~our~~their ~~internal~~families, control ~~over~~a ~~financial~~majority ~~reporting as~~ of the ~~end~~outstanding shares of ~~fiscal 2009. Furthermore, we expect that, beginning with~~ our ~~fiscal~~common ~~year~~stock. ~~ended December 31~~Accordingly, ~~2010,~~they ~~our~~have ~~independent~~and ~~registered public accounting firm~~ will behave ~~required~~significant toinfluence ~~attest~~in todetermining ~~whether our assessment of~~ the ~~effectiveness~~outcome of ~~our~~all ~~internal~~corporate ~~control~~transactions ~~over~~or ~~financial~~other ~~reporting~~matters, isincluding ~~fairly~~the ~~stated~~election inof ~~all~~directors, ~~material~~mergers, ~~respects~~consolidations and ~~separately~~the ~~report~~sale onof ~~whether~~all itor ~~believes~~substantially weall ~~have~~of ~~maintained~~our assets, inand ~~all~~a ~~material~~change ~~respects,~~in ~~effective internal~~ control. ~~over~~The ~~financial~~interests ~~reporting as~~ of ~~the end of the fiscal year~~Mr. WeTeja ~~expect to incur additional expenses~~ and/or ~~diversion~~our ofother ~~management's~~directors ~~time~~may asdiffer afrom ~~result~~the interests of ~~performing~~ the ~~system~~other ~~and~~stockholders ~~process evaluation, testing~~ and ~~remediation~~thus ~~required~~result in ~~order~~corporate todecisions ~~comply~~that ~~with~~are ~~the~~disadvantageous ~~certification~~to ~~requirements~~other stockholders.

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 are necessary for us to produce reliable financial reports and are important to help prevent financial fraud. Although Management believes that the material weaknesses 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 53% 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.

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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.

In addition, our common stock is ~~initially unlikely to be~~ not followed by any market analysts, and there ~~may~~are benot ~~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.~~-8-

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, 2009 we had 8,113,307shares 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 4,344,557 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 2,596,000 shares. Our Vice President, Neev Nissenson, and his affiliates own approximately 1,687,000 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.

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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.

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

Effective as of March 1, 2009, we lease a production facility located at 61B Industrial Parkway, Carson City, NV 89706, under a lease that ~~expires~~expired on February 28, 2011, at a monthly rent of $45,~~120~~430. Minimum payments on this lease for the next 12 months will be $4965,~~440~~160. ~~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 near future.

ITEM 3. LEGAL PROCEEDINGS

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

ITEM 4. (~~REMOVED~~removed ~~AND~~and ~~RESERVED~~reserved)

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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 ~~2009~~2010 and ~~2008~~2009.

Fiscal Quarter End	Low Bid		High Bid
31-Mar-09	$	0.57	$	1.79
31-Mar-11	$	0.08	$	0.13
30-Jun-09	$	0.45	$	1.24
31-Mar-10	$	0.55	$	1.03
30-Sep-09	$	0.75	$	1.09
30-June-10	$	0.65	$	1.00
31-Dec-09	$	1.00	$	1.05
30-Sep-10	$	0.16	$	0.74
31-Mar-08	$	0.85	$	1.75
31-Dec-10	$	0.05	$	0.30
30-Jun-08	$	1.76	$	2.60
31-Mar-09	$	0.57	$	1.79
30-Sep-08	$	1.98	$	2.62
30-June-09	$	0.45	$	1.24
31-Dec-08	$	1.35	$	2.30
30-Sep-09	$	0.75	$	1.09
31-Dec-09	$	1.00	$	1.05

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, ~~2009~~2010, we had 6867 stockholders of record.

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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, ~~2009~~2010

The Company does not currently have a formal equity compensation plan. Also, as of December 31, 2010 there were no outstanding equity awards either under a plan approved by security holders or not approved by security holders.

	A	B		C
Plan 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	1,160,000		--	--
Total	1,160,000	$	0.58	(1)

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

	Options Outstanding
Range price ($)	Number of Options	Weighted Average Remaining Life	Weighted Average Exercise Price
$0.50	990,000	1.0	$0.50
$1.00	170,000	0.7	1.00

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Recent Sales of Unregistered Securities

In July and August 2009, two investors extended their promissory note arrangements that were entered into in the previous year in the aggregate principal amount of $89,474 for an additional one year bearing 15% interest per annum. These notes will now mature in the fiscal quarter ending September 30, 2010. These notes were discounted by the issuance of shares of the Company’s common stock equal to 5% of the principal amount of the notes. In total the Company issued an aggregate of 4,110 shares in connection with this discount.

In June and August 2009, the Company entered into three new promissory note agreements with related parties, an Israeli individual and two notes with Cyprus Corporation, in the aggregate amount of $125,000. These notes are to be paid in full at various dates between June 18, 2010 and August 23, 2010 and bear 15% interest per annum. In addition, these notes were discounted by the issuance of shares of the Company’s common stock equal to 5% of the principal amount of the note. In total the Company issued an aggregate of 6,479 shares in connection with this discount.

~~There~~In ~~will~~July beand noAugust ~~penalties~~2009, two investors extended their promissory note arrangements that were entered into in the previous year in the aggregate principal amount of $89,474 for ~~early~~an ~~repayment~~additional one year bearing 15% interest per annum. These notes will now mature in the fiscal quarter ending September 30, 2010. These notes were discounted by the issuance of shares of the Company’s common stock equal to 5% of the principal amount of the notes. In total the Company issued an aggregate of 4,110 shares in connection with this discount.

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 December 31, 2009, Anney Business Corp, a consultant, exercised an option to purchase 56,000 shares in redemption of $28,000 of accrued expenses in accordance with a consulting agreement.

InOn February ~~and~~2, ~~March~~ 2010, the Company ~~entered~~issued ~~into~~14,140 ashares ~~new~~of ~~promissory~~common stock to a note ~~agreements~~holder ~~with~~for ~~related~~consideration ~~parties~~of inextending the ~~aggregate~~maturity ~~amount~~date of ~~$175,000~~a promissory note. ~~These~~On ~~notes~~June ~~are~~10, to2010 bethe ~~paid~~Company inissued ~~full~~1,768 atshares ~~various~~of ~~dates~~common ~~between~~stock ~~February~~to ~~and~~a ~~March~~note holder for consideration of ~~2012 and~~ ~~bear~~extending ~~11%~~the ~~interest~~maturity ~~per~~date ~~annum.~~of Ina ~~addition,~~promissory ~~these~~note. ~~notes~~On ~~were~~March ~~discounted~~25, by2010 the ~~issuance~~Company ofissued 10,500 shares of ~~the Company’s~~ common stock ~~equal~~ to 7%a note holder for consideration of extending the ~~principal~~maturity ~~amount~~date of ~~the~~a promissory note. ~~per~~On ~~year.~~May In20, ~~total~~2010 the Company issued an ~~aggregate~~2,943 shares of ~~24,640~~common ~~shares~~stock into ~~connection~~a ~~with~~note ~~this~~holder ~~discount~~for consideration of extending the maturity date of a promissory note.

On March 24, 2011, the Company issued an aggregate of 1,666,667 shares of common stock for $250,000 in cash to certain investors including our board members Messrs. Amit Barzelai, Uri Wittenberg and Hagai Langstadter .

In addition, approximately $337,000 of debt that was in default as at March 24, 2011 (consisting of $300,000 original principal amount plus accrued interest thereon) issued to certain note holders (including Zvi bar-nes Nissensohn, the father of Ofer Bar-Nes Nissensohn) were converted into approximately 2,247,000 shares of the Company’s common stock at the price of $0.15 per share. The Company also issued 283,333 shares of common stock to an affiliate of Amit Barzelai and agreed to issue 30,000 additional shares of its common stock to the converting note holders in consideration for prior debt extensions.

On April 1, 2011, we engaged the services of Strategic Global Advisors, LLC (“SGA”) as our investor relations consultant under a one year agreement calling for fees of $7,500 per month. In addition we issued 500,000 shares to SGA and granted it a five year option to purchase an additional 500,000 shares at an exercise price of $0.15 per share.

-11-

In April 2011, the Company’s board of directors approved an agreement whereby $408,000 of accrued obligations owed by our Company and its Phoenix Aerospace subsidiary to Zahir Teja, our President and Chief Executive Officer was converted into 2,720,000 additional shares of our common stock, at a conversion price of $0.15 per share.

In April 2011, the Company issued an aggregate of 1,000,000 additional shares of its common stock to four members of our board of directors and granted to such persons options to purchase an aggregate of 1,000,000 additional shares at an exercise price of $0.15 per share.

In May 2011 $55,910 was raised through the promise to issue 372,733 shares of common stock.

For a further description of the above transactions, see Item 10. Directors, Executive Officers and Corporate Governance and Item 13. Certain Relationships and Related Transactions and Director Independence, elsewhere in this Annual Report.

ITEM 6. SELECTED FINANCIAL DATA

Not applicable.

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.

-19-

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~~manufactures ~~Teja,~~ and ~~Phoenix~~remanufactures ~~Aerospace,~~aircraft ~~Inc.~~ground ~~entered~~support ~~into a Share Exchange Agreement dated as of December 1, 2006~~equipment. AsThis aequipment ~~result~~is ofneeded 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~~operate aand ~~holding~~maintain ~~company~~military ~~structure~~aircraft. ~~This~~We ~~structure,~~provide wethis ~~believe,~~ground ~~facilitates~~support ~~future~~equipment ~~acquisitions~~in ~~and~~ the ~~opening~~following ~~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.~~ways:

~~The~~· ~~Company~~Studies ~~manufactures~~for ~~and~~Life ~~remanufactures~~Extension ~~aircraft~~of ~~ground~~Aging ~~support~~Equipment ~~equipment.~~- ~~This~~Analyze ~~equipment~~obsolescence, ~~is needed to operate and maintain military aircraft. Our customers are United States military and aerospace companies. Our facilities are located in our Carson City~~supportability, ~~Nevada headquarters. The Company is ISO 9001/2000 certified~~maintainability, ~~which~~and isrecommend ~~due~~future ~~to expire~~design onfor ~~June 11, 2011~~replacement.

~~The~~· ~~Company~~Manufacture ~~finances~~– ~~production~~Design, ~~primarily~~engineer, ~~through~~and ~~contract~~produce ~~revenues.~~per ~~There~~customer ~~are several types of contracts/revenue streams detailed below:~~specifications.

· ~~Long~~Manufacture ~~term~~New ~~manufacturing and design contract~~ – ~~generally,~~Legacy ~~contracts~~equipment ~~which~~under ~~have~~license ~~expected durations~~ of ~~more~~Original ~~than~~Equipment ~~twelve~~Manufacturer ~~months~~(OEM). · Short term manufacturing contracts and orders – generally, orders for a specific unit which require less than twelve months of work to complete. · Remanufacturing orders and contracts – generally, orders for a specific unit and requires less than twelve months of work to complete.

·	Remanufacture – Aged equipment to virtually condition and warranty them as new.

·	Parts Trading - Supply other support parts for various equipment on a retail basis.

The different types of contracts detailed below:

·	Long term manufacturing and design contract – generally, contracts which have expected durations of more than twelve months.

·	Short term manufacturing contracts and orders – generally, orders for a specific unit which require less than twelve months of work to complete.

·	Remanufacturing orders and contracts – generally, orders for a specific unit and requires less than twelve months of work to complete.

·	Parts trading – generally, these orders are for parts that are not manufactured by the Company; and the Company buys and sells these parts with limited added value.

·	Study contracts – generally, these contracts are for general services related to the conducting of feasibility and proof of concept studies on items requested by the customer.

~~Management~~We ~~believes~~have ~~that~~historically ~~the~~had ~~scope~~success ofwith forming partnerships with large, well-known OEM’s in the ~~market~~defense ~~opportunity~~industry ~~for~~in order to develop our manufacturing and remanufacturing~~/refurbishing~~ ~~support~~niche. Based ~~equipment~~on ~~for~~these ~~the~~historic Usuccesses we recently entered into a licensing agreement with DRS Environmental Systems, Inc. (a subsidiary of DRS Technologies, Inc., which is a wholly-owned subsidiary of Finmeccanica S.p.A). Management ~~military~~believes ~~market~~this agreement provides us with proprietary technical data to manufacture. With this data it is ~~viable~~very likely we can get contracts on a sole-source basis to manufacture and remanufacture equipment which we have already been providing and other products we have not yet had the opportunity to provide. We ~~The~~also ~~viability~~believe this agreement could lead to higher volume contracts in the areas of our expertise. As of the ~~business~~date ~~opportunity~~of this report, we have not executed any definitive contracts under this agreement nor is ~~supported~~there byany ~~the~~assurance ~~following~~that ~~market~~we ~~characteristics:~~will in the near-term.

·Results ~~the~~of ~~aging support equipment in~~ the ~~field~~Operations at- ~~large~~Fiscal – 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; andSummary

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

ItDuring isthe ~~difficult~~year toended ~~determine~~December ~~what~~31, ~~portion~~2010 ofthe Company was in a very precarious financial position primarily related to the ~~above-referenced~~lack ~~defense~~of ~~spending~~success ~~will~~in beobtaining ~~allocated~~the working capital necessary to ~~manufacturing~~pay our obligations timely which, ~~remanufacturing~~correspondingly, prevented us from fulfilling our open customer orders; producing from our backlog; and ~~refurbishing~~generating ofsufficient ~~support~~operational ~~equipment~~cash flows. The ~~Moreover,~~following ~~there~~ is noa ~~assurance~~detailed ~~that~~discussion ~~the~~of ~~previously~~our ~~set~~results ~~forth~~for ~~market~~the ~~characteristics~~periods ~~will~~presented ~~not~~in ~~change.~~this report:

~~-20-~~Revenue

The ~~military~~51% ~~market~~decline isin ~~currently~~revenue ~~dominated~~for bythe ~~major~~twelve ~~players~~months ~~such~~ended asDecember ~~Lockheed Martin Corporation~~31, ~~Honeywell~~2010 ~~International~~from ~~Inc,~~the ~~Northrop~~same ~~Grumman~~period ~~Corporation,~~in ~~and~~2009 ~~DRS,~~was ~~Inc.~~the Weresult doof ~~not~~our ~~intend~~inability to ~~compete~~obtain ~~with~~parts ~~these~~and ~~large~~services ~~defense~~from ~~contractors,~~outside ~~rather~~vendors wenecessary ~~seek~~ to ~~establish~~complete ~~approved contractor, licensing,~~ and ~~teaming~~ship ~~relationships with defense contractors such as Lockheed Martin and Honeywell. Management believes that these contractual relationships, coupled with~~ our ~~designation~~products asbeginning ain Umid-2010.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.

~~COMPARISON~~Additionally, OFin ~~THE~~early ~~PERIOD~~2010, ~~ENDED~~our ~~DECEMBER~~production staff, along with our officers, performed a detailed cost analysis of the USAF trailer program (revenue for this program is recognized using the percentage of completion method) that began in late 2008. This analysis resulted in a significant increase in our estimated costs to complete the first phase of the program. Correspondingly, we reduced the revenue recognized through December 31, 2010 related to the project by approximately $350,000 and recognized a loss of approximately $60,000. Additionally, the adjustments in our cost estimates resulted in us not recognizing revenue in 2010 related to the project while the 2009 ~~AND~~recognized ~~DECEMBER~~revenue 31was approximately 41% of the total for that period. Our currently revised estimates indicate additional costs to complete the first phase of this program are approximately $1,260,000 ~~2008~~of which approximately $1,200,000 is expected to be billed to the Air Force in late 2011 into 2012.

Financial Information - Percentage of Revenue
Twelve Months ended December 31, 2009
	2009			2008
Sales		100	%	100	%
Cost of sales		-73	%	-61	%
Gross profit		27	%	39	%
Operating expenses:
General and administrative expenses		-31	%	-45	%
Total operating expenses		-31	%	-45	%
Other income (expense)		-2	%	23	%
Net Income (loss)		-7	%	17	%

-13-

~~Results~~Our revenues from our other manufacturing, re-manufacturing, and parts-trading were relatively flat in 2010. While study contracts accounted for approximately 12% of our 2010 revenue (13% of the total in 2009), actual revenue recognized on these contracts decreased approximately 33% from 2009. ~~Operations-Fiscal~~The ~~Summary~~decrease in study contract revenue was a result of the completion of studies that began in 2009, were completed in 2010, and no new studies were started during 2010.

~~Revenues Revenues~~If ~~increased~~we ~~68%~~are successful in obtaining the necessary additional capital we expect increases in our revenue in the second half of 2011 and into 2012. These increases are expected to ~~$3,663,429~~be ~~for~~substantially generated from the ~~twelve~~completion ~~months~~of ~~ended~~the ~~December~~first ~~31,~~phase ~~2009,~~of ~~compared~~the USAF trailer program; the next phase of the trailer program in which we believe we will be able to ~~$2,180,804~~achieve ~~for~~at a lower cost than that of the ~~twelve~~first; ~~months~~and ~~ended~~expected ~~December~~orders 31obtained from our DRS licensing agreement as discussed above; however, ~~2008~~there are no assurances that these expectations will be realized.

~~Revenue~~Cost ~~increased~~of ~~in our manufacturing and remanufacturing streams and decreased in the study and parts trading during 2009.~~Sales

~~For~~Our ~~the~~cost ~~twelve~~of ~~months~~sales ~~ended~~as ~~December~~a 31percentage of revenue increased in 2010 (approximately $2,160,000 ~~2009~~in 2010 and $2,691,000 ~~remanufacturing~~in ~~contracts~~2009) ~~accounted~~despite ~~for~~the ~~43%~~decline ofin our revenues, ~~manufacturing~~due ~~and~~to ~~design~~additional ~~were~~costs ~~32%,~~incurred ~~parts~~on ~~trading~~the ~~were~~trailer ~~12%,~~program ~~and~~as ~~study~~discussed ~~contracts~~above ~~were~~while ~~13%~~not ofrecognizing ~~our~~any ~~sales~~corresponding revenue from the project. Additional ~~This~~increases ~~compares~~in tothe ~~manufacturing~~cost of ~~10%,~~sales ~~remanufacturing~~in ~~accounting~~2010 ~~for~~were ~~34%~~due ofto increases in our ~~revenues,~~raw ~~study~~materials ~~contracts~~resulting ~~for~~from ~~28%~~our ~~and~~inability ~~parts~~to ~~trading~~pay ~~accounting~~our ~~for~~vendors ~~27%~~timely which further prevented us from taking advantage of ~~our~~volume ~~total~~discounts ~~revenues~~and ~~for the~~being ~~twelve~~subject ~~months~~to ~~ended~~price ~~December~~increases 31in commodities used in these materials. Based on our previous experience we expect margins to increase, ~~2008~~but there can be no assurance given that will actually occur.

