EDGAR 10-K Filing

Company CIK: 704172
Filing Year: 2021
Filename: 704172_10-K_2021_0001493152-21-025300.json

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ITEM 1. BUSINESS
ITEM 1. BUSINESS OVERVIEW
INTRODUCTION
PHI Group, Inc. (the “Company” or “PHI”) (www.phiglobal.com) is primarily engaged in mergers and acquisitions, running PHILUX Global Funds, SCA, SICAV-RAIF, a “Reserved Alternative Investment Fund” (“RAIF”) under the laws of Luxembourg, and establishing 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.philuxcap.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 agriculture, renewable energy, real estate, infrastructure, and the Asia Diamond Exchange 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 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 a number of sub-funds for investment in real estate, renewable energy, infrastructure, agriculture and healthcare and on developing and establishing the 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. Recently, the Company has signed a Memorandum of Agreement to acquire seventy percent ownership in Five-Grain Treasure Spirits Company, Ltd., a baiju distiller in Jilin Province, China. 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 12, 2021, the Company owned the following subsidiaries: (1) Asia Diamond Exchange, Inc., a Wyoming corporation (100%), (2) Empire Spirits, Inc., a Nevada corporation (85% - formerly Provimex, Inc.) (3) (4) PHILUX Global Funds SCA, SICAV-RAIF, a Luxembourg Reserved Alternative Investment Fund (100%), (4) PHILUX Capital Advisors, Inc., a Wyoming corporation (100%), (5) CO2-1-0 (CARBON) CORP., a Wyoming corporation (51%), (6) PHI Luxembourg Development S.A., a Luxembourg corporation (100%), (7) PHILUX Global General Partners SA, a Luxembourg corporation (100%), (8) PHI Luxembourg Holding SA, a Luxembourg corporation (100%), (9) PHI Vietnam Investment and Development Company Ltd., a Vietnamese limited liability company (100%), (10) Phivitae Healthcare, Inc. (100%), , (11) American Pacific Plastics, Inc., a Wyoming corporation (100%), and (12) American Pacific Resources, Inc., a Wyoming corporation (100%),
ASIA DIAMOND EXCHANGE, INC. AND THE DEVELOPMENT OF ASIA DIAMOND EXCHANGE IN VIETNAM
Along with the establishment of PHILUX Global Funds, since March 2018 the Company has worked closely with the Authority of Chu Lai Open Economic Zone and the Provincial Government of Quang Nam, Vietnam to develop the Asia Diamond Exchange. Quang Nam Provincial Government has agreed to allocate more than 200 hectares in the sanctioned Free-Trade Zone near Chu Lai Airport, Nui Thanh District, Quang Nam Province in Central Vietnam for us to set up a multi-commodities center which would include the Asia Diamond Exchange. Recently, another opportunity has arisen with the start of construction of the new international airport in Long Thanh District, Dong Nai Province near Ho Chi Minh City in Southern Vietnam. In December 2020, the Vietnamese central government designated 1,200 hectares of land in Bau Can village, Long Thanh District, Dong Nai Province as a new industrial zone. We are in the process of applying for 600 hectares close to the Long Thanh International Airport to develop Long Thanh Multi-Commodities Logistics Center (LMLC) with a plan to house the proposed International Financial Center, an Urban Area and other hi-tech industrial operations. On June 04, 2021, the Company incorporated Asia Diamond Exchange, Inc., a Wyoming corporation, ID number 2021-001010234, as the holding company for the Asia Diamond Exchange project.
EMPIRE SPIRITS, INC. (FORMERLY PROVIMEX, INC.)
Provimex, Inc. was originally incorporated as a Nevada corporation on September 23, 2004, Entity Number C25551-4, to engage in international trade. On 9/26/2021, the company changed its name to Empire Spirits, Inc. as the holding company for the acquisition of seventy percent (70%) ownership in Five-Grain Treasure Spirits Company, Ltd., a baiju distiller in Jilin Province, China. PHI Group, Inc., through Empire Spirits, Inc. will provide additional required capital for Five-Grain to fully execute its business plan. The budget for this transaction will be one hundred million U.S. dollars (USD 100,000,000), to be paid in three tranches. The Company will complete the due diligence of Five-Grain before signing a Definitive Agreement for the consummation of this transaction, which is scheduled to close by the end of 2021.
Baijiu is a white spirit distilled from sorghum. It is similar to vodka but with a fragrant aroma and taste. It is currently the most consumed spirit in the world. Mainly consumed in China, it is gaining popularity in the rest of the world.
Five-Grain specializes in the production and sales of spirits and the development of proprietary spirit production processes. It also possesses a patented technology to grow red sorghum for baiju manufacturing. The patented grain produces superior yield and quality. Five-Grain is a reputable bulk alcohol supplier to some of the largest spirits companies in the world.
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 have 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.
