PHIL PHI Group Inc (PK)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: March 31, 2024

 

or

 

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________________________ to ______________________________________

 

Commission File Number: 001-38255-NY

 

PHI GROUP, INC.

(n/k/a PHILUX GLOBAL GROUP INC)

(Exact name of registrant as specified in its charter)

 

Wyoming		90-0114535
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer identification Number)

 

2323 Main Street Irvine,		CA 92614
(Address of principal executive offices)		(Zip Code)

 

	714-642-0571
	(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of exchange on which registered
Common Stock		PHIL		OTC Pink

 

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 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 ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.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 ☐ No ☒

 

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	☐		Accelerated filer	☐
	Non-accelerated filer	☐		Smaller reporting company	☒

 

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

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of May 20, 2024, there were 46,873,940,565 shares of the registrant’s $0.001 par value Common Stock issued and outstanding and 600,000 shares of the registrant’s $0.001 par value Class B Series I Preferred Stock issued and outstanding.

 

 

 

PHI GROUP, INC.

 

INDEX TO FORM 10-Q

 

PART I - FINANCIAL INFORMATION	F-1
Item 1- Consolidated Financial Statements – Unaudited	F-1
Consolidated Balance Sheets as of March 31, 2024 and June 30, 2023	F-1
Consolidated Statements of Operations for the three months and nine months ended March 31, 2024	F-2
Consolidated Statements of Cash Flows for the nine months ended March 31, 2024	F-3
Consolidated Statement of Changes in Stockholders’ Deficit for the quarter ended March 31, 2024	F-4
Notes to Consolidated Financial Statements	F-5
Item 2 -Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
Item 3- Quantitative and Qualitative Disclosures about Market Risk	10
Item 4- Controls and Procedures	11
PART II - OTHER INFORMATION	13
Item 1- Legal Proceedings	13
Item 1A- Risk Factors	13
Item 2- Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3- Defaults Upon Senior Securities	16
Item 4- Submission of Matters to a Vote of Security Holders	16
Item 5- Other Information	16
Item 6- Exhibits	16
SIGNATURES	17
Exhibit 21.1
CERTIFICATIONS

 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1- CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

 

PHI GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

		Mar 31, 2024				June 30, 2023
ASSETS
Current Assets
Cash and cash equivalents		$	41,745			$	19,765
Marketable securities			-				420
Other current assets			83,333				241,426
Total current assets			125,078				261,611
Other assets:
Investments			32,400				32,604
Total Assets			157,478				294,215
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable			621,280				616,245
Sub-fund obligations			1,624,775				1,624,775
Accrued expenses			2,288,990				1,485,310
Short-term loans and notes payable			3,167,163				1,164,685
Convertible Promissory Notes			54,420				297,805
Due to officers			294,782				1,027,782
Advances from customers and client deposits			1,029,757				1,079,038
Derivative liabilities and Note Discount			12,964				1,220,576
Total Liabilities			9,094,131				8,516,217
Stockholders’ deficit:
Preferred Stock, $0.001 par value; 500,000,000 shares authorized. 600,000 shares of Class B Series I issued and outstanding as of 3/31/2024 and 6/30/2023 respectively. Par value:			600				600
APIC - Class B Series I			1,840				1,840
Total Preferred Stock			2,440				2,440
Common stock, $0.001 par value; 60 billion shares authorized; 46,150,489,186 shares issued and outstanding on 3/31/2024; 60 billion shares authorized and 39,414,493 shares issued and outstanding as of 6/30/2023.
Par value:			46,150,490				39,414,493
Common stock, value			46,150,490				39,414,493
APIC - Common Stock			29,544,056				32,773,102
Common Stock to be issued			1,106,790				22,500
Common Stock to be cancelled			(35,500	)			(35,500	)
Treasury stock: 484,767 shares as of 3/31/24 and 6/30/23, respectively - cost method.			(44,170	)			(44,170	)
Accumulated deficit			(83,711,642	)			(77,319,372	)
Total Acc. Other Comprehensive Income (Loss)			(1,949,117	)			(3,035,495	)
Total stockholders’ deficit			(8,936,653	)			(8,222,002	)
Total liabilities and stockholders’ deficit		$	157,478			$	294,215

 

The accompanying notes form an integral part of these audited consolidated financial statements

 

 

PHI GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

UNAUDITED

 

		2024				2023				2024				2023
		For the Three Months Ended								For the Nine Months Ended
		March 31,								March 31,
		2024				2023				2024				2023
Net revenues
Consulting, advisory and management services			-				-				5,000				25,000
Total revenues		$	-			$	-			$	5,000			$	25,000
Operating expenses:
Salaries and wages			52,500				90,000				157,800				270,000
Professional services, including non-cash compensation			146,110				157,462				418,045				436,226
General and administrative			22,350				59,603				77,565				102,819
Total operating expenses		$	220,960			$	307,065			$	653,410			$	809,045
Income (loss) from operations		$	(220,960	)		$	(307,065	)		$	(648,410	)		$	(784,045	)
Other income and expenses
Interest expense			(76,918	)			(377,009	)			(357,218	)			(822,905	)
Other income (expense)			(1,392,528	)			(1,094,638	)			(5,386,642	)			(2,609,718	)
Net other income (expenses)		$	(1,469,446	)		$	(1,471,647	)		$	(5,743,860	)		$	(3,432,624	)
Net income (loss)		$	(1,690,405	)		$	(1,778,712	)		$	(6,392,270	)		$	(4,216,669	)
Net loss per share:
Basic		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
Diluted		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
Weighted average number of shares outstanding:
Basic			44,025,990,449				34,018,394,095				44,025,990,449				34,018,394,095
Diluted			44,025,990,449				34,018,394,095				44,025,990,449				34,018,394,095

 

The accompanying notes form an integral part of these consolidated financial statements

 

 

PHI GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED MARCH 31, 2024 AND 2023

(UNAUDITED)

 

		2024				2023
		MARCH 31,
		2024				2023
Cash flows from operating activities:
Net income (loss) from operations		$	(6,392,270	)		$	(4,216,669	)
Changes in derivatives and mark-to-market			(121,030	)			(1,485,011	)
Stock issuance for cancellation of debts, warrant exercises and service			2,404,786				3,793,473
Adjustment for funds in transit			-				2,500
Adjustments to reconcile net income to net cash used in operating activities
(Increase) decrease in assets and prepaid expenses
Deferred financing costs			197,366				113,440
Other (increase) decrease in assets and prepaid expenses			(82,913	)			7,000
Increase (decrease) in accounts payable and accrued expenses
Accounts payable			5,035				(400	)
Accrued expenses (net)			807,680				224,793
Sub-fund obligations and contingency commitments			(69,450	)			108,684
Advances from customers and client deposits			20,169				95,000
Net cash provided by (used in) operating activities			(3,230,627	)			(1,357,190	)
Cash flows from investing activities:
Net cash provided by (used in) investing activities			-				-
Cash flows from financing activities:
Common Stock			1,122,224				251,800
Common Stock to be issued			1,084,290				396,000
Loans and Notes Payable			1,046,092				680,919
Net cash provided by (used in) financing activities			3,252,606				1,328,719
Net decrease in cash and cash equivalents			21,980				(28,471	)
Cash and cash equivalents, beginning of period			19,765				67,896
Cash and cash equivalents, end of period		$	41,745			$	39,424

 

The accompanying notes form an integral part of these audited consolidated financial statements

 

 

PHI GROUP, INC. AND SUBSIDIARIES

STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE QUARTER ENDED MARCH 31, 2024 (UN-AUDITED)

 

 