~~There~~General ~~was~~and aAdministrative notable increase in remanufacturing revenue as a result of increased demand for the remanufactured air start carts, as well as demand for remanufactured mobile air condition units a product we started to produce only in 2009. These units are typically of high dollar volume. Management believes although there can be no assurance that demand for these items will remain consistent during the year ended December 31, 2010.Expenses

~~In manufacturing~~Our ~~and~~2010 ~~design~~general ,and weadministrative ~~were~~expenses ingenerally remained the ~~primary~~same ~~execution of a large manufacturing and design contract~~ in ~~the~~2010 ~~twelve~~from ~~months ended December 31,~~ 2009. In ~~which~~2010 ~~contributed to~~ our ~~significant~~general ~~increase~~and inadministrative ~~revenues.~~expenses ~~Management~~were ~~believes~~approximately ~~that~~57% ~~this order will be a significant portion~~ of our ~~near~~total ~~future~~revenue ~~revenues.~~compared ~~This order also contains an option for the customer~~ to ~~order~~31% ~~additional~~in ~~units, which if exercised will lead to additional revenues~~2009.

~~Parts~~In ~~trading~~2010 ~~revenue~~salaries ~~decreased~~accounted infor ~~the~~approximately ~~year~~28% ~~ended~~of ~~December~~our ~~31,~~general ~~2009~~and asadministrative ~~compared~~expenses towhich ~~the~~represented ~~year ended December 31, 2008, as~~ a ~~result~~slight ofdecline ~~decreased~~from ~~demand.~~the Wecomparable ~~expect,~~period ~~although~~in ~~there~~2009 ~~can~~due beto noa ~~assurance,~~reduction ~~that~~in ~~this~~our ~~revenue~~administrative ~~stream~~staff ~~might continue to decrease~~ in ~~the twelve months ended December 31,~~ 2010.

~~-21-~~Legal, accounting, and consulting fees, which accounted for approximately 33% of the total general and administrative expenses in 2010, increased from the 2009 period due to increases in the costs of our annual audit; reviews of our interim financial statements; and increases in our business and marketing consulting services.

~~Revenue~~Our ~~from~~other ~~study~~general ~~orders~~and ~~decreased~~administrative asexpenses wewhich ~~reached~~primarily ~~the~~consist ~~final stages~~ of ~~performance. As we did not receive additional study type orders in the twelve months ended December 31~~utilities, ~~2009,~~travel ~~management~~to ~~believes~~support ~~that~~our ~~revenue~~marketing ~~from~~and ~~this~~capital ~~stream~~raising ~~will decrease in the near future. Management believes~~efforts, ~~although there can be no assurance, that these study order may spawn additional orders to remanufacture~~ and~~/or~~ ~~manufacture the equipment types that were studied~~rent, ~~increasing~~remained ~~manufacturing~~relative ~~and~~flat ~~remanufacturing~~for ~~revenue in~~ the ~~future~~periods presented.

WeIn ~~tend~~2010 towe ~~have~~also ~~few~~incurred ~~diverse~~a ~~contracts~~one-time ~~with~~charge ~~typically~~related ~~large~~to ~~customers~~the ~~which~~write-off ~~make~~obsolete upinventory ~~significant portions~~ of ~~our~~approximately ~~revenue. The United States Air Force and Navy represented 43% of the Company’s revenues for the year ended December 31~~$114,000 ~~2009. The~~that ~~remaining 57% of sales~~ was toclassified ~~aerospace~~as ~~companies~~non-current ~~and~~inventory ~~military~~in ~~contractors. Two customers represented 49% of the Company’s revenues for the year ended December 31,~~ 2009. ~~Management feels that similar trends will continue in the near future.~~

~~Cost~~In ofearly ~~Sales~~2011 ~~Cost~~we ofwere ~~sales~~able ~~consists~~reduce ~~primarily~~some of ~~sub~~our ~~contractors~~general and ~~raw~~administrative ~~materials~~expenses ~~used~~through insalary ~~the~~reductions ~~manufacturing and remanufacturing processes, along~~ with ~~labor~~our ~~and allocations of indirect labor and overhead. Cost of sales increased to $2~~officers,~~691,198 for~~ ~~the~~reductions ~~twelve~~in ~~months~~our ~~ended~~overall ~~December 31~~workforce, ~~2009,~~and ~~compared to $1,334,162 for~~ the ~~twelve~~elimination ~~months ended December 31, 2008, representing 73% and 61%~~ of ~~the~~consulting ~~total revenues for the twelve months ended December 31, 2009 and December 31, 2008, respectively~~agreements. ~~These~~We ~~costs~~expect ~~rose~~to ~~because~~maintain wethese ~~had~~reduced ~~more~~expense ~~contracts,~~levels ~~higher~~until ~~revenue volume, and as a result more materials costs and labor costs as streams~~ such astime ~~manufacturing,~~we ~~remanufacturing and parts trading require more direct materials cost. However, since there~~ are ~~significant~~able ~~variations~~obtain ~~between~~additional ~~many~~financing ~~of our orders~~ and ~~contracts~~increase itour ismanufacturing ~~difficult~~as todiscussed ~~identify trends in material costs~~above.

~~There~~Other was an increase in costs of sales as a percentage of total sales in the twelve months ended December 31, 2009 as compared to the same period in 2008 primarily due to a couple of atypical high margin sales orders in remanufacturing and manufacturing during 2008. The orders required less material purchases. These atypical orders did not reoccur in 2009 and management believes they are unlikely to reoccur in the near future. In addition we had lower gross profit on our manufacturing and design contracts which are 32% of our 2009 revenues. Management believes, although there can be no assurance, that such gross margins in manufacturing and design will remain consistent in the twelve months ended December 31, 2010 as the design and prototype costs associated with the long term contract tend to lower gross profits.Expenses

~~General~~In ~~and~~2010 ~~Administrative~~we ~~Expenses.~~experienced ~~General~~a ~~and~~slight ~~administrative~~increase in our other expenses ~~increased~~primarily byrelated ~~17%~~to ~~from~~interest ~~$989,030~~expense for ~~the~~our ~~twelve~~outstanding ~~months~~debt ~~ended~~and ~~December~~debt ~~31,~~extension ~~2008~~incentives. We expect this to ~~$1,153,355~~increase ~~for~~in ~~the~~2011 ~~twelve~~through ~~months~~which ~~ended~~time ~~December~~we ~~31,~~are ~~2009. The~~successful ~~increase~~at ineither ~~general~~paying ~~and~~off ~~administrative~~the ~~costs~~debt iswith ~~primarily~~cash ~~attributable~~or ~~increase~~converting ~~of salaries,~~to ~~audit~~shares ~~fees,~~of ~~travel,~~our ~~entertainment,~~common ~~and~~stock ~~professional~~as ~~fees. Management~~many ~~believes,~~of ~~although~~these ~~there~~debts ~~can~~are bein nodefault ~~assurance,~~and ~~that~~provide weour ~~will~~creditors ~~see~~with apenalty ~~slow~~provisions ~~climb~~as discussed in ~~general~~our ~~and~~notes ~~administrative~~to ~~expenses~~our asconsolidated ~~the~~financial ~~Company matures~~statements.

As a percentage of revenues, general and administrative expenses decreased to 31% of the total revenue for the twelve months ended December 31, 2009, as compared to 45% of the total revenue for the twelve months ended December 31, 2008. Management further believes, although there can be no assurance, that the general and administrative infrastructure we currently have can support significantly higher revenue volume without significantly increasing general and administrative costs.

Interest Expense. Interest expense increased by 44% to $91,330 for the twelve months ended December 31, 2009, as compared to $62,992 for the twelve months ended December 31, 2008. The increase in interest expense is primarily attributed to having to pay the expenses associated with the promissory note arrangement for the entire year of 2009 in comparison to approximately seven months of similar expenses for similar notes in 2008. The interest rate stayed at 15% APR for the 2008 and 2009 notes, however the incentive discount changed. The 2008 notes received a more significant discount of shares and warrants as incentive whereas the notes entered into in 2009 had only shares as incentive. We expect total interest expenses to increase in the near future.

Taxes on Income We had no tax liabilities for the twelve months ended December 31, 2009 or 2008.

Net Loss Net loss for the twelve months ended December 31, 2009 amounted to ($246,490) as compared to a net income of $360,774 for the twelve months ended December 31, 2008. The decrease in income is primarily attributed to a recovery of contingency in the amount of $566,154 the twelve months ended December 31, 2008 which did not recur in 2009.

-22-

Summary of Liquidity

~~Although~~We wehave ~~experienced~~produced ~~improved~~poor financial results in ~~2009~~2010 ~~and~~from ~~plan to finance most of~~ our operations ~~through~~even ~~revenues,~~though we ~~are~~maintained ~~still burdened by~~ a ~~significant~~reasonable ~~working~~amount ~~capital~~of ~~deficit.~~backlog Welargely ~~did~~because ~~find~~of itour ~~necessary~~inability to ~~extend~~pay orcurrent ~~issue new debt through promissory notes to replace previous note arrangements~~obligations. ~~Management~~ ~~believes,~~The ~~although~~lack ~~there can be no assurance, that the Company is nearing the point~~ of ~~breaking~~working ~~even.~~capital ~~However,~~prohibited ~~the~~us ~~significant~~from ~~liabilities~~being ~~accrued~~able into ~~this~~execute ~~year~~a ~~and~~necessary inamount ~~past~~of contract ~~years~~work ~~will~~during ~~continue~~2010 to ~~burden~~meet ~~the~~these ~~Company’s~~obligations ~~cash flow~~timely.

WeIn ~~have~~March, ~~diverse~~2011, ~~customer~~we ~~payment~~successfully ~~arrangements~~converted in$300,000 ~~some~~of the aggregate principal amount of ~~our~~certain ~~contracts.~~obligations ~~Some~~into ~~payments~~common ~~are~~shares ~~contingent~~of ~~upon~~the ~~delivery~~Company ~~and~~at ~~have~~$ 0.15 per share which was at a ~~net~~premium 30to ~~payment~~the ~~schedule~~market ~~while~~price ~~some~~of ~~customers~~our ~~make~~common ~~advances~~shares orat ~~allow~~the ~~milestone~~time ~~billing~~of ~~which~~conversion. At ~~allows~~the ~~financing~~same time, our Board of Directors approved the ~~production~~raising ~~process;~~of ~~this~~up isto ~~typical~~$1,000,000 in ~~all~~equity through private placement offerings of our ~~revenue~~common ~~streams~~shares of stock at $0. ~~Still~~15 a share. To date, ~~there~~we ~~are~~have ~~large~~raised ~~outlays~~$315,000 ~~for~~through ~~materials~~the ~~and~~private ~~engineering~~placement ~~that~~offering; onhowever, ~~occasion~~there ~~have~~is ~~caused~~no ~~delays~~assurance inwe ~~payments~~will toachieve ~~vendors~~continued success.

~~Cash Flows (Operating, Investing, and Financing)~~-14-

~~Cash~~ In asApril ~~of December 31~~2011, ~~2009,~~our ~~amounted~~Board toof ~~$148~~Directors,~~478~~ as ~~compared~~an ~~with~~additional ~~$225~~cost saving objective,~~767~~ asapproved the elimination of ~~December~~our 31wholly-owned subsidiary, ~~2008~~Phoenix Europe Ventures, aInc. ~~decrease~~which ofwas ~~$77,289~~based in Israel.

~~Cash~~We ~~used~~have diverse customer payment arrangements in ~~operating~~some ~~activities~~of ~~decreased~~our tocontracts. ~~$42,455~~Some ~~from~~payments ~~$67,842~~are ~~for~~contingent ~~the~~upon ~~twelve~~delivery ~~months~~and ~~ended~~have ~~December~~a 31net 30 payment schedule, ~~2009..~~while ~~The~~some ~~change~~customers inmake advances or allow milestone billing which allows financing of the ~~cost~~production process; this is typical in ~~excess~~all of ~~billings~~our ~~decreased~~revenue ~~cash~~streams. Still, ~~flow~~there ~~when~~are welarge ~~incurred~~outlays ~~costs~~for materials and engineering that on aoccasion ~~long~~have ~~term~~caused ~~contract~~delays in payments to our suppliers. ~~Inventory~~Due ~~and~~to ~~work~~our large working capital deficit we have fallen behind in ~~process~~paying ~~increased~~our ~~significantly~~suppliers, ~~and~~however, ~~decreased~~we ~~cash~~have asreached ~~delivery~~an understanding with some of ~~certain~~our key suppliers to whom we owe money, whereby they will continue to supply us with products ~~was~~and ~~deferred~~services as long as we continue to ~~2010~~make progress paying down existing past invoices. ToFor ~~summarize,~~new weorders ~~had~~going ~~unbilled~~forward ~~long~~in ~~term~~the ~~contracts~~near ~~and~~future, ~~inventory~~we ~~costs~~anticipate that ~~caused~~suppliers usmay torequire ~~accumulate~~payment ~~account~~prior ~~payables~~to shipment.

AsOur ~~our~~significant ~~products~~current ~~tend~~obligations towill becontinue ~~large,~~to ~~changes~~hamper inour ~~the~~ability ~~cash flow items year over year are subject~~ to ~~great~~generate ~~fluctuations~~significant ~~which~~cash ~~might~~flows ~~not~~from beour ~~attributed~~operations tofor aat ~~trend~~least ~~but~~the ~~rather~~first tohalf ~~specific circumstances~~ of ~~a delivery and cutoff date~~2011.

~~Net~~Cash ~~cash decreased from investing activities by $45,902 due to the purchase of a new vehicle, and software.~~Flows

~~Net~~As ~~cash provided~~noted byabove ~~financing~~we ~~activities~~experienced ~~for~~poor ~~the~~operational ~~twelve~~cash ~~months~~flows ~~ended~~beginning ~~December~~in ~~31,~~late 2009 ~~was~~and ~~$11,068~~continuing through 2010. Our ~~This~~operational iscash ~~primarily~~outlays ~~due~~were topartly off-set by the ~~payoff~~deferral of ~~previous~~a ~~promissory~~significant ~~note~~portion ~~arrangements~~of tovendor ~~private~~obligations. We ~~investors~~are ~~and~~no ~~the~~longer ~~issuance~~in ofa ~~new~~position orto ~~extended~~defer ~~promissory~~these ~~notes. These~~payments ~~notes~~and ~~also~~require ~~contained~~significant ~~stock~~working ~~incentives~~capital ~~and~~infusions ~~stock~~in ~~warrants~~the near future.

~~Capital~~Our ~~Expenditures~~investing ~~and~~activities ~~Other~~through ~~Obligations~~2010 consisted only of equipment purchases essential to maintaining the reduced level of operations for much of the year. At the present time, we do not believe we need significant amounts of cash for equipment purchases to begin our expected increased level of business in 2011.

~~Management~~For ~~believes~~the ~~that~~twelve ~~there~~months isended noDecember ~~need~~31, ~~for~~2010, ~~material~~as ~~capital~~further ~~investments~~discussed inabove, ~~order~~we towere ~~execute~~unsuccessful ~~the~~in ~~current~~obtaining ~~backlog.~~significant ~~Our~~ capital ~~investments~~through ~~are~~debt ~~primarily for the purchase of equipment for the services and products that we provide~~ or ~~intend~~equity ~~to provide~~offerings. As ~~This~~further ~~equipment~~noted ~~includes vehicles~~above, ~~shop~~in ~~tools,~~early ~~and shop machinery. Although this may change~~2011, we ~~currently~~have dobegun ~~not~~an ~~expect~~aggressive plan to ~~make~~raise ~~material~~significant capital ~~investments~~primarily inthrough ~~the~~equity ~~next twelve months~~offerings.

On January 29, 2009, we 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 $49,440.

Sources of Liquidity

WeIn ~~shall~~March ~~continue~~2011 new members were nominated to ~~finance~~the ~~most~~Board ofand ~~our~~subsequently, ~~operations~~the ~~through~~new ~~monetizing~~Board ~~our~~approved ~~current~~to ~~backlog,~~raise ~~supplemented~~up to $1,000,000 by ~~financing~~private ~~activities~~placement ~~through~~of ~~the~~our ~~issuances~~common ofshares ~~debt~~at ~~and~~$0.15 /per orshare ~~equity~~of ~~instruments~~which we have raised $305,000 as ~~necessary~~of the date of this report.

~~-23-~~ In April 2011, we engaged the services of Strategic Global Advisors LLC an Investor Relations company to assist in generating market awareness of the company. Through this relationship, we are targeting a raise of approximately of $ 700,000 in early to mid 2011 through additional private placements of our common stock, however, there is no assurance this will actually be successful.

We ~~are~~have ~~able~~also toengaged ~~obtain cash from orders in~~ the ~~form~~services of ~~progress~~Assured ~~billings~~Value ~~and~~Advisors, ~~cash advances from some of our customers~~Inc. ~~For~~who ~~these types of orders, many times there~~ is ~~little~~experienced ~~need~~in ~~for~~merchant usbanking ~~to finance materials~~ and ~~labor. One~~financing ~~of the manufacturing orders is~~ for ~~the~~other ~~design~~funding ~~and~~later ~~manufacturing~~in ~~of new aircraft engine trailers for the approximate amount of $1~~2011,~~110,549.~~ Wehowever ~~collected~~there ais ~~significant~~no ~~amount~~assurance of ~~these revenues on a monthly basis or progress toward milestones~~succeeding. However, significant portions of payments are reserved for reaching specific mile stones and resulted in significant costs in excess of billings. We also typically negotiate with customers to receive cash advances in order to facilitate the processing of their orders.

