PHIL PHI Group Inc (PK)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

☒ ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended: JUNE 30, 2024

 

or

 

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

 

For the transition period from _________________________to _____________________________________

 

PHI GROUP, INC.

(n/k/a PHILUX GLOBAL GROUP INC)

(Exact name of

registrant as specified in its charter)

 

Wyoming		001-38255-NY		90-0114535
(State or other jurisdiction		(Commission		(IRS Employer
of incorporation)		File Number)		Identification No.)

 

17011 Beach Blvd., Suite 900, Huntington Beach, CA		92647
(Address of principal executive offices)		(Zip Code)

 

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

 

2323 Main Street, Irvine, CA

92614

(Former name or former address, if changed since last report)

 

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 Markets

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

 

Yes ☐ No ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

 

Yes ☐ No ☒

 

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (ss229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, indefinitive proxy or information statement incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

 

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 ☒

 

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

 

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

Yes ☐ No ☒

 

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed fiscal quarter:

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of October 15, 2024, there were 46,873,940,565 shares of the registrant’s $0.001 par value Common Stock and 600,000 shares of Class B Series I Preferred Stock issued and outstanding.

 

 

 

TABLE OF CONTENTS

 

PART I
Item 1.	Business Overview	3
Item 1A.	Risk Factors	7
Item 1B	Unresolved Staff Comments	9
Item 2.	Description of Properties	9
Item 3.	Legal Proceedings	9
Item 4.	Submission of Matters to a Vote of Security Holders	9
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	10
Item 6.	Selected Financial Data	10
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	14
Item 8.	Financial Statements and Supplementary Data	15
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	16
Item 9A.	Controls and Procedures	16
Item 9B.	Other Information	17
PART III
Item 10.	Directors and Executive Officers of the Registrant	18
Item 11.	Executive Compensation	19
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	20
Item 13.	Certain Relationships and Related Transactions	22
Item 14.	Principal Accountant Fees and Services	22
PART IV
Item15.	Exhibits and Financial Statement Schedules	22
	SIGNATURES	29
	CERTIFICATIONS

 

The statements contained in this annual report that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our financial condition, results of operations and business, which can be identified by the use of forward-looking terminology, such as “estimates,” “projects,” “plans,” “believes,” “expects,” “anticipates,” “intends,” or the negative thereof or other variations thereon, or by discussions of strategy that involve risks and uncertainties. All forward-looking statements are based largely on current expectations and beliefs concerning future events that are subject to substantial risks and uncertainties. Actual results may differ materially from the results suggested herein. Factors that may cause or contribute to such differences include, but are not limited to, the company’s ability to develop and successfully market the products and services described in this report (and the costs associated therewith); their acceptance in the marketplace; technical difficulties or errors in the products and/or services; the company’s customer and active prospect base containing a substantially lower number of interested customers than the company anticipates; the failure to consummate the pending acquisitions, joint ventures and/or strategic alliances at all (or on a timely basis) due to various reasons; difficulty integrating or managing multiple companies from technology, operational and marketing aspects; the success (and cost) of new marketing strategies as a result of mergers and acquisitions; unfavorable critical reviews; increased competition (including product and price competition); entrance of new competitors into the market; timing and significance of additional new product and service introductions by the company and its competitors; general economic and market factors, including changes in securities and financial markets; technology obsolescence, the adequacy of working capital, cash flows and available financing to fund the company’s business model and the proposed acquisitions or investments ; and other risks and uncertainties indicated throughout this report and from time to time in the company’s releases and filings including without limitation filings with the Securities and Exchange Commission. As used in this report, the terms “we,” “us,” “our,” the “company” and “PHI” mean PHI Group, Inc. and the term “common stock” means PHI Group, Inc.’s common stock, $.001 par value per share (unless context indicates a different meaning).

 

 

PART I

 

ITEM 1. BUSINESS OVERVIEW

 

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 promoting 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. (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.

 

 

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 group. The Inventor group filed a Provisional Patent Application with the US Patent and Trademark Office (USPTO) for the “Multi-Impulse Energy System” and shall assign and transfer certain intellectual properties related to energy generation using the earth’s available geomagnetic energy to Philux Global Energy, Inc. for commercialization.

 

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.

 

SUBSIDIARIES:

 

As of October 15, 2024, the Company has the following subsidiaries: (1) Asia Diamond Exchange, Inc., a Wyoming corporation (100%), (2) Philux Global Funds SCA, SICAV-RAIF, a Luxembourg Reserved Alternative Investment Fund (100%), (3) Philux Luxembourg Development S.A., a Luxembourg corporation (100%), (4) PHI Luxembourg Holding SA, a Luxembourg corporation (100%), (5) Philux Global General Partners SA, a Luxembourg corporation (100%), (6) Philux Capital Advisors, Inc., a Wyoming corporation (100%), (7) Philux Global Advisors, Inc., a Wyoming corporation (100%), (8) Philux Global Healthcare, Inc., a Wyoming corporation (100%), (9) Philux Global Energy Inc., a Wyoming corporation (100%), and (10) Philux Global Vietnam Investment and Development Company Ltd., a Vietnamese limited liability company (100%)

 

 

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 and logistics centers.

 

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 Asia 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 aiming at 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.

 

Mr. Smet has started a structuring project, in order for PHI to set up and establish an International Financial Center in conjunction with the Asia Diamond Exchange. This will be similar as what Mr. Smet has established successfully for Dubai in 2002-2005 and this now incorporating the international changes of the last decade.

 

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.

 

The Company has incorporated Asia Diamond Exchange, Inc., a Wyoming corporation, ID number 2021-001010234, as the holding company for the development of the Asia Diamond Exchange in Vietnam.

 

PHILUX GLOBAL FUNDS SCA, SICAV-RAIF

 

On June 11, 2020, the Company received the approval from the Luxembourg Commission de Surveillance du Secteur Financier (CSSF) and successfully established and activated PHILUX GLOBAL FUNDS SCA, SICAV-RAIF (the “Fund”), Registration No. B244952, a Luxembourg bank fund organized as a Reserved Alternative Investment Fund in accordance with the Luxembourg Law of July 23, 2016 relative to reserved alternative investment funds, Law of August 23, 2016 relative to commercial companies, and Modified Law of July 12, 2013 relative to alternative investment fund managers.