										Additional				Preferred				Stock				Additional												Common				Common				Other								Total
		Common Stock								Paid-in				Stock				Par				Paid-in				Treasury				Stock				Stock to be				Stock to be				Comprehensive				Accumulated				Shareholder
		Shares				Par Value				Capital				Shares				Value				Capital				Shares				Amount				cancelled				issued				Gain (loss)				Deficit				Deficit
Balance at Fiscal Year Ended June 30, 2022			31,429,380,289			$	31,429,381			$	34,394,912				600,000			$	600			$	1,840				(484,767	)			(44,170	)			(35,000	)			0			$	(572,591	)		$	(71,717,973	)		$	(6,543,502	)
Common Shares issued for conversions of promissory notes durng the quarter ended September 30, 2022			392,096,775				392,097			$	(158,483	)			-				-																															$	233,614
Common Shares issued for exercise of warrants during the quarter ended September 30, 2022			2,279,166,666				2,279,167			$	115,913																																							$	2,395,080
Common Shares cancelled during quarter ended September 30, 2022			-454,758,300				(454,758	)		$	(90,952	)			-				-				-				-				-				-				-				-				-			$	(545,710	)
Balance as of December 31, 2022			33,645,885,430				33,645,886			$	34,261,391				600,000			$	600			$	1,840				(484,767	)			(44,170	)			(35,000	)			16,000			$	(572,022	)		$	(74,155,929	)		$	(6,881,906	)
Common Shares issued for conversions of promissory notes durng the quarter ended March 31, 2023			1,909,744,449				1,909,744				(333,569	)			-				-				-				-				-				-				-				-				-			$	1,576,175
Common Shares issued for cash during the quarter ended March 31, 2023			609,309,245				609,309				15,556																																							$	624,865
Common Shares issued for contractual obligation during the quarter ended March 31, 2023			185,000,000				185,000				-				-				-				-				-				-				-				-				-				-			$	185,000
Balance as of March 31, 2023			36,349,939,124				36,349,940				33,943,377				60,000				600				1,840				(484,767	)			(44,170	)			(35,000	)			396,000			$	(2,966,071	)		$	(75,932,642	)		$	(8,286,628	)
Common Shares issued for conversion of notes			1,568,970,299				1,568,970				-594,093				-				-				-				-				-				-				-				-				-				974,877
Common Shares issued for cash			1,495,583,852				1,495,583				-576,187				-				-				-				-				-				-				-				-				-				919,396
Balance at fiscal year ended June 30, 2023			39,414,493,275				39,414,493				32,773,102				60,000				600				1,840				(484,767	)			(44,170	)			(35,000	)			22,500			$	(3,035,495	)		$	(77,319,372	)		$	(8,222,002	)
Common shares issued for conversion of notes by Brin Financial Corporation during 9/30/23 quarter			171,561,860				171,562				(68,625	)			-				-																																102,937
Common Shares issued for exercise of warrants by Mast Hill Fund LP during 9/30/23 quarter			2,931,619,052				2,931,619				(1,175,299	)																																							1,756,320
Common shares issued for conversion of note by 1800 Diagonal Lending LLC  during 9/30/23 quarter			187,540,984				187,541				(112,525	)			-				-				-				-				-				-				-				-				-				75,016
Balance at quarter ended September 30, 2023			42,705,215,171				42,705,215				31,416,653				60,000				600				1,840				(484,767	)			(44,170	)			(35,000	)			759,562			$	(3,035,916	)		$	(80,309,276	)		$	(8,540,992	)
Common Stock issued for stock purchase agreements with current shareholders under Rule 144			468,407,608				468,408				(172,404	)			-				-																																296,004
Common Stock issued for conversion of promissory note			119,000,000				119,000				(59,500	)			-				-				-				-				-				-				-				-				-				59,500
Balance at quarter ended December 31, 2023			43,292,622,779				43,292,623				31,184,749				60,000				600				1,840				(484,767	)			(44,170	)			(35,000	)			1,128,388			$	(2,053,646	)		$	(82,021,213	)		$	(8,546,330	)
Balance			43,292,622,779				43,292,623				31,184,749				60,000				600				1,840				(484,767	)			(44,170	)			(35,000	)			1,128,388			$	(2,053,646	)		$	(82,021,213	)		$	(8,546,330	)
Common shares issued for conversion of note by Mast Hill Fubd LP during March 2024 quarter			1,024,372,467				1,024,372				(614,623	)			-				-																																409,749
Common Stock issued for stock purchase agreements with current shareholders under Rule 144			1,583,493,940				1,583,494				(876,068	)																																							707,426
Common Shares issued for conversions of promissory notes			-				-				-				-				-
Common Shares issued for consulting service			250,000,000				250,000				(150,000	)			-				-				-				-				-				-				-				-				-				100,000
Balance as of March 31, 2024			46,150,489,186				46,150,489				29,544,058				60,000				600				1,840				(484,767	)			(44,170	)			(35,000	)			1,106,790				(1,949,117	)			(83,711,642	)			(8,936,653	)
Balance			46,150,489,186				46,150,489				29,544,058				60,000				600				1,840				(484,767	)			(44,170	)			(35,000	)			1,106,790				(1,949,117	)			(83,711,642	)			(8,936,653	)

 

The accompanying notes form an integral part of these consolidated financial statements

 

 

PHI GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 – NATURE OF BUSINESS

 

INTRODUCTION

 

PHI Group, Inc. (n/k/a Philux Global Group Inc) (the “Company” or “PHI”) (www.philuxglobal.com) is primarily engaged in mergers and acquisitions, advancing Philux Global Funds, SCA, SICAV-RAIF, a “Reserved Alternative Investment Fund” (“RAIF”) under the laws of Luxembourg, and developing the Asia Diamond Exchange in Vietnam. Besides, the Company provides corporate finance services, including merger and acquisition advisory and consulting services for client companies through our wholly owned subsidiary Philux Capital Advisors, Inc. (formerly PHI Capital Holdings, Inc.) (www.philuxcapital.com) and invests in selective industries and special situations aiming to potentially create significant long-term value for our shareholders. Philux Global Funds intends to include a number of sub-funds for investment in select growth opportunities in the areas of renewable energy, real estate, infrastructure, healthcare, agriculture, and the Asia Diamond Exchange in conjunction with the International Financial Center in Vietnam.

 

BACKGROUND

 

Originally incorporated on June 8, 1982 as JR Consulting, Inc., a Nevada corporation, the Company applied for a Certificate of Domestication and filed Articles of Domestication to become a Wyoming corporation on September 20, 2017. In the beginning, the Company was foremost engaged in mergers and acquisitions and had an operating subsidiary, Diva Entertainment, Inc., which operated two modeling agencies, one in New York and one in California. In January 2000, the Company changed its name to Providential Securities, Inc., a Nevada corporation, following a business combination with Providential Securities, Inc., a California-based financial services company. In February 2000, the Company then changed its name to Providential Holdings, Inc. In October 2000, Providential Securities withdrew its securities brokerage membership and ceased its financial services business. Subsequently, in April 2009, the Company changed its name to PHI Group, Inc. From October 2000 to October 2011, the Company and its subsidiaries were engaged in various transactions in connection with mergers and acquisitions advisory and consulting services, real estate and hospitality development, mining, oil and gas, telecommunications, technology, healthcare, private equity, and special situations. In October 2011, the Company discontinued the operations of Providential Vietnam Ltd., Philand Ranch Limited, a United Kingdom corporation (together with its subsidiaries Philand Ranch - Singapore, Philand Corporation - US, and Philand Vietnam Ltd. - Vietnam), PHI Gold Corporation (formerly PHI Mining Corporation, a Nevada corporation), and PHI Energy Corporation (a Nevada corporation), and mainly focused on acquisition and development opportunities in energy and natural resource businesses.

 

The Company is currently focused on Philux Global Funds, SCA, SICAV-RAIF by launching Philux Global Select Growth Fund and potentially other sub-funds for investment in real estate, renewable energy, infrastructure, agriculture, healthcare and the International Financial Center and Asia Diamond Exchange in Vietnam. In addition, Philux Capital Advisors, Inc., a wholly owned subsidiary of the Company, continues to provide corporate and project finance services, including merger and acquisition (M&A) advisory and consulting services for U.S. and international companies. The Company has also formed Philux Global Advisors, Inc. to serve as the investment advisor to Philux Global Funds and other potential fund clients in the future.

 

In May 2023, the company signed a business cooperation agreement with SSE Global JSC, a Vietnamese joint stock company, to establish SSE Global Group, Inc., a Wyoming corporation, (www.sseglobalgroup.com) to commercialize a self-sustainable energy technology.

 

In June 2023 the Company signed a business cooperation agreement with Saphia Alkali JSC, a Vietnamese joint stock company, to form Sapphire Alkali Global Group in the United States to finance, manufacture, sell and distribute Saphia Alkali’s proprietary products on a worldwide basis.

 

In December 2023 the Company signed an Agreement for Comprehensive Cooperation Agreement with a Vietnamese inventor (the “Inventor”) to cooperate in the development and implementation of a proprietary clean energy technology using geomagnetic energy and focus on the following areas: (1) Applying the Inventor’s proprietary inventions that are specifically designed to exploit the earth’s available geomagnetic energy to generate energy and store energy without using an energy storage system (ESS), (2) Producing and providing generators using the earth’s available geomagnetic energy, (3) Producing engines (spaceships, airplanes, ships, cars, trains, motorcycles, etc.) powered by the earth’s available geomagnetic energy, and (4) Developing additional multiple new technologies that the Inventor has studied and researched. The Parties agree to use Philux Global Energy, Inc., a Wyoming corporation and wholly-owned subsidiary of Philux Global Group, Inc., Registration Number 2022-001066221, incorporated on January 3, 2022, as the operating company to commercialize energy-related products based on the proprietary researches and developments of the Inventor. The Inventor shall serve as the Chief Technology Officer of Philux Global Energy, Inc. and transfer certain intellectual properties related to energy generation using the earth’s available geomagnetic energy to Philux Global Energy, Inc. for commercialization. The Inventor and the Company each will hold fifty percent (50%) of the initial Common Stock of Philux Global Energy, Inc.

 

The Company intends to integrate these clean energy technologies in the new subsidiary to be established in United Arab Emirates which will replace its former subsidiary CO2-1-0 (CARBON) Corp. to continue engaging in carbon emission mitigation using blockchain and crypto technologies.

 

No assurances can be made that the Company will be successful in achieving its plans.

 

BUSINESS STRATEGY

 

PHI’s strategy is to:

 

1. Identify, build, acquire, commit and deploy valuable resources with distinctive competitive advantages;

 

2. Identify, evaluate, acquire, participate and compete in attractive businesses that have large, growing market potential;

 

3. Build an attractive investment that includes points of exit for investors through capital appreciation or spin-offs of business units.

 

F-5

 

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

PRINCIPLES OF CONSOLIDATION

 

The consolidated financial statements include the accounts of PHI Group, Inc. (a/k/a Philux Global Group, Inc.) and its active wholly owned subsidiaries: (1) Philux Capital Advisors, Inc., a Wyoming corporation (100%), (2) Philux Global Advisors, Inc., a Wyoming corporation (100%), (3) PHI Luxembourg Development S.A., a Luxembourg corporation (100%), (4) Philux Global Funds SCA, SICAV-RAIF, a Luxembourg Reserved Alternative Investment Fund (100%), (5) Philux Global General Partners SA, a Luxembourg corporation (100%), and (6) PHI Luxembourg Holding SA, a Luxembourg corporation (100%), collectively referred to as the “Company.” All significant inter-company transactions have been eliminated in consolidation.

 

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

 

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. These statements should be read in conjunction with the audited financial statements for the year ended June 30, 2023. In the opinion of management, all adjustments consisting of normal reoccurring accruals have been made to the financial statements. The results of operation for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2024.

 

USE OF ESTIMATES

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

 

CASH AND CASH EQUIVALENTS

 

The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents.

 

MARKETABLE SECURITIES

 

The Company’s securities are classified as available-for-sale and, as such, are carried at fair value. Securities classified as available-for-sale may be sold in response to changes in interest rates, liquidity needs, and for other purposes.