AsWith ofthe ~~December~~expected ~~31,~~capital ~~2009~~infusions as noted above, we ~~had~~believe ~~backlog~~we ~~orders~~will ofbe ~~approximately~~able ~~$8,303,245~~to asgenerate ~~compared~~cash tofrom aoperations ~~backlog~~through ofour ~~$5,693,160~~existing ~~for~~backlog ~~December~~and ~~31,~~from ~~2008.~~obtaining ~~Management~~new ~~believes~~orders ~~that~~through aour ~~significant~~newly ~~portion~~entered ofDRS ~~our~~agreement ~~revenue~~as ~~will~~discussed beabove. ~~delivered~~The inUS ~~the~~Armed ~~the~~Forces ~~twelve~~maintains ~~months~~a ~~ended~~significant ~~December~~inventory ~~31,~~of ~~2010.~~Ground ~~Additionally,~~Support ~~management~~Equipment isthat ~~expecting,~~has ~~although~~been ~~there~~deployed ~~can~~in beharsh noenvironments ~~assurance,~~which ~~that~~has ~~additional~~led ~~orders~~to ~~will~~worn ~~come~~out ~~in.~~or Ofunreliable ~~our~~Ground ~~2009~~Support ~~backlog,~~Equipment. $4Furthermore,~~800,000~~ isobsolescence aissues ~~Department~~may ~~of Defense~~require ~~program~~some ~~designated~~equipment to ~~Phoenix~~be ~~Aerospace~~replaced ~~projects.~~with Innew ~~this~~equipment ~~program~~or webe ~~will~~remanufactured. ~~supply~~When ~~the~~this ~~Department~~equipment ofreturns ~~Defense~~from ~~various~~these ~~remanufactured~~environments, ~~and~~it ~~newly~~requires ~~manufactured~~major ~~ground~~overhaul ~~support~~and ~~equipment~~maintenance. We ~~expect,~~believe ~~although~~we ~~there~~have ~~can~~positioned ourselves to be noat ~~assurance,~~the toforefront ~~see~~within ~~significant~~this ~~revenue~~sector ~~from~~with ~~this~~our ~~program~~technical skills and licenses in ~~2010~~place.

Debt ~~and Capital~~Obligations

We ~~may~~are ~~consider~~in the process of raising ~~additional~~both equity capital through private placement and~~/or~~ ~~public~~other ~~placements~~debt financing to fund ~~possible~~the ~~acquisitions~~working ~~and~~capital ~~other~~demand. In ~~business~~March ~~development~~2011, ~~activities~~a group of three (3) note holders converted an aggregate principal amount of $300,000 in notes to equity. Currently we are in default on most of our outstanding notes payable. We have offered the same conversion terms and ~~for~~conditions ~~working~~to ~~capital~~these note holders. To date we have been unsuccessful in converting additional notes, however, these negotiations are on-going.

We have issued promissory note arrangements in the amount of $214,474 maturing in 2010. Management believes, although there can be no assurance, that we will be able to repay or extend the notes or enter into new note arrangements at terms that are favorable to the Company.-15-

In February and March 2010, the Company entered into a new long term promissory note agreements with related parties in the aggregate amount of $175,000. These notes are to be paid in full at various dates between February and March of 2012 and bear 11% interest per annum. In addition, these notes were discounted by the issuance of shares of the Company’s common stock equal to 14% of the principal amount of the note. In total the Company issued an aggregate of 24,640 shares in connection with this discount.

Recent Issued Accounting Pronouncements

Please refer to ~~note~~our 1summary of significant accounting policies contained in the footnotes to consolidated financial ~~statement~~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~~material accounting policies that are both most important to the portrayal of our financial condition and results, and that require ~~managements~~management’s most difficult, subjective, or complex judgments often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

-24-

Revenue Recognition

~~Certain~~We ofare ~~the~~currently ~~Company’s~~in ~~revenue~~engaged ~~stream~~in ~~require~~ the ~~use~~manufacture of ~~management~~aircraft ~~judgment~~engine ~~and~~trailers ~~estimation. A~~for ~~description~~the ofUnited ~~those~~States ~~revenue~~Air ~~streams~~Force is(“USAF”). asDue ~~follows:· Long~~to the long-term ~~manufacturing~~nature ~~and design contract – generally, contracts which have expected durations~~ of ~~more~~the ~~than~~project ~~twelve~~we ~~months~~recognize ~~are~~revenue ~~accounted for~~ using the percentage of completion method. The Company estimates its cost to complete the contract and recognizes its revenues based on the total cost incurred at the period as percentage of the total expected cost of the contract. The Company from time to time reviews its assumptions relating to the contract estimates.

~~· Long~~The ~~term~~determination ~~manufacturing~~of ~~and~~the ~~design~~point ~~contract~~or –points ~~generally,~~at ~~contracts~~ which ~~have~~revenue ~~expected~~shall ~~durations~~be ofrecognized ~~more~~as ~~than~~earned ~~twelve~~and ~~months~~costs ~~are~~shall ~~accounted~~be ~~for~~recognized as expenses using the percentage of completion method. ~~The~~require ~~Company~~significant ~~estimates~~judgment ~~its~~and ~~cost~~input tofrom ~~complete~~our ~~the~~production personnel as well as our accounting department. Accounting for this contract ~~and~~is ~~recognizes~~essentially ~~its~~a ~~revenues~~process ~~based~~of onmeasuring the ~~total~~results ~~cost~~of ~~incurred~~relatively atlong-term ~~the~~events ~~period~~and asallocating ~~percentage~~those ofresults ~~the~~to ~~total~~relatively ~~expected~~short-term ~~cost~~accounting periods. This involves considerable use of estimates in determining revenues, costs, and profits and in assigning the ~~contract~~amounts to accounting periods. The ~~Company~~process ~~from~~is ~~time~~complicated by the need to ~~time~~evaluate ~~reviews~~continually ~~its~~the ~~assumptions~~uncertainties ~~relating~~inherent toin the ~~contract~~performance of contracts and by the need to rely on estimates of revenues, costs, and the extent of progress toward completion.

~~· Short~~While ~~term~~the ~~manufacturing~~contract ~~contracts~~revenue ~~and~~amount ~~orders~~is –fixed, costs related to the contract require the development of reasonable estimates. We generally, ~~orders~~obtain ~~for~~our aestimates ~~specific~~for ~~unit~~materials, which ~~require~~we ~~less~~believe ~~than~~to ~~twelve~~be ~~months~~reasonable, ofbased ~~work~~on tovendor ~~complete.~~quotes ~~The~~for ~~Company~~parts ~~recognizes~~or ~~revenue~~purchase orders. We rely on ~~these~~past ~~types~~experience ofwith ~~contract~~external ~~based~~consultants onand ~~the~~knowledge ~~completed~~gained ~~contract~~from ~~method~~other ~~when~~similar ~~delivery~~products ~~has~~manufactured ~~occurred~~to determine our estimated indirect and labor costs.

~~· Remanufacturing~~We ~~orders~~review and ~~contract –~~revise ~~generally,~~these ~~orders~~estimates ~~for~~at aleast ~~specific~~quarterly ~~unit~~or ~~and~~when ~~requires~~other ~~less~~circumstances ~~than~~indicate ~~twelve~~revision ~~months~~is ofnecessary. Revisions ~~work~~ to ~~complete.~~our ~~The~~cost ~~Company~~estimates ~~recognizes~~can ~~revenue~~have material impacts on ~~these~~our ~~types~~financial position and results of ~~contract~~operations. For ~~based~~example, ona ~~the~~5% ~~completed~~change ~~contract~~in ~~method~~our ~~when~~cost ~~delivery~~estimates ~~has~~would ~~occurred~~result in an approximately $60,000 change in profit or additional losses related to the contract.

~~· Study~~See ~~contracts~~our –Results ~~generally,~~of ~~these~~Operations ~~contracts~~discussion ~~are~~ for ~~general services related to~~ the ~~conducting~~financial ofimpacts ~~feasibility and proof~~ of ~~concept~~such ~~studies~~revisions onmade ~~items~~during ~~requested by the customer~~2010. ~~The Company recognizes revenue on these types of contract as a service and product transaction based on performance of milestones.~~

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. Stock based compensation can create temporary differences between book and tax expenses. Accrued expenses to related parties which are not deductible until paid are also a source for temporary differences between book and tax value. In addition the company makes an assessment whether it is expected to realize tax benefits for the use of the carry forward losses in the near future. This assessment is partially based on historical data as well as future expectations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

-2516-

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 sheets of Phoenix International Ventures, Inc. as of December 31, ~~2009~~2010 and ~~2008~~2009, and the related consolidated statements of income, stockholders’ equity, and cash flows for the years ended December 31, ~~2009~~2010 and ~~2008~~2009. 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 audits 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~~consolidate financial statements referred to above present fairly, in all material respects, the consolidated financial position of Phoenix International Ventures, Inc. as of December 31, ~~2009~~2010 and ~~2008~~2009, and the consolidated results of its ~~operations~~operation and its cash flows for each of the years ~~then~~ ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that Phoenix International Ventures, Inc. will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, Phoenix International Ventures, Inc. has suffered losses during the periods presented which raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s:/ Mark Bailey & Company, Ltd.

Reno, Nevada

~~March~~May, 3116, ~~2010~~2011

-2617-

Phoenix International Ventures, Inc.
Condensed Consolidated Balance Sheet as of
Consolidated Balance Sheets
		December 31, 2009			December 31, 2008
		December 31,			December 31,
~~Assets~~	Assets	2010			2009
Current Assets
Current assets
~~Cash~~	Cash	$	~~148~~2,~~478~~631		$	~~225~~148,~~767~~478
~~Accounts receivable, net~~	Accounts receivable, net		616,~~329~~228			~~367~~61,~~074~~329
~~Cost in excess of billings~~	Cost in excess of billings		~~277,519~~-			-277,519
~~Inventory~~	Inventory		~~437~~23,~~595~~277			~~186~~437,~~516~~595
~~Prepaid and other current assets~~	Prepaid and other current assets		75,~~306~~524			177,~~650~~306
~~Total current assets~~	Total current assets		~~932~~37,~~227~~660			~~797~~932,~~007~~227
Property and equipment, net			73104,~~514~~499			4773,~~943~~514
~~Other assets~~	Other assets		~~118~~23,~~200~~431			-118,200
~~Total assets~~	Total assets	$	1165,~~123,941~~590		$	~~844~~1,~~950~~123,941
	Liabilities and Stockholders' (Deficit)
Current liabilities
	Line of credit		15,756			13,087
	Accounts payable		1,189,457			599,167
	Related party accounts payable		289,915			536,280
	Other accrued expenses		182,830			146,979
	Billings in excess of cost		59,201			-
	Customer deposits		56,000			450,835
	Notes payable, related party		382,610			210,636
	Notes payable, current portion net of discounts		87,741			43,085
	Legal settlement		384,000			384,000
	Accrued officers salaries		399,148			-
	Officer loans		408,836			39,461
	Total current liabilities		3,455,494			2,423,530
Long term liabilities
	Notes payable		48,034			67,849
	Officer advances		-			369,375
	Total long term liabilities		48,034			437,224
	Total liabilities		3,503,528			2,860,754
Commitment and Contingencies
Stockholders' (deficit)
	Preferred stock - $0.001 par value; 1,000,000 shares
	authorized; zero shares issued and outstanding		-			-
	at December 31, 2010 and December 31,2009
	Common stock - $0.001 par value; 50,000,000 shares
	authorized; and 8,142,657 and 8,113,307 shares		8,143			8,113
	issued and outstanding at December 31, 2010 and
	December 31,2009.
	Additional paid in capital		1,456,507			1,427,160
						-
	Accumulated Deficit		(4,802,588	)		(3,172,086	)
	Total stockholders' deficit		(3,337,938	)		(1,736,813	)
	Total liabilities and stockholders' (deficit)	$	165,590		$	1,123,941

Liabilities and Stockholders' (Deficit)
Current liabilities
Line of credit	$	13,087		$	48,340
Accounts payable		599,167			379,693
Other accrued expenses		146,979			236,060
Customer deposits		450,835			447,202
Notes payable, current potion net of discounts		253,721			212,751
Legal settlement		384,000			384,000
Due related party		536,280			232,304
Officer loans		39,461			39,461
Total current liabilities		2,423,530			1,979,811
Long term liabilities
Notes payable, net of discounts		67,849			24,811
Officer advances		369,375			369,375
Total liabilities		2,860,754			2,373,997
Commitments and Contingencies
Stockholders' (deficit)
Preferred stock - $0.001 par value; 1,000,000 shares authorized; zero shares issued and outstanding at December 31, 2009 and December 31, 2008		-			-
Common stock - $0.001 par value; 50,000,000 shares authorized; 8,113,307 and 8,046,718 shares issued and outstanding at December 31, 2009 and December 31, 2008.		8,113			8,046
Additional paid in capital		1,427,160			1,388,503
Accumulated deficit		(3,172,086	)		(2,925,596	)
Total stockholders’ deficit		(1,736,813	)		(1,529,047	)
Total liabilities and stockholders' (deficit)	$	1,123,941		$	844,950
The accompanying notes are an integral part of the financial statements

-27-

Phoenix International Ventures, Inc.
Condensed Consolidated Income Statement
For The Twelve Months Ended
		December 31,			December 31,
		2009			2008
Sales		$	3,663,429		$	2,180,804
Cost of sales			2,691,198			1,334,162
Gross margin			972,231			846,642
Operating expenses
General and Administrative			1,153,335			989,030
Total operating expenses			1,153,335			989,030
Loss from operations			(181,104	)		(142,388	)
Other Income			25,944			566,154
Interest expense			(91,330	)		(62,992	)
Net income (loss) before taxes			(246,490	)		360,774
Income taxes			-			-
Net income (loss)		$	(246,490	)	$	360,774
Net income (loss) per common share:
	Basic	$	(0.03	)	$	0.05
	Diluted	$	(0.03	)	$	0.04
Weighted average shares outstanding:
	Basic		8,051,742			7,823,549
	Diluted		8,051,742			9,809,149
The accompanying notes are an integral part of the financial statements

-28-

Phoenix International Ventures, Inc
Consolidated Statements of Stockholders' Deficit
For the years December 31, 2009 and 2008
					Additional Paid In		Subscription
	Shares		Amount		Capital		Receivable			(Deficit)			Total
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						50,000
Payment of $13,020 towards subscription receivable at January 18, 2008								13,020						13,020
Issuance of 3,750 shares and warrants 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								30,413
Issuance of 1,200 shares and warrants 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								10,056
Issuance of 2,500 shares and warrants to purchase 10,000 at $2.60 as part of a note agreement at July 21, 2008		2,500		3		21,098								21,101
Issuance of 1,050 shares and warrants to purchase 4,150 at $2.40 as part of a note agreement at July 24, 2008		1,050		1		8,122								8,123
Issuance of 1,875 shares as part of a note agreement at August 8, 2008		1,875		1		4,648								4,649
Issuance of 3,200 shares as part of a note agreement at August 18, 2008		3,200		3		8,061								8,064
Exercise of warrants to purchase 1,900 shares at $1.00 per share at September 29, 2008		1,900		2		1,898								1,900
Exercise of options to purchase 274,000 shares at $0.50 per share at September 30, 2008		274,000		274		136,726								137,000
Exercise of warrants to purchase 2,100 shares at $1.00 per share at October 27, 2008		2,100		2		2,098								2,100
Issuance of 9,000 shares at $2.22 for debt reduction in October 27, 2008		9,000		9		19,991								20,000
Net Income											360,774			360,774
Balance December 31, 2008		8,046,718	$	8,046	$	1,388,503	$	-		$	(2,925,596	)	$	(1,529,047	)
Issuance of 2,381 shares as part of a note agreement at June 30, 2009		2,381		3		2,498								2,501
Issuance of 2,941 shares as part of a note agreement at June 30, 2009		2,941		3		2,497								2,500
Issuance of 2,294 shares as part of a note agreement at July 21, 2009		2,294		2		2,498								2,500
Issuance of 1,157 shares as part of a note agreement at August 29, 2009		1,157		1		1,249								1,250
Issuance of 1,816 shares as part of a note agreement at August 29, 2009		1,816		2		1,971								1,973
Exercise of Options to purchase 56,000 shares at $0.50 per share at December 30, 2009		56,000		56		27,944								28,000
Net (Loss)											(246,490	)		(246,490	)
Balance - December 31, 2009		8,113,307		8,113	$	1,427,160				$	(3,172,086	)	$	(1,736,813	)

The accompanying notes are an integral part of the financial statements

-2918-

Phoenix International Ventures, Inc. Consolidated Statements of Cash Flows For the Twelve Months Ended

Phoenix International Ventures, Inc.
Consolidated Income Statements
For The Twelve Months Ended

	December 31,			December 31,
	2010			2009

Sales	$	1,795,326		$	3,663,429

Cost of sales		(2,162,400	)		(2,691,198	)

Gross margin	$	(367,074	)	$	972,231

Operating expenses
General and administrative expenses	$	1,137,656		$	1,153,335

Total operating expenses	$	1,137,656		$	1,153,335

Loss from operations	$	(1,504,730	)	$	(181,104	)

Other Income (Loss)		(5,725	)		25,944
Interest expense		(100,047	)		(91,330	)

Net loss before taxes	$	(1,610,502	)	$	(246,840	)

Income taxes		(20,000	)		-

Net loss	$	(1,630,502	)	$	(246,490	)

Net loss per common share:
Basic & diluted	$	(0.20	)	$	(0.03	)