 

The following entities had previously been engaged to support the Fund’s operations: a) Custodian Bank: Hauck & Aufhauser Privatbankiers AG, b) Administrative Registrar & Transfer Agent: Hauck & Aufhauser Alternative Investment Services S.A., c) Fund Manager: Hauck & Aufhauser Fund Services S.A., d) Fund Attorneys: DLP Law Firm SARL and VCI Legal, e) Investment Advisor: PHILUX Capital Advisors, Inc., f) Fund Auditors: E&Y Luxembourg and E&Y Vietnam, g) Fund Tax Advisor: ATOZ Tax Management, Luxembourg, h) Fund Independent Asset Valuator: Cushman & Wakefield, Vietnam. Currently the Fund is in the process of changing the custodian bank, administrative registrar & transfer agent, investment advisor and the fund manager.

 

The Fund is an umbrella fund intended to contain one or more sub-fund compartments for investing in select opportunities in the areas of real estate, infrastructure, renewable energy, agriculture, healthcare and especially the Asia Diamond Exchange and the International Financial Center in Vietnam.

 

Other subsidiaries of the Company that are established in conjunction with PHILUX Global Funds include PHI Luxembourg Development S.A., PHILUX Global General Partners SA, and PHI Luxembourg Holding SA. Website: www.philuxfunds.com.

 

 

PHILUX CAPITAL ADVISORS, INC.

 

Philux Capital Advisors, Inc. was originally incorporated under the name of “Providential Capital, Inc.” in 2004 as a Nevada corporation and wholly owned subsidiary of the Company to provide merger and acquisition (M&A) advisory services, consulting services, project financing, and capital market services to clients in North America and Asia. In May 2010, Providential Capital, Inc. changed its name to PHI Capital Holdings, Inc. It was re-domiciled as a Wyoming corporation on September 20, 2017 and changed its name to “PHILUX Capital Advisors, Inc.” on June 03, 2020. This subsidiary has successfully managed merger plans for a number of privately held and publicly traded companies and continues to focus on serving the Pacific Rim markets in the foreseeable future. Website: www.philuxcapital.com.

 

PHILUX GLOBAL ADVISORS, INC.

 

Incorporated in April 2022 as a Wyoming corporation, Philux Global Advisors, Inc. will serve as the investment advisor for Philux Global Funds SCA SICAV-RAIF.

 

PHILUX GLOBAL HEALTHCARE, INC.

 

Philux Global Healthcare, Inc., a Wyoming corporation, was established in February 2023 to replace Phivitae Healthcare, Inc., as a subsidiary of the Company to cooperate with Dr. Dung Anh Hoang of Belgium and his affiliates to develop a software management system for intensive care units in Vietnam and launch medical bioplastic products that have ready buyers in Europe and Africa. The Company intends to use this subsidiary as a holding company to acquire and consolidate targets in the healthcare industry.

 

PHILUX GLOBAL ENERGY, INC.

 

On January 3, 2022, the Company incorporated “PHILUX GLOBAL ENERGY, INC.” as a subsidiary of the Company to develop renewable energy technologies and serve as the holding company for acquiring energy-related business.

 

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 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 group. The Inventor group filed a Provisional Patent Application with the US Patent and Trademark Office (USPTO) for the “Multi-Impulse Energy System” and shall assign and transfer certain intellectual properties related to energy generation using the earth’s available geomagnetic energy to Philux Global Energy, Inc. for commercialization.

 

 

ITEM 1A. RISK FACTORS

 

RISK FACTORS

 

Investment in our securities is subject to various risks, including risks and uncertainties inherent in our business. The following sets forth factors related to our business, operations, financial position or future financial performance or cash flows which could cause an investment in our securities to decline and result in a loss.

 

General Risks Related to Our Business

 

Our success depends on our management team and other key personnel, the loss of any of whom could disrupt our business operations.

 

Our future success will depend in substantial part on the continued service of our senior management and certain external experts. The loss of the services of one or more of our key personnel and/or outside experts could impede implementation and execution of our business strategy and result in the failure to reach our goals. We do not carry key person life insurance for any of our officers or employees. Our future success will also depend on the continued ability to attract, retain and motivate highly qualified personnel in the diverse areas required for continuing our operations. We cannot assure that we will be able to retain our key personnel or that we will be able to attract, train or retain qualified personnel in the future.

 

Risks Related to Mergers and Acquisitions

 

Our strategy in mergers and acquisitions involves a number of risks and we have a limited history of successful acquisitions. Even when an acquisition is completed, we may have to continue our service for integration that may not produce results as positive as management may have projected.

 

The Company continues evaluating various opportunities and negotiating to acquire other companies, assets and technologies. Acquisitions entail numerous risks, including difficulties in the assimilation of acquired operations and products, diversion of management’s attention from other business concerns, amortization of acquired intangible assets and potential loss of key employees of acquired companies. We have limited experience in assimilating acquired organizations into our operations. Although potential synergy may be achieved by acquisitions of related technologies and businesses, no assurance can be given as to the Company’s ability to integrate successfully any operations, personnel, services or products that have been acquired or might be acquired in the future. Failure to successfully assimilate acquired organizations could have a material adverse effect on the Company’s business, financial condition and operating results.

 

Acquisitions involve a number of special risks, including:

 

●	failure of the acquired business to achieve expected results;
●	diversion of management’s attention;
●	failure to retain key personnel of the acquired business;
●	additional financing, if necessary and available, could increase leverage, dilute equity, or both;
●	the potential negative effect on our financial statements from the increase in goodwill and other intangibles; and
●	the high cost and expenses of completing acquisitions and risks associated with unanticipated events or liabilities.