The Fund is an umbrella fund containing one or more sub-fund compartments intended to invest in real estate, infrastructure, renewable energy, agriculture, healthcare and especially the Multi-Commodities Center (MCC) in Vietnam which will include the Asia Diamond Exchange and potentially the proposed International Financial Center.
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.
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 several privately held and publicly traded companies and continues to focus on serving the Pacific Rim markets in the foreseeable future. This subsidiary currently serves as the investment advisor to PHILUX Global Funds SCA, SICAV-RAIF and also arranges debt financing for its international clients.
CO2-1-0 (CARBON) CORP
In August 2021, PHI Group signed a Letter of Intent with Indonesia-based CYFS Group, headed by Mr. Choky Fernando Simanjuntak, to sponsor and co-found CO2-1-0 (CARBON) CORP to implement a new disruptive carbon mitigation initiative through environmentally sustainable projects starting in Indonesia, Vietnam, other ASEAN countries, and worldwide. On September 21, 2021 CO2-1-0 (CARBON) CORP was incorporated as a Wyoming corporation to manage this program. PHI Group will contribute a major portion of the development budget and will hold 50.1% shares of CO2-1-0 (CARBON).
According to the United Nation Framework Convention on Climate Change (UNFCCC), together with the Paris agreement and Kyoto protocol in 2016, where Indonesia has actively participated and agreed to maintain the earth temperature not to exceed by 1,5 degrees Celsius by 2030. The greenhouse gases (GHG), mainly CO2, CH4, N2O, SF6, HFCs, PFCs, are the root cause of global climate change, each of which can be calculated as CER (CO2 Emission Reduction) equivalent. The target for Indonesia is 834 million tonnes of CER by 2030.
Currently, CER is being tediously registered, validated, and certified centrally under UNFCCC methodology by a few independent institutions, mostly in the US and Europe, where the CER later can be traded (as carbon credits) voluntarily. For the past 5 years, the market for carbon credits is nearly zero, and due to complexity of the processes, many companies/ projects have less appetite to be engaged into the carbon credit opportunity. Many environmentally sustainable projects (renewable energy/ waste/ agriculture/forestry/ etc.) have failed to get financial support especially at the initial/ development stage, due to the above reasons, causing less economic value of the project or delays.
Though the carbon market is still on hibernate stage, CER value is estimated to rise to US$ 100/ ton CER by 2030, while crypto currency is just starting and has attracted many millennials and gen-Z who are more aware to green environment and sustainability (recent survey result, Indonesian college students, 12-13 July 2021). It is believed that from year 2022 onward the world will witness the boom of renewable energy projects/ sustainability initiatives that are related to Carbon Credits, with an enormous market size of 23 Giga tones of CO2 emission to be reduced in 2030. The Taskforce on Scaling Voluntary Carbon Markets (TSVCM), sponsored by the Institute of International Finance (IIF) with knowledge support from McKinsey, estimates that demand for carbon credits could increase by a factor of 15 or more by 2030 and by a factor of up to 100 by 2050. Overall, the market for carbon credits could be worth upward of $50 billion in 2030.
CO2-1-0 (CARBON) aims to provide a solution in disruptive decentralized new carbon market system using blockchain technology which will be empowering environmentally sustainable projects (renewable energy/ waste/ agriculture/ forestry/ etc.) starting in Indonesia, Vietnam, other ASEAN countries and worldwide. It has a clear and systematic product development roadmap, and the ultimate milestones of the products estimated to be launched in the near future. The solution, methodology, and improved TACCC (transparent, accurate, consistent, complete, and comparable) business process originally introduced by CO2-1-0 (CARBON) will bring full impact to better environment and life of millions.
AMERICAN PACIFIC RESOURCES, INC.
American Pacific Resources, Inc. (“APR”) is a Wyoming corporation established in April 2016 to serve as a holding company for various natural resource projects. On September 2, 2017, APR entered into an Agreement of Purchase and Sale with Rush Gold Royalty, Inc. (“RGR”), a Wyoming corporation, to acquire a 51% ownership in twenty-one mining claims over an area of approximately 400 acres in Granite Mining District, Grant County, Oregon, U.S.A., in exchange for a total purchase price of twenty-five million U.S. Dollars ($US 25,000,000) to be paid in a combination of cash, convertible demand promissory note and PHI Group, Inc.’s Class A Series II Convertible Cumulative Redeemable Preferred Stock (“Preferred Stock”). This transaction was closed effective October 3, 2017. Following the first amendment dated April 19, 2018 and the second amendment dated September 29, 2018 retroactively effective April 20, 2018, to the afore-mentioned Agreement of Purchase and Sale, PHI Group, Inc. paid ten million shares of its Class A Series II Convertible Cumulative Redeemable Preferred Stock, a convertible demand promissory note and cash totaling $25,000,000 to Rush Gold Royalty, Inc. As of June 30, 2020, the Company has recorded $462,000 paid for this transaction as expenses for research and development in connection with the Granite Mining Claims project. The value of these mining claims is expected to be adjusted later after a new valuation of these mining assets is conducted by an independent third-party valuator.