Weighted average shares outstanding:
Basic and diluted		8,136,109			8,051,742

	December 31, 2009			December 31, 2008
Cash flows from operating activities
Net income (loss)	$	(246,490)		$	360,774
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation		20,331			13,638
Amortization of debt discount		45,430			43,397
Recovery of contingent liability		-			(566,154)
Accrued interest		2,981			-
Change in accounts receivable		308,782			(248,098)
Accounts receivables service fees		(3,037	)		(32,047)
Cost in excess of billings		(277,519)			-
Change in inventory		(365,079)			(22,268)
Changes in prepaid expenses		10,344			(13,120)
Change in other assets		(4,200)			-
Change in customer deposits		3,633			140,096
Change in accounts payable		219,474			264,511
Change in accrued expenses		(89,081)			-
Change in related party payable		331,976			(8,571)
Net cash used in operating activities		(42,455)			(67,842)
Cash flows from investing activities
Purchase of property and equipment		(45,902)			-
Net cash used in investing activities		(45,902)			-
Cash flows from financing activities
Proceeds from subscription receivable		-			63,020
Proceeds from notes payable		195,777			236,536
Repayments on notes payable		(149,456)			(84,451)
Repayments related party notes		-			(9,149)
Issuance of common stock		-			3,999
Proceeds from (payments on) line of credit		(35,253)			13,340
Net cash provided by (used in) financing activities		11,068			223,295
Decrease in cash		(77,289)			155,453
Cash, beginning of year		225,767			70,314
Cash, end of period	$	148,478		$	225,767
Cash paid for
Interest	$	42,920		$	8,098
Income taxes		-			-
Non cash investing and financing activities:
Issuance of 10,589 shares of common stock with promissory notes		10,724			-
Issuance of 3,750 shares of common stock with promissory notes as debt discount		-			9,263
Issuance of 15,000 warrants with promissory notes as debt discount		-			21,150
Issuance of 274,000 shares of common stock in redemption of accrued expenses		-			137,000
Issuance of 274,000 shares of common stock in redemption of accrued expenses
Issuance of 9,000 share of common stock in redemption of accrued expenses					20,000
Issuance of 13,575 shares of common stock with promissory notes					34,093
Issuance of 33,950 warrants with promissory notes					44,313
Issuance of 56,000 shares of common stock in redemption of accrued expenses		28,000

The accompanying notes are an integral part of the financial statements

-3019-

Phoenix International Ventures, Inc.
Consolidated Statements of Stockholders' Deficit
For The Years Ended December 31, 2010 and 2009

					Additional
					Paid in		Accumulated
	Shares		Amount		Capital		Deficit			Total

Balance - December 31, 2008		8,046,718	$	8,046	$	1,388,503	$	(2,925,596	)	$	(1,529,047	)

Issuance of 2,381 shares as part of a note agreement at June 30, 2009		2,381		3		2,498					2,501

Issuance of 2,941 shares as part of a note agreement at June 30, 2009		2,941		3		2,497					2,500

Issuance of 2,294 shares as part of a note agreement at July 21, 2009		2,294		2		2,498					2,500

Issuance of 1,157 shares as part of a note agreement at August 29, 2009		1,157		1		1,249					1,250

Issuance of 1,816 shares as part of a note agreement at August 29,2009		1,816		2		1,971					1,973

Exercise of Options to purchase 56,000 shares at $0.50 per share at December 30, 2009		56,000		56		27,944					28,000

Net loss								(246,490	)		(246,490	)

Balance - December 31, 2009		8,113,307		8,113		1,427,160		(3,172,086	)		(1,736,813	)

Incentive common stock issued		29,350		30		29,347					29,377

Net loss								(1,630,502	)		(1,630,502	)

Balance - December 31, 2010		8,142,657	$	8,143	$	1,456,507	$	(4,802,588	)	$	(3,337,938	)

The accompanying notes are an integral part of the financial statements

-20-

Phoenix International Ventures, Inc.
Consolidated Statements of Cash Flows
For the Twelve Months Ended

	December 31			December 31
	2010			2009
Cash flows from operating activities
Net loss	$	(1,630,502	)	$	(246,490	)
Adjustments to reconcile net loss to net cash

Depreciation		19,974			20,331
Amortization of debt discount		-			45,430
Accrued interest		-			2,981
Change in accounts receivable		55,101			308,782
Accounts receivable service fees		-			(3,037	)
Cost in excess of billings		277,519			(277,519	)
Billing in excess of cost		59,201
Change in inventory		414,318			(365,079	)
Changes in prepaid expenses		1,782			10,344
Change in other assets		94,769			(4,200	)
Change in customer deposits		(394,835	)		3,633
Change in accounts payable		590,290			219,474
Change in accrued expenses		35,851			(89,081	)
Change in amounts due to related party		152,783			331,976

Net cash used in operating activities		(323,749	)		(42,455	)

Cash flows from investing activities
Purchase of property and equipment		(52,553	)		(45,902	)

Net cash used for investing activities		(52,553	)		(45,902	)

Cash flows from financing activities
Net Proceeds from notes payable		227,786			46,321
Proceeds from (payments on) line of credit		2,669			(35,253	)

Net cash provided by financing activities		230,455			11,068

Decrease in cash		(145,847	)		(77,289	)

Cash, beginning of year		148,478			225,767

Cash, end of year	$	2,631		$	148,478

Cash paid for
Interest				$	42,920
Income taxes		-			-

Non-cash investing and financing activities:
Issuance of 10,589 shares of common stock with promissory notes		-		$	10,724
Issuance of 56,000 shares of common stock with promissory notes		-		$	28,000
Issuance of 29,350 shares of common stock for debt discount	$	32,876			-

The accompanying notes are an integral part of the financial statements

-21-

Phoenix International Ventures, Inc.

Notes to Consolidated Financial Statements

December 31, ~~2009~~2010

Note 1 - Summary of Significant Accounting Policies

Nature of Activities

Phoenix International Ventures, Inc. (PIV) was organized August 7, 2006 as a Nevada ~~Corporation~~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.

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~~ to customers. Accounts receivable are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts ~~if applicable~~. Historically, the Company has been successful at collecting amounts billed.

-31-

During 2008, the Company sold a portion of its receivables to an intermediary to provide shortened collection periods. The intermediary charged a fee of approximately ten percent of the total receivables purchased. For the year ended December 31, 2008, the Company sold $325,621 of the then outstanding receivables. The Company paid the intermediary $32,047 during the year ended December 31, 2008, that is included in general and administrative expenses. During 2009 the company did not sell any of its receivables; however an additional cost of $3,037 associated with the 2008 costs was recorded in the year ended 2009. The Company does not have any future obligation to repurchase the receivables sold to the intermediary.

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~~and ~~31,~~for ~~2009~~the ~~and~~year ~~2008,~~ended ~~management~~December ~~believes~~31, ~~that~~2010 ~~all~~the accounts receivable ~~are collectible~~balance, ~~and~~allowance ~~thus~~for ~~the~~uncollectible ~~amount~~accounts, ofand ~~the~~corresponding ~~allowance~~bad ~~for~~debt ~~doubtful~~expense ~~accounts~~were ~~was~~not ~~zero~~material. In ~~There~~2009 ~~was~~we norecognized bad debt expense ~~for~~of ~~the years ended December 31~~$8, ~~2009 or 2008~~989.

-22-

Phoenix International Ventures, Inc.

Notes to Consolidated Financial Statements

December 31, 2010

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.

~~Inventory~~The Company’s inventory consists of certain parts that are held for direct resale, raw materials, and accumulated contract costs for items not yet delivered to the customer. These costs include purchases of direct materials, direct labor, and allocations of indirect production costs. ~~Inventory also includes items purchased that are held for resale.~~

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 years
Furniture and fixtures	7 years
Computer software	3-5 years
Auto	5 years

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.

-32-

Concentrations

The Company generates significant amounts of its revenue from a small number of customers. The United States Government, specifically the Air Force and Navy, represented 17% and 43% of the Company’s revenues for the ~~year~~years ended December 31, 2010 and 2009, respectively. The remaining 5783% ofand ~~sales~~57%, ~~was~~respectively tofor ~~aerospace~~the ~~companies~~years ~~and~~ended ~~military~~December ~~contractors.~~31, ~~Two~~2010 ~~customers~~and ~~represented~~2009, ~~49%~~ of ~~the~~sales ~~Company’s~~were ~~revenues~~to ~~for~~less ~~the~~than ~~year~~ten aerospace ~~ended~~companies ~~December~~and ~~31,~~military ~~2008~~contractors.

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.

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, ~~2009~~2010 and ~~2008~~2009. 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.

Generally accepted accounting principles prescribe methods for measuring fair value, establish a fair value hierarchy based on the inputs used to measure fair value and expands disclosures about the use of fair value measurements.-23-

~~The~~Phoenix ~~valuation~~International ~~techniques utilized are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources~~Ventures, ~~while unobservable inputs reflect internal market assumptions~~Inc. ~~These two types of inputs create the following fair value hierarchy:~~

Notes to Consolidated Financial Statements

December 31, 2010

Generally accepted accounting principles prescribe methods for measuring fair value within the fair value hierarchy based on the inputs used. The fair value hierarchy as established by US GAAP is as follows:

Level 1 – Quoted prices for identical instruments in active markets.

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 – Significant ~~inputs~~unobservable tomanagement ~~the~~judgment ~~valuation~~and ~~model are unobservable~~estimates.

Stock Based Compensation.

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~~ it 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 and non-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~~Company did not issue any stock based compensation during the periods presented. Prior awards were fully vested on the date of grant with the corresponding expense recognized in previous periods,.

Revenue Recognition

The Company accounts for its different revenue streams according to the following methods:

· Long term manufacturing and design ~~contract~~contracts – generally, contracts which have expected durations of more than twelve months are accounted for using the percentage of completion method. The Company estimates its cost to complete the contract and recognizes its revenues based on the total cost incurred at the period as percentage of the total expected cost of the contract. The Company ~~from~~reviews, ~~time~~at toleast ~~time~~quarterly, ~~reviews~~ its assumptions relating to the contract estimates.

· Short term manufacturing and re-~~33-~~manufacturing orders – generally, orders for a specific unit which require less than twelve months of work to complete. The Company recognizes revenue on these types of contracts based on the completed contract method when delivery has occurred.

· Short term manufacturing contracts and orders – generally, orders for a specific unit which require less than twelve months of work to complete. The Company recognizes revenue on these types of contracts based on the completed contract method when delivery has occurred.

· Remanufacturing orders and contract - – generally, orders for a specific unit and requires less than twelve months of work to complete. The Company recognizes revenue on these types of contracts based on the completed contract method when delivery has occurred.

·	Parts trading – generally, these orders are for parts that are not manufactured by the Company; and the Company buys and sells these parts with relatively small added value. The Company recognizes revenue on these types of contracts when delivery has occurred.

· Study contracts – generally, these contracts are for ~~general services related to the~~ conducting of feasibility and proof of concept studies on items requested by the customer. The Company recognizes revenue on these types of ~~contract~~ contracts as acontractual ~~service~~milestones ~~and~~are ~~product transaction based on performance of milestones~~achieved.

Cost of sales includes purchase of direct materials, freight, receiving, inspection, manufacturing labor and engineering, certain insurances, production supplies, allocated indirect labor and overhead costs, and allocated depreciation which to date has not been material.

We have not historically incurred significant warranty obligations on our products. As of December 31, 2010 and 2009 we accrued estimated warranty obligations of $23,269 and $0, respectively included in other accrued expenses.

-24-

Phoenix International Ventures, Inc.

Notes to Consolidated Financial Statements

December 31, 2010

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 per share is calculated by dividing net earnings by the sum of the weighted average number of common shares used in the basic earnings 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 per share calculation. Both basic earnings (loss) and diluted earnings per share amounts are calculated for all periods presented. The Company does not have any outstanding instruments that are convertible into shares of common stock.

Recent Issued Accounting Pronouncements

In ~~October~~April ~~2009,~~2010 anthe ~~update~~Financial ~~was~~Accounting ~~made~~Standards toBoard “Issued Accounting Standards Update 2010-17 Revenue Recognition –-Milestone ~~Multiple~~Method ~~Deliverable~~(Topic 605) Milestone Method of Revenue ~~Arrangements.”~~Recognition ~~This~~a ~~update~~consensus ~~removes~~of the ~~objective-and-reliable-evidence-of-fair-value~~FASB ~~criterion~~Emerging ~~from~~Issues Task Force. The amendments in the ~~separation~~update provide guidance on the criteria ~~used~~that toshould ~~determine~~be met for determining whether anthe ~~arrangement~~milestone ~~involving~~method ~~multiple~~of ~~deliverables~~revenue ~~contains~~recognition ~~more~~is ~~than~~appropriate. ~~one~~A ~~unit~~vendor can recognize consideration that is contingent upon achievement of ~~accounting,~~a ~~replaces~~milestone ~~references~~in toits ~~“fair~~entirety ~~value”~~as ~~with~~revenue ~~“selling~~in ~~price”~~the toperiod ~~distinguish~~in ~~from~~which the ~~fair~~milestone ~~value~~is ~~measurements~~achieved ~~required~~only ~~under~~if the ~~“Fair~~milestone ~~Value~~meets ~~Measurements~~all ~~and~~criteria ~~Disclosures”~~to ~~guidance,~~be ~~provides~~considered asubstantive. Determining ~~hierarchy~~whether ~~that~~a ~~entities~~milestone ~~must~~is ~~use~~substantive tois ~~estimate~~a ~~the~~matter ~~selling~~of ~~price,~~judgment ~~eliminates~~made at the ~~use~~inception of the ~~residual~~arrangement. The ~~method~~update also provides for ~~allocation,~~additional ~~and~~disclosure. The ~~expands~~amendments in the ~~ongoing~~update ~~disclosure~~are ~~requirements.~~effective ~~This~~on ~~update~~a isprospective ~~effective~~basis for ~~the~~milestones ~~company~~achieved ~~beginning~~in ~~January 1~~fiscal years, ~~2011~~ and ~~can~~interim beperiods ~~applied~~within ~~prospectively~~those oryears, ~~retrospectively.~~beginning ~~Adoption~~on isor ~~not~~after ~~expected~~June to15, ~~materially~~2010. ~~impact~~Early ~~the~~adoption ~~company’s~~is ~~consolidated~~permitted. The ~~financial~~Company ~~position,~~is ~~results~~currently ofassessing ~~operations~~the orapplicability ~~cash~~of ~~flows~~this ~~directly~~update ~~when~~to itour ~~becomes~~study ~~effective,~~contracts. If as the ~~company~~Company ~~will~~determines ~~not~~the ~~elect~~update ~~retrospective~~is ~~adoption. However~~applicable, ~~this~~it ~~update~~ may ~~impact~~have ~~how~~material ~~the~~impacts ~~company~~on ~~reflects~~our ~~multiple-element~~future ~~arrangements~~financial ~~entered~~position, ~~into~~results ~~subsequent~~of ~~to January 1~~operations, ~~2011~~and cash flows. .

Reclassifications

The Company has reclassified certain prior period amounts to conform to the current year presentation. These reclassifications had no material impact on the financial position, results of operations, or cash flows in the periods presented.

Note 2 - Financial Condition, Liquidity, and Going Concern

At December 31, ~~2009~~2010, the Company assessed its ability to continue as a going concern. The Company has a significant working capital deficit ofwhich ~~$1,491,303~~is ~~and~~reflective ~~accumulated deficit~~ of ~~$3,172,086, along with a net loss for~~ the ~~twelve~~inability ~~months~~to ~~ended~~meet ~~December~~its ~~31,~~outstanding ~~2009~~vendor ~~of $246,490~~obligations. ~~Various~~ ~~other factors support the Company’s viability as a going concern including the procurement of new contracts and sales orders.~~ The ~~Company~~inability ~~has developed a plan~~ to ~~address~~meet ~~its~~these ~~financial~~obligations ~~situation~~has ~~and~~severely ~~believes~~hampered ~~it can finance most of its operations through monetizing its current backlog. The plan is based on~~ the Company’s ~~current~~ability ~~financial~~to ~~assets,~~generate ~~backlog~~revenue ~~and~~from ~~expectations~~the ~~regarding~~normal ~~revenues~~course ~~and~~of ~~operating costs~~business.

~~-34-~~The Company, since early 2011, has implemented an aggressive plan to raise additional capital primarily through equity financing in order to fund planned operations. Through the date of this report the Company has achieved limited success in obtaining financing primarily through private placements.

The Company ~~may need to depend on additional capital raising efforts~~believes, inalthough ~~addition~~there ~~to 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~~its ~~Company’s~~capital ~~future~~raising efforts ~~and~~will ~~anticipated~~be ~~operating~~sufficient ~~improvements~~to ~~will~~begin befulfilling ~~successful.~~ongoing ~~However~~orders. Additionally, ~~management~~the ~~believes~~Company ~~that~~has ~~the~~significantly ~~company~~reduced isits ~~viable~~operating ~~for~~expenses in the ~~next twelve months~~interim.

If the Company is unsuccessful in obtaining capital it will fail to continue as going concern.

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:	~~2009~~2010		~~2008~~2009
United States	9291	%	6592	%
Europe	89	%	358	%
Total:	100	%	100	%

-25-

Phoenix International Ventures, Inc.

Notes to Consolidated Financial Statements

December 31, 2010

Note 4 - Inventory

~~Inventory~~At ~~consists~~December of31, ~~used~~2010 ~~equipment that can be remanufactured for re-sale~~ and ~~parts~~2009 ~~used in fulfilling current customer orders. Non-current~~ inventory ~~consists~~consisted of ~~parts~~the ~~with limited current demand that are of limited supply. Management periodically reviews these parts for impairment as potential future application diminishes.~~following:

At December 31, 2009 and 2008 inventory consists of the following:

	2010		2009
Raw materials	$	21,704	$	136,589
Work in process		1,573		415,006
Subtotal		23,277		551,595
Non-current inventory (classified as other assets)		-		(114,000)
Total	$	23,277	$	437,595

	2009		2008
Raw materials	$	136,589	$	114,000
Work in process		415,006		72,516
Total	$	551,595	$	186,516
Non-current(classified as other asset)		114,000		-
Inventory, current	$	437,595	$	186,516

For the twelve months ended December 2010 the Company recognized an expense of $114,000 related to a fair value adjustment for obsolete inventory previously classified as non-current in 2009. The expense is included in general and administrative expenses for the twelve months ended December 31, 2010.

Note 5 – Long-Term Contracts

~~The~~For ~~Company~~certain ~~recognizes~~contracts, ~~revenues~~specifically ~~and~~the ~~reports~~USAF ~~profits~~trailer ~~from~~program ~~long-term~~currently ~~contracts~~in ~~under~~progress, the Company recognizes revenues in accordance with the percentage of completion method of accounting. The percentage of completion method involves cost estimates to compute the contract profit which are subject to review and revision.