 

These risks could have a material adverse effect on our business, results of operations and financial condition since the values of the securities received for the consulting service at the execution of the acquisition depend on the success of the company involved in acquisition. In addition, our ability to further expand our operations through acquisitions may be dependent on our ability to obtain sufficient working capital, either through cash flows generated through operations or financing activities or both. There can be no assurance that we will be able to obtain any additional financing on terms that are acceptable to us, or at all.

 

Risks associated with private equity (PE) funds

 

There are, broadly, five key risks to private equity investing:

 

1. Operational risk: The risk of loss resulting from inadequate processes and systems supporting the organization. It is a key consideration for investors regardless of the asset classes that funds invest into.

 

 

2. Funding risk: This is the risk that investors are not able to provide their capital commitments and is effectively the ‘investor default risk’. PE funds typically do not call upon all the committed investor capital and only draw capital once they have identified investments. Funding risk is closely related to liquidity risk, as when investors are faced with a funding shortfall they may be forced to sell illiquid assets to meet their commitments.

 

3. Liquidity risk: This refers to an investor’s inability to redeem their investment at any given time. PE investors are ‘locked-in’ for between five and ten years, or more, and are unable to redeem their committed capital on request during that period. Additionally, given the lack of an active market for the underlying investments, it is difficult to estimate when the investment can be realized and at what valuation.

 

4. Market risk: There are many forms of market risk affecting PE investments, such as broad equity market exposure, geographical/sector exposure, foreign exchange, commodity prices, and interest rates. Unlike in public markets where prices fluctuate constantly and are marked-to-market, PE investments are subject to infrequent valuations and are typically valued quarterly and with some element of subjectivity inherent in the assessment. However, the market prices of publicly listed equities at the time of sale of a portfolio company will ultimately impact realization value.

 

5. Capital risk: The capital at risk is equal to the net asset value of the unrealized portfolio plus the future undrawn commitments. In theory, there is a risk that all portfolio companies could experience a decline in their current value, and in the worst-case drop to a valuation of zero. Capital risk is closely related to market risk. Whilst market risk is the uncertainty associated with unrealized gains or losses, capital risk is the possibility of having a realized loss of the original capital at the end of a fund’s life.

 

There are two main ways that capital risk brings itself to bear - through the failure of underlying companies within the PE portfolio and suppressed equity prices which make exits less attractive. The former is impacted by the quality of the fund manager, i.e. their ability to select portfolio companies with good growth prospects and to create value, hence why fund manager selection is key for investors. The condition, method, and timing of the exit are all factors that can affect how value can be created for investors.

 

Risks Associated with Building and Operating a Diamond Exchange

 

Fundamentally, the key requirements for a successful diamond exchange include the following:

 

1. Supply: One of the most important things for a successful trading hub is the ability to secure ample, stable, and sustainable supply of commodities. In the case of a diamond exchange, adequate supply of rough diamond must be secured to make it successful.

 

2. Capital: Besides the infrastructure, facilities, systems, and amenities to operate the diamond exchange, the organizers must be able to arrange very large amounts of capital to facilitate the trade and other business activities related to the exchange.

 

3. Participants: The organizers must be able to attract a large number of international diamonteers to participate in the exchange. There is no guarantee that people will come when the exchange is built.

 

4. Venue: The venue must be able to provide competitive advantages compared with existing diamond exchanges in the world in terms of (a) modern facilities, latest technologies and state-of-the-art provisions, (b) tax relief, (c) financial facilitating network from big investors, (d) retail banking, lending institutions and foreign exchange facilities, (e) licenses and registrations, (f) global multi-commodities trading flatform, and (g) other amenities.

 

Risks Associated with International Markets

 

As some of our business activities are currently involved with international markets, any adverse change to the economy or business environment in these countries could significantly affect our operations, which would lead to lower revenues and reduced profitability.

 

Some of our business activities are currently involved with non-US countries. Because of this presence in specific geographic locations, we are susceptible to fluctuations in our business caused by adverse economic or other conditions in this region, including stock market fluctuation. A stagnant or depressed economy in these countries generally, or in any of the other markets that we serve, could adversely affect our business, results of operations and financial condition.

 

 

Risks Related to Our Securities

 

Insiders have substantial control over the company, and they could delay or prevent a change in our corporate control, even if our other stockholders wanted such a change to occur.

 

Though our executive officers and directors as of the date of this report, in the aggregate, only hold a small portion of our outstanding common stock, we have the majority voting rights associated with the Company’s Class B Series I Preferred Stock, which decision may allow the Board of Directors to exercise significant control over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This could delay or prevent an outside party from acquiring or merging with us even if our other stockholders wanted it to occur.

 

The price at which investors purchase our common stock may not be indicative of the prevailing market price.

 

The stock market often experiences significant price fluctuations that are unrelated to the operating performance of the specific companies whose stock is traded. These market fluctuations could adversely affect the trading price of our shares. Investors may be unable to sell their shares of common stock at or above their purchase price, which may result in substantial losses.

 

Since we do not currently meet the requirements for our stock to be quoted on NASDAQ, NYSE MKT LLC or any other senior exchange, the tradability in our securities will be limited under the penny stock regulations.

 

Under the rules of the Securities and Exchange Commission, as the price of our securities on the OTCQB or OTC Markets is below $5.00 per share, our securities are within the definition of a “penny stock.” As a result, it is possible that our securities may be subject to the “penny stock” rules and regulations. Broker-dealers who sell penny stocks to certain types of investors are required to comply with the Commission’s regulations concerning the transfer of penny stock. These regulations require broker-dealers to:

 

*Make a suitability determination prior to selling penny stock to the purchaser;

*Receive the purchaser’s written consent to the transaction; and

*Provide certain written disclosures to the purchaser.

 

These requirements may restrict the ability of broker/dealers to sell our securities, and may affect the ability to resell our securities.

 

Our compliance with the Sarbanes-Oxley Act and SEC rules concerning internal controls may be time consuming, difficult and costly for us.