On April 23, 2018, the Company’s Board of Directors passed a resolution to declare a twenty percent (20%) special stock dividend from its holdings of Common Stock in American Pacific Resources, Inc., a subsidiary of the Company, to shareholders of Common Stock of the Company as follows: (a) Declaration date: April 23, 2018; (b) Record date: May 31, 2018; (c) Payment date: October 31, 2018; (d) Dividend ratio: All eligible shareholders of Common Stock of the Company as of the Record date shall be entitled to receive two (2) shares of Common Stock of American Pacific Resources, Inc. for every ten (10) shares of Common Stock of PHI Group, Inc. held by such shareholders as of the referenced Record date. The payment date was rescheduled for March 29, 2019.
Most recently, on June 25, 2021, the Board of Directors of PHI Group, Inc., adopted a resolution to further extend the Record Date to December 31, 2021 and amend the provisions for the afore-mentioned stock dividend as follows: (a) Eligible shareholders: In order to be eligible for the above-mentioned special stock dividend, the minimum amount of Common Stock of PHI Group, Inc. each shareholder must hold as of December 31, 2021 (the New Record Date) is two thousand (2,000) shares; (b) Dividend ratio: All eligible shareholders of Common Stock of the Company as of the new Record Date will be entitled to receive one (1) share of Common Stock of American Pacific Resources, Inc. for every two thousand (2,000) shares of Common Stock of PHI Group, Inc. held by such shareholders as of the new Record date; and (c) Payment Date: the Payment Date for the distribution of the special stock dividend to be ten (10) business days after a registration statement for said special stock dividend shares is declared effective by the Securities and Exchange Commission.
PHIVITAE HEALTHCARE, INC.
PHIVITAE HEALTHCARE, INC., a Wyoming corporation, is a wholly-owned subsidiary of PHI Group established on July 07, 2017 under the name of “PHIVATAE Corporation, Inc.” with the intention to acquire a pharmaceutical and medical equipment distribution company in Romania and to manage distribution of medical equipment and pharmaceutical products to emerging markets. This subsidiary changed its name to PHIVITAE HEALTHCARE, INC. on March 17, 2020. On April 27, 2020, PHI Group, Inc. signed a business cooperation agreement with Natural Well Technical Ltd. (“NWTL”), Taiwanese company, to jointly cooperate in the research and development activities of pertinent technologies that have been initiated and continue to be carried out by NWTL and applying them to produce commercial products and services in the fields of healthcare, beauty supply, agriculture and industry as well as any other business activities deemed mutually beneficial. PHIVITAE is also in the process of entering into a strategic alliance with a Vietnam-based medical supply company.
STOCK OWNERSHIPS:
MYSON GROUP, INC.
As of June 30, 2020, PHI Group, Inc. and PHI Capital Holdings, Inc., a wholly owned subsidiary of the Company, together owned 33,805,106 shares of Common Stock of Myson Group, Inc., a Nevada corporation currently traded on the OTC markets under the symbol “MYSN.” The Company wrote off 32,900,106 shares of MYSN stock held in certificate form as worthless as of June 30, 2019, as Myson Group was not in good standing with the State of Nevada at that time. Subsequently, Myson Group filed a Certificate of Reinstatement with the Secretary of State of Nevada on June 04, 2021.
SPORTS POUCH BEVERAGE COMPANY, INC.
As of June 30, 2020, the Company through PHILUX Capital Advisors, Inc. owned 292,050,000 shares of Sports Pouch Beverage Company, Inc., a Nevada corporation traded on the OTC Markets under the symbol “SPBV”. On March 19, 2021 this company signed a Business Combination Agreement with Glink Apps International, Inc. and expects to change its name and trading symbol to reflect to core business of Glink Apps International, Inc.

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ITEM 1A. RISK FACTORS
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.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.

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ITEM 2. PROPERTIES
ITEM 2. DESCRIPTION OF PROPERTIES
As of June 30, 2021, the Company did not own any realty or equipment.

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ITEM 3. LEGAL PROCEEDINGS
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.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
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, 2021
0.0135
0.0055
Per Share Common Stock Prices for the Quarters
High
Low
Quarter Ended June 30, 2021
0.0198
0.0024
Quarter Ended March 31, 2021
0.0146
0.0002
Per Share Common Stock Prices by Quarter
For the Fiscal Year Ended June 30, 2021
High Low
Quarter Ended June 30, 2021 0.0198 0.0024
Quarter Ended March 31, 2021 0.0146 0.0002
Quarter Ended December 31, 2020 0.0007 0.0000
Quarter Ended September 30, 2020 0.0002 0.0000
Per Share Common Stock Prices by Quarter
For the Fiscal Year Ended June 30, 2020
High Low
Quarter Ended June 30, 2020 0.0002 0.0000
Quarter Ended March 31, 2020 0.0002 0.0000
Quarter Ended December 31, 2019 0.0002 0.0000
Quarter Ended September 30, 2019 0.0002 0.0000
Holders of Common Equity:
As of October 10, 2021, there are approximately 1,586 shareholders of record of the Company’s common stock, of which 1,287 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.