Cost and estimated earnings on ~~these contracts~~this contract for the years ended December 31, ~~2009~~2010 and ~~2008~~2009 were as follows:

	2009			2008
	2010			2009
Costs incurred to date	$	1,~~120~~311,~~484~~947		$	~~171~~1,~~810~~120,484
Estimated contract profit		258,577			51,254
Estimated contract profit (loss)		(119,275	)		258,577
Less: billings to date		(1,~~101~~251,~~542~~873	)		(~~234~~1,~~274~~101,542	)
. Costs in excess of billings and recognized profit	$	277,519		$	(11,210	)
Costs (billings) in excess of billings (costs) and recognized profit (loss)	$	(59,201	)	$	277,519

~~-35-~~During the year ended December 31, 2010 the Company made material revisions to its estimated costs to complete the USAF trailer program. These revisions resulted in the Company recognizing no revenue for the year ended December 31, 2010 as well as a loss of $59,201.

Note 6 - Property and Equipment

At December 31, ~~2009~~2010 and ~~2008~~2009 property and equipment consisted of the following:

	2009		2008
	2010		2009
Equipment	$	1050,~~075~~555	$	510,~~200~~075
Office equipment		1416,~~205~~223		14,205
Auto		83,337		4583,~~355~~337
Trailer		2,500		2,500
Software system		2232,~~426~~481		1922,~~381~~426
		132,543		86,641
		185,096		132,543
Less accumulated depreciation		(5980,~~029~~597)		(3859,~~698~~029	)
Total	$	73104,~~514~~499	$	4773,~~943~~514

~~Depreciation for the years ended December 31, 2009 and 2008 was $20,331 and $13,638, respectively.~~-26-

Phoenix International Ventures, Inc.

Notes to Consolidated Financial Statements

December 31, 2010

Depreciation expense for the years ended December 31, 2010 and 2009 was $19,974 and $20,331, respectively.

Note 7 - Notes Payable

The Company has abeen ~~revolving~~able ~~line~~to ofeither ~~credit~~extend ~~from~~or asecure ~~foreign~~new ~~financial~~debt ~~institution~~financing ~~totaling~~during ~~$13,087. The~~the ~~line~~period ofending ~~credit~~December ~~bears~~31, a2010. ~~monthly~~As ~~interest~~of ~~ranging~~December ~~from~~31, ~~10%-13%~~2010 ~~based~~and ~~upon~~2009 ~~the~~accrued ~~amount~~interest ~~extended,~~relating atto ~~December~~notes ~~31,~~payable ~~2009~~was ~~the~~approximately ~~line~~$25,000 ofand ~~credit~~$1,500, ~~was~~respectively. Interest ~~fully~~expense ~~extended~~associated ~~and~~with the ~~interest~~notes payable was atapproximately ~~13%.~~$55,000 ~~This~~in ~~item~~2010 ~~has~~compared ~~been~~to ~~classified~~approximately as$37,000 ain ~~line of credit~~2009.

~~The~~Outstanding ~~Company~~notes ~~has~~of aapproximately ~~revolving~~$342,000 ~~line~~are in default. Two of ~~credit~~the ~~from~~defaults aare ~~financial~~due ~~institution~~to ~~totaling~~the ~~$35,000. In~~inability ~~October~~to ~~2009,~~pay off the ~~line~~entire ofamount ~~credit~~as ~~converted~~per tothe anmaturity ~~installment~~date ~~note~~while ~~payable~~the ofother ~~equal~~four ~~installments~~are ~~$883~~in ~~per~~default ~~month~~because ~~which~~of ~~includes~~inability ~~interest~~to (make 9required quarterly interest payments.~~75%~~ ~~annual~~All ~~percentage~~notes ~~rate) and~~that ~~principal~~are ~~payments~~currently ~~until~~in ~~September~~default ~~30,~~have ~~2013.~~been categorized as current. As of ~~December~~the ~~31,~~date ~~2009~~of ~~the~~this ~~Company~~report ~~owed~~no ~~$33,186~~demands onof ~~this~~repayment ~~note~~have ~~payable.~~been made on these notes.

InAt ~~July~~December ~~and August 2009~~31, two investors extended their promissory note arrangements that were entered into in the previous year in the aggregate principal amount of $89,474 for an additional one year bearing 15% interest per annum. These notes will now mature in the fiscal quarter ending September 30, 2010. ~~These~~and ~~notes~~2009 ~~were discounted by the issuance of shares of the Company’s common stock equal to 5% of the principal amount of the~~ notes ~~for~~payable aconsist ~~total value~~ of ~~$4,473. In total~~ the Company issued an aggregate of 4,110 shares in connection with this discount. The discount is amortized throughout the life of the note and is included in the interest expenses line item in the statement of income.following:

In June and August 2009, the Company entered into three new promissory note agreements with related parties in the aggregate amount of $125,000. These notes are to be paid in full at various dates between June 18, 2010 and August 23, 2010 and bear 15% interest per annum. In addition, these notes were discounted by the issuance of shares of the Company’s common stock equal to 5% of the principal amount of the note for a total value of $6,250. In total the Company issued an aggregate of 6,479 shares in connection with this discount. The discount is amortized throughout the life of the note and is included in the interest expenses line item in the statement of income.

Description	2010		2009
Unsecured, issued to an individual in August 2009, previously due August 2010, 15% interest accrued monthly, interest paid quarterly, related party		42,270		35,636
Unsecured, issued to a corporation in August 2009, previously due August 2010, 15% interest accrued monthly, interest paid quarterly, related party		25,000		25,000
Unsecured, issued to an individual in February 2009, due February 2011, 11% interest accrued monthly, interest paid quarterly, related party		100,000		-
Unsecured, issued to a corporation in March 2010, due March 2011, 11% interest accrued monthly, interest paid quarterly, related party		75,000		-
Unsecured, issued to an individual in May 2010, due May 2011, 11% interest accrued monthly, interest paid quarterly, related party		40,340		-
Unsecured, issued to an individual in June 2010, due June 2011, 11% interest accrued monthly, interest paid quarterly		25,000		-
Unsecured, issued to a corporation extended in June 2010, due June 2011, 11% interest accrued monthly, interest paid quarterly, related party		50,000		50,000
Unsecured, issued to an individual extended in July 2010, due July 2011, 11% interest accrued monthly, interest paid quarterly, related party		50,000		50,000
Issued to a financial institution in October 2007, due October 2012, 0% interest, secured by automobile		18,173		25,702
Issued to a financial institution in October 2009, due October 2014, 8% interest, secured by automobile		27,431		32,015
Unsecured, issued to a financial institution in October 2009, due October 2013, interest of Prime + 6.5%		25,485		33,186
Unsecured, issued to a corporation in November 2010, due April 2011, 9% interest		15,391		-
Unsecured, issued to a financial institution in a foreign country, 12.4% interest		2,662		7,387
Unsecured, issued to a corporation, 7% interest		-		12,644
Unsecured, issued to an individual in June 2009, due June 2010, 15% interest accrued monthly, interest paid quarterly, related party		-		50,000
Other unsecured short term notes payable to various financial institutions		21,633		-
Total Notes Payable		518,385		321,570
Less current portion		470,351		253,721
Non-current portion		48,034		67,849

-36-

Maturities of long-term debt over each of the next five years
	2011		486,894
	2012		15,784
	2013		10,945
	2014		4,762
	2015		-
Total principal payments		$	518,385

At December 31, 2009 and 2008 notes payable consist of the following:

	2009		2008
Unsecured note payable to a financial institution in a foreign country; 12.4% per annum	$	7,387	$	1,736
Secured note payable to a financial institution; monthly payments of $756 until 2012; collateralized by an automobile		25,702		34,638
Unsecured promissory note agreements, less unamortized discount $5,915 of in 2009; effective interest rates are approximately 15%		210,636		188,568
Unsecured note payable to an individual; interest at 7%		12,644		12,620
Secured note payable to a financial institution; monthly payments of $671 until October 2014; interest at 7.99%;collateralized by an automobile		32,015		-
Unsecured note payable to a financial institution; 9.75% per annum; monthly payments of $883 until October 2013		33,186		-
	$	321,570	$	237,562

Following are maturities of long-term debt for each of the next five years:
2010		253,721
2011		23,100
2012		23,100
2013		15,999
2014		5,649
Total principal payments	$	321,570
Less current portion of notes		253,721
Non-current portion of notes	$	67,849

Note 8 - Related Party Transactions

As of December 31, ~~2009~~2010, the Company owed a total of $~~536~~1,~~280~~480,509 to related parties, including $62382,~~311~~610 in notes payable as identified above in Note 7, $166,915 due to a consultant, $~~169~~321,~~865~~365 due in respect to deferred payment of salaries to certain of the Company’s current and former officers, 57$77,~~126~~783 of accrued vacation to officers, ~~and~~ $1123,~~978~~000 ~~due~~with respect to ~~another~~parts ~~related~~purchased, ~~party~~and ~~for~~$408,836 ~~various out~~ of ~~pocket~~officer ~~expenses~~advances. These related parties and officers have agreed not to demand payment until the Company’s financial resources and cash reserves are sufficient enough to permit payment.

During ~~2009~~2010, the Company purchased inventory from a related party totaling $~~745~~225,000. At December 31, ~~2009~~2010, the Company owed that related party $~~245~~123,000. This amount is recorded in related ~~parties~~party accounts payable on the balance sheet.

The Company’s former CFO’s employment contract expired in April 2009. The Company solicited his consulting services through December 31 2009 for $2,000 per month. For the twelve months ended December 31, 2009, the Company paid $17,500 of salaries, $16,000 in consulting fees, and $24,000 as a reduction of his previously deferred salary.-27-

OnPhoenix ~~April~~International 26Ventures, ~~2007, the Company entered into a consulting agreement with a related party to assist the Company with its business development~~Inc. At December 31, 2009 the Company owes $62,311 to the related party. Consulting fees under the agreement require a minimum annual payment of $120,000. At December 31, 2009, the Consultant exercised an option to purchase 56,000 shares of the Company’s common stock resulting in a $28,000 reduction of previously accrued fees.

~~-37-~~Notes to Consolidated Financial Statements

~~Additionally, as of~~ December 31, 2009, 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 2010.

~~Note~~On 9-April ~~Share~~26, ~~Capital~~2007, the Company entered into a consulting agreement with a related party to assist the Company with its business development. At December 31, 2010 the Company owes $166,915 to the related party and is recorded in related party accounts payable on the balance sheet. Consulting fees under the agreement require a minimum annual payment of $120,000.

~~Between~~Note ~~June~~9 ~~and~~- ~~August~~Stock ~~2009~~Based weCompensation ~~issued~~and ~~10,589 shares of common stock related to the issuance of debt instruments resulting in the recognition of debt discounts totaling $10,724.~~Warrants

InThe ~~December~~Company ~~2009,~~does not have a ~~related~~formally ~~party~~approved ~~consultant~~stock-based ~~exercised~~compensation ~~options~~plan. For ~~for~~the 56years ended December 31,~~000~~ ~~shares~~2010 atand $02009 the Company did not issue any stock-based (options) compensation.50 All ~~per~~previously ~~shares~~issued options were expensed in ~~redemption~~periods not presented in this report. As of ~~$28~~December 31,~~000~~ of2010 ~~previously~~all ~~accrued~~remaining, ~~fees~~unexercised outstanding options expired.

~~Note~~ The 10following ~~Stock~~table ~~Based~~illustrates ~~Compensation~~the ~~and~~Company’s ~~Warrants~~option activity as of December 31, 2010:

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 options during the twelve months ended December 31, 2009 and the twelve months ended December 31, 2008..

	Shares		Weighted Average Exercise Price
Outstanding at January 1, 2009		1,216,000	$	0.55
Granted		–		–
Exercised		(56,000)		0.50
Forfeited/Expired		–		–

Outstanding at December 31, 2009		1,216,000		0.55

Granted		–		–
Exercised		–		–
Forfeited/Expired		(1,216,000)		0.55

Outstanding at December 31, 2010		–		–

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 did 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.

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. .

All outstanding options are fully vested with the resulting compensation expense recognized in previous periods. As of December 31, 2009 there was no unrecognized compensation expense related to unvested options.

The following table illustrates the option activity as of December 31, 2009:

	Shares		Weighted Average Exercise Price
Outstanding at December 31, 2007		–		–
Granted		1,490,000	$	0.5
Exercised		(274,000)		0.5
Forfeited/Expired		–		–
Outstanding at December 31, 2008		1,216,000		0.55
Granted		–		–
Exercised		(56,000)		0.5
Forfeited/Expired		–		–
Outstanding at December 31, 2009		1,160,000		0.57

-38-

The following table summarizes information about options outstanding and exercisable at December 31, 2009

	Options Outstanding
Range price ($)	Number of Options	Weighted Average Remaining Life	Weighted Average Exercise Price
$0.50	990,000	1.0 years	$0.50
$1.00	170,000	0.7 years	$1.00

The intrinsic value of the outstanding options was $529,800 as of December 31, 2009.

Warrants

~~From~~In ~~time~~periods prior to ~~time~~those presented, the Company ~~issues~~issued warrants in connection with private placements of debt and equity.

~~The~~At ~~Company~~December ~~estimated~~31, 2009 the ~~fair~~Company ~~value~~had of33,950 ~~the~~ warrants ~~issued~~outstanding. At ~~during the year ended~~ December 31, ~~2008~~2010 ~~using~~all apreviously ~~Black-~~outstanding ~~Scholes~~warrants ~~model. The~~expired ~~Company used an estimated volatility of 107%~~unexercised. ~~The~~ No ~~Company~~additional ~~does~~warrants ~~not~~were ~~have~~issued aduring ~~sufficient history of warrant exercises, therefore,~~ the ~~expected~~years ~~term~~ended isDecember ~~the contractual term~~31, 12010 ~~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~~2009.

~~The following table illustrates the warrant activity as of December 31, 2009:~~-28-

	Warrants		Weighted Average Exercise Price
Outstanding at December 31, 2007		325,072	1.0
Granted		33,950	2.5
Exercised		(4,000)	1.0
Forfeited/Expired			–
Outstanding at December 31, 2008		355,022	1.2
Granted			3
Exercised			1
Forfeited/Expired		321,072	–
Outstanding at December 31, 2009		33,950	2.5

Phoenix International Ventures, Inc.

~~-39-~~Notes to Consolidated Financial Statements

~~The following table summarizes information about warrants outstanding and exercisable at~~ December 31, ~~2009~~2010

Price	Number	Weighted Average Remaining Life	Weighted Average Exercise Price
2.47	15,000	.50 years	2.47
2.58	4,800	.50 years	2.58
2.60	10,000	.58 years	2.60
2.40	4,150	.58 years	2.40

Note 10- Income Taxes

~~Note~~Significant ~~11-~~components ~~Income~~of ~~Taxes~~the Company’s net deferred tax asset as of December 31, 2010 and 2009 were as follows:

Significant components of the Company’s net deferred tax asset as of December 31, 2009 and 2008 were as follows:

	2010			2009
Deferred tax assets:
Net operating loss carryforwards	$	1,093,000		$	847,000
Uniform capitalization		(25,000	)		26,000
Accrued vacation pay		8,000			24,000
Non qualified stock options		-			95,000
Settlement Agreement		134,000			134,000
Subpart F losses		1,000			3,000
Currency Changes		2,000			-
Accrued Warranty Reserve		8,000			-
Related party accrued expenses		51,000			209,000
Property plant & equipment		(7,000	)		(7,000	)
Net deferred tax asset		1,272,000			1,345,000
Less: Current Portion		(17,000	)		(50,313	)
Non-current Portion		1,255,000			1,147,000
Less valuation allowance		(1,272,000	)		(1,345,000	)
Deferred tax asset after valuation allowance	$	-		$	-

	2009			2008
Deferred tax assets:
Net operating loss carryforwards	$	847,000		$	742,000
Uniform capitalization		26,000			8,000
Accrued vacation pay		24,000			19,000
Non qualified stock options		95,000			102,000
Subpart F losses		3,000			4,000
Related party accrued expenses		209,000			220,000
Property plant & equipment		(7,000	)		(7,000	)
Net deferred tax asset (liability)		1,197,000			1,088,000
Less: Current Portion		(50,000	)		(27,000	)
Non-current Portion		1,147,000			1,061,000
Less valuation allowance		(1,197,000	)		(1,088,000	)
Deferred tax asset after valuation allowance	$	-		$	-

As of December 31, 2010 and 2009, the Company had federal net operating loss carry forwards of approximately $4.0 million and $2.4 million, respectively. These operating losses will be available to reduce future taxable income and begin to expire in 2024. In addition, the Company also has temporary timing differences between its book income and tax income that will generate future tax benefits. The Company evaluated whether it is expected to realize tax benefits for the use of the carry forward items in the near future, based on historical data as well other information the Company believes that a 100% valuation analysis is appropriate. The following is a reconciliation of income tax at the statutory rate to the Company’s effective rate:

As of December 31, 2009 and 2008, the Company had federal net operating loss carry forwards of approximately $2.4 million and $2.1 million, 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. The Company evaluated whether it is expected to realize tax benefits for the use of the carry forward items in the near future, based on historical data as well other information the company believes that a 100% valuation analysis is appropriate. Following is a reconciliation of income tax at the statutory rate to the Company’s effective rate:

	2010			2009
Computed at the expected statutory rate		35.00	%		35.00	%
Meals & Entertainment		(0.52	)		(1.99	)
Stock Options		-			1.37
Fines & Penalties		-			(0.97	)
Total permanent differences		34.48			33.41
Depreciation		-			0.13
Accrued Vacation		0.51			(2.36	)
Accrued Officer's salaries		3.14			2.65
Stock Options		-			2.84
Warranty reserve		0.51			-
Legal Settlement		(8.36	)		-
Foreign Losses		0.19			0.32
Section 263A Adjustment		(1.57	)		(7.88	)
Total temporary differences		(5.58	) %		(4.30	)%
Total tax before valuation allowance		28.89			29.11
Valuation allowance/NOL carryforward		(28.89	)		(29.11	)
Income tax expense – effective rate		0.00	%		0.00	%

-4029-

	2009			2008
Computed at the expected statutory rate		35.00	%		35.00	%
Meals & Entertainment		(1.99	)		1.11
Stock Options		1.37			(38.12	)
Fines & Penalties		(0.97	)		0.90
Total permanent differences		33.41			(1.11	)
Depreciation		0.13			(0.59	)
Accrued Vacation		(2.36	)		2.58
Accrued Officer's salaries		2.65			5.77
Stock Options		2.84			(9.43	)
Contingency		0.00			(50.51	)
Foreign Losses		0.32			4.50
Section 263A Adjustment		(7.88	)		0.44
Total temporary differences		(4.30	) %		(47.24	)
Total tax before valuation allowance		29.11			(48.35	)
Valuation allowance/NOL carryforward		(29.11	)		48.35
Income tax expense – effective rate		0.00	%		0.00	%

Phoenix International Ventures, Inc.