 

It may be time consuming, difficult and costly for us to develop and implement the internal controls and reporting procedures required by the Sarbanes-Oxley Act. We may need to hire additional financial reporting, internal controls and other finance staff in order to develop and implement appropriate internal controls and reporting procedures. If we are unable to comply with the internal controls requirements of the Sarbanes-Oxley Act, we may not be able to obtain the independent accountant certifications that the Sarbanes-Oxley Act requires publicly traded companies to obtain.

 

ITEM 1B. UNRESOLVED STAFF COMMENTS.

 

None.

 

ITEM 2. DESCRIPTION OF PROPERTIES

 

As of June 30, 2024, the Company did not own any realty or equipment.

 

ITEM 3. LEGAL PROCEEDINGS

 

The Company is currently not a party to any material pending legal proceedings and, to the best of its knowledge, no such action by or against Company has been threatened.

 

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

 

None

 

 

PART II

 

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

 

The Company’s Common Stock is currently trading on the OTC Markets under the symbol “PHIL”. The following sets forth the high and low prices of the Company’s Common Stock in the US for the most recent month, two most recent quarters and each quarter during the preceding two fiscal years.

 

The prices for the Company’s common stock quoted by brokers are not necessarily a reliable indication of the value of the Company’s common stock.

 

Per Share Common Stock Prices for the Month		High				Low
Ended September 30, 2024			0.0003				0.0002

 

Per Share Common Stock Prices for the Quarter		High				Low
Quarter Ended June 30, 2024			0.0005				0.0002

 

Per Share Common Stock Prices by Quarter

 

For the Fiscal Year Ended June 30, 2024

 

		High				Low
Quarter Ended June 30, 2024			0.0005				0.0002
Quarter Ended March 31, 2024			0.0006				0.0002
Quarter Ended December 31, 2023			0.0006				0.0002
Quarter Ended September 30, 2023			0.0007				0.0004

 

Per Share Common Stock Prices by Quarter

 

For the Fiscal Year Ended June 30, 2023

 

		High				Low
Quarter Ended June 30, 2023			0.0008				0.0005
Quarter Ended March 31, 2023			0.0025				0.0001
Quarter Ended December 31, 2022			0.0020				0.0008
Quarter Ended September 30, 2022			0.0026				0.0005

 

Holders of Common Equity:

 

As of October 15, 2024 there are approximately 1,605 shareholders of record of the Company’s common stock, of which 1,299 are active.

 

Dividends:

 

Cash dividend: The Company has not declared or paid a cash dividend to common stock shareholders since the Company’s inception. The Board of Directors presently intends to retain any earnings to finance company operations and does not expect to authorize cash dividends to common shareholders in the foreseeable future. Any payment of cash dividends in the future will depend upon Company’s earnings, capital requirements and other factors.

 

ITEM 6. SELECTED FINANCIAL DATA

 

June 30,		2024				2023				2022
Net revenues		$	5,000			$	25,000			$	30,000
Income (loss) from operations		$	(1,157,772	)		$	(1,000,623	)		$	(16,899,928	)
Net other income (expense)		$	(7,037,608	)		$	(4,608,523	)		$	(4,254,515	)
Net income (loss)		$	(8,195,380	)		$	(5,609,146	)		$	(21,154,443	)
Net income (loss) per share		$	(0.00	)		$	(0.00	)		$	(0.00	)
Total assets		$	90,856			$	294,215			$	469,963
Total liabilities		$	9,744,823			$	8,516,216			$	7,013,465

 

 

ITEM 7. 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.

 

RESULTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 2024 AND JUNE 30, 2023

 

Revenues:

 

The Company received $5,000 from consulting services for the fiscal year ended June 30, 2024 as compared to $25,000 from consulting services for the fiscal year ended June 30, 2023.

 

Operating Expenses:

 

The Company incurred total operating expenses of $1,162,772 for the fiscal year ended June 30, 2024 as compared to $1,025,623 for the year ended June 30, 2023. The increase of operating expenses between the two fiscal periods in the amount of $137,149 includes an increase of $305,740 in the development costs of the Asia Diamond Exchange, offset by a decrease of $149,700 in salaries and wages, a decrease of $440 in general and administrative expenses, and a decrease of $18,451 in professional services.

 

 

Income (loss) from operations:

 

The Company had a loss from operations of $1,157,772 for the fiscal year ended June 30, 2024 as compared to a loss from operations of $1,000,623 for the fiscal year ended June 30, 2023. This represents an increase of $157,149 in loss from operations during the current fiscal year as compared to that of the precious year. This was mainly due to a decrease of $20,000 in revenue, an increase of $305,740 in the development costs of the Asia Diamond Exchange, offset by a decrease of $149,700 in salaries and wages, a decrease of $440 in general and administrative expenses, and a decrease of $18,451 in professional services as mentioned above.

 

Other income (expense):

 

The Company had net other expenses of $7,037,608 for the fiscal year ended June 30, 2024 as compared to net other expenses of $4,608,523 for the fiscal year ended June 30, 2024. The net variance of $2,429,085 between the two fiscal periods was primarily due to decrease of $451 in other income, a decrease in interest expenses in the amount of $534,569 and an increase in other expenses in the amount of $2,963,202. As for other expenses, the Company incurred $6,637,341 under this category during the fiscal year ended June 30, 2024, primarily due to a loss in the amount of $325,713 in connection with conversion of notes, penalties of $1,408,906 from loans and notes payable, and total financing costs of $1,435,191, as compared to $3,674,139 in other expenses during the previous fiscal year. Interest expenses for the current fiscal year is $400,303 as compared to interest expenses of $934,872 for the previous fiscal year.

 

Net income (loss):

 

The Company had a net loss of $8,195,380 for the fiscal ended June 30, 2024, as compared to a net loss of $5,609,146 for the fiscal year ended June 30, 2023, representing an increase of $2,586,234 in net loss between the two fiscal years. The net loss per share based on the basic and diluted weighted average number of common shares outstanding for the fiscal years ended June 30, 2024 and June 30, 2023 was both $(0.00).

 

CASH FLOWS

 

We had in cash and cash equivalents of $303 as of June 30, 2024 as compared to $17,765 in cash and cash equivalents as of June 30, 2024, respectively.

