Company: PHIL
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011742
Chunk: 150

Company: PHI GROUP INC
Filing Date: 2025-05-20
Form: 10-Q
Item: Part II, Item 1A
Chunk 150
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 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.

13

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.

R