~~The~~Notes ~~Company has considered its previously taken tax positions for uncertainty and believes that all positions taken in tax filings will more likely than not~~ to beConsolidated ~~sustained~~Financial on examination by tax authorities. As of December 31, 2009 and 2008, the Company did not have any interest and penalties accrued for uncertain tax positions The Company is open to audit for 2006, 2007 and 2008.Statements

~~Note~~December 1231, ~~– Commitments and Contingencies~~2010

The Company ~~leases~~has aconsidered ~~10,300~~its ~~square~~previously ~~foot~~taken ~~operating~~tax ~~facility~~positions ~~under~~for auncertainty and ~~lease~~believes ~~term~~that ~~which~~all ~~commenced~~positions ontaken ~~March~~in 1,tax ~~2009~~filings ~~and~~will ~~expires~~more likely than not to be sustained on ~~February~~examination ~~28,~~by ~~2011~~tax authorities. ~~Minimum~~ ~~lease~~As ~~payments~~of ~~remaining~~December 31, ~~for~~2010 the ~~facility~~Company ~~total~~ recognized $5720,~~680~~000 in statutory penalties related to the failure to report the required activity of its wholly owned foreign subsidiary. ~~Lease~~The ~~expense~~Company ~~through~~is ~~December~~open ~~31,~~to ~~2009~~Internal Revenue Service audit for ~~this~~2006 ~~facility~~through ~~was~~the ~~$41,200~~present.

AsNote of11 ~~May~~– ~~26,~~Subsequent 2006, the Company entered into a settlement agreement with Kellstrom totaling $1,173,913 plus interest. In the settlement, the contingent amount of $566,154 became payable only in the event the Company was awarded an Air Start Cart development contract prior to May 26, 2008 in the minimum amount of $10,000,000. The contingent payment was directly tied to the contract award, not the satisfaction of the trade credits. At May 26, 2008, the contract was not received and all other terms of the settlement, with the exception of the remaining trade credits outstanding and included in the Company’s current liabilities, were satisfied. Correspondingly, the contingency expired without being met; therefore, the Company recovered the previously recognized contingent liability in the amount of $566,154. In accordance with the Settlement Agreement, the Company agreed to provide Kellstrom a total of $500,000 towards the purchase of any materials, repairs, maintenance, or overhaul services. The credit is due upon receipt of any order from Kellstrom, and the Settlement Agreement does not provide a specific termination date in lieu of full satisfaction. While there is not a specific requirement to pay Kellstrom cash in lieu of the trade credits, Kellstrom has reserved the right to pursue any remaining settlement amounts in the event the Company fails to honor the remaining trade credit obligation.Events

~~-41-~~On March 24, 2011, the Company’s Board of Directors approved private placements of up to 6,666,667 shares of the Company’s common stock for up to $1,000,000 in cash at a price per share of $0.15 (the “Financing”), pursuant to the terms of a subscription agreement dated as of February 28, 2011, as amended by a supplement dated March 22, 2011. Messrs. Amit Barzelai, Uri Wittenberg and Hagai Langstadter purchased an aggregate of 1,666,667 shares of Company common stock for $250,000. The offering of the remaining 5,000,000 shares will be made to accredited investors through April 30, 2011, subject to the Company’s right to terminate the offering at any time or extend it to as later as May 31, 2011.

~~Note~~On 13February ~~–Quarterly~~27, 2011, the Board of Directors accepted the resignation of Niv Nissenson as the Company’s Chief Financial ~~Information~~Officer (“CFO”) originally given on February 22, 2011. Mr. Nissenson resigned for personal reasons. Mr. Nissenson indicated that he had no disagreements with the Company’s accounting policies or practices. The resignation was effective on February 27, 2011. The Company appointed Teja Shariff as the Company’s interim Chief Financial Officer until the sooner of June 1, 2011 or until a permanent replacement is elected by the Board. Mr. Shariff is the brother of the Company’s CEO and President, Mr. Zahir Teja.

~~During~~On ~~the~~March ~~preparation~~22, 2011 Neev Nissenson resigned as Secretary and as a member of the ~~financial~~board ~~statements~~of ~~for~~directors of the ~~twelve~~Company ~~months~~and ~~ended~~its ~~December~~subsidiaries. On 31the same date the Company, ~~2009~~Zahir Teja and certain other parties entered into a settlement agreement and mutual release with Mr. Nissenson. Under terms of the agreement, the Company ~~discovered certain~~agreed ~~errors~~to ~~related~~pay to ~~revenue~~ ~~recognized~~Mr. Nissenson the sum of $136,593 in accrued salary and related compensation under his employment agreement with the ~~three~~ ~~months~~Company, ~~ended~~payable ~~March~~in 31monthly installments of $2,500 ~~2009~~each ~~that~~commencing ~~should~~September ~~have~~30, ~~been~~2011. Mr. ~~deferred~~Nissenson agreed to terminate his employment agreement with the ~~three~~Company ~~months~~and ~~ended~~the ~~June~~parties ~~30,~~exchanged ~~2009~~mutual releases.

~~The~~In ~~Company~~a ~~discovered~~related ~~that~~development, ~~revenue~~on ~~totaling~~March ~~$420~~22,~~000~~ ~~recognized~~2011, ~~during~~the Company, Zahir Teja and certain other parties entered into a settlement agreement and mutual release with Mr. Haim Nissenson and Anney Consulting Corp. (“Anney”). Under the ~~three~~terms ~~months~~of ~~ended~~the ~~March~~agreement, 31the October 2, ~~2009~~2006 ~~should~~consulting ~~not~~agreement ~~have~~among ~~been~~Mr. ~~recognized~~Haim ~~until~~Nissenson, Anney, Zahir Teja and the ~~subsequent~~Company, ~~quarterly~~and ~~period~~all ~~due~~amendments thereto, were terminated, and in full payment for $181,211 of accrued consulting fees payable to Anney, the ~~products~~Company ~~not~~agreed ~~being~~to ~~shipped~~issue ~~until~~to ~~early~~Anney ~~April~~an ~~2009~~aggregate of 308,018 shares of Company common stock. The ~~impacts~~agreement ofalso obligates the ~~correction~~Company to remove Haim Nissenson and Neev Nissonson from a $15,000 personal guaranty to an Israeli bank by September 30, 2011, and provides Haim Nissenson and Anney with certain piggyback registration rights on all Company shares owned by them, subject to the terms of a maximum two year lockup agreement. For so long as the ~~error~~lockup agreement remains in effect, the ~~interim~~parties ~~financial~~agreed ~~information~~that Anney and Haim Nissenson could nominate one individual to serve as ~~reported~~a onmember ~~Forms~~of ~~10-Q~~the ~~for~~board of directors of the ~~three~~Company ~~months~~so ~~ended~~long ~~March~~as ~~31,~~such ~~2009~~nominee ~~and~~is ~~June~~reasonably ~~30,~~acceptable ~~2009~~to ~~are~~the ~~reflected~~members inof the ~~following~~Company’s ~~table:~~board of directors.

Three months ended March 31, 2009
	As Reported			Change			As Restated
Sales	$	931,842			(420,000	)		511,842
Cost of sales		661,067			(297,859	)		363,208
Gross margin		270,775			(122,141	)		148,634
Loss from operations		(38,825	)		(122,141	)		(160,966	)
Net loss		(59,977	)		(122,141	)		(182,118	)
Net (loss) per common share:
Basic and diluted		(0.01	)		(0.02	)		(0.03	)

To fill the vacancy created by the resignation of Neev Nissenson, on March 24, 2011, Zahir Teja appointed Amit Barzelai to serve as a member of the Board of Directors. Pursuant to the authority granted to the directors in the Company By-Laws, Messrs. Teja and Barzelai then amended the By-Laws to increase the size of the board of directors of the Company from two persons to a minimum of three and a maximum of seven persons. The directors then appointed Messrs. Uri Wittenberg, Hagai Langstadter and Ofer Bar-Nes Nissensohn to serve as additional members of the board of directors of the Company and each of its subsidiaries. As a result, the board of directors of the Company and each of its subsidiaries now consists of five members.

Three months ended June 30, 2009
	As Reported			Change		As Restated
Sales	$	646,533			420,000		1,066,533
Cost of sales		437,800			297,859		735,659
Gross margin		208,733			122,141		330,874
Loss from operations		(113,744	)		122,141		8,397
Net loss		(151,198	)		122,141		(29,057	)
Net loss per common share:
Basic and diluted		(0.02	)		0.02		(0.00	)

-30-

The correction in the interim revenue recognition did not have any impact on the revenue as reported for the six months ended June 30, 2009 or any future periods included in the fiscal year ended December 31, 2009. Forms 10-Q for periods ended March 31, 2010 and June 30, 2010 will reflect the comparative correction of the error along with appropriate disclosure in accordance with US GAAP.

Note 14 - Subsequent Events

Subsequent events were evaluated through March 31, 2010.

In February and March 2010, the Company entered into a new promissory note agreements with related parties in the aggregate amount of $175,000. These notes are to be paid in full at various dates between February and March of 2012 and bear 11% interest per annum. In addition, these notes were discounted by the issuance of shares of the Company’s common stock equal to 7% of the principal amount of the note per year. In total the Company issued an aggregate of 24,640 shares in connection with this discount for a total value of $24,500.

-42-

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

~~Not~~On ~~applicable~~April 11, 2011, by letter dated April 10, 2011, Phoenix International Ventures, Inc. ( “Company”) notified its independent registered public accounting firm, Hunter & Renfro LLP (“H&R”), of its intention to engage Mark Bailey & Company (“Bailey”), as its new independent registered public accounting firm, at which time the Company dismissed H&R. The decision to dismiss H&R and to engage Bailey was approved by the Company's Board of Directors.

~~ITEM~~Bailey ~~9AT~~had formerly audited the Company’s consolidated balance sheet as of December 31, 2009 and the related consolidated statements of operations and comprehensive loss, stockholders' deficit, and cash flows for the year then ended. ~~CONTROLS~~ Such ~~AND~~audit ~~PROCEDURES~~did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles.

~~(a) Management’s~~In ~~Evaluation~~early 2010, H&R was engaged by the Company to act as its independent accountants and reviewed the unaudited quarterly balance sheets of ~~Disclosure~~the ~~Controls~~Company as at March 31, 2010, June 30, 2010 and ~~Procedures~~September 30, 2010, and the related unaudited consolidated statements of operations and comprehensive loss, stockholders' deficit, and cash flows for the three fiscal quarters ended September 30, 2010. H&R did not audit any of the consolidated financial statements of the Company.

AsDuring of the ~~end~~Company’s of2010 ~~the~~fiscal ~~period~~year ~~covered~~and bythe ~~this~~subsequent ~~Annual~~interim ~~Report,~~period weended ~~carried~~April ~~out~~10, an2011 ~~evaluation of~~ (the ~~effectiveness~~date of ~~the~~H&R’s ~~design~~dismissal), ~~and~~there ~~operation~~were ofno ~~our~~disagreements ~~disclosure~~between ~~controls~~the Company and ~~procedures.~~H&R ~~Disclosure~~on ~~controls~~any ~~and~~matter ~~procedures~~of ~~are~~accounting ~~designed~~principles toor ~~ensure~~practices, ~~that~~financial ~~information~~statement ~~required~~disclosure, toor beauditing ~~disclosed~~scope isor ~~recorded~~procedure, ~~processed~~which, ~~summarized~~if ~~and~~not ~~reported~~resolved ~~within~~to ~~the time periods specified in the Securities and Exchange Commission~~H&R’s ~~rules and forms~~satisfaction, ~~and~~would ishave ~~accumulated~~caused ~~and~~it ~~communicated~~ to ~~management,~~make ~~including~~reference ~~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~~subject ~~that~~matter ~~we file or submit under the Securities Exchange Act~~ of ~~1934 as amended (~~the ~~“Exchange~~disagreements ~~Act”).~~in ~~Our~~connection ~~disclosure~~with ~~controls~~its ~~and procedures are designed to provide reasonable assurance of achieving these objectives~~report. Also, ~~Based~~during ~~upon~~such ~~this evaluation~~periods, ~~our~~there ~~Chief~~were ~~Executive~~no ~~Officer~~“reportable ~~and~~events” ~~Chief~~as ~~Financial~~defined ~~Officer~~in ~~have~~Item ~~concluded that our disclosure controls and procedures are not effective to~~ 304(a)(1)(v) ~~reasonable assurance level~~ of ~~achieving~~Regulation ~~such objectives~~S-K.

~~(b) Management’s~~The ~~Report~~Company onprovided ~~Internal~~H&R ~~Control~~with ~~over~~the ~~Financial~~foregoing ~~Reporting~~disclosures and has requested that it furnish a letter addressed to the Securities and Exchange Commission stating whether or not H&R agrees with the statements made by the Company herein.

~~Our~~On ~~management~~April is10, ~~responsible~~2011, ~~for~~the ~~establishing~~Company ~~and~~reengaged ~~maintaining~~Bailey ~~adequate~~as ~~internal~~its ~~control~~independent ~~over~~registered ~~financial~~public ~~reporting. Internal~~accounting ~~control~~firm ~~over~~to ~~financial~~audit ~~reporting~~it’s isconsolidated ~~defined~~financial instatements ~~Rule~~as ~~13a-15(f)~~at orDecember ~~15d-15(f)~~31, ~~promulgated~~2010 ~~under~~and for the ~~Exchange~~fiscal ~~Act~~year asthen aended. During ~~process~~the ~~designed~~Company’s ~~by,~~recent orfiscal ~~under~~year and the ~~supervision~~subsequent ofinterim period ended April 11, 2011 (the ~~Company~~date of Bailey’s ~~Chief~~engagement), ~~Executive~~the ~~Officer~~Company ~~and~~did ~~Chief~~not ~~Financial~~consult ~~Officer~~Bailey ~~and~~with ~~effected~~respect byto the ~~Company’s~~application ~~board~~ of ~~directors,~~accounting ~~management~~principles ~~and~~to ~~other~~a ~~personnel~~specified transaction, toeither ~~provide~~completed ~~reasonable~~or ~~assurance~~proposed, ~~regarding~~or the ~~reliability~~type of ~~financial~~audit ~~reporting~~opinion ~~and~~that ~~the~~might ~~preparation~~be ofrendered on its financial statements, ~~for~~any ~~external~~reportable ~~purposes~~events inor ~~accordance~~other ~~with~~matters ~~accounting~~set ~~principles~~forth ~~generally accepted~~ in ~~the~~Item ~~United~~304(a)(2) ~~States~~ of ~~America~~Regulation ~~and includes those policies and procedures that:~~S-K.

-Item 9A. ~~Pertain~~Controls ~~to the maintenance of records that in reasonable detail accurately~~ and ~~fairly reflect the transactions and dispositions of the assets of the Company;~~Procedures

-Disclosure ~~Provide~~Controls 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~~Procedures

-Our ~~Provide~~management, ~~reasonable~~with ~~assurance~~the ~~regarding~~participation ~~prevention~~of orour ~~timely~~Principal ~~detection~~Executive Officer and Principal Financial Officer, evaluated the effectiveness of ~~unauthorized~~our ~~acquisition~~disclosure controls and procedures as of December 31, ~~use~~2010 or(as ~~disposition~~such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the ~~Company’s~~“Exchange ~~assets~~Act”). Based on this evaluation, our Principal Executive Officer and our Principal Financial Officer concluded that ~~could~~our ~~have~~disclosure acontrols ~~material~~and ~~effect~~procedures, onsubject to the ~~financial~~limitations ~~statements~~as noted below, were not effective during the period and as of the end of the period covered by this annual report to ensure that information required to be disclosed by us in reports that we file or submit under the 1934 act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to our management as appropriate to allow timely decisions regarding required disclosures.

Because of ~~its~~ inherent limitations, ~~internal~~our ~~control~~disclosure ~~over~~controls ~~financial~~and ~~reporting~~procedures may not prevent or detect misstatements. ~~Projections~~ ofA 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~~system, no matter how well ~~designed,~~conceived ~~have~~and ~~inherent limitations. Therefore~~operated, ~~even those systems determined to be effective~~ can provide only reasonable, not absolute, assurance ~~with~~that ~~respect~~the toobjectives ~~financial~~of ~~statement~~the ~~preparation~~controls ~~and~~system ~~presentation~~are met. Because of the inherent limitations ofin ~~internal~~all ~~control~~controls systems, ~~there~~no isevaluation aof ~~risk~~controls ~~that~~can ~~material~~provide ~~misstatements~~absolute ~~may~~assurance ~~not~~that beall ~~prevented or detected on a timely basis by internal~~ control ~~over~~issues ~~financial~~and ~~reporting.~~instances ~~However, these inherent limitations are known features~~ of ~~the financial reporting process. Therefore~~fraud, itif ~~is possible to design into the process safeguards to reduce~~any, ~~though~~have ~~not~~been ~~eliminate, this risk~~detected.