 

Net cash used in our operating activities was $1,967,750 for the fiscal year ended June 30, 2024 as compared to cash used in operating activities of $1,572,400 for the fiscal year ended June 30, 2023. The variance in cash used in operating activities between the two fiscal periods was $395,350.

 

There was no cash provided by or used in investing activities during the fiscal year ended June 30, 2024, compared to $3,557 cash provided by investing activities during the same period ended June 30, 2023.

 

Net cash provided by financing activities was $1,949,682 for the fiscal year ended June 30, 2024 as compared with net cash provided by financing activities of $1,520,712 for the fiscal year ended June 30, 2023. The net cash provided by financing activities for the current fiscal year primarily came from net notes payable in the amount of $167,511 and $1,867,790 from common stock and common stock to be issued.

 

HISTORICAL FINANCING ARRANGEMENTS

 

SHORT TERM NOTES PAYABLE AND ISSUANCE OF COMMON STOCK

 

In the course of its business, the Company has obtained short-term loans from individuals and institutional investors and from time to time raised money by issuing restricted common stock of the Company under the auspices of Rule 144. These notes typically bear interest rates ranging from 0% to 36% per annum but sometimes may have higher interest rates (Notes 8 & 10).

 

 

CONVERTIBLE PROMISSORY NOTES

 

The Company has also from time to time issued convertible promissory notes to various private investment funds for short-term working capital and special projects. Typically, these notes bear interest rates from 5% to 12% per annum, mature within one year, are convertible to common stock of the Company at a discount ranging from 42% to 50%, and may be repaid within 180 days at a prepayment premium ranging from 130% to 150% (Note 8).

 

COMPANY’S PLAN OF OPERATION FOR THE FOLLOWING 12 MONTHS

 

In the next twelve months the Company aims to focus on commercializing the geomagnetic energy technology, advancing the Philux Global Select Growth Fund under Philux Global Funds SCA, SICAV-RAIF, developing the Asia Diamond Exchange and International Financial Center in Vietnam as well as carrying out merger and its acquisition program and also investing in special situations. We will also continue to provide advisory and consulting services to international clients through our wholly owned subsidiary Philux Capital Advisors, Inc. and Philux Global Advisors, Inc.

 

The Company will continue to work on the multiple financing agreements amounting to several billion dollars with international investor groups, as reported in various 8-K filings with the Securities and Exchange Commission. The Company intends to use these funds to commercialize the geomagnetic energy technology, advance the Philux Global Select Growth Fund under Philux Global Funds SCA, SICAV-RAIF, implement the Asia Diamond Exchange and International Financial Center in Vietnam as well as carry out merger and its acquisition program. We have devoted intense efforts on closing some of these transactions and expect to begin receiving capital through these sources in the near future to support our business plan.

 

FINANCIAL PLANS

 

MATERIAL CASH REQUIREMENTS: We must raise substantial amounts of capital to fulfill our business plans. We intend to use equity, debt and project financing to meet our capital needs for investments and acquisitions.

 

Management has taken action and formulated plans to meet the Company’s operating needs through June 30, 2025 and beyond. The working capital cash requirements for the next 12 months are expected to be generated from operations and additional financing. The Company also plans to generate revenues from its consulting services, merger and acquisition advisory services, and acquisitions of target companies with positive cash flows.

 

AVAILABLE FUTURE FINANCING ARRANGEMENTS: The Company may use various sources of funds, including short-term loans, long-term debt, equity capital, and project financing as may be necessary. The Company believes it will be able to secure the required capital to implement its business plan.

 

EQUITY LINE OF CREDIT WITH INSTITUTIONAL INVESTOR

 

On March 01, 2022, the Company entered into an equity purchase agreement with an institutional investor (“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.

 

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

The following discussion about PHI Group Inc.’s market risk involves forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements.

 

Currency Fluctuations and Foreign Currency Risk

 

Some of our acquisition targets and partner companies are located outside of the United States and use currencies other than the U.S. dollar as the official currencies of those countries. The fluctuations of exchange rates in these countries may affect the value of our business.

 

Interest Rate Risk

 

We do not have significant interest rate risk, as most of our debt obligations are primarily short-term in nature to individuals, with fixed interest rates.

 

Valuation of Securities Risk

 

Since some of our income in the past was paid with the marketable securities, the value of our assets may fluctuate significantly depending on the market value of the securities we hold.

 

 

ITEM 8. FINANCIAL STATEMENTS

 

PHI GROUP, INC.

INDEX TO FINANCIAL STATEMENTS

 

Report of Independent Registered Public Accounting Firm (PCAOB No.:6662)		F-1
Balance Sheet as of June 30, 2024 and June 30, 2023		F-2
Statement of Operations for the fiscal years ended June 30, 2024 and June 30, 2023		F-3
Statement of Cash Flows for the fiscal years ended June 30, 2024 and June 30, 2023		F-4
Statement of Stockholders’ Equity (Deficit) for the fiscal years ended June 30, 2024 and June 30, 2023		F-5
Notes to Financial Statements		F-6

 

 

M.S. Madhava Rao Chartered Accountant 316, 1st cross, 7th block, 4th phase, BSK 3rd Stage, Bengaluru, India 56085 Tel No: +91 8861838006, email: mankalr@yahoo.com

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

(To be provided)

 

 

PHI GROUP, INC. (A/K/A PHILUX GLOBAL GROUP INC.) AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