 

Typically, each investment in marketable securities represents less than twenty percent (20%) of the outstanding common stock and stock equivalents of the investee, and each security is quoted on either the OTC Markets or other public exchanges. As such, each investment is accounted for in accordance with the provisions of SFAS No. 115.

 

Unrealized holding gains and losses for available-for-sale securities are excluded from earnings and reported as a separate component of stockholder’s equity. Realized gains and losses for securities classified as available-for-sale are reported in earnings based upon the adjusted cost of the specific security sold. As of March 31, 2024, the Company did not hold any marketable securities.

 

F-6

 

 

FAIR VALUE OF FINANCIAL INSTRUMENTS

 

Fair Value - Definition and Hierarchy

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether or not the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

 

A fair value hierarchy for inputs is used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs are to be used when available.

 

Valuation techniques that are consistent with the market or income approach are used to measure fair value. The fair value hierarchy is categorized into three levels based on the inputs as follows:

 

Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.

 

Level 2 - Valuations based on inputs other than quoted prices included in Level 1 that are observable, either directly or indirectly.

 

Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

 

Fair value is a market-based measure, based on assumptions of prices and inputs considered from the perspective of a market participant that are current as of the measurement date, rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The availability of valuation techniques and observable inputs can vary from investment to investment and are affected by a wide variety of factors, including; type of investment, whether the investment is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the transaction.

 

To the extent that valuation is based upon models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the investments existed. Accordingly, the degree of judgment exercised by the Fund in determining fair value is greatest for investments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy in which the fair value measurement falls in its entirety is determined based upon the lowest level input that is significant to the fair value measurement.

 

Fair Value - Valuation Techniques and Inputs

 

The Company holds and may invest public securities traded on public exchanges or over-the-counter (OTC), private securities, real estate, convertible securities, interest bearing securities and other types of securities and has adopted specific techniques for their respective valuations.

 

Equity Securities in Public Companies

 

Unrestricted

 

The Company values investments in securities that are freely tradable and listed on major securities exchanges at their last reported sales price as of the valuation date. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy.

 

Securities traded on inactive markets or valued by reference to similar instruments are generally categorized in Level 2 or 3 of the fair value hierarchy.

 

F-7

 

 

Restricted

 

Securities traded on public exchanges or over-the-counter (OTC) where there are formal restrictions that limit (i.e. Rule 144 holding periods and underwriter’s lock-ups) their sale shall be valued at the closing price on the date of valuation less applicable discounts. The Company may apply a discount to securities with Rule 144 restrictions. Additional discounts may be assessed if the Company believes there are other mitigating factors which warrant the additional discounting. When determining potential additional discounts, factors that will be taken into consideration include, but are not limited to; securities’ trading characteristics, volume, length and overall impact of the restriction as well as other macro-economic factors. Valuations should be discounted appropriately until the securities may be freely traded.

 

If it has been determined that the exchange or OTC listed price does not accurately reflect fair market value, the Company may elect to treat the security as a private company and apply an alternative valuation method.

 

Investments in restricted securities of public companies may be included in Level 2 of the fair value hierarchy. However, to the extent that significant inputs used to determine liquidity discounts are not observable, investments in restricted securities in public companies may be categorized in Level 3 of the fair value hierarchy.

 

The Company’s financial instruments primarily consist of cash and cash equivalents, accounts receivable, marketable securities, short-term notes payable, convertible notes, derivative liability and accounts payable.

 

As of the balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented on the balance sheet. This is primarily attributed to the short maturities of these instruments.

 

Effective July 1, 2008, the Company adopted ASC 820 (previously SFAS 157), Fair Value Measurements and adopted this Statement for the assets and liabilities shown in the table below. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, establishes a fair value hierarchy based on the inputs used to measure fair value, and expands disclosures about the use of fair value measurements. The adoption of ASC 820 did not have a material impact on our fair value measurements. On September 30, 202â, the Company did not have any nonfinancial assets or nonfinancial liabilities that are recognized or disclosed at fair value. ASC 820 requires that financial assets and liabilities that are reported at fair value be categorized as one of the types of investments based upon the methodology mentioned in Level 1, Level 2 and Level 3 above for determining fair value.

 

Assets measured at fair value on a recurring basis are summarized below. The Company also has convertible notes and derivative liabilities as disclosed in this report that are measured at fair value on a regular basis until paid off or exercised.

 

Available-for-sale securities

 

The Company uses various approaches to measure fair value of available-for-sale securities, while applying the three-level valuation hierarchy for disclosures, specified in ASC 820. Our Level 1 securities were measured using the quoted prices in active markets for identical assets and liabilities.

 

The company’s policy regarding the transfers in and/or out of Level 3 depends on the trading activity of the security, the volatility of the security, and other observable units which clearly represents the fair value of the security. If a level 3 security can be measured using a more fairly represented fair value, we will transfer these securities either into Level 1 or Level 2, depending on the type of inputs.

 

ACCOUNTS RECEIVABLE

 

Management reviews the composition of accounts receivable and analyzes historical bad debts. As of March 31, 2024, the Company did not have any accounts receivable.

 

F-8

 

 

PROPERTIES AND EQUIPMENT

 

Property and equipment are carried at cost less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful life of the assets from three to five years. Expenditures for maintenance and repairs are charged to expense as incurred.

 

REVENUE RECOGNITION STANDARDS

 

ASC 606-10 provides the following overview of how revenue is recognized from an entity’s contracts with customers: An entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

 

Step 1: Identify the contract(s) with a customer.

 

Step 2: Identify the performance obligations in the contract.

 

Step 3: Determine the transaction price – The transaction price is the amount of consideration in a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer.

 

Step 4: Allocate the transaction price to the performance obligations in the contract – Any entity typically allocates the transaction price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or service promised in the contract.

 

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation – An entity recognizes revenue when (or as) it satisfies a performance obligation by transferring a promised good or service to a customer (which is when the customer obtains control of that good or service).

 

The amount of revenue recognized is the amount allocated to the satisfied performance obligation. A performance obligation may be satisfied at a point in time (typically for promises to transfer goods to a customer) or over time (typically for promises to transfer service to a customer). For performance obligations satisfied over time, an entity recognizes revenue over time by selecting an appropriate method for measuring the entity’s progress toward complete satisfaction of that performance obligation. (Paragraphs 606-10 25-23 through 25-30).

 

In addition, ASC 606-10 contains guidance on the disclosures related to revenue, and notes the following:

 

It also includes a cohesive set of disclosure requirements that would result in an entity providing users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. Specifically, Section 606-10-50 requires an entity to provide information about:

 

- Revenue recognized from contracts with customers, including disaggregation of revenue into appropriate categories.

- Contract balances, including the opening and closing balances of receivables, contract assets, and contract liabilities.

- Performance obligations, including when the entity typically satisfies its performance obligations and the transaction prices is that is allocated to the remaining performance obligations in a contract.

- Significant judgments, and changes in judgments, made in applying the requirements to those contracts.

 

Additionally, Section 340-40-50 requires an entity to provide quantitative and/or qualitative information about assets recognized from the costs to obtain or fulfill a contract with a customer.

 

The Company’s revenue recognition policies are in compliance with ASC 606-10. The Company recognizes consulting and advisory fee revenues in accordance with the above-mentioned guidelines and expenses are recognized in the period in which the corresponding liability is incurred.

 

F-9

 

 

STOCK-BASED COMPENSATION

 

Effective July 1, 2006, the Company adopted ASC 718-10-25 (previously SFAS 123R) and accordingly has adopted the modified prospective application method. Under this method, ASC 718-10-25 is applied to new awards and to awards modified, repurchased, or cancelled after the effective date. Additionally, compensation cost for the portion of awards that are outstanding as of the date of adoption for which the requisite service has not been rendered (such as unvested options) is recognized over a period of time as the remaining requisite services are rendered.

 

RISKS AND UNCERTAINTIES

 

In the normal course of business, the Company is subject to certain risks and uncertainties. The Company provides its service and receives marketable securities upon execution of transactions. Consequently, the value of the securities received from customers can be affected by economic fluctuations and each customer’s business growth. The actual realized value of these securities could be significantly different than recorded value.

 

RECENT ACCOUNTING PRONOUNCEMENTS

 

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06-Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)-Accounting For Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for annual and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020. The Company intends to adopt ASU 2020-06 for the quarter beginning January 1, 2023.

 

Update No. 2018-13 – August 2018

 

Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement

 

Modifications: The following disclosure requirements were modified in Topic 820:

 

1. In lieu of a roll-forward for Level 3 fair value measurements, a non-public entity is required to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities.

 

2. For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly.

 

3. The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date.

 

Additions: The following disclosure requirements were added to Topic 820; however, the disclosures are not required for non-public entities:

 

1. The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period.

 

2. The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements.

 

The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

 

F-10

 

 

Update No. 2018-07 – June 2018

 

Compensation – Stock Compensation (Topic 718)

 

Improvements to Nonemployee Share-Based Payment Accounting

 

Main Provisions: The amendments in this Update expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers.

 

The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year.

 

Update No. 2017-13 - September 2017

 

Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606)

 

FASB Accounting Standards Updates No. 2014-09, Revenue from Contracts with Customers (Topic 606), issued in May 2014 and codified in ASC Topic 606, Revenue from Contracts with Customers, and No. 2016-02.

 

The transition provisions in ASC Topic 606 require that a public business entity and certain other specified entities adopt ASC Topic 606 for annual reporting 3 periods beginning after December 15, 2017, including interim reporting periods within that reporting period. FN2 All other entities are required to adopt ASC Topic 606 for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019.

 

Update No. 2016-10 - April 2016

 

Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing

 

The core principle of the guidance in Topic 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:

 

1. Identify the contract(s) with a customer.

2. Identify the performance obligations in the contract.

3. Determine the transaction price.

4. Allocate the transaction price to the performance obligations in the contract.

5. Recognize revenue when (or as) the entity satisfies a performance obligation.

 

The amendments in this Update do not change the core principle of the guidance in Topic 606. Rather, the amendments in this Update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas.