AsManagement’s ofReport ~~December 31, 2009, 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~~Over ~~issued~~Financial 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, as of the end of the period covered by this report, such internal controls over financial reporting were not effective. 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.Reporting

~~-43-~~Our internal controls over financial reporting are designed by, or under the supervision of our Principal Executive Officer and Principal Financial Officer or persons performing similar functions, and effected by our 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 generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:

~~The~~● ~~matters~~Pertain ~~involving~~to ~~internal~~the ~~controls~~maintenance ~~over~~of ~~financial~~records ~~reporting~~ that ~~our~~in ~~management~~reasonable ~~considered~~detail toaccurately beand ~~material~~fairly ~~weaknesses~~reflect ~~under~~ the ~~standards~~transactions and dispositions of ~~the~~our ~~Public~~assets; ~~Company~~● ~~Accounting~~Provide ~~Oversight~~reasonable ~~Board~~assurance ~~were:~~that ~~ineffective~~transactions ~~controls~~are ~~over~~recorded ~~period~~as ~~end~~necessary to permit preparation of financial ~~disclosure~~statements in accordance with accounting principles generally accepted in the United States and ~~reporting~~that ~~processes~~our ~~including~~receipts ~~not~~and ~~having~~expenditures aare ~~functioning~~being ~~audit~~made ~~committee~~only ~~consisting~~in accordance with authorizations of ~~independent~~our ~~Board~~management ~~members~~and asdirectors; ~~well~~and as● ~~lack~~Provide ofreasonable ~~expertise~~assurance ~~with~~regarding ~~respect~~prevention toor ~~the~~timely ~~application~~detection of USunauthorized ~~GAAP~~acquisition ~~and~~or ~~SEC~~disposition ~~rules~~of ~~and~~our ~~regulations~~assets that could have a material effect on the financial statements.

~~Management~~Our ~~believes~~management ~~that~~has evaluated the ~~material~~effectiveness ~~weaknesses~~of ~~set~~our ~~forth~~internal ~~above~~control ~~did~~over ~~not~~financial ~~have~~reporting an(“ICFR”) based ~~effect~~on the control criteria established in a report entitled Internal Control—Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that our internal control over financial ~~results~~reporting was not effective as of December 31, 2010. Based on its evaluation, our management concluded that our internal control over financial reporting has the following deficiencies as of December 31, 2010:

~~This~~We ~~annual~~did ~~report does~~ not ~~include~~maintain aneffective ~~attestation~~controls ~~report~~to ofensure ~~the~~there ~~Company's~~is ~~registered~~adequate ~~public~~analysis, ~~accounting~~documentation, ~~firm~~reconciliation, ~~regarding~~and ~~internal~~review ~~control~~of ~~over~~accounting ~~financial~~records ~~reporting. Management's~~and ~~report~~supporting ~~was~~data, ~~not~~especially ~~subject~~as toit ~~attestation~~relates ~~by the Company's registered public accounting firm pursuant~~ to ~~temporary~~complex ~~rules~~transactions. ofThese ~~the~~control ~~SEC~~deficiencies ~~that~~contributed ~~permit the Company~~ to ~~provide only~~ the ~~management's~~individual ~~report~~material inweaknesses ~~this~~described ~~annual report.~~below:

~~Management’s~~a) ~~Remediation~~Shortage ~~Initiatives~~of qualified financial reporting personnel with sufficient depth, skills and experience to apply accounting principles generally accepted in the United States of America (“GAAP”).

Inb) anWe ~~effort~~did tonot ~~remediate~~maintain ~~the~~effective ~~identified~~controls ~~material~~to ~~weaknesses~~ensure ~~and~~there ~~other~~is ~~deficiencies~~adequate ~~and~~analysis, ~~enhance our internal controls~~documentation, ~~we have initiated~~reconciliation, orand ~~plan~~review toof ~~initiate,~~accounting ~~the~~records ~~following~~and ~~series~~supporting ~~of measures:~~data.

c) We ~~plan~~do tonot ~~update~~have ~~some~~adequate ~~of our current procedures to better address period end financial disclosure. In addition greater~~ controls ~~will~~in beplace ~~implemented~~ to ~~oversee~~identify ~~cutoff~~and ~~date~~approve non-recurring transactions ~~which~~such wethat ~~feel was a part of~~ the ~~material~~validity ~~weaknesses.~~and ~~Management~~proper ~~also~~accounting ~~plans~~can tobe ~~update~~determined ~~controls~~on ~~relating~~a totimely ~~other processes~~basis.

Wed) ~~anticipate~~During ~~that~~2010 ~~these~~the ~~initiatives~~Company ~~will~~did ~~be at least partially, if~~ not ~~fully,~~have ~~implemented~~a byfunctioning ~~December~~independent ~~31,~~auditing ~~2010~~committee. ~~Additionally, we plan to test our updated controls in order to remediate our deficiencies by December 31, 2010.~~

~~(c) Changes in Internal Control over Financial Reporting~~-31-

~~Aside~~In ~~from~~summary, ~~updating~~the ~~some~~control ~~procedures~~deficiencies ~~there~~and ~~were~~material noweaknesses ~~changes~~noted above could result in ~~our~~a ~~internal~~material ~~control~~misstatement ~~over~~of ~~financial~~the ~~reporting~~aforementioned ~~during~~accounts ~~our~~or ~~fiscal~~disclosures ~~quarter~~that ~~ended~~would ~~December~~result ~~31,~~in ~~2009~~a ~~that~~material ~~have~~misstatement ~~materially~~to ~~affected,~~the Company’s interim or ~~are~~annual ~~reasonably~~consolidated ~~likely~~financial tostatements ~~materially~~that ~~affect~~would not be prevented or detected. Accordingly, ~~our~~management ~~internal~~has determined that each of the control ~~over~~deficiencies ~~financial~~described ~~reporting~~above constitutes a material weakness.

~~ITEM~~Remediation ~~9B. OTHER~~of ~~INFORMATION~~Material Weakness

None of the material weaknesses previously disclosed was effectively remediated during 2010 or through the date of this report.

Notwithstanding the material weaknesses discussed above, our management has concluded that the consolidated financial statements included in this Annual Report on Form 10-~~44-~~K fairly present in all material respects our financial condition, results of operations, and cash flows for the years ended December 31, 2010 and 2009 in conformity with accounting principles generally accepted in the United States of America.

Inherent Limitations Over Internal Controls

Because of its inherent limitations, internal control over financial reporting may not prevent or detect all errors or misstatements and all fraud. Therefore, even those systems determined to be effective can provide only reasonable, not absolute, assurance that the objectives of the policies and procedures are met. Also, 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.

Our Board of Directors, management and Mark Bailey & Company our independent auditors discussed these weaknesses and we have assigned the highest priority to their correction. In 2011, we plan to continue to add financial resources and expertise, both through internal hiring and using outside consultants that will provide hands-on oversight of the monthly financial closing, data analysis, and account reconciliation.

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

Changes in Internal Control Over Financial Reporting

There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the year ended December 31, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

There is no information that was required to be disclosed, but was not disclosed in a report on a Form 8-K during the fourth quarter of our fiscal year ended December 31, 2010.

-32-

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

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

Name	Age	Position
Zahir Teja	5557	President, Chief Executive Officer, Director
Neev Nissenson	3132	Vice President, Chief Financial Officer, Secretary, Director (*)
Teja Shariff	54	Interim Chief Financial Officer
Amit Barzelai	41	Director
Uri Wittenberg	39	Director
Hagai Langstadter	33	Secretary and Director
Ofer Bar Nes Nissensohn		Director

_________________________

(*) Resigned as Chief Financial Officer February 22, 2011 and as Vice President, Secretary and a Director on March 22, 2011.

Zahir Teja - President, Chief Executive Officer, Director

Zahir Teja, ~~age 55,~~ 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.

Mr. Teja is not a director of any other public company. Mr. Teja’s lifelong business experience and significant knowledge and expertise in the ground support equipment industry make him a suitable person to serve on the Company’s Board of Directors.

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 Director Independence - Consulting Agreement” below.

Neev Nissenson - Vice President, Chief Financial Officer, Secretary and Director

Neev Nissenson, age 3132, ~~has~~served ~~serves~~ as our Vice President and Chief Financial Officer. Heuntil ~~holds~~his ~~this~~resignation ~~position~~in atFebruary ~~the pleasure of the Board of Directors~~2011. He ~~has~~was ~~also been~~ a member of the Board of Directors since our inception. ~~His~~and ~~term~~served ~~as a board member is one year~~ until ~~the next meeting of stockholders and until~~ his ~~successor~~resignation ~~has~~in ~~been~~March ~~duly elected and qualified~~2011. 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.

Mr. Nissenson is not a director of any other public company. Mr. Nissenson’s executive master degree in business administration as well his past experience with investment banking and consulting to public companies make him a suitable person to serve on the Company’s board of directors.-33-

~~Under~~Teja ~~the October 2006 Consulting Agreement~~N, ~~the parties agreed~~Shariff, ~~among~~Interim ~~other~~Chief ~~things,~~Financial 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 Director Independence - Consulting Agreement” below.Officer

~~-45-~~Teja N. Shariff was the Chief Financial Officer and Chief Accounting Officer of the Company from its inception until April 2009 when he resigned and Niv Nissenson became Chief Financial Officer. In February 2011, Mr. Shariff assumed the position of interim Chief Financial Officer and Chief Accounting Officer of the Company as a result of the resignation of Mr. Nissenson. 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. Mr. Shariff is the brother of Zahir Teja, our President and Chief Executive Officer.

Amit Barzelai

Amit Barzelai graduated from the College of Management, Israel in 1995 with a B.Sc. in Business Management, specializing in Accounting and Finance. Since his graduation, he has held various positions in various private companies in Israel with his duties primarily involving, management, business development, financing and financial management, accounting, internal accounting and fraud detection. Mr. Barzelai is the founder and CEO of Eliyahu Barzelai Holdings & Investments Ltd., a family investment company where he is involved in planning, strategizing and executing company’s investments.

Uri Wittenberg

Uri Wittenberg has been the managing director and chairman of the board of directors of Wittenberg Barzalei Infrastructure & Environmental Ltd. since 2005. Located in Tel Aviv, Israel, Wittenberg Barzalei Infrastructure & Environmental Ltd. provides environmental management services and advanced environmental technologies. Its services include waste management services and logistics services for industrial clients using advanced technologies and recovery of waste in the form of energy or organic materials; water purification technologies; wastewater management; sludge treatment technologies and Bio Agro technologies. Mr. Wittenberg is also a managing director and chairman of other businesses in Israel, including U. Wittenberg – Initiative & Management Ltd., E. Taieb Engineering Ltd., a leading Israel construction and engineering company, and WineWise Ltd., a commercial trading company that imports wines and spirits in Israel. Mr. Wittenberg holds an MBA in marketing and finance from the College of Management, Tel Aviv, Israel.

Hagai Langstadter

Hagai Langstadter has, since 2006, been the group financial and legal manager for DDG Ltd., an affiliated company of Delin Group, a multi-national group of companies that invests primarily in real estate. From 2005 to 2006 he was a financial and macro analyst for the Manufactures Association of Israel. Mr. Langstadter received his law degree from Bar Ilan University in 2006.

Ofer Bar Nes Nissensohn

Ofer Bar Nes Nissensohn has, since 2006, been an investment manager in Bar-Nes Holdings & Assets, a private family investment company. For four years prior thereto, he was a director of Tiv Taam Holdings 1 (formerly, World Group Holdings Ltd.), a public investment and holdings company in Israel, and from 2007 to 2009 was a director of Tiv Tam Holdings. Mr. Nissensohn is also a director of two development stage technology companies located in Israel. Mr. Nissensohn is the son of Zvi Bar-Nes Nissensohn, a shareholder and one of the former note holders of the Company.

Significant Employees

As of December 31, ~~2009~~2010, 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

~~There~~Except as indicated above, there are no family relationships among our directors, executive officers, or persons nominated or chosen by us to become directors or executive officers.

-34-

Involvement in Certain Legal Proceedings

To the best of our knowledge, during the past ten 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; (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, or any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; and (5) been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. (covering stock, commodities or derivatives exchanges, or other SROs).

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, all such forms were filed on time.

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, our principal accounting officer as well as all other employees, and is filed herewith. If we make substantive amendments to this Code of Ethics or grant any waiver, including any implicit waiver, we will disclose the nature of such amendment or waiver on our website or in a report on Form 8-K within four business days of such amendment or waiver.

Security Holder Nominating Procedures

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

-46-

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, 2009, the Board of Directors:~~-35-

For the year ended December 31, 2010, the Board of Directors:

Reviewed and discussed the audited financial statements with management, and

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, ~~2009~~2010 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.

-47-

Summary Compensation Table

Name and Principal Position	Year	~~Salary~~	~~Bonus~~Salary	~~Stock Awards~~	~~Option awards~~	~~Non-Equity Incentive Plan Comp.~~Bonus	~~All other compensation~~	~~Total~~Stock Awards	Option awards	Non-Equity Incentive Plan Comp.	All other compensation	Total
		~~($)~~	($)	~~($)~~	~~($)~~	($)	~~($)~~	($)	($)	($)	($)	($)
Zahir Teja(1)	~~2009~~	~~180,000~~						~~180,000~~
President, CEO, Director	2010			180,000								180,000
	2008	120,000						120,000
	2009			180,000									180,000
Neev Nissenson(2)	2009	126,000						126,000
	2008			120,000									120,000
VP, CFO, Secretary, Director
Neev Nissenson(2)
	2008	109,000						109,000
VP, CFO, Secretary, Director	2010			126,000									126,000
Teja N. Shariff(3)
	2009			126,000									126,000
Former CFO, Treasurer, CAO	2009	17,500					42,500	60,000
	2008			109,000									109,000
	2008	60,000						60,000
Teja N. Shariff(3)	2010			17,500									17,500
Former CFO, Treasurer, CAO	2009			17,500							42,500		60,000
	2008			60,000									60,000

(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. InPortions ~~2008, some~~ of Mr. Teja salary was not paid and deferred. ~~No salary payments were deferred in 2009.~~ The amount of the deferred salary owed to Mr. Teja at December 31, ~~2009~~2010 is $97180,898. In April 2011, Mr. Teja agreed to exchange all other loans owed to him by the Company and its subsidiary, aggregating $408,000, for 2,720,000 shares of our common stock, valued at $0.15 per share.

(2) Pursuant to 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, some of Mr. Nissenson’s salary was not paid and deferred. NoThe ~~salary~~amount ~~payments~~of ~~were~~the deferred insalary at December 31, 2009 is $39,548. In ~~The~~2010, ~~amount~~some of ~~the~~Mr. ~~deferred~~Nissenson’s salary was not paid and deferred. As at December 31, ~~2009~~2010, is $3995,548 of accrued salary and related compensation was due and payable to Mr. Nissenson. Pursuant to a March 22, 2011 settlement agreement, the Company and Mr. Nissenson agreed that an aggregate of $136,593 in accrued salary and related compensation under his employment agreement with the Company would be paid in monthly installments of $2,500 each commencing September 30, 2011.

(3) 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 has retained Mr. Shariff as a consultant to the Company for $2,000 per month. The Company has paid down in 2009 previously deferred salary in the amount of $24,000. At December 31, 2009 the Company owed Mr. Shariff $16,000 in respect of deferred salaries.-36-

(3) 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 has retained Mr. Shariff as a consultant to the Company for $2,000 per month. The Company has paid down in 2009 previously deferred salary in the amount of $24,000. At December 31, 2010 the Company owed Mr. Shariff $27,500 in respect of deferred compensation. Effective February 27, 2011 the Company appointed Mr. Shariff Interim CFO, and Mr. Shariff currently serves as our Principal Accounting Officer.

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~~is 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.

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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~~In ~~Company~~2007, ~~has~~the Company entered into ana three year employment agreement with Neev Nissenson to serve as the Company's Vice President. The term of the Agreement iswas 36subject ~~months~~to ~~commencing~~automatic onextensions ~~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 iswas $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 iswas also entitled to certain fringe benefits and reimbursement of expenses. The employment agreement ~~may~~was beterminable ~~terminated~~ by the Company for “Cause” and may be terminated by Mr. Nissenson for “Good Reason” or on 90 days' notice.

~~Under~~On February 22, 2011, Neev Nissenson tendered his resignation as our Chief Financial Officer (accepted by the ~~employment~~board ~~agreement~~on February 27, 2011) and on March 22, 2011Mr. Nissenson resigned as Secretary and Vice President and as a member of the board of directors of the Company ~~has~~and ~~granted~~its subsidiaries. On the same date the Company, Zahir Teja and certain other parties entered into a settlement agreement and mutual release with Mr. Nissenson. Under anterms ~~option~~of the agreement, the Company agreed to ~~purchase~~pay ~~330,000~~to ~~shares~~Mr. ofNissenson the ~~Company's~~sum ~~common~~of ~~stock~~$136,593 atin anaccrued ~~exercise~~salary ~~price~~and related compensation under his employment agreement with the Company, payable in monthly installments of $~~.50~~2,500 ~~per~~each ~~share~~commencing September 30, 2011. Mr. ~~The~~Nissenson ~~options~~agreed to terminate ~~December~~his ~~31,~~employment ~~2010~~agreement with the Company and the parties exchanged mutual releases.

Teja N. ~~Sharriff~~Shariff Employment Agreement

The Company had previously entered into an employment agreement with Teja N. Shariff to serve as the Company's Chief Financial Officer.

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~~effective ~~Board~~February ~~intends retained~~27, Mr2011. ~~Shariff as a consultant to the Company.~~

Outstanding Equity Awards atand ~~2009~~Stock ~~Fiscal Year End~~Options

~~The~~No ~~following~~options ~~table~~were ~~sets~~granted ~~forth~~during the ~~stock~~fiscal ~~options~~years ~~held~~ended byDecember ~~the~~31, ~~named~~2010 ~~executives~~and as2009 ofand none were outstanding at December 31, ~~2009~~2011.

Options Awards

Stock Awards

Name

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

12/31/10

Neev Nissenson

330,000(1)

0.50

12/31/10

Teja N. Shariff

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

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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.