		June 30,				June 30,
		2024				2023
ASSETS
Current Assets
Cash and cash equivalents		$	303			$	19,765
Marketable securities			-				420
Other current assets			58,333				241,426
Total current assets			58,636				261,611
Other assets:
Investments			32,220				32,604
Total Assets			90,856				294,215
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable			626,730				616,245
Sub-fund obligations			1,624,775				1,624,775
Accrued expenses			1,795,874				1,485,310
Short-term loans and notes payable			4,460,981				1,164,685
Convertible Promissory Notes			5,000				297,805
Due to Officers			278,812				1,027,782
Advances from customers			952,650				1,079,038
Derivative liabilities and Note Discount			-				1,220,576
Total Liabilities			9,744,823				8,516,216
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 06/30/2024 and 06/30/2023 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; 46,873,940,565 shares issued and outstanding on 06/30/2024; 60 billion shares authorized and 31,429,380,453 shares issued and outstanding on 6/30/2023, respectively, adjusted for 1 for 1,500 reverse split effective March 15, 2012. Par value:			46,873,941				39,414,493
APIC - Common Stock			29,109,985				32,773,102
Common Stock to be issued			1,890,290				22,500
Common Stock to be cancelled			(35,500	)			(35,500	)
Treasury stock: 484,767 shares as of 6/30/24 and 6/30/23, respectively - cost method.			(44,170	)			(44,170	)
Accumulated deficit			(85,514,751	)			(77,319,372	)
Total Acc. Other Comprehensive Income (Loss)			(1,936,201	)			(3,035,495	)
Total stockholders’ deficit			(9,653,967	)			(8,222,002	)
Total liabilities and stockholders’ deficit		$	90,856			$	294,214

 

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

 

 

PHI GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEARS ENDED

 

		2024				2023
		JUNE 30,
		2024				2023
Net revenues
Consulting, advisory and management services		$	5,000			$	25,000
Total revenues			5,000				25,000
Operating expenses:
Salaries and wages			210,300				360,000
Professional services, including non-cash compensation			76,791				95,242
Asia Diamond Exchange development costs			770,588				464,848
General and administrative			105,093				105,533
Total operating expenses			1,162,772				1,025,623
Income (loss) from operations			(1,157,772	)			(1,000,623	)
Other income and expenses
Other income			37				488
Interest expense			(400,303	)			(934,872	)
Other expenses			(6,637,341	)			(3,674,139	)
Net other income (expenses)			(7,037,608	)			(4,608,523	)
Net income (loss)		$	(8,195,380	)		$	(5,609,146	)
Net loss per share:
Basic		$	(0.00	)		$	(0.00	)
Diluted		$	(0.00	)		$	(0.00	)
Weighted average number of shares outstanding:
Basic			44,127,075,436				34,455,935,655
Diluted			44,127,075,436				34,455,935,655

 

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

 

 

PHI GROUP, INC. AND SUBSIDIARIES

 CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED JUNE 30, 2024 AND 2023

 

		2024				2023
Cash flows from operating activities:
Net income (loss) from operations		$	(8,195,380	)		$	(5,609,146	)
Mark-to-market adjustments			1,491,657				(2,455,157	)
Net change due to non-cash issuance of stock			3,428,526				4,845,007
Fund in transit			-				9,500
Acc. Other Comprehensive Inc (Loss)			(1,612,555	)
Reserve for loan penalties			1,958,703
Adjustments to reconcile net income to net cash used in operating activities:
(Increase) decrease in assets and prepaid expenses
Marketable securities			420				126
Total deferred financing costs			241,426				114,434
Total (increase) decrease in assets and prepaid expenses			(58,333	)			-
Increase (decrease) in accounts payable and accrued expenses
Accounts payable			10,485				440
Sub-fund obligations			-				50,000
Accrued expenses			893,689				553,893
Advances from customers and client deposits			(126,388	)			413,604
Derivative liabilities			-				504,899
Total increase (decrease) in accounts payable and accrued expenses			777,785				1,522,836
Net cash provided by (used in) operating activities			(1,967,750	)			(1,572,400	)
Cash flows from investing activities:
Net cash provided by (used in) investing activities			-				3,557
Cash flows from financing activities:
Net Loans from Directors/Officers			(85,619	)			(49,435	)
Notes payable (net)			167,511				29,352
Common Stock (including stock to be issued)			1,867,790				1,540,795
Net cash provided by (used in) financing activities			1,949,682				1,520,712
Net decrease in cash and cash equivalents			(18,068	)			(48,131	)
Cash and cash equivalents, beginning of period			17,765				67,896
Cash and cash equivalents, end of period		$	303			$	17,765

 

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 YEARS ENDED JUNE 30, 2024 AND JUNE 30, 2023

 

		Shares				Par Value				Capital				Shares				Value				Capital				Shares				Amount				cancelled				issued				Gain (loss)				Deficit				Deficit
										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 during 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 during the quarter ended March 31, 2023			1,909,744,449				1,909,744				(333,569	)							-				-								-				-				-				-				-			$	1,576,175
Common Shares issued for conversions of promissory notes			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
Common Shares issued for contractual obligation			185,000,000				185,000				-								-				-								-				-				-				-				-			$	185,000
Balance as of March 31, 2023			36,349,939,124				36,349,940				33,943,377				600,000				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				600,000				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				600,000				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				600,000				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 Fund 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 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				600,000				600				1,840				(484,767	)			(44,170	)			(35,000	)			1,106,790				(1,949,117	)			(83,711,642	)			(8,936,654	)
Balance			46,150,489,186				46,150,489				29,544,058				600,000				600				1,840				(484,767	)			(44,170	)			(35,000	)			1,106,790				(1,949,117	)			(83,711,642	)			(8,936,654	)
Common shares issued for conversion of note by 1800 Diagonal Lending LLC on 5/10/2024			723,451,379				723,452				(434,072	)							-				-								-				-				-				-				-				289,380
Common shares issued for conversion of note by 1800 Diagonal Lending LLC			723,451,379				723,452				(434,072	)							-				-								-				-				-				-				-				289,380
Balance as of June 30, 2024			46,873,940,565				46,873,941				29,109,985				600,000				600				1,840				(484,767	)			(44,170	)			(35,000	)			1,890,290				(1,936,201	)			(85,514,751	)			(9,653,967	)
Balance			46,873,940,565				46,873,941				29,109,985				600,000				600				1,840				(484,767	)			(44,170	)			(35,000	)			1,890,290				(1,936,201	)			(85,514,751	)			(9,653,967	)

 

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

 

 

PHI GROUP, INC. AND SUBSIDIARIES

(a/k/a PHILUX GLOBAL GROUP INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 – NATURE OF BUSINESS

 

PHI Group, Inc. (n/k/a Philux Global Group Inc) (the “Company” or “PHI”) (www.philuxglobal.com) is primarily engaged in promoting Philux Global Funds, SCA, SICAV-RAIF, a “Reserved Alternative Investment Fund” (“RAIF”) under the laws of Luxembourg, developing the Asia Diamond Exchange in conjunction with the International Financial Center in Vietnam and advancing a breakthrough “pure” geomagnetic energy technology that may potentially revolutionize the energy industry worldwide. Besides, the Company provides corporate finance services, including merger and acquisition advisory and consulting services for client companies through our wholly owned subsidiaries Philux Capital Advisors, Inc. (www.philuxcapital.com) and Philux Global Advisors, Inc. and participates 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 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. 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.