Share dividend: On March 12, 2012 the Board of Directors of the Company declared a special stock dividend to shareholders of Common Stock of the Company with the following stipulations: (a) Declaration date: March 16, 2012; (b) Record date: June 15, 2012; (c) Payment date: September 17, 2012; (d) Dividend ratio: All eligible shareholders of Common Stock of the Company as of the Record date shall receive three new shares of Common Stock of the Company for each share held by such shareholders as of the referenced record date. The purpose of this special stock dividend was to partially mitigate the impact of the dilution in connection with the 1-for-1,500 reverse split of the Common Stock on the Company’s long-term shareholders and reward them for staying with the Company. On June 6, 2012, the Company’s Board of Directors passed a resolution to change the record date for the special stock dividend to July 31, 2012 and the distribution date to November 30, 2012. The Company has reserved a total of 5,673,327 shares of Common Stock for this special dividend distribution and will reset a new distribution date when a registration statement for the dividend shares is declared effective by the Securities and Exchange Commission.

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. SELECTED FINANCIAL DATA
SELECTED FINANCIAL DATA
June 30,
Net revenues $ 61,000 $ 12,531 $ -
Income (loss) from operations $ (888,184 ) $ (1,861,207 ) $ (2,410,213 )
Net other income (expense) $ (6,112,184 ) $ 539,402 $ (519,448 )
Net income (loss) $ (7,000,368 ) $ (1,321,805 ) $ (2,929,661 )
Net income (loss) per share $ (0.00 ) $ (0.00 ) $ (0.00 )
Total assets $ 892,228 $ 465,469 $ 1,084,095
Total liabilities $ 7,690,620 $ 7,525,259 $ 7,086,819

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
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, 2021 AND JUNE 30, 2020
Revenues:
The Company received $61,000 from consulting services for the fiscal year ended June 30, 2021 as compared to $12,531 from consulting services for the fiscal year ended June 30, 2020.
Operating Expenses:
The Company incurred total operating expenses of $949,184 for the fiscal year ended June 30, 2021 as compared to $1,873,738 for the year ended June 30, 2020. The decrease of $924,554 includes a decrease of $91,308 in general and administrative expenses, a decrease of $780,746 in professional services, and a decrease of $52,5000 in salaries and wages fees between the two fiscal periods. The decrease in professional services was due to a decrease in the expenses associated with setting up the Luxembourg bank funds during the fiscal year ended June 30, 2021.
Income (loss) from operations:
The Company had a loss from operations of $888,184 for the fiscal year ended June 30, 2021 as compared to a loss from operations of $1,861,207 for the fiscal year ended June 30, 2020. This represents a decrease of $973,023 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 $91,308 in general and administrative expenses, a decrease of $780,746 in professional services, a decrease of $52,5000 in salaries and wages fees between the two fiscal periods as mentioned above, plus an increase of $48,469 in revenues in the current period.
Other income (expense):
The Company had net other expenses of $6,112,184 for the fiscal year ended June 30, 2021 as compared to net other income of $539,402 for the fiscal year ended June 30, 2020. The net variance of $6,651,586 between the two fiscal periods was primarily due to an increase of $56,557 in interest expenses, a decrease of $750,751 in other income, and an increase in other expenses in the amount of $5,844,278. The Company recognized $104,356 as other income in connection with a gain in settlement of debt in the amount of $87,228, a refund of $10,650 and total adjustments of $6,458 from the accounts of the Luxembourg bank funds during the fiscal year ended June 30, 2021 as compared to a total of 855,107 as other income from derivative gains during the same period in 2020. As for other expenses, the Company incurred $5,860,341 under this category during the fiscal year ended June 30, 2021, primarily due to loss on issuance of stock in the amount of $2,431,914, loss on conversion of notes in the amount of $2,558,325, loss on note discounts of $215,216, penalties of $174,987 and financing origination costs of $28,070 as compared to $16,063 in other expenses during the previous fiscal year.
Net income (loss):
The Company had a net loss of $7,000,368 for the fiscal ended June 30, 2021, as compared to a net loss of $1,321,805 for the fiscal year ended June 30, 2020, representing a variance of $5,678,563 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, 2021 and June 30, 2020 was both $(0.00).
CASH FLOWS
We had in cash and cash equivalents of $95,344 as of June 30, 2021 as compared to $225,381 in cash and cash equivalents as of June 30, 2020, respectively.
Net cash provided by our operating activities was $158,720 for the fiscal year ended June 30, 2021 as compared to cash used in operating activities of $(720,125) for the fiscal year ended June 30, 2020.
The underlying reasons for the variance in net cash provided by and used in operating activities between the two fiscal year periods were mainly due to an increase in net loss from operations of $5,678,563, a net increase of $6,885,045 due to conversion of notes, a net decrease in assets and prepaid expenses of $770,632 and a net increase in accounts payable and accrued expenses of $521,324 between the two fiscal years.