 

The Company has either evaluated or is currently evaluating the implications, if any, of each of these pronouncements and the possible impact they may have on the Company’s financial statements. In most cases, management has determined that the implementation of these pronouncements would not have a material impact on the financial statements taken as a whole.

 

F-11

 

 

NOTE 3 – MARKETABLE EQUITY SECURITIES AVAILABLE FOR SALE

 

The Company’s marketable securities are classified as available-for-sale and, as such, are carried at fair value. All of the securities are comprised of shares of common stock of the investee. Securities classified as available-for-sale may be sold in response to changes in interest rates, liquidity needs, and for other purposes. These marketable securities are quoted on the OTC Markets or other public exchanges and are accounted for in accordance with the provisions of SFAS No. 115.

 

The Company wrote off 91 shares of Mag Mile Capital Inc., formerly Myson Group, Inc., as of March 31, 2024 and did not recognize any value for them.

SCHEDULE OF FAIR VALUE OF INVESTMENTS MARKETABLE EQUITY SECURITIES 

Securities available for sale		Level 1				Level 2				Level 3				Total
March 31, 2024			None			$	0			$	0			$	0
June 30, 2023			None			$	420			$	0			$	420

 

NOTE 4 – PROPERTIES AND EQUIPMENT

 

The Company did not have any properties or equipment as of March 31, 2024.

 

NOTE 5 – OTHER ASSETS

 

Other Assets as of March 31, 2024 and June 30, 2023 comprise of:

SCHEDULE OF OTHER ASSETS 

		March 31, 2024				June 30, 2023
Investment in PHILUX Global Funds, SCA, SICAV-RAIF		$	32,400			$	32,604
Total Other Assets		$	32,400			$	32,604

 

For the investments in PHILUX Global Funds, as of March 31, 2024, PHI Luxembourg Development SA, a Luxembourg corporation and wholly-owned subsidiary of PHI Group, Inc. held twenty-eight ordinary shares of PHILUX Global Funds valued at EUR 28,000, PHI Luxembourg Holding SA, a Luxembourg corporation 100% owned by PHI Group, Inc. as the ultimate beneficiary owner (UBO), held one participating share of PHILUX Global Funds valued at EUR 1,000, and PHILUX Global General Partner SA, a Luxembourg corporation 100% owned by PHI Group, Inc. as the ultimate beneficiary owner (UBO), held one management share of PHILUX Global Funds valued at EUR 1,000. The total holdings in PHILUX Global Funds were equivalent to $32,400 as of March 31, 2024 based on the prevalent exchange rate at that time.

 

The Company has treated all development costs of the Asia Diamond Exchange as expenses which will be capitalized as common shares in Asia Diamond Exchange, Inc., a Wyoming corporation.

 

NOTE 6 – CURRENT LIABILITIES

 

Current Liabilities of the Company consist of the followings as of March 31, 2024 and June 30, 2023.

SCHEDULE OF CURRENT LIABILITIES 

Current Liabilities		March 31, 2024				June 30, 2023
Accounts payable			621,280				616,245
Sub-fund obligations			1,624,775				1,624,775
Accrued expenses			2,288,990				1,485,310
Short-term loans and notes payable			3,167,163				1,164,685
Convertible Promissory Notes			54,420				297,805
Due to officers			294,782				1,027,782
Advances from customers and client deposits			1,029,757				1,079,038
Derivative liabilities and Note Discount			12,964				1,220,576
Total Liabilities			9,094,131				8,516,217

 

ACCRUED EXPENSES: Accrued expenses as of March 31, 2024 totaling $2,288,990 consist of $1,185,594 in accrued salaries and payroll liabilities, $506,962 in accrued interest from notes and loans, $3,309 from American Express and $593,125 in other accrued expenses due to administrative and extension fees from short-term notes.

 

NOTES PAYABLE: As of March 31, 2024, Notes Payable consist of $3,017,931 in short-term loans and notes payable, $43,750 in PPP loan, $54,420 in convertible promissory notes and $105,482 in Merchant Cash Advance loans.

 

ADVANCES FROM CUSTOMERS AND DEPOSITS FROM CLIENTS:

 

As of March 31, 2024, the Company recorded $819,038 as Advances from Customers for consulting fees previously received from a client plus mutually agreed accrued interest and $210,719 of deposits from other clients/partners for project financing agreements.

 

SUB-FUND OBILGATIONS: The Company has recorded a total of $1,624,775 from four partners/investors towards the expenses for setting up sub-funds under the master PHILUX Global Funds. These amounts are currently booked as liabilities until these sub-funds are set up and activated, at which time the sub-fund participants will receive their respective percentages of the general partners’ portion of ownership in the relevant sub-funds based on their actual total contributions.

 

NOTE 7 – DUE TO OFFICERS

 

Due to officer, represents loans and advances made by officers and directors of the Company and its subsidiaries, unsecured and due on demand. As of March 31, 2024 and June 30, 2023, the balances were $294,782 and $1,027782, respectively. Following the resignation of Tam Bui, $663,350 owed to him that was previously recognized as Due to Officers was reclassified as a regular note.

SCHEDULE OF COMPONENTS OF DUE TO OFFICERS AND DIRECTORS 

Officers/Directors		March 31, 2024				Jun 30, 2023
Henry Fahman			294,782			$	364,432
Tam Bui			0			$	663,350
Total		$	294,782			$	1,027,782

 

F-12

 

 

NOTE 8 – LOANS AND PROMISSORY NOTES

 

A. SHORT TERM NOTES PAYABLE:

 

In the course of its business, the Company has obtained short-term loans from individuals and institutional investors.

 

As of March 31, 2024, the Company had a total of $3,167,163 in short-term notes payable with $501,207 in accrued and unpaid interest, $680,875 in penalties, and $593,125 in accrued administrative and extension fees, $43,750 SBA PPP loan with $1,602 in accrued and unpaid interest and $105,482 in merchant cash advances. The interest rates on these notes vary.

 

B. CONVERTIBLE PROMISSORY NOTES OUTSTANDING AS OF MARCH 31, 2024

 

As of March 31, 2024, the Company had a net balance of $54,420 in convertible promissory notes.

 

NOTE 9 – BASIC AND DILUTED NET PROFIT (LOSS) PER SHARE

 

Net loss per share is calculated in accordance with SFAS No. 128, “Earnings per Share”. Under the provision of SFAS No. 128, basic net loss per share is computed by dividing the net loss for the period by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock outstanding for the period and common stock equivalents outstanding at the end of the period. Basic and diluted weighted average numbers of shares for the period ended March 31, 2024 were the same since the inclusion of Common stock equivalents is anti-dilutive.

 

NOTE 10 – STOCKHOLDER’S EQUITY

 

As of March 31, 2024, the total number of authorized capital stock of the Company consisted of 60 billion shares of voting Common Stock with a par value of $0.001 per share and 500,000,000 shares of Preferred Stock with a par value of $0.001 per share. The rights and terms associated with the Preferred Stock will be determined by the Board of Directors of the Company.

 

TREASURY STOCK

 

The balance of treasury stock as of March 31, 2024 was 484,767 shares valued at $44,170 according to cost method.

 

COMMON STOCK

 

ISSUANCES OF COMMON STOCK

 

During the quarter ended March 31, 2024, the Company issued a total of 1,583,493,940 shares of its restricted Common Stock, par value of $0.001, to a number of existing shareholders under the auspices of Rule 144 for cash and 250,000,000 shares of its restricted Common Stock to an investor relations firm for consulting services to be provided for a period of twelve months.

 

On January 4, 2024, Mast Hill Fund. LP converted $185,000.00 principal amount of the convertible promissory note dated March 14, 2023 together with $18,484.81 interest, $334.52 default interest, $101,742.41 in default amounts, and $1,750.00 for fees totaling $307,311.74 into 1,024,372,467 shares of free-trading Common Stock of the Company

 

As of March 31, 2024, there were 46,150,489,186 shares of the Company’s common stock issued and outstanding.

 

PREFERRED STOCK

 

CLASS B SERIES I PREFERRED STOCK

 

As of March 31, 2024, there were 600,000 shares of Class B Series Preferred Stock issued and outstanding.

 

F-13

 

 

NOTE 11 – STOCK-BASED COMPENSATION PLAN

 

1. On February March 18, 2015, the Company adopted an Employee Benefit Plan to set aside 1,000,000 shares of common stock for eligible employees and independent contractors of the Company and its subsidiaries. As of March 31, 2024 the Company has not issued any stock in lieu of cash under this plan.

 

2. On September 23, 2016, the Company issued incentive stock options and nonqualified stock options to certain key employee(s) (Henry Fahman – CEO/CFO) and directors (Tam Bui, Henry Fahman, and Frank Hawkins constitute the Board of Directors) as deferred compensation. The options allow the holders to acquire the Company’s Common Stock at the fair exercise price of the Company’s Common Stock on the grant date of each option at $0.24 per share, based on the 10-days’ volume-weighted average price prior to the grant date. The number of options is equal to a total of 6,520,000. The options terminate seven years from the date of grant and become vested and exercisable after one year from the grant date. The following assumptions were used in the Monte Carlo analysis by Doty Scott Enterprises, Inc., an independent valuation firm, to determine the fair value of the stock options:

SCHEDULE OF FAIR VALUE OF STOCK OPTION ASSUMPTIONS 

Risk-free interest rate			1.18	%
Expected life			7 years
Expected volatility			239.3	%
Vesting is based on a one-year cliff from grant date.

 

Annual attrition rates were used in the valuation since ongoing employment was condition for vesting the options.

 

The fair value of the Company’s Stock Options as of issuance valuation date is as follows:

SCHEDULE OF FAIR VALUE OF STOCK OPTION ISSUANCE DATE 

Holder

Issue Date

Maturity Date

Stock Options

Exercise Price

Fair Value at Issuance

Tam Bui

9/23/2016

9/23/2023

875,000

Fixed price: $0.24

$

219,464

Frank Hawkins

9/23/2016

9/23/2023

875,000

Fixed price: $0.24

$

219,464

Henry Fahman

9/23/2016

9/23/2023

4,770,000

Fixed price: $0.24

$

1,187,984

 

These stock options expired on 9/23/2023.

 

3. On September 9, 2021, the Company adopted the PHI Group 2021 Employee Benefit Plan and set aside 2,600,000,000 shares of its common stock to provide a means of non-cash remuneration to selected eligible employees and independent contractors (“Eligible Participants”) of the Company and its subsidiaries. On September 17, 2021, the Company filed Form S-8 Registration Statement under the Securities Act of 1933 with the Securities and Exchange Commission to register these shares for the above-mentioned plan. As of March 31, 2024 the Company has issued a total of 2,407,196,586 shares for consulting services and salaries under the PHI Group 2021 Employee Benefit Plan.

 

NOTE 12– RELATED PARTY TRANSACTIONS

 

The Company recognized a total of $52,500 in salaries for the President and the Secretary & Treasurer of the Company during the quarter ended March 31, 2024.

 

Henry Fahman, Chairman and Chief Executive Officer of the Company from time to time lends money to the Company. These loans are without interest and payable upon demand.

 

As of March 31, 2024, the Company still owed the following amounts to Related Parties:

SCHEDULE OF RELATED PARTIES 

No.		Name:		Title:				Amount:				Description:
1)		Henry Fahman			Chairman/CEO			$	371,796			Accrued salaries
								$	294,782			Loans
3)		Tina Phan			Secretary/Treasurer			$	353,799			Accrued salaries

 

F-14

 

 

NOTE 13 – CONTRACTS AND COMMITMENTS

 

1. EQUITY LINE OF CREDIT WITH INSTITUTIONAL INVESTOR

 

On March 01, 2022, the Company entered into an equity purchase agreement with Mast Hill Fund LP (“The Investor”) as follows:

 

The Investor will provide an equity line of up to $10,000,000 to the Company, pursuant to which the Company has the right, but not the obligation, during the 24 months after an effective registration of the underlying shares, to issue a notice to the Investor (each a “Drawdown Notice”) which shall specify the amount of registered shares of common stock of the Company (the “Put Shares”) that the Company elects to sell to the Investor, from time to time, up to an aggregate amount equal to $10,000,000.

 

The pricing period of each put will be the 7 trading days immediately following receipt of the Put Shares (the “Pricing Period”).

 

The purchase price per share shall mean 90% of the average of the 2 lowest volume-weighted average prices of the Common Stock during the Pricing Period, less clearing fees, brokerage fees, other legal, and transfer agent fees incurred in the deposit (the “Net Purchase Amount”). The Investor shall pay the Net Purchase Amount to the Company by wire for each Drawdown Notice within 2 business days of the end of the Pricing Period.

 

The put amount in each Drawdown Notice shall not be less than $50,000 and shall not exceed the lesser of (i) $500,000 or (ii) 200% of the average dollar trading volume of the Common Stock during the 7 trading days immediately before the Put Date, subject to Beneficial Ownership cap.

 

There shall be a 7 trading day period between the receipt of the Put Shares and the next put.

 

The Company intends to file an S-1 Registration Statement with the Securities and Exchange Commission for this Equity Line of Credit as part of its alternative financing plan.

 

2. AGREEMENT WITH TECCO GROUP FOR PARTICIPATION IN PHILUX INFRASTRUCTURE FUND COMPARTMENT OF PHILUX GLOBAL FUNDS

 

On August 10, 2020, Tecco Group, a Vietnamese company, signed an agreement with PHI Luxembourg Development SA, a subsidiary of the Company, to participate in the proposed infrastructure fund compartment of PHILUX Global Funds SCA, SICAV-RAIF. According to the agreement, Tecco Group will contribute $2,000,000 for 49% ownership of the general partners’ portion of said infrastructure fund compartment. As of June 30, 2023, Tecco Group has paid a total of $156,366.25 towards the total agreed amount.

 

3. INVESTMENT AGREEMENTS AND MEMORANDUM OF UNDERSTANDING

 

As of March 31, 2024, the Company and its subsidiaries have seven active agreements for loan financing, asset management, partnership, joint venture, and memorandum of understanding with international investor groups for a total of 4.99 billion U.S. dollars, as reported in various 8-K filings with the Securities and Exchange Commission. The Company has been working closely with these investor groups and expects to begin receiving capital through these sources in the near future to support its acquisition and investment programs.

 

4. DEVELOPMENT OF THE ASIA DIAMOND EXCHANGE AND INTERNATIONAL FINANCIAL CENTER IN VIETNAM

 

Along with the establishment of Philux Global Funds, the Company has worked with the Authority of Chu Lai Open Economic Zone in Central Vietnam and the Provinces of Quang Nam and Dong Nai, Vietnam, to develop the Asia Diamond Exchange for lab-grown, rough and polished diamond together with a multi-commodities logistics center.

 

Mr. Ben Smet, who successfully established the Dubai Diamond Exchange in 2002-2005, has been leading fulltime a group of experts for the setup of the Asian Diamond Exchange since January 2018. He has brought together main trading players in the rough diamond industry to come to Vietnam. He has also established a partnership with the biggest player in the rough trading and polishing business and engaged other main international diamond trading groups to join the overall venture.

 

The Company has taken the decision to move the greater part of the ADE rough and polishing venture, first to an Industrial Zone to be established close to the new international Airport in Long Thanh District, Dong Nai Province, Vietnam and currently to the Thanh Da Peninsula in conjunction with the contemplated International Financial Center. This location change has caused that the entire KPC Process and administration had to be adapted and redone with renewed financial input, mostly carried by Mr. Smet.

 

Once the Company has effectuated all budgeting and all financial requirements and obligations, the ongoing process will effectively materialize and Mr. Smet then shall transfer the entire venture to Philux Global Group, Inc.

 

On June 04, 2022 the Company incorporated Asia Diamond Exchange, Inc., a Wyoming corporation, ID number 2022-001010234, as the holding company for this venture.

 

5. AGREEMENT WITH FIVE-GRAIN TREASURE SPIRITS CO., LTD.

 

On January 18, 2022 PHI Group entered into an Agreement of Purchase and Sale with Five Grain Treasure Spirits Co., Ltd. (“FGTS) and the majority shareholders of FGTS (the “Majority Shareholders”) to acquire seventy percent (70%) of ownership in FGTS for the total purchase price of one hundred million U.S. dollars, to be paid in three tranches. The Company has renegotiated with Five-Grain to revise the Agreement of Purchase and Sale and to cooperate in producing American-made baijiu products through its subsidiary Empire Spirits, Inc. in the US. However, as of the date of this report both parties have not officially signed and announced the new agreement.

 

F-15

 

 

6. AGREEMENT FOR COMPREHENSIVE COOPERATION WITH DR. TRI VIET DO

 

On February 10, 2023, the Company signed an agreement for comprehensive cooperation with Dr. Tri Viet Do, a German-trained expert in electromagnetic energy and quantum physics, to jointly cooperate in the development and commercialization of a number of key products using proprietary intellectual properties already developed by him. The scope of study and development includes: 1) Producing generators using electromagnetic and quantum fields extracted from the energy absorbed from the earth; 2) Producing engines (spaceships, airplanes, ships, cars, trains, motorcycles, etc.) powered by electromagnetic and quantum energy; 3) Machines to kill harmful bacteria and viruses, including covid-19 and variants; 4) Medicines to treat 25 types of infectious diseases and cancers using atomic nuclear energy, super-matter and antimatter; 5) Desalination of seawater, separating minerals, medicines and rare metals from sea water; 6) Environmental technology for treating and sterilizing wastewater to become clean water; 7) Waste treatment by automatic classification of wastes into various categories; 8) Clean agriculture with electromagnetic and quantum fields for use in farming; and 9) Aquatic poultry farming by treating the rearing environment with electromagnetic and quantum fields and providing food energy for poultry and aquatic products.

 

As of the date of this report, the Company has also evaluated and engaged other clean energy technologies that may have potential commercialization advantages.

 

7. Investment Commitment AgreementS WITH Saigon Silicon City JSC

 

On February 21, 2023, Philux Global Group Inc. (a/k/a PHI Group, Inc.) and its subsidiaries Philux Global Funds SCA, SICAV-RAIF and Philux Global Vietnam Investment and Development Company, Ltd., (collectively referred to as “the Investor”) signed an Investment Commitment Agreement with Saigon Silicon City Joint Stock Company (“SSC”) whereby the Investor is committed to providing or causing to be provided a total of five hundred million U.S. dollars (USD 500,000,000) for investment in Saigon Silicon City for the first phase of construction and subsequent additional capital as needed to complete its entire development and investment program over a 52-hectare of land at Lot I6 & I7, Road D1, Saigon High Technology Park, Long Thanh My Ward, District 9, Ho Chi Minh City, Vietnam.

 

According to the Investment Commitment Agreement, within thirty days of the signing of this Agreement, the Investor will provide or cause to be provided fifty million U.S. dollars (USD 50,000,000) for SSC to resume the implementation of its building plan. Additional tranches of fifty million U.S. dollars (USD 50,000,000) will be released to SSC at regular intervals as needed to ensure uninterrupted construction progress. Both Parties shall determine and stipulate the terms and conditions for the Investment Commitment in writing prior to the release of funds to SSC. Upon the signing of this Agreement, SSC shall make a deposit of Five Hundred Thousand U.S. Dollars (USD 500,000) with the Investor as earnest money for legal, administrative and processing fees in connection with the Investment Commitment Agreement. This amount will be fully refundable to SSC if the Investor fails to fulfill its commitment as mentioned in the Agreement. The Investor intends to use a portion of the financing commitments from certain international institutional and ultra-high net worth investors for investment in Saigon Silicon City.