 

F-6

 

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 target 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 group. The Inventor group has filed a Provisional Patent Application for the Multi-Impulse Energy Technology with the U.S. Patent and Trademark Office (USPTO) and will transfer certain intellectual properties related to energy generation using the earth’s available geomagnetic energy to Philux Global Energy, Inc. for commercialization.

 

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

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

PRINCIPLES OF CONSOLIDATION

 

The consolidated financial statements include the accounts of (1) PHI Group, Inc., its subsidiaries including (2) PHILUX Global Funds SCA, SICAV-RAIF, a Luxembourg bank fund designed to hold a number of subfund compartments for investing in various selective industries, (3) PHI Luxembourg Development S.A., the mother holding company for PHILUX Global Funds, (4) PHI Luxembourg Holding S.A., (5) PHILUX Global General Partner S.A., (6) Asia Diamond Exchange, Inc., a Wyoming corporation (100%), (7) PHILUX Capital Advisors, Inc., a Wyoming corporation (100%), and Philux Global Advisors, Inc., a Wyoming corporation, collectively referred to as the “Company.” The other subsidiaries of the Company were not active during the fiscal year ended June 30, 2024. All significant inter-company transactions have been eliminated in consolidation.

 

USE OF ESTIMATES

 

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 period. 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.

 

Each investment in marketable securities typically represents less than twenty percent (20%) of the outstanding common stock and stock equivalents of the investee, and each security is quoted on a national exchange or on the OTC Markets. As such, each investment is accounted for in accordance with the provisions of ASC 320 (previously 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. On June 30, 2024 and 2023 the marketable securities have been recorded at $0 and $420, respectively, based upon the fair value of the marketable securities at that time.

 

F-7

 

ACCOUNTS RECEIVABLE

 

Management reviews the composition of accounts receivable and analyzes historical bad debts. There was no account receivable or bad debt during the fiscal ended June 30, 2024.

 

IMPAIRMENT OF LONG-LIVED ASSETS

 

Effective January 1, 2002, the Company adopted ASC 350 (Previously SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”), which addresses financial accounting and reporting for the impairment or disposal of long-lived assets and supersedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,” and the accounting and reporting provisions of APB Opinion No. 30, “Reporting the Results of Operations for a Disposal of a Segment of a Business.” The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with ASC 350. ASC 350 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal.

 

PROPERTY AND EQUIPMENT

 

Property and equipment are stated at cost. Maintenance and repair costs are charged to expense as incurred; costs of major additions and betterments are capitalized. When property and equipment are sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is reflected in income. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, ranging from three to ten years.

 

DEPRECIATION AND AMORTIZATION

 

The cost of property and equipment is depreciated over the estimated useful lives of the related assets. Depreciation and amortization of fixed assets are computed on a straight-line basis.

 

NET EARNINGS (LOSS) PER SHARE

 

The Company adopted the provisions of ASC 260 (previously SFAS 128). ASC 260 eliminates the presentation of primary and fully diluted earnings per share (“EPS”) and requires presentation of basic and diluted EPS. Basic EPS is computed by dividing income (loss) available to common stockholders 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.

 

The net earnings (loss) per share is computed as follows:

 

SCHEDULE OF NET EARNINGS (LOSS) PER SHARE 

Basic and diluted loss per share:		2024				2023
Numerator:
Net income (loss):		$	(8,195,380	)		$	(5,609,146	)
Denominator:
Basic weighted average number of common shares outstanding:			44,127,075,436				34,455,935,655
Basic net income per share			(0.00	)			(0.00	)
Diluted weighted average number of common shares outstanding:			44,127,075,436				34,455,935,655
Diluted net income (loss) per share:		$	(0.00	)		$	(0.00	)

 

F-8

 

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.

 

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.

 

F-9

 

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.

 

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. ASC 820 permits the Company to defer the recognition and measurement of the nonfinancial assets and nonfinancial liabilities until January 1, 2010. At June 30, 2023, 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.

 

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.

 

F-10

 

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-11

 

ADVERTISING

 

The Company expenses advertising costs as incurred. Advertising costs for the years ended June 30, 2024 and 2023 were zero and $500, respectively.

 

COMPREHENSIVE INCOME (LOSS)

 

ASC 220-10-45 (previously SFAS 130, Reporting Comprehensive Income) establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income is defined to include all changes in equity, except those resulting from investments by owners and distributions to owners. Among other disclosures, SFAS No. 130 requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. As of June 30, 2024 and 2023, respectively, accumulated other comprehensive income (loss) of ($1,936,201) and ($3,035,495) are presented on the accompanying consolidated balance sheets.

 

INCOME TAXES

 

The Company accounts for income taxes in accordance with ASC 740 (previously SFAS No. 109, “Accounting for Income Taxes”). Deferred taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

REPORTING OF SEGMENTS

 

ASC 280 (previously Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information), which supersedes Statement of Financial Accounting Standards No. 14, Financial Reporting for Segments of a Business Enterprise, establishes standards for the way that public enterprises report information about operating segments in annual financial statements and requires reporting of selected information about operating segments in interim financial statements regarding products and services, geographic areas and major customers. ASC 280 defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company operated in one revenue-generating segment during the years ended June 30, 2024 and June 30, 2023.

 

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.

 

F-12

 

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 nonpublic 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 nonpublic 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.

 

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.

 

F-13

 

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.

 

NOTE 3 – OTHER CURRENT ASSETS

 

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. 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 nationally quoted on the National Association of Securities Dealers OTC Bulletin Board (“OTCBB”) or the OTC Markets. As such, each investment is accounted for in accordance with the provisions of SFAS No. 115.

 

The Company did not own any marketable securities available for sale as of June 30, 2024.

 

SCHEDULE OF FAIR VALUE OF INVESTMENTS MARKETABLE EQUITY SECURITIES

Securities available for sale		Level 1				Level 2				Level 3				Total
June 30, 2024		$	-			$	-			$	-			$	-
June 30, 2023		$	-			$	420			$	-			$	420

 

During the fiscal year ended June 30, 2024, there was no transfer of securities from level 3 to level 2.

 

F-14

 

NOTE 4 – OTHER ASSETS

 

The Other Assets comprise of the following as of June 30, 2024 and 2023.

 

SCHEDULE OF OTHER ASSETS 

		2024				2023
Investment in Philux Global Funds			32,220				32,604
			-
Total Other Assets		$	32,220			$	32,604

 

Investments as of June 30, 2024 consist of $32,220 in the initial General Partner, Limited and Ordinary Shares of Philux Global Funds SCA, SICAV-RAIF based on the exchange rate as of June 30, 2024.

 

NOTE 5 – PROPERTY AND EQUIPMENT

 

As of June 30, 2024 the Company did not have any property or equipment.

 

NOTE 6 – CURRENT LIABILITIES

 

Current liabilities of the Company consist of the followings as of June 30, 2024 and 2023:

SCHEDULE OF CURRENT LIABILITIES 

Current Liabilities		June 30, 2024				June 30, 2023
Accounts payable			626,730				616,245
Sub-fund obligations			1,624,775				1,624,775
Accrued expenses			1,795,874				1,485,310
Short-term loans and notes payable			4,460,981				1,164,685
Convertible Promissory Notes			5,000				297,805
Due to officers			278,812				1,027,782
Advances from customers and client deposits			952,650				1,079,038
Derivative liabilities and Note Discount			-				1,220,576
Total Current Liabilities			9,744,823				8,516,216

 

ACCRUED EXPENSES: Accrued expenses as of June 30, 2024 consist of $1,238,095 in accrued salaries, $543,834 in accrued interest from notes and loans and $10,000 from accrued financing costs.

 

NOTES PAYABLE (NET): Notes payable consist of $1,919,153 in short-term notes and loans payable and $2,541,828 of reserve for note extensions and amendments.

 

ADVANCES FROM CUSTOMERS AND CLIENT DEPOSITS

 

Advances from Customers and Client Deposits were $952,650 as of June 30, 2024.

 

SUB-FUND OBILGATIONS: As of June 30, 2023, the Company has received $800,000 from European Plastic Joint Stock Company towards the expenses for setting up the energy sub-fund, $518,409 from Saigon Pho Palace Joint Stock Company and $150,000 from Sinh Nguyen Co., Ltd. towards the expenses for setting up the real estate sub-fund, and $156,366.25 from TECCO Group towards the expenses for setting up the infrastructure sub-fund, respectively, under the master PHILUX Global Funds. The Company recorded these amounts as liabilities until these sub-funds are set up and capitalized, at which time the sub-fund participants will receive 49% of the general partners’ portion of ownership in the relevant sub-funds for a total contribution of $2,000,000 each. The Company recorded a total of $1,624,775 as of June 30, 2024 as well as June 30, 2022 as sub-fund obligations.

 

F-15

 

NOTE 7- DUE TO OFFICERS AND DIRECTORS

 

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 June 30, 2024 and 2023 , the balances were $278,812 and $1,027,782, respectively.

SCHEDULE OF COMPONENTS OF DUE TO OFFICERS AND DIRECTORS 

Officers/Directors		June 30, 2024				June 30, 2023
Henry Fahman (Chairman and CEO)			278,812				364,432
Tam Bui (former Director and COO)			-				663,350
Total		$	278,812			$	1,027,782

 

NOTE 8 – LOANS AND PROMISSORY NOTES

 

SHORT TERM NOTES PAYABLE:

 

In the course of its business, the Company has obtained short-term loans from individuals and institutional investors and from time to time raised money by issuing restricted common stock of the Company under the auspices of Rule 144. As of June 30, 2024, the Company had $4,460,981 in short-term notes payable consisting of $1,769,921 of regular short-term notes and $43,750 SBA loan, $105,482 in merchant cash advances and $2,541,828 of reserve for loan extensions and amendments. These notes typically bear interest rates ranging from 0% to 36% per annum.

 

CONVERTIBLE PROMISSORY NOTES:

 

As of June 30, 2024, the principal balance of the only outstanding convertible note was $5,000.

 

NOTE 9 – BASIC AND DILUTED NET 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 year ended June 30, 2024 were the same since the inclusion of Common stock equivalents is anti-dilutive.

 

NOTE 10. STOCKHOLDER’S EQUITY

 

As of June 30, 2024, the total number of authorized capital stock of the Company consisted of Sixty Billion shares of voting Common Stock with a par value of $0.001 per share and Five Hundred Million shares of Preferred Stock with a par value of $0.001 per share.

 

Treasury Stock

 

The balance of treasury stock as of June 30, 2024 was 487,767 shares valued at $44,170 based on cost basis.

 

Common Stock

 

During the fiscal year ended June 30, 2024, the Company issued the following shares of its Common Stock for cash, conversion of promissory notes, warrant exercise, and consulting service:

SCHEDULE OF CONVERSIONS OF COMMON STOCK 

7/1/2023		Beginning balance:		39,414,493,275
Issuances:		Warrant exercise:		2,931,619,052
		Conversion of notes:		2,225,916,690
		Issuances for cash to certain shareholders under Rule 144: