The information set forth in Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") 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 use of terms such as "believes," "anticipates," "intends" or "expects." These forward-looking statements relate to the plans, objectives and expectations of the Company for future operations. Although the Company believes that its expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of its knowledge of its business and operations, in light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this report 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 quarterly report.

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

OVERVIEW

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

We manufacture support equipment for military aircraft which is used for maintaining, operating or testing aircraft sub-systems. We also remanufacture existing support equipment in order to extend usefulness and eliminate original product defects. We are ISO 9001/2000 certified, which is due for renewal on April 26, 2010.

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

Results of Operations

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Financial Information - Percentage of Revenues
(Unaudited)

                               Nine Months ended
                                 September 30,
                                 2009          2008
Revenues                          100 %         100 %
Cost of Goods Sold                -70 %         -60 %
Gross Profit                       30 %          40 %
Operating Expenses:
General and Administrative        -34 %         -43 %
Total Operating Expenses          -34 %         -43 %
Other Income (Expenses)            -3 %          31 %
Income (Loss) before Taxes         -6 %          28 %
Net income (loss)                  -6  %         28 %

Comparison of Nine Months Ended September 30, 2009 and September 30, 2008

Revenues. Revenues increased 63% to $2,733,970 for the nine months ended September 30, 2009 as compared to $1,678,843 for the nine months ended September 30, 2008.

For the nine months ended September 30, 2009, 38% of our revenues were from remanufacturing, 33% were manufacturing and design, 14% were parts trading, and 15% from study contracts. This compares to 11% of revenues from remanufacturing, 35% from manufacturing and design, 26% from parts trading and 28% from study contracts during the nine months ended September 30, 2008.

The increase in revenues was primarily driven by an increase in the execution of remanufacturing orders in the nine months ended September 30, 2009 as compared to the same period in 2008. The increase in the execution of remanufacturing orders is a result of increased demand for these items; in addition we believe that favorable relations with suppliers contributed to the increase in receipt and execution of such sales orders. We currently have orders for additional remanufactured goods which we expect to execute in the next twelve months. Management expects, although there can be no assurance, that remanufacturing will continue to be a significant portion of our sales, although the demand we have experienced for remanufacturing orders has tended to be erratic.

Manufacturing and design revenue increased as well, primarily due to costs incurred in the execution of a long term contract for the design and manufacturing of aircraft engine trailers which began at the end of 2008. We expect this contract to continue to generate significant revenues in the next twelve months. Management believes, although there can be no assurance, that manufacturing and design sales will continue to be a significant portion of our revenues.

Revenue from study contracts decreased during the nine months ended September 30, 2009 as compared to the same period in 2008. These contracts are reaching their life-end. We have not accumulated additional study contracts in the past twelve months and we expect this revenue stream to be depleted next year. However, management believes, although there can be no assurance, that marketing efforts may result in future study contracts.

The volume of revenue from parts trading remained consistent for the nine months ended September 30, 2009 as compared to the same period in 2008. Management believes, although there can be no assurance, that the volume of revenue from parts trading will remain relatively similar for the next twelve months.

For the nine months ended September 30, 2009, 86% of our revenues were derived from U.S. customers and 14% from European customers as compared to the nine months ended September 30, 2008 during which 64% of our revenues were derived from U.S. customers and 36% from European customers. Revenues from European customers consisted of only parts trading for the nine months ending September 30, 2009 as compared to the nine months ended September 30, 2008 in which significant portions of the sales from Europe were from remanufacturing activities. Management expects this trend to continue in the next twelve months.

Cost of Sales. Cost of sales consists primarily of subcontractors and raw materials used in manufacturing along with other related charges. Cost of sales increased 87% to $1,900,603 for the nine months ended September 30, 2009, compared to $1,014,418 for the nine months ended September 30, 2008, representing 70% and 60% of the total revenues for nine months ended September 30, 2009 and nine months ended September 30, 2008, respectively.

The increase in our cost of sales in the nine months ended September 30, 2009 as a percentage of revenue is primarily attributable to a decrease in the portion of study revenue out of the entire revenue in the nine months ended September 30, 2009. Study contracts require fewer acquisitions of materials and tend to have higher margins. In addition, during the nine months ending September 30, 2008 we had high margins in our manufacturing revenue stream which is not expected to reoccur. Management believes, although there can be no assurance, that approximatly70% cost of sales as a percentage of revenue is typical of the Company's future aggregate revenue stream.

General and Administrative Expenses. General and administrative expenses increased by 29% to $936,280 for the nine months ended September 30, 2009 from $727,122 for the nine months ended September 30, 2008. The increases in general and administrative costs are primarily attributable to an increase of salaries, audit fees, travel, entertainment, rent and professional fees for the nine months ended September 30, 2009 as compared with the same period in 2008.

The 63% increase in revenue for the nine months ended September 30, 2009 demanded additional outlays and expenses to the Company. Management believes, although there can be no assurance, that continued increase in revenues may result in continued increase in general and administrative expenses, although at a lower growth rate.