There was $406,427 in cash used in investing activities during the fiscal year ended June 30, 2021, compared to no cash provided by or used in investing activities during the same period ended June 30, 2020.
Net cash provided by financing activities was $117,670 for the fiscal year ended June 30, 2021 as compared with $873,827 for the fiscal year ended June 30, 2020. The net cash provided by financing activities for the current fiscal year primarily came from loans from officers and directors in the amount of $24,049 and $112,530 from issuance of common stock for cash.
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 bear interest rates ranging from 0% to 36% per annum. (Notes 8 & 13).
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’s goals are to create a number of sub-funds under PHILUX Global Funds SCA, SICAV-RAIF for investment in real estate, renewable energy, agriculture, infrastructure, and healthcare, as well as develop the Asia Diamond Exchange in Vietnam. In addition, the Company will continue to carry out its merger and acquisition program by acquiring target companies for roll-up strategy and also invest in special situations. In particular, the Company will complete the acquisition of Five-Grain Treasure Spirits Co., Ltd. under Empire Spirits, Inc. and develop a private baiju brand to increase revenues. Moreover, the Company will continue to provide advisory and consulting services to international clients through its wholly owned subsidiary PHILUX Capital Advisors, Inc. (formerly known as PHI Capital Holdings, Inc.)
FINANCIAL PLANS
MATERIAL CASH REQUIREMENTS: We must raise substantial amounts of capital to fulfill our plans for PHILUX Global Funds and for acquisitions. We intend to use equity, debt and project financing to meet our capital needs for acquisitions and investments.
Management has taken action and formulated plans to meet the Company’s operating needs through June 30, 2022 and beyond. The working capital cash requirements for the next 12 months are expected to be generated from operations, sale of marketable securities and additional financing. The Company plans to generate revenues from its consulting services, merger and acquisition advisory services, and acquisitions of target companies with 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 FACILITY
On March 6, 2017, PHI Group, Inc., a Nevada corporation (the “Company”) and Azure Capital, a Massachusetts Corporation (the “Investor”) entered into an Investment Agreement (the “Investment Agreement”) and a Registration Rights Agreement (the “Registration Rights Agreement”), each dated March 6, 2017 between the Company and the Investor.
Pursuant to the Investment Agreement, the Investor committed to purchase, subject to certain restrictions and conditions, up to $10,000,000 worth of the Company’s common stock, over a period of 36 months from the effectiveness of the registration statement registering the resale of shares purchased by the Investor pursuant to the Investment Agreement. The Company agreed to initially reserve 20,000,000 shares of its Common Stock for issuance to the Investor pursuant to the Investment Agreement. In the event the Company cannot register a sufficient number of shares of its Common Stock for issuance pursuant to the Investment Agreement, the Company will use its best efforts to authorize and reserve for issuance the number of shares required for the Company to perform its obligations in connection with the Investment Agreement as soon as reasonably practical.
This Investment Agreement was amended on August 3, 2017 to allow for the reservation of 65,445,000 shares of the Company’s Common Stock for issuance to the Investor pursuant to the corrected Investment Agreement.
The Company has filed a S-1 Registration Statement with the Securities and Exchange Commission to include 7,936,600 shares of its Common Stock for issuance in connection with the first tranche of the Equity Line Facility. The S-1 Registration Statement, as amended, was declared effective by the Securities and Exchange Commission on January 11, 2018.
As of the day of this report, the Company has not accessed the Equity Line Facility for funding. The Company sent an official notice to Azure Capital on September 7, 2021 to terminate this Investment Agreement effective retroactively January 11, 2021. The Company intends to file an Offering Circular pursuant to Tier 2 of Regulation A of the United States Securities and Exchange Commission (the “SEC”) to raise capital for the acquisition of Five-Grain Treasure Spirits, Co., Ltd. in Jilin Province, China and to launch the Asia Diamond Exchange in Vietnam.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8. FINANCIAL STATEMENTS
PHI GROUP, INC.