Compensation to Directors

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

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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~~May of12, ~~this Annual Report on Form 10-K~~2011, 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 Class
Common Stock	Zahir Teja(3)	President, CEO, Director	64,~~035~~870,000	6828.9%
Common Stock	~~Neev~~Anney ~~Nissenson~~Business Corp.(4) Rue Arnold Winkelried 8, Case postale 1385, 1211 Geneve 1, Switzerland	~~Vice~~Former ~~President,~~5% ~~Secretary, Director, and CFO~~Stockholder	3780,~~268,000~~768	394.6%
Common Stock	~~Anney~~Teja ~~Business Corp~~N.~~(6)~~ ~~Rue~~Shariff ~~Arnold Winkelried 8, Case postale 1385, 1211 Geneve 1, Switzerland~~(5)	5%Chief ~~Stockholder~~Financial Officer	5296,~~235,~~000	641.8%
Common Stock	~~All~~Amit ~~Officers~~Barzelai ~~and Directors as a group that consists of 2 persons~~(6)	Director	71,~~061~~607,~~000~~306	779.5%
Common Stock	~~Teja~~Uri N.Wittenberg ~~Shariff~~(57)	~~Former CFO, Treasurer~~Director	~~296~~1,~~000~~740,667	410.3%
Common Stock	Hagai Langstadter (8)	Director	799,160	4.7%
Common Stock	Ofer Bar-Nes Nissensohn (9)	Director	500,000	3.0%
Common Stock	All Officers and Directors as a group that consists of 6 persons		9,813,133	58.7%

______________________________

(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.

(3) Mr. Teja's share holdings consist of 2,150,000 shares of the Company's common stock beneficially owned by him. ~~Under~~as ~~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~~and ~~irrevocable proxies signed by the holders of~~ 2,~~538~~720,000 ~~shares~~additional ~~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~~issued ~~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~~him ~~their~~in ~~shares~~payment ~~at shareholders meetings; accordingly, Mr. Teja may be deemed to be the beneficial owner~~ of ~~the 687~~$408,000 ~~shares~~ of ~~the~~accrued ~~Company's~~obligations ~~common~~owed ~~stock beneficially owned~~ by ~~Anney.~~the ~~Mr.~~Company ~~Teja~~ and ~~Mr.~~its ~~Shariff are brothers~~subsidiary.

~~-50-~~ (4) Anney Business Corp.'s share holdings consist of 780,786 shares of the Company's common stock beneficially owned by it. As at December 31, 2010, Anney Business Corp. beneficially owned more than 5% of our outstanding common stock. Haim Nissenson is the sole owner of Anney Business Corp. Does not include (i) 395,000 shares of the Company's common stock beneficially owned by Neev Nissenson, the son of Haim Nissenson, (ii) 5,000 shares of the Company's common stock beneficially owned by the wife of Neev Nissenson, or (iii) an aggregate of 5,000 shares of the Company’s common stock beneficially owned by other members of the family of Haim Nissenson. Anney and Haim Nissenson each disclaim beneficial ownership of all shares of common stock owned by other members of his family.

~~(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 687,000 shares of the Company's common stock beneficially owned by it. Under a 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 2,150,000 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-in38-~~fact.~~

(6) The ~~percent~~owner of ~~class~~218,183 isshares ~~based~~of onCompany 8common stock,~~137~~ Mr. Barzelai purchased 500,~~947~~000 additional shares for $75,000 in the private placement described elsewhere in this Annual Report. Mr. Barzelai received 250,000 shares of our common stock ~~issued~~ and ~~outstanding~~an immediately exercisable five year option to purchase 250,000 additional shares of our common stock at an exercise price of $0.15 per share in April 2011 in consideration for his agreement to serve as a director of the ~~date~~Company. In addition, pursuant to an August 2010 finders agreement, in April 2011 Eliyahu Barzelai Holdings & Investments Ltd., which owned 105,790 shares of ~~this~~common ~~Annual~~stock ~~Report~~of the Company at December 31, 2010, also received 283,333 additional shares of common stock in consideration for its facilitating the $250,000 equity financing for the Company consummated on ~~Form~~March ~~10-K~~24, 2011. As a result, Eliyahu Barzelai Holdings & Investments Ltd. currently owns 389,123 shares. Mr. Barzelai has the power to vote and dispose of the shares owned by Eliyahu Barzelai Holdings & Investments Ltd.

(7) The owner of 174,000 shares of Company common stock, Mr. Wittenberg purchased 1,066,667 additional shares for $160,000 in the March 2011 private placement described elsewhere in this Annual Report. He also received 250,000 additional shares and an immediately exercisable five year option to purchase 250,000 additional shares of our common stock at an exercise price of $0.15 per share in April 2011 in consideration for his agreement to serve as a director of our Company.

(8) Represents 199,160 shares owned as at December 31, 2010, 100,000 shares purchased in the March 2011 private placement for $15,000, and 250,000 additional shares and an immediately exercisable five year option to purchase 250,000 additional shares of our common stock at an exercise price of $0.15 per share, issued in April 2011 in consideration for Mr. Langstadter’s agreement to serve as a director of our Company.

(9) Represents 250,000 shares and an immediately exercisable five year option to purchase 250,000 additional shares of our common stock at an exercise price of $0.15 per share, issued in April 2011 in consideration for Mr. Nissensohn’s agreement to serve as a director of our Company. Ofer Bar-Nes Nissensohn is the son of Zvi Bar-Nes Nissensohn, a shareholder of the Company and one of the former note holders of the Company who converted a $110,000 note into 733,333 shares of Company common stock in March 2011. Ofer Bar-Nes Nissensohn disclaims any beneficial interest in the shares owned by Zvi Bar-Nes Nissensohn.

The percent of class is based on 16,879,818 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.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

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

·● Any of our directors or officers; ·● Any person proposed as a nominee for election as a director; ·● Any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding shares of common 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~~Company submits all related party transactions to the board of directors for approval. The related party abstains in the vote.

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The Company and Phoenix Aerospace, Inc. 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. exchanged all the issued and outstanding shares of Phoenix Aerospace, Inc. common stock for 3,000,000 shares of the common stock of the Company. As a result of this transaction, Phoenix Aerospace, Inc. became a wholly owned subsidiary of the Company, and Mr. Teja became a principal stockholder of and continued to be a principal of the Company. The effective date of this transaction was January 1, 2007.

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 executive officers.

In 2009 the Company purchased inventory in connection with the performance on remanufacturing contracts from Mawenzi, Inc. a company owned by the brother in law of our CEO, President and Director, Mr. Zahir Teja. In aggregate the Company purchased from Mawenzi $745,000 worth of parts. At December 31, 2009 the Company owed Mawenzi, Inc. $245,000. The Company believes that all purchases were made at fair market value.-39-

~~Consulting~~In ~~Agreement~~2010 the Company purchased inventory in connection with the performance on remanufacturing contracts from Mawenzi, Inc. a company owned by the brother in law of our CEO, President and Director, Mr. Zahir Teja. At December 31, 2010 the Company owed Mawenzi, Inc. $123,000. The Company believes that all purchases were made at fair market value.

~~The~~On ~~Company~~March ~~entered~~22, ~~into~~2011 aNeev ~~Consulting~~Nissenson ~~Agreement~~resigned ~~dated~~as ~~October~~Secretary ~~2, 2006 with Mr. Teja,~~ and ~~Anney~~as ~~Business Corp.,~~ a ~~British~~member ~~Virgin~~of ~~Islands~~the ~~company~~Board ~~(“Anney”),~~of ~~which~~Directors isof ~~wholly~~the ~~owned~~Company and ~~controlled~~its bysubsidiaries. On the ~~Nissenson~~same ~~family. Haim Nissenson~~date, ~~who is~~ the ~~father of Neev Nissenson~~Company, isZahir ~~the~~Teja ~~Chairman~~and ofcertain ~~Anney.~~other ~~The~~parties ~~term~~entered ofinto ~~the~~a ~~Agreement~~settlement ~~shall~~agreement ~~run~~and somutual ~~long~~release aswith Mr. ~~Teja and the~~ Nissenson. Under ~~family~~terms ~~are stockholders~~ of the ~~Company. The Agreement's effective date was April 26~~agreement, ~~2007 (“Effective Date”). Under~~ the ~~Agreement,~~Company ~~Anney~~ agreed to ~~provide~~pay ~~consulting services~~ to ~~the Company~~Mr. ~~For~~Nissenson ~~providing~~the ~~these~~sum ~~services, Anney will receive a fee~~ of $10136,~~000~~593 ~~per~~in ~~month.~~accrued ~~Anney~~salary ~~is also entitled to receive annually a bonus~~ and ~~success~~related ~~fee~~compensation ~~calculated~~under ashis ~~follows:~~employment ~~the~~agreement ~~product~~with ~~of (A) one percent (1%) and (B) all revenues from~~ the Company's, ~~operations~~payable in ~~excess~~monthly installments of $42,~~000,000.~~500 ~~The~~each ~~foregoing~~commencing ~~bonus~~September ~~and success fee shall not exceed $130~~30,~~000~~ ~~during~~2011. ~~any twelve month period~~Mr. ~~The~~Nissenson ~~Company~~agreed ~~granted Anney an option~~ to ~~purchase~~terminate ~~330,000~~his ~~shares~~employment ofagreement with the Company's ~~common~~and ~~stock~~the atparties anexchanged ~~exercise~~mutual ~~price of $~~releases.~~50 per share. The option terminates December 31, 2010.AS of December 31, 2009 Anney has exercised all of its options.~~

~~The~~In ~~parties~~a ~~also~~related ~~agreed~~development, toon ~~vote~~March ~~their~~22, ~~shares~~2011, tothe ~~nominate~~Company, Zahir Teja and ~~Neev~~certain ~~Nissenson~~other asparties ~~directors~~entered ~~and~~into toa ~~appoint~~settlement ~~Mr.~~agreement ~~Teja~~and asmutual ~~President~~release ~~and~~with Mr. Haim Nissenson asand ~~Vice~~Anney ~~President~~Consulting Corp. ~~Each~~(“Anney”). Under terms of the agreement, the October 2, 2006 consulting agreement among Mr. Haim Nissenson, Anney, Zahir Teja and the Company, and all amendments thereto, were terminated, and in full payment for $181,211 of accrued consulting fees payable to Anney, ~~further~~the Company agreed to ~~give~~issue ~~the~~to ~~other~~Anney ~~the~~an ~~right~~aggregate of ~~first~~308,018 ~~refusal~~shares ifof heCompany ~~wants~~common stock. The agreement also obligates the Company to ~~sell~~remove ~~any~~Haim ofNissenson ~~his~~and Neev Nissonson from a $15,000 personal guaranty to an Israeli bank by September 30, 2011, and provides Haim Nissenson and Anney with certain piggyback registration rights on all Company shares. owned ~~The~~by ~~Agreement~~them, ~~contains~~subject ~~other~~to the terms of the maximum two year lockup agreement referred to below. For so long as the lockup agreement remains in effect, the parties agreed that Anney and ~~conditions~~Haim Nissenson could nominate one individual to serve as a member of the board of directors of the Company so long as such nominee is reasonably acceptable to the members of the Company’s board of directors.

To fill the vacancy created by the resignation of Neev Nissenson, on March 24, 2011, Zahir Teja appointed Amit Barzelai to serve as a member of the Board of Directors. Pursuant to the authority granted to the directors in the Company By-Laws, Messrs. Teja and Barzelai then amended the By-Laws to increase the size of the board of directors of the Company from two persons to a minimum of three and a maximum of seven persons. The directors then appointed Messrs. Uri Wittenberg, Hagai Langstadter and Ofer Bar-Nes Nissensohn to serve as additional members of the Board of Directors of the Company and each of its subsidiaries. As a result, the board of directors of the Company and each of its subsidiaries now consists of five members.

In addition, approximately $337,000 of debt currently in default (consisting of $300,000 original principal amount plus accrued interest thereon) issued to certain note holders (including Zvi bar-nes Nissenson, the father of Ofer Bar-Nes Nissenson) was converted into approximately 2,247,000 shares of the Company’s common stock at the price of $0.15 per share. The Company also agreed to issue 30,000 additional shares of its common stock to the converting note holders in consideration for prior debt extensions.

In April 2011, the Company’s Board of Directors approved an agreement whereby $408,000 of accrued obligations owed by our Company and its Phoenix Aerospace subsidiary to Zahir Teja, our President and Chief Executive Officer was converted into 2,720,000 additional shares of our common stock, at a conversion price of $0.15 per share.

In April 2011, the Company issued an aggregate of 1,000,000 additional shares of its common stock to Amit Barzelai (250,000 shares) Uri Wittenberg (250,000 shares), Hagai Langstadter (250,000 shares) and Ofer Bar-Nes Nissensohn (250,000 shares), and immediately exercisable five year options entitling each of such persons to purchase an additional 250,000 shares of our common stock at an exercise price of $0.15 per share, in consideration for such persons agreement to serve as members of our Board of Directors. We agreed to issue these securities to these members of our Board of Directors, in consideration for their agreement to serve in such capacity in the absence of directors and officers’ liability insurance.

On February 2, 2010 the Company issued 14,140 shares of common stock to a note holder for consideration of extending the maturity date of a promissory note. On June 10, 2010 the Company issued 1,768 shares of common stock to a note holder for consideration of extending the maturity date of a promissory note. On March 25, 2010 the Company issued 10,500 shares of common stock to a note holder for consideration of extending the maturity date of a promissory note. On May 20, 2010 the Company issued 2,943 shares of common stock to a note holder for consideration of extending the maturity date of a promissory note.

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Director Independence

Our determination of independence of directors is made using the definition of “independent director” contained in the rules of the NYSE Amex 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, ~~2008~~2010 and 2009, contained in the corresponding fiscal periods. On April 10, 2010, MBC resigned and Hunter & Renfro LLP was appointed as our independent public accountants and reviewed our unaudited financial statements for the quarters ended March 31, 2010, June 30, 2010 and September 30, 2010. In March, 2011, the new board of directors replaced Hunter & Renfo LLP and rehired MBC as our auditors to audit our 2010 financial statements. There were no disputes between our company and Hunter & Renfo LLP that led to our replacement of such accountants and the rehiring of MBC as our auditors.

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Audit and Non-Audit Fees

Aggregate fees for professional services rendered to the Company by MBC as of or for the two fiscal years ended December 31, 2009 and 2008 are set forth below.

Aggregate fees for professional services rendered to the Company by MBC as of or for the two fiscal years ended December 31, 2010 and 2009 are set forth below.
	Fiscal Year
	2010		2009
Audit Fees	$	90,000	$	80,700
Audit-Related Fees				0
Tax Fees	$	21,000		10,000
All Other				10,650
Total	$	111,000	$	101,350

	Fiscal Year
	2009		2008
Audit Fees	$	80,700	$	49,500
Audit-Related Fees		0		0
Tax Fees		10,000		15,000
All Other		10,650		-
Total	$	101,350	$	64.500

Audit Fees Aggregate fees billed by our auditors for professional services rendered in connection the audit of our annual consolidated financial statements for the fiscal years ended December 31, 2010 and December 31, 2009.

Audit-related Fees ~~Aggregate~~Represents fees ~~billed~~related byto ~~our auditors for professional services rendered in connection with a~~ review of ~~the~~our Interim financial ~~statements~~information ~~included~~contained in ~~our quarterly reports on~~ Form 10-Q ~~and~~for the ~~audit~~periods ofended ~~our~~March ~~annual~~31, ~~consolidated~~June ~~financial~~30 ~~statements~~and ~~for~~September ~~the~~30, ~~fiscal~~2010 ~~years~~These ~~ended~~fees ~~December~~were ~~31,~~paid ~~2009~~to ~~and~~Hunter ~~December~~& ~~31,~~Renfro ~~2008~~LLP.

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

-5341-

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Exhibit
Number	~~Description~~	Description
3.1	~~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)).~~	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)).~~	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)).
3.3		Amended and Restated By-Laws (incorporated by reference to Exhibit 10.4 to Form 8-K filed on March 25, 2011).
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).
4.1		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)).
4.3	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).
4.2		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).
4.4	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).
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).
4.5	Form of uncollateralized promissory note (incorporated by reference to Exhibit 4.1 of the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 11, 2009)
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).
4.6	Form of uncollateralized promissory note extension (incorporated by reference to Exhibit 4.2 of the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 11, 2009).
4.5		Form of uncollateralized promissory note (incorporated by reference to Exhibit 4.1 of the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 11, 2009)
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)).
4.6		Form of uncollateralized promissory note extension (incorporated by reference to Exhibit 4.2 of the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 11, 2009).
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)).
10.1		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)).
10.3	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)).
10.2		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)).
10.4	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)).
10.3		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)).
10.5	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)).
10.4		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)).
10.6	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)).
10.5		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)).
10.7	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)).
10.6		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)).
10.8	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)).
10.7		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)).
10.9	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).
10.8		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)).
10.10	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).
10.9		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).
10.11	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).
10.10		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).
10.12	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).
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).
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)).
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).
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)).
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)).
23.1	Consent of Mark Bailey & Company, Ltd.
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)).
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 2002
23.1		Consent of Mark Bailey & Company, Ltd.
31.2	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 2002
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 2002
32.1	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 2002
31.2		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 2002
32.2	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
32.1		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 2002
32.2		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

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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 31, 2010	By:	/s/ Zahir Teja
Date: May 16, 2011	By:	/s/ Zahir Teja
		Zahir Teja President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this ~~report~~Form 10-K Annual 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, 2010	By:	/s/ Zahir Teja
SIGNATURE		TITLE	DATE
		Zahir Teja
/s/ Zahir Teja		Chairman and Chief Executive Officer	May 16, 2011
		President, CEO, Director
Zahir Teja
March 31, 2010	By:	/s/ Neev Nissenson
/s/ Teja N. Shariff		Chief Financial Officer and Secretary	May 16, 2011
		Neev Nissenson
Teja N. Shariff		(Principal Financial and Accounting Officer)
		CFO, Principal Accounting and Financial Officer, Vice President, Director
/s/ Amit Barzelai		Director	May 16, 2011
Amit Barzelai

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/s/ Uri Wittenberg	Director	May 16, 2011
Uri Wittenberg

/s/ Hagai Langstadter	Director	May 16, 2011
Hagai Langstadter

/s/ Ofer Bar-Nes Nissensohn	Director	May 16, 2011
Ofer Bar-Nes Nissensohn

~~EXHIBIT INDEX~~-43-

Exhibit
Number	Description
3.1	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).
4.5	Form of uncollateralized promissory note (incorporated by reference to Exhibit 4.1 of the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 11, 2009)
4.6	Form of uncollateralized promissory note extension (incorporated by reference to Exhibit 4.2 of the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 11, 2009).
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 2002
31.2	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 2002
32.1	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 2002
32.2	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

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