 

Effective March 21, 2023, Philux Global Group and Saigon Silicon City JSC signed an amendment to amend Article 2 of the afore-mentioned Investment Commitment Agreement as follows: “Due to additional administrative and legal requirements in connection with the Investor’s release of funds, within thirty days of the signing of this Amendment, the Investor will provide or cause to be provided fifty million U.S. dollars (USD 50,000,000) for SSC to resume the implementation of its building plan. Additional amounts of capital will be provided to SSC by the Investor at various intervals as needed to ensure uninterrupted construction until the completion of the project.”

 

F-16

 

 

On April 21, 2023, both parties signed an amendment to extend the delivery of the first investment tranche to Saigon Silicon City JSC within forty-five days commencing April 21, 2023.

 

On June 05, 2023, Philux Global Vietnam Investment and Development Co. Ltd., a subsidiary of Philux Global Group Inc. (f/k/a PHI Group, Inc.), and Saigon Silicon City JSC (“SSC”) signed an Agreement to terminate the Investment Commitment Agreement previously entered into by the two parties on February 21, 2023 in its entirety.

 

On June 05, 2023 Philux Global Group Inc. (a/k/a PHI Group, Inc.) (the “Investor”/”Provider”) signed an Investment Commitment Agreement with SSC whereby the Investor/Provider is committed to arranging up to one and half billion U.S. dollars (USD 1,500,000,000) as may be needed to complete the SSC’s entire development and investment program over a 52-hectare of land at Lot I6 & I7, Road D1, Saigon High Technology Park, Long Thanh My Ward, District 9, Ho Chi Minh City, Vietnam.

 

According to the Investment Commitment Agreement, upon the signing of this Agreement, the SSC shall make a deposit of Five Hundred Thousand U.S. Dollars (USD 500,000) with Philux Global Group as earnest money for legal, administrative and processing fees in connection with the Investment Commitment Agreement. This amount will be fully refundable to SSC if the Company fails to fulfill its commitment as mentioned in the Agreement

 

Within thirty days after the deposit of at least two hundred thousand U.S. dollars (USD 200,000) of the refundable earnest money as mentioned above, the Investor/Provider will provide or cause to be provided fifty million U.S. dollars (USD 50,000,000) for SSC to resume the implementation of its building plan. Additional tranches of funds will be released to SSC at regular intervals as needed to ensure uninterrupted construction progress. Both Parties shall determine and stipulate the terms and conditions for the Investment Commitment in writing prior to the release of funds to SSC. The Investor/Provider intends to use a portion of the financing commitments from certain international institutional and ultra-high net worth investors for investment in SSC.

 

8. BUSINESS COOPERATION AGREEMENT WITH SSE GLOBAL JSC

 

In May 2023, the Company signed a Business Cooperation Agreement with SSE Group JSC, a Vietnamese joint stock company, to jointly cooperate in the areas of energy efficiency and mitigation of global greenhouse gas (GHG) emissions by using SSE Group’s proprietary technologies.

 

According to the agreement, SSE Group JSC and Philux Global Group Inc. have incorporated “SSE Global Group Inc.,” a Wyoming corporation, Registration ID 2023-00127, (www.sseglobalgroup.com) to apply SSE Group’s breakthrough technologies for the energy industry, especially to improve fuel efficiency and mitigate global GHG emissions.

 

Global GHG emissions have been steadily increasing over the years, primarily due to human activities such as burning fossil fuels, deforestation, industrial processes, and agriculture. Carbon dioxide (CO2) is the most significant GHG, accounting for the majority of emissions. The main sectors contributing to GHG emissions are energy production, transportation, industry, agriculture, and land use change. Emerging economies, such as China and India, have witnessed significant increases in emissions due to rapid industrialization and urbanization. Rising GHG emissions lead to the greenhouse effect, causing global warming and climate change. This phenomenon contributes to various environmental and socio-economic challenges, including extreme weather events, sea-level rise, disrupted ecosystems, and threats to human health and food security.

 

SSE Group’s proprietary technologies are a self-sustaining energy system created by absolute interactions with the air condition of the atmosphere. Test results have shown that this system can enhance and extend the burning time of traditional fuels such as gasoline, diesel and coal by 50% or more and eliminate toxic emissions surpassing Euro6 standards of harmful exhaust. It also cleans the carbon in the internal combustion engine and stabilizes the burning temperature of the engine chamber for optimal performance. For use in vehicles, the installation is fast and inexpensive and does not require any additional power supply or batteries. SSE Global Group intends to launch products for internal combustion engines and fossil fuel power plants to save input fuels and eliminate toxic emissions.

 

F-17

 

 

9. PURCHASE AND SALE AGREEMENT WITH JINSHAN LTD. CO.

 

On June 27, 2023, Premier Enterprises Group Inc., a Wyoming corporation and subsidiary of PHI Group, Inc. (/n/k/a Philux Global Group Inc.), (the “Registrant”) entered into an Agreement of Purchase and Sale with Jinshan Limited Liability Company, a limited liability company organized and existing by virtue of the laws of Socialist Republic of Vietnam, with principal business address at 37 Road No. 4, Do Thanh Housing Complex, Ward 4, District 3, Ho Chi Minh City, Vietnam, hereinafter referred to as “JSH,” the Majority Member(s) of JSH, hereinafter referred to as the “Majority Member(s),” (both JSH and the Majority Member(s) are referred to as the “Seller”), to acquire fifty-one percent (51%) of equity ownership in JSH for a purchase price to be determined as follows:

 

The value of JSH’s fifty-one percent (51%) equity ownership as at the date of signing this contract shall be (a) provisionally calculated as Five Million One Hundred Ninety Four Thousand Seven Hundred Fourteen United States Dollars (US$5,194,714), which is equivalent to fifty-one percent (51%) of twice the equity of JSH according to the audit report of JSH issued by Viet Dragon Auditing and Consulting Co., Ltd. made for the year ended March 31, 2023, based on the exchange rate of foreign currency transfer by Eximbank Vietnam as at the end of June 26, 2023, (b) or an amount equivalent to fifty-one percent (51%) of the value of JSH independently valued by a qualified professional valuation firm mutually acceptable on or before the Closing Date of this transaction, whichever is greater, (c) or a number of shares of PEG with a market value of twice the greater amount between the two cases above, based on the average ten-day closing price of PEG shares in the U.S. Stock Market immediately prior to the Closing date after PEG has become a publicly traded company in the U.S. for at least one month, according to the final agreement between the Parties prior to or on the Closing date.

 

The Closing of this transaction is subject to PEG’s being listed and traded on a U.S. stock exchange at least one month prior to the Closing date.

 

The foregoing description of the Agreement of Purchase and Sale dated June 27, 2023 among Premier Enterprises Group Inc., a subsidiary of PHI Group, Inc., Jinshan Limited Liability Company and the Majority Member(s) of JSH is qualified in its entirety by reference to the full text of said Agreement, which was filed as Exhibit 10.1 to the Form 8-K on June 28, 2023.

 

10. BUSINESS COOPERATION AGREEMENT WITH SAPHIA ALKALI JOINT STOCK COMPANY

 

On June 27, 2023, SAPHIA ALKALI JOINT STOCK COMPANY, a Vietnamese joint stock company with principal business address at No 27, Sub-alley 1, Alley 104, Viet Hung Street, Viet Hung Ward, Long Bien District, Hanoi City, Vietnam, represented by Mrs. Nguyen Phuong Dung, its Chairperson, hereinafter referred to as “SAP,” and PHI GROUP INC. (/n/k/a PHILUX GLOBAL GROUP INC, hereinafter referred to as “PGG,” signed a Business Cooperation Agreement and agreed to undertake the followings:

 

- SAP and PGG agree to jointly cooperate primarily in the areas of alkali technologies as well as any other business that may be considered mutually beneficial.

 

F-18

 

 

- Specifically, SAP and PGG will initially focus on forming a company in the United States (“NewCo”) to finance, manufacture, sell and distribute SAP’s proprietary alkali products on a worldwide basis, except Vietnam and certain territories that are handled directly by SAP.

 

- SAP will initially make available and transfer certain technologies as may be needed to NewCo to serve the needs of this Business Cooperation Agreement.

 

- The relationship established between SAP and PGG by this Agreement shall be exclusive with respect to the areas of SAP’s proprietary technologies outside of Vietnam.

 

- The Parties shall agree on the roles, responsibilities and benefits of each party in connection with NewCo or other particular business undertakings, which shall be detailed in a separate definitive agreement.

 

- In particular, PGG will be responsible for providing or causing to be provided three hundred million U.S. dollars (USD 300,000,000), or more, from time to time to NewCo as may be needed to implement the latter’s business plan in connection with this Business Cooperation Agreement. Hereby, a group of shareholders appointed by PGG will own 40% of NewCo’s equity interest and a group of shareholders appointed by SAP will own 60% of NewCo’s equity interest.

 

- The parties herein shall determine the capital structure of NewCo in a separate subsequent addendum to this Business Cooperation Agreement.

 

- The Business Cooperation Agreement shall be effective upon signing and shall terminate in writing by the Parties.

 

The foregoing description of the Business Cooperation Agreement dated June 27, 2023 between Saphia Alkali Joint Stock Company and Philux Global Group Inc. is qualified in its entirety by reference to the full text of said Agreement, which was filed as Exhibit 10.1 to the Current Report on Form 8-K July 3, 2023.

 

11. DEVELOPMENT OF PHILUX GLOBAL TRADE, INC.

 

On August 19, 2022, the Company established Philux Global Trade, Inc., a Wyoming corporation, to engage in international trade.

 

12. ASSET MANAGEMENT AGREEMENT

 

On August 30, 2023, the Company signed an Asset Management Agreement with an European ultra-high net-worth investor to manage a total of ninety million U.S. dollars ($90,000,000) for this investor for a period of five years. The Company will earn 2% annual management fee of the assets under management and share thirty percent (30%) of the profits from this investment portfolio.

 

13. ISSUANCE OF CONVERTIBLE PROMISSORY NOTE

 

On November 9, 2023, the Company issued a Convertible Promissory Note to 1800 Diagonal Lending LLC, a Virginia limited liability company, for $58,500.00, with a one-time interest charge of seventeen percent (17%) to be applied on the issuance date to the principal amount. Any Principal Amount or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) from the due date thereof until the same is paid (“Default Interest”). Accrued, unpaid Interest and outstanding principal, subject to adjustment, shall be paid in eight (8) payments with the first six (6) payments each in the amount of $10,326.34; and the final two (2) payments each in the amount of $2,000.00 (a total payback to the Holder of $65,958.00). At any time following an Event of Default, the Holder shall have the right, to convert all or any part of the outstanding and unpaid amount of this Note into fully paid and non-assessable shares of Common Stock at the conversion price equal to 58% multiplied by the lowest trading price for the Common Stock during the twenty (20) Trading Days prior to the conversion date. On May 10, 2024, 1800 Diagonal Lending LLC converted the balance of this note, together with accrued interest and other charges into 723,451,379 shares of Common Stock of the Company.

 

F-19

 

 

14. Agreement for Comprehensive Cooperation WITH a Vietnamese Inventor

 

On December 8, 2023, a Vietnamese engineer (the “Inventor”), and the Company entered into an Agreement for Comprehensive Cooperation Agreement and agreed to undertake the followings:

 

1) Applying the Inventor’s proprietary inventions that are specifically designed to exploit the earth’s available geomagnetic energy to generate energy and store energy without using an energy storage system (ESS).

 

2) Producing and providing generators using the earth’s available geomagnetic energy.

 

3) Producing engines (spaceships, airplanes, ships, cars, trains, motorcycles, etc.) powered by the earth’s available geomagnetic energy.

 

4) Developing additional multiple new technologies.

 

The Parties agree to use Philux Global Energy, Inc., a Wyoming corporation and wholly-owned subsidiary of Philux Global Group, Inc., Registration Number 2022-001066221, incorporated on January 3, 2022, as the operating company to commercialize energy-related products based on the proprietary researches and developments of the Inventor.

 

The Inventor shall serve as the Chief Technology Officer of Philux Global Energy, Inc. and transfer certain intellectual properties related to energy generation and energy storage using the earth’s available geomagnetic energy to Philux Global Energy, Inc. to be patented jointly under the name of the Inventor and Philux Global Energy, Inc. for commercialization.

 

The Inventor and the Registrant each will hold fifty percent (50%) of the initial Common Stock of Philux Global Energy, Inc.

 

Both the Registrant and the Inventor mutually warrant that the intellectual properties and technologies that have been developed and/or will have been developed by the Inventor shall never be used for warfare purposes under any circumstances.

 

The Registrant also warrants and is committed to taking Philux Global Energy, Inc. (PGE) public in the U.S. Stock Markets, particularly Nasdaq, within one year or as soon as possible based on PGE’s progress and growth.

 

The foregoing description of the Agreement for Comprehensive Cooperation is qualified in its entirety by reference to the full text of said notice, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

 

On January 18, 2024, the Inventor and the Company signed Amendment Number 1 to the afore-mentioned Agreement for Comprehensive Cooperation whereby the Company agreed to pay the Inventor an annual amount of two hundred fifty thousand U.S. dollars for the first three years upon satisfactory review of the Inventor’s technologies by the Company’s management or authorized representative following the signing of the Agreement.

 

Philux Global Energy, Inc. has engaged a US law firm to assist in the filing of a patent for this technology.

 

15. EXTENSION FOR REPURCHASE OF THE COMPANY’S COMMON STOCK

 

On December 22, 2023, the Company’s Board of Directors passed a corporate resolution to extend the time period for the repurchase of its own shares of common stock from the open market from time to time in accordance with the terms mentioned below and subject to liquidity conditions, availability of funds, cash balances, cash flow conditions, satisfaction of certain open contractual obligations and the judgment of the Company’s Board of Directors and Management with respect to optimal use of potentially available funds in the future:

 

1.	Purpose of Repurchase: To enhance shareholder value.

 

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2.	Details of Repurchase:

 

	a.	Class of shares to be repurchased: Common Stock of PHI Group, Inc. (n/k/a Philux Global Group, Inc.)
	b.	Number of repurchasable shares: As many as economically conducive and optimal for the Company and its shareholders.
	c.	Total repurchase dollar amount: To be determined by prevalent market prices at the times of transaction.
	d.	Methods of repurchase: Open market purchase and/or negotiated transactions.
	e.	Repurchase period: As soon as practical until June 30, 2024.
	f.	The Company intends to fund the proposed share repurchase program with proceeds from certain long-term financing programs, future earnings, disposition of applicable non-core assets and other potential sources, subject to liquidity, availability of funds, comparative judgment of optimal use of available cash in the future, and satisfaction of certain open contractual obligations.
	g.	The share repurchase program will be in full compliance with state and federal laws and certain covenants with the Company’s creditors and may be terminated at any time based on future circumstances and judgment of the Company.

 

16. INVESTMENT MANAGEMENT AGREEMENT WITH A ULTRA-HIGH NETWORTH INVESTOR GROUP

 

On February 14, 2024, Philux Capital Advisors, Inc., a subsidiary of the registrant, (the” Investment Manager”), signed an Asset Management Agreement (the “Agreement”) with a ultra-high-net-worth investor group (the “Investor Party”) to manage a total principal amount of Five Hundred Sixty Two Million Five Hundred Thousand United States Dollars (“the Investment Fund”) on behalf of the Investor Party for investment in different transactions to be selected, advised and managed by the Investment Manager for a period of five years. According to the Agreement, the Investment Manager shall receive 5% annual management fee of the principal amount and share 30% profits from the Investment Fund.

 

The Company intends to allocate a large portion of the Investment Fund for initial investment in Saigon Silicon City project, the development of the International Financial Center and the Asia Diamond Exchange in Vietnam, Philux Global Energy’s geomagnetic energy technology initiatives and a potential joint venture with a leading international AI chip manufacturer to set up manufacturing facilities in Vietnam. In addition, the Company plans to implement its share buyback program as previously announced.

 

This event was reported on Form 8-K filed with the Securities and Exchange Commission on February 21, 2024.

 

17. COMMON STOCK TO BE ISSUED

 

As of March 31, 2024, the Company recorded $1,106,790 as Common Stock to be issued to a number of current shareholders of the Company in connection with stock purchase agreements under Rule 144.

 

NOTE 14 - GOING CONCERN UNCERTAINTY

 

As shown in the accompanying consolidated financial statements, the Company has accumulated deficit of $as of March 31, 2024 and total stockholders’ deficit of $8,936,653. For the quarter ended March 31, 2024, the Company incurred a net loss of $1,690,405 as compared to a net loss of $1,778,712 during the same period ended March 31, 2023. These factors as well as the uncertain conditions that the Company faces in its day-to-day operations with respect to cash flows create an uncertainty as to the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. Management has taken action to strengthen the Company’s working capital position and generate sufficient cash to meet its operating needs through June 30, 2024 and beyond.

 

NOTE 15 – SUBSEQUENT EVENT

 

The financial statements included in this Form 10-Q were approved by management and available for issuance on or about May 20, 2024. Subsequent events have been evaluated through this date.

 

1. INVESTMENT MANAGEMENT AGREEMENT WITH A ULTRA-HIGH NETWORTH INVESTOR GROUP

 

On April 14, 2024, Philux Capital Advisors, Inc., a subsidiary of the registrant, (the” Investment Manager”), signed an Asset Management Agreement (the “Agreement”) with a ultra-high-net-worth investor group (the “Investor Party”) to manage a total principal amount of Fifty Million United States Dollars (“the Investment Fund”) on behalf of the Investor Party for investment in different transactions to be selected, advised and managed by the Investment Manager for a period of five years. According to the Agreement, the Investment Manager shall receive 5% annual management fee of the principal amount and share 30% profits from the Investment Fund.

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Except for the audited historical information contained herein, this report specifies forward-looking statements of management of the Company within the meaning of Section 27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act of 1934 (“forward-looking statements”) including, without limitation, forward-looking statements regarding the Company’s expectations, beliefs, intentions and future strategies. Forward-looking statements are statements that estimate the happening of future events and are not based on historical facts. Forward- looking statements may be identified by the use of forward-looking terminology, such as “could”, “may”, “will”, “expect”, “shall”, “estimate”, “anticipate”, “probable”, “possible”, “should”, “continue”, “intend” or similar terms, variations of those terms or the negative of those terms. The forward-looking statements specified in this report have been compiled by management of the Company on the basis of assumptions made by management and considered by management to be reasonable. Future operating results of the Company, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking statements. The assumptions used for purposes of the forward-looking statements specified in this report represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. In addition, those forward-looking statements have been compiled as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this report. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in this report are accurate and the Company assumes no obligation to update any such forward-looking statements.

 

INTRODUCTION

 

PHI Group, Inc. (n/k/a Philux Global Group Inc) (the “Company” or “PHI”) (www.philuxglobal.com) is primarily engaged in mergers and acquisitions, advancing Philux Global Funds, SCA, SICAV-RAIF, a “Reserved Alternative Investment Fund” (“RAIF”) under the laws of Luxembourg, and developing the Asia Diamond Exchange in Vietnam. Besides, the Company provides corporate finance services, including merger and acquisition advisory and consulting services for client companies through our wholly owned subsidiary Philux Capital Advisors, Inc. (formerly PHI Capital Holdings, Inc.) (www.philuxcapital.com) and invests in selective industries and special situations aiming to potentially create significant long-term value for our shareholders. Philux Global Funds intends to include a number of sub-funds for investment in select growth opportunities in the areas of renewable energy, real estate, infrastructure, healthcare, agriculture and the Asia Diamond Exchange in together with the International Financial Center in Vietnam.

 

BACKGROUND

 

Originally incorporated on June 8, 1982 as JR Consulting, Inc., a Nevada corporation, the Company applied for a Certificate of Domestication and filed Articles of Domestication to become a Wyoming corporation on September 20, 2017. In the beginning, the Company was foremost engaged in mergers and acquisitions and had an operating subsidiary, Diva Entertainment, Inc., which operated two modeling agencies, one in New York and one in California. In January 2000, the Company changed its name to Providential Securities, Inc., a Nevada corporation, following a business combination with Providential Securities, Inc., a California-based financial services company. In February 2000, the Company then changed its name to Providential Holdings, Inc. In October 2000, Providential Securities withdrew its securities brokerage membership and ceased its financial services business. Subsequently, in April 2009, the Company changed its name to PHI Group, Inc. From October 2000 to October 2011, the Company and its subsidiaries were engaged in various transactions in connection with mergers and acquisitions advisory and consulting services, real estate and hospitality development, mining, oil and gas, telecommunications, technology, healthcare, private equity, and special situations. In October 2011, the Company discontinued the operations of Providential Vietnam Ltd., Philand Ranch Limited, a United Kingdom corporation (together with its subsidiaries Philand Ranch - Singapore, Philand Corporation - US, and Philand Vietnam Ltd. - Vietnam), PHI Gold Corporation (formerly PHI Mining Corporation, a Nevada corporation), and PHI Energy Corporation (a Nevada corporation), and mainly focused on acquisition and development opportunities in energy and natural resource businesses.

 

 

The Company is currently focused on Philux Global Funds, SCA, SICAV-RAIF by launching Philux Global Select Growth Fund and potentially other sub-funds for investment in real estate, renewable energy, infrastructure, agriculture, healthcare and the Asia Diamond Exchange and International Financial Center in Vietnam. In addition, Philux Capital Advisors, Inc. (formerly Capital Holdings, Inc.), a wholly owned subsidiary of the Company, continues to provide corporate and project finance services, including merger and acquisition (M&A) advisory and consulting services for U.S. and international companies. The Company has also formed Philux Global Advisors, Inc. to serve as the investment advisor to Philux Global Funds and other potential fund clients in the future.

 

The Company intends to amend the Purchase and Sale Agreement that was originally signed on January 18, 2022 with Five-Grain Treasure Spirits Co., Ltd., a Chinese baiju distiller, to collaborate in launching American-made baiju products through Empire Spirits, Inc., a subsidiary of the Company. The Company has renegotiated with Five-Grain to revise the Agreement of Purchase and Sale and to cooperate in producing American-made baijiu products through Empire Spirits, Inc. in the US. However, as of the date of this report both parties have not officially signed and announced the new agreement.

 

In May 2023, the company signed a business cooperation agreement with SSE Global JSC, a Vietnamese joint stock company, to establish SSE Global Group, Inc., a Wyoming corporation, (www.sseglobalgroup.com) to commercialize a self-sustainable energy technology.

 

In June 2023 the Company signed a business cooperation agreement with Saphia Alkali JSC, a Vietnamese joint stock company, to form Sapphire Alkali Global Group in the United States to finance, manufacture, sell and distribute Saphia Alkali’s proprietary products on a worldwide basis.

 

In December 2023 the Company signed an Agreement for Comprehensive Cooperation Agreement with a Vietnamese inventor (the “Inventor”) to cooperate in the development and implementation of a proprietary clean energy technology using geomagnetic energy and focus on the following areas: (1) Applying the Inventor’s proprietary inventions that are specifically designed to exploit the earth’s available geomagnetic energy to generate energy and store energy without using an energy storage system (ESS), (2) Producing and providing generators using the earth’s available geomagnetic energy, (3) Producing engines (spaceships, airplanes, ships, cars, trains, motorcycles, etc.) powered by the earth’s available geomagnetic energy, and (4) Developing additional multiple new technologies that the Inventor has studied and researched. The Parties agree to use Philux Global Energy, Inc., a Wyoming corporation and wholly-owned subsidiary of Philux Global Group, Inc., Registration Number 2022-001066221, incorporated on January 3, 2022, as the operating company to commercialize energy-related products based on the proprietary researches and developments of the Inventor. The Inventor shall serve as the Chief Technology Officer of Philux Global Energy, Inc. and transfer certain intellectual properties related to energy generation and energy storage using the earth’s available geomagnetic energy to Philux Global Energy, Inc. to be patented jointly under the name of the Inventor and Philux Global Energy, Inc. for commercialization. The Inventor and the Company each will hold fifty percent (50%) of the initial Common Stock of Philux Global Energy, Inc.

 

The Company intends to integrate the clean energy technologies mentioned above in the new subsidiary to be established in United Arab Emirates which will replace its former subsidiary CO2-1-0 (CARBON) Corp. to continue engaging in carbon emission mitigation using blockchain and crypto technologies.

 

These activities are disclosed in greater detail elsewhere in this report. No assurances can be made that the Company will be successful in achieving its plans.

 

BUSINESS STRATEGY

 

PHI’s strategy is to:

 

1. Identify, build, acquire, commit and deploy valuable resources with distinctive competitive advantages;

 

2. Identify, evaluate, acquire, participate and compete in attractive businesses that have large, growing market potential;

 

3. Build an attractive investment that includes points of exit for investors through capital appreciation or spin-offs of business units.

 

 

SUBSIDIARIES:

 

As of November 20, 2023, the Company has the following subsidiaries: (1) Asia Diamond Exchange, Inc., a Wyoming corporation (100%), (2) American Pacific Resources, Inc., a Wyoming corporation (100%, (3) Empire Spirits, Inc., a Nevada corporation (85% - formerly Provimex, Inc.) (4) Philux Global Funds SCA, SICAV-RAIF, a Luxembourg Reserved Alternative Investment Fund (100%), (5) Philux Luxembourg Development S.A., a Luxembourg corporation (100%), (6) PHI Luxembourg Holding SA, a Luxembourg corporation (100%), (7) Philux Global General Partners SA, a Luxembourg corporation (100%), (8) Philux Capital Advisors, Inc., a Wyoming corporation (100%), (9) Philux Global Advisors, Inc., a Wyoming corporation (100%), (10) Philux Global Healthcare, Inc., a Wyoming corporation (100%), (11) Philux Global Trade Inc., a Wyoming corporation (100%), (12) Philux Global Energy Inc., a Wyoming corporation (100%), and (13) Philux Global Vietnam Investment and Development Company Ltd., a Vietnamese limited liability company (100%).

 

AMERICAN PACIFIC RESOURCES, INC.

 

American Pacific Resources, Inc. (“APR”) is a Wyoming corporation established in April 2016 as a subsidiary of the Company to serve as a holding company for various natural resource projects. On September 2, 2017, APR entered into an Agreement of Purchase and Sale with Rush Gold Royalty, Inc. (“RGR”), a Wyoming corporation, to acquire a 51% ownership in twenty-one mining claims over an area of approximately 400 acres in Granite Mining District, Grant County, Oregon, U.S.A., in exchange for a total purchase price of twenty-five million U.S. Dollars ($US 25,000,000) to be paid in a combination of cash, convertible demand promissory note and PHI Group, Inc.’s Class A Series II Convertible Cumulative Redeemable Preferred Stock (“Preferred Stock”). This transaction was closed effective October 3, 2017. Following the first amendment dated April 19, 2018 and the second amendment dated September 29, 2018 retroactively effective April 20, 2018, to the afore-mentioned Agreement of Purchase and Sale, PHI Group, Inc. paid ten million shares of its Class A Series II Convertible Cumulative Redeemable Preferred Stock to Rush Gold Royalty, Inc.. As of June 30, 2020, the Company recorded $462,000 paid for this transaction as expenses for research and development in connection with the Granite Mining Claims project. The value of these mining claims is expected to be adjusted later after a new valuation of these mining assets is conducted by an independent third-party valuator.

 

The Company has passed several resolutions with respect to the declaration of a twenty percent (20%) special stock dividend in American Pacific Resources, Inc. to shareholders of Common Stock of the Company. Due to the continued adverse effects of the coronavirus pandemic and other factors that have delayed the development of APR, it has deemed necessary for the Company to suspend the distribution of the APR special stock dividend until later on in order to allow APR additional time to reach certain milestones that would make the spin-off of APR and this special stock dividend distribution economically beneficial for the Company’s shareholders. The Company will provide an update regarding the new Record Date for this special dividend when certain conditions are met.

 

ASIA DIAMOND EXCHANGE AND INTERNATIONAL FINANCIAL CENTER IN VIETNAM

 

Along with the establishment of Philux Global Funds, the Company has worked with the Authority of Chu Lai Open Economic Zone in Central Vietnam and the Provinces of Quang Nam and Dong Nai, Vietnam, to develop the Asia Diamond Exchange for lab-grown, rough and polished diamond together with a multi-commodities logistics center.

 

Mr. Ben Smet, who successfully established the Dubai Diamond Exchange in 2002-2005, has been leading fulltime a group of experts for the setup of the Asian Diamond Exchange since January 2018. He has brought together the main trading players in the rough diamond industry to come to Vietnam. He has also established a partnership with the biggest player in the rough trading and polishing business and engaged other main international diamond trading groups to join the overall venture.

 

The Company has taken the decision to move the greater part of the ADE rough and polishing venture, first to an Industrial Zone to be established close to the new international Airport in Long Thanh District, Dong Nai Province, Vietnam and currently to the Thanh Da Peninsula in conjunction