As a percentage of revenues, general and administrative expenses decreased to 34% for the nine months ended September 30, 2009, as compared to 43% for the nine months ended September 30, 2008.

Net (loss) income. Net Loss for the nine months ended September 30, 2009 amounted to $175,289 as compared to a net income of $461,689 for the same period during 2008. The 2008 income was attributable to a one time recovery of contingent income in the amount of $556,154 in the nine months ended September 30, 2008.

Comparison of Three Months Ended September 30, 2009 and September 30, 2008

Revenues. Revenues increased 55% to $1,155,596 for the three months ended September 30, 2009 compared to $746,137 for three months ended September 30, 2008.

For the three months ended September 30, 2009, 36% of the revenues were derived from manufacturing and design, 10% were derived from study contracts and 36% were derived from remanufacturing orders, and 18% were derived from parts trading as compared with the three months ended September 30, 2008, during which 60% of revenues were derived from manufacturing and design, 16% were derived from study contracts, 22% were derived from parts trading and 2% were derived from remanufacturing.

The increase in sales was primarily driven by an increase in the execution of remanufacturing orders in the three months ended September 30, 2009 as compared to the same period in 2008. The increase in the execution of remanufacturing orders is a result of increased demand for these items; in addition we believe that favorable relations with a supplier contributed to the increase in receipt and execution of such sales orders. We currently have orders for additional remanufactured goods which we expect to execute in the next twelve months. Management expects, although there can be no assurance, that remanufacturing will continue to be a significant portion of our sales, although the demand we have experienced for remanufacturing orders has tended to be erratic.

For the three months ended September 30, 2009, 82% of our revenues were derived from U.S. customers and 18% from European customers as compared to 77% from U.S. customers and 23% from European customers for the same period in 2008. Revenues from European customers consisted of only parts trading for the three months ended September 30, 2009 and the three months ended September 30, 2008.

Cost of Sales. Cost of sales consists primarily of subcontractors and raw materials used in manufacturing along with other related charges. Cost of sales increased 74% to $801,674 for the three months ended September 30, 2009, compared to $461,202 for the three months ended September 30, 2008, representing 69% and 61% of the total revenues for three months ended September 30, 2009 and September 30, 2008, respectively.

The increase in our cost of sales in the three months ended September 30, 2009 as a percentage of revenue is primarily attributable to decreases in the portion of study revenue as a percentage of the entire revenue in the three months ended September 30, 2009. Study contracts require fewer acquisitions of materials and tend to have higher margins. In addition in the three months ending September 30, 2008 we had high margins in our manufacturing revenue stream which are not expected to reoccur. Management believes, although there can be no assurance, that approximately 70% cost of sales as a percentage of the revenues is typical of the Company's future aggregate revenue streams.

General and Administrative Expenses. General and administrative expenses increased by 10% to $309,029 for the three months ended September 30, 2009 from $282,315 for the three months ended September 30, 2008.

As a percentage of revenues, general and administrative expenses decreased to 26% for the three months ended September 30, 2009, as compared to 38% for the three months ended September 30, 2008. This is a result of an increase in revenues for three months ended September 30, 2009 as compared to September 30, 2008.

LIQUIDITY AND CAPITAL RESOURCES

Cash as of September 30, 2009 amounted to $99,225, as compared with $225,767 as of December 31, 2008, a decrease of $126,542.

Accounts receivable decreased as of September 30, 2009 as compared to December 31, 2008 primarily due to a $234,000 account receivable that has been accumulating for a longer than usual period of time as of December 31, 2008. The longer payment period resulted from our Company being processed by our customer as a vendor in connection with that contract. Many times, payments for new programs or customers take longer to be paid.

Accounts payable increased as of September 30, 2009 as compared to December 31, 2008 primarily due costs related to the performance of one of the Company's long term design contracts. In this contract we are at a point in which we have to spend significant outlays in order to complete a phase.

We lease a 10,300 square foot operating facility under a lease term that commenced March 1, 2009 and expires February 28, 2011. Minimum lease payments remaining for this facility total $70,040.

We will continue to finance our operations mainly from the cash provided from operating activities. Management believes that we will execute significant portions of our backlog in the next twelve months, and proceeds from those sales are expected to fund most of our operations. As of September 30, 2009, we had a backlog of approximately $6,993,504. In some of these orders, we collect revenues as we progress on the project and in some cases we can collect advances from our customers in order to pay for material and/or labor for those projects. In another contract, for $904,200 the Company has negotiated with the customer to provide an advance of 25% of the total billings in order to alleviate the working capital burden. Additionally, management is expecting, although there can be no assurance, that additional orders will be received.

We issued three new private capital notes and extended two of the original notes, due to mature in one year, payable between June and August 2010 with principal value of $214,474. We believe that we have sufficient funds to repay these note arrangements upon their maturity. In addition, we believe that if needed we will be able to extend some of those notes. Management is considering raising additional cash by issuing debt and/or equity securities.