Report of Independent Registered Public Accounting Firm
Balance Sheet as of June 30, 2021 and June 30, 2020
Statement of Operations for the fiscal years ended June 30, 2021 and June 30, 2020
Statement of Cash Flows for the fiscal years ended June 30, 2021 and June 30, 2020
Statement of Stockholders’ Equity (Deficit) for the fiscal years ended June 30, 2021 and June 30, 2020
Notes to Financial Statements
AUDITOR’S REPORT
PHI GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (AUDITED)
June 30, June 30,
ASSETS
Current Assets
Cash and cash equivalents $ 95,344 $ 225,381
Marketable securities 385,457 235,088
Total current assets 480,801 460,469
Other assets:
Investments 411,427 5,000
Total Assets 892,228 465,469
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable 608,521 354,080
Sub-fund obligations 1,474,775 1,266,634
Accrued expenses 2,166,006 2,798,743
Short-term notes payable (net) 306,735 395,950
Convertible Promissory Notes (net) 220,230 272,207
Due to officers 1,720,323 1,696,274
Advances from customers 582,237 430,500
Derivative liabilities and Note Discount 611,792 310,870
Total Liabilities 7,690,620 7,525,259
Stockholders’ deficit:
Preferred Stock, $0.001 par value; 500,000,000 shares authorized. zero shares Class A Series II issued and outstanding as of 6/30/2021 and 6/30/2020, respectively. Par value: - 10,000
180,000 shares and 120,000 shares Class B Series I issued and outstanding as of 06/30/2021 and 06/30/2020 respectively. Par value:
Common stock, $0.001 par value; 40 billion shares authorized; 26,081,268,895 shares issued and outstanding on 06/30/2021; 40 billion shares authorized and 13,232,408,755 shares issued and outstanding on 6/30/2020, respectively, adjusted for 1 for 1,500 reverse split effective March 15, 2012.
Par value: 26,081,269 13,232,410
APIC - Common Stock 21,123,349 23,922,943
Common Stock to be issued 15,000 $ -
Common Stock to be cancelled (2,696,411 ) (35,500 )
Treasury stock: 484,767 shares as of 6/30/21 and 6/30/20, respectively - cost method. (44,170 ) (44,170 )
Accumulated deficit (51,010,719 ) (44,010,352 )
Total Acc. Other Comprehensive Income (Loss) (266,890 ) (135,301 )
Total stockholders’ deficit (6,798,392 ) (7,059,790 )
Total liabilities and stockholders’ deficit $ 892,228 $ 465,469
The accompanying notes form an integral part of these audited consolidated financial statements
PHI GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS (AUDITED)
FOR THE YEARS ENDED
JUNE 30,
Net revenues
Consulting, advisory and management services $ 61,000 $ 12,531
Total revenues 61,000 12,531
Operating expenses:
Salaries and wages 247,500 300,000
Professional services, including non-cash compensation 543,848 1,324,594
General and administrative 157,836 249,144
Total operating expenses 949,184 1,873,738
Income (loss) from operations (888,184 ) (1,861,207 )
Other income and expenses
Interest expense (356,199 ) (299,642 )
Other income 104,356 855,107
Other expenses (5,860,341 ) (16,063 )
Net other income (expenses) (6,112,184 ) 539,402
Net income (loss) $ (7,000,368 ) $ (1,321,805 )
Net loss per share:
Basic $ (0.00 ) $ (0.00 )
Diluted $ (0.00 ) $ (0.00 )
Weighted average number of shares outstanding:
Basic 17,386,377,288 13,152,136,099
Diluted 17,386,377,288 13,152,136,099
The accompanying notes form an integral part of these audited consolidated financial statements.
PHI GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (AUDITED)
FOR THE YEARS ENDED JUNE 30, 2021 AND JUNE 30, 2020
Cash flows from operating activities:
Net income (loss) from operations $ (7,000,368 ) $ (1,321,805 )
Mark-to-market adjustments (63,261 ) (135,301 )
Net change due to conversion of notes 7,280,825 395,780
Adjustments to reconcile net income to net cash used in operating activities:
(Increase) decrease in assets and prepaid expenses
Marketable securities (150,369 ) (21,605 )
Escrow deposits for Luxembourg bank funds - 792,237
Total (increase) decrease in assets and prepaid expenses (150,369 ) 770,632
Increase (decrease) in accounts payable and accrued expenses
Accounts payable 254,441 164,928
Sub-fund obligations 208,141 -
Accrued expenses (632,737 ) 409,632
Change of loans from Directors/Officers -
Advances from customers 151,737 (7,500 )
Derivative liabilities 110,311 (996,551 )
Total increase (decrease) in accounts payable and accrued expenses 91,893 (429,431 )
Net cash provided by (used in) operating activities 158,720 (720,125 )
Cash flows from investing activities:
Net cash provided by (used in) investing activities (406,427 ) -
Cash flows from financing activities:
Loans from Directors/Officers 24,049 805,379
Notes payable (18,909 ) 64,159
Common Stock 112,530 4,200
Net cash provided by (used in) financing activities 117,670 873,738
Net decrease in cash and cash equivalents (130,037 ) 154,613
Cash and cash equivalents, beginning of period 225,380 71,768
Cash and cash equivalents, end of period $ 95,344 $ 225,381
The accompanying notes form an integral part of these audited consolidated financial statements
PHI GROUP, INC. AND SUBSIDIARIES
STATEMENT OF STOCKHOLDERS’ DEFICIT (AUDITED)
FOR THE YEARS ENDED JUNE 30, 2021 AND JUNE 30, 2020
Common Stock Preferred Stock Additional Treasury Stock Common Stock Other
Comprehensive
Accumulated Total Shareholders’
Shares Par Value Amount Shares Amount Paid-in Capital Shares Amount to be Cancelled Gain (loss) Deficit Deficit
Balance at July 01, 2019 10,009,756,808 $ 10,009,757 10,120,000 $ 10,120 $ 26,745,616 (484,767 ) $ (44,767 ) $ (35,500 ) $ - $ (42,688,547 ) $ (6,002,724 )
Total Common Shares issued for conversions of notes 3,166,651,947 $ 3,166,652
$ (2,770,873 )
Total Common Shares issued for cash 56,000,000 $ 56,000
$ (51,800 )
$ 4,200
Total Common Shares issued from Jul 1,2019 to June 30, 2020 3,222,651,947 $ 3,222,652
$ (2,822,673 )
$ 264,679
Total Class B Series I Preferred Shares issued for loan repayment
60,000 $ 60 $ -
$ 60
Net Income (Loss) for FY ended June 30, 2020
$ (1,321,805 )
Balance at June 30, 2020 13,232,408,755 $ 13,232,409 10,180,000 $ 10,180 $ 23,922,943 (484,767 ) $ (44,767 ) $ (35,500 ) $ (135,301 ) $ (44,010,352 ) $ (7,055,590 )
Common Shares issued for conversion of note during quarter ended September 30, 2020 239,611,455 $ 239,611
($ 219,192 )
$ 20,419
Common Shares issued for conversion of notes during quarter ended December 31, 2020 991,987,513 $ 991,988
($ 829,718 )
$ 162,270
Common Shares issued for conversion of notes during quarter ended March 31, 2021 8,781,230,346 $ 8,781,230
($ 8,080,856 )
$ 700,374
Common Shares issued for conversion of notes during quarter ended June 30, 2021 1,514,851,203 $ 1,514,851
$ 2,073,720
$ 3,457,779
Common Shares issued for cash during quarter ended June 30, 2021 867,049,520 $ 867,050
$ 1,647,395
$ 2,514,445
Common Shares issued for conversion of preferred stock in quarter ended June 30, 2021 213,651,293 $ 213,651 (10,000,000 ) ($ 10,000 ) $ 174,126
$ 377,777
Common Shares issued for investment during quarter ended June 30, 2021 235,478,810 $ 235,479
$ 2,425,432
$ 2,660,911
Common Shares issued for note agreement during quarter ended June 30, 2021 5,000,000 $ 5,000
$ 9,500
$ 14,500
Net Income (Loss) for FY ended June 30, 2021
($ 6,661,278 )
Balance at June 30, 2021 26,081,268,895 $ 26,081,269 180,000 $ 180 $ 21,123,350 (484,767 ) (44,170 ) (35,500 ) ($ 266,890 ) $ (50,671,629 ) ($ 3,798,392 )
The accompanying notes form an integral part of these audited consolidated financial statements.
PHI GROUP, INC. AND SUBSIDIARIES
(FORMERLY PROVIDENTIAL HOLDINGS, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - NATURE OF BUSINESS
PHI Group, Inc. (the “Company” or “PHI”) (www.phiglobal.com) is primarily engaged in the operations of PHILUX Global Funds, SCA, SICAV-RAIF, a “Reserved Alternative Investment Fund” (“RAIF”) under the laws of Luxembourg, and the development of 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.philuxcap.com) and invests in selective industries as well as special situations aiming to potentially create significant long-term value for our shareholders. PHILUX Global Funds intends to hold a number of sub-funds for investment in agriculture, renewable energy, real estate, infrastructure, healthcare and the Asia Diamond Exchange in Vietnam.
BACKGROUND
Originally incorporated on June 8, 1982 as JR Consulting, Inc., a Nevada corporation, the Company operated as a Nevada corporation until June 30, 2020 when it filed a Certificate of Dissolution with the Secretary of State of Nevada and started to operate as a Wyoming corporation pursuant to the Articles of Domestication filed with the Wyoming Secretary of State 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 modeling agencies in New York and 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 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 listed on the Frankfurt Stock Exchange (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 publicly traded company), 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 operating PHILUX Global Funds, SCA, SICAV-RAIF by setting up a number of sub-funds for investment in real estate, renewable energy, infrastructure, agriculture and healthcare as well as developing and establishing the Asia Diamond Exchange in Vietnam. In addition, PHILUX Capital Advisors, Inc. (formerly Capital Holdings, Inc.), a wholly owned subsidiary of the Company, serves as the investment advisor to PHILUX Global Funds and continues to provide corporate and project finance services, including merger and acquisition (M&A) advisory and consulting services for other client companies. 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 PHI Group, Inc., its wholly owned subsidiaries (1) PHILUX Global Funds SCA, SICAV-RAIF, a Luxembourg bank fund designed to hold a number of subfund compartments for investing in various selective industries, (2) PHI Luxembourg Development S.A., the mother holding company for PHILUX Global Funds, (3) PHI Luxembourg Holding S.A., (4) PHILUX Global General Partner S.A., (5) PHILUX Capital Advisors, Inc., a Wyoming corporation (100%), American Pacific Resources, Inc., a Wyoming corporation (100%), and (6) American Pacific Plastics, Inc., a Wyoming corporation, collectively referred to as the “Company.” 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, 2021 and 2020 the marketable securities have been recorded at $385,457 and $235,088, respectively, based upon the fair value of the marketable securities at that time.
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, 2021.
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:
Basic and diluted loss per share:
Numerator:
Net income (loss) $ (7,000,368 ) $ (1,321,805 )
Denominator:
Basic weighted average number of common shares outstanding 17,386,377,288 13,152,136,099
Basic net income (loss) per share $ (0.00 ) $ (0.00 )
Diluted weighted average number of Common shares outstanding 17,386,377,288 13,152,136,099
Diluted net income (loss) per share $ (0.00 ) $ (0.00 )
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.
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, 2021, 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.
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.
ADVERTISING
The Company expenses advertising costs as incurred. Advertising costs for the years ended June 30, 2021 and 2020 were $0 and $50,377, respectively. The Company did not incur any advertising and investor relations expenses during the fiscal year ended June 30, 2021.
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, 2021 and 2020, respectively, accumulated other comprehensive income (loss) of $266,890 and $135,301 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, 2021 and June 30, 2020.
RISKS AND UNCERTAINTIES
In the normal course of business, the Company is subject to certain risks and uncertainties. The Company provides its service and receives marketable securities upon execution of transactions. Consequently, the value of the securities received from customers can be affected by economic fluctuations and each customer’s business growth. The actual realized value of these securities could be significantly different than recorded value.
RECENT ACCOUNTING PRONOUNCEMENTS
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06-Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)-Accounting For Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for annual and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020. The Company intends to adopt ASU 2020-06 for the quarter beginning January 1, 2022.
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 rollforward 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.
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.
Marketable securities owned by the Company and classified as available for sale as of June 30, 2021 consisted of 905,000 shares of Myson Group, Inc. (formerly Vanguard Mining Corporation) and 292,050,000 shares of Sports Pouch Beverage Company, both public companies traded on the OTC Markets (Trading symbols MYSN and SPBV, respectively). The fair value of the marketable securities recorded as of June 30, 2021 was $ 385,457.
Securities available for sale Level 1 Level 2 Level 3 Total
June 30, 2021 - $ 5,792 $ 379,665 $ 385,457
June 30, 2020 $ - $ 1,448 $ 233,640 $ 235,088
During the fiscal year ended June 30, 2021, there was no transfer of securities from level 3 to level 2.
NOTE 4 - OTHER ASSETS
The Other Assets comprise of the following as of June 30, 2021 and 2020
Development costs of Asia Diamond Exchange $ 406,427 -
Investment in AQuarius Power, Inc. 5,000 $ 5,000
Total Other Assets $ 411,427 $ 5,000
Investments as of June 30, 2021 consist of a $5,000 investment in AQuarius Power, Inc., a renewable energy technology company and $406,427 in Asia Diamond Exchange, Inc. The Company received 406,426,740 shares of Common Stock of Asia Diamond Exchange, Inc., par value of $0.001, for $406,427 incurred in connection with the development costs of the Asia Diamond Exchange project.
NOTE 5 - PROPERTY AND EQUIPMENT
As of June 30, 2021 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, 2021 and 2020:
June 30, 2021 June 30, 2020
Accounts Payable $ 608,521 $ 354,080
Accrued Expenses $ 2,166,006 $ 2,798,743
Notes Payable (net) $ 526,965 $ 668,157
Due to Officers and Directors $ 1,720,323 $ 1,696,274
Derivative Liabilities $ 611,792 $ 310,870
Advance from customers $ 582,237 $ 430,500
Sub-fund Obligations $ 1,474,775 $ 1,266,634
Total Current Liabilities $ 7,690,620 $ 7,525,259
ACCRUED EXPENSES: Accrued expenses as of June 30, 2021 consist of $1,765,149 in accrued salaries and payroll taxes and $400,857 in accrued interest from notes and loans
NOTES PAYABLE (NET): Notes payable consist of $306,735 in short-term notes and loans payable and $220,230 in convertible promissory notes.
ADVANCES FROM CUSTOMERS
Advances from Customers were $ 582,237 and $430,500 as of June 30, 2021 and June 30, 2020, respectively.
SUB-FUND OBILGATIONS: As of June 30, 2021, 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 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 $1,474,775 as of June 30, 2021 and $1,266,634 as of June 30, 2020 as sub-fund obligations.
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, 2021 and 2020 , the balances were $1,720,323 and $1,696,274, respectively.
Officers/Directors June 30, 2021 June 30, 2020
Henry Fahman 1,056,973 1,032,924
Tam Bui 663,350 663,350
Total $ 1,720,323 $ 1,696,274
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, 2021, the Company had $306,735 in short-term notes payable consisting of $227,046 of regular short-term notes, $43,750 SBA loan, $35,939 merchant cash advance with $398,580 in accrued and unpaid interest. These notes bear interest rates ranging from 0% to 36% per annum.
