Company: PHIL
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011742
Chunk: 92

Company: PHI GROUP INC
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 8
Chunk 92
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 any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.

10

Under
the supervision and with the participation of management, including its principal executive officer and principal financial officer,
the Company’s management assessed the design and operating effectiveness of internal control over financial reporting as of March
31, 2025 based on the framework set forth in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission.

We
have identified material weaknesses in our internal control over financial reporting:

    (i)
    inadequate
    segregation of duties consistent with control objectives;

    (ii)
    ineffective
    controls over period-end financial disclosure and reporting processes.

If
we fail to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report
our financial results in a timely manner, which may adversely affect investor confidence in our company.

Based
on this assessment, management concluded that the Company’s internal control over financial reporting was not effective as of March
31, 2025.

Management’s
Remediation Plan

We
plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this
quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses,
we plan to implement the following changes in the future:

    (i)
    appoint
    additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and

    (ii)
    adopt
    sufficient written policies and procedures for accounting and financial reporting.

The
remediation efforts set out in (i) are largely dependent upon our company securing additional financing to cover the costs of implementing
the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control
issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making
can be faulty and that breakdowns can occur because of simple error or mistake.

Management
believes that despite our material weaknesses set forth above, our consolidated financial statements for the quarterly report ended March
31, 2025 are fairly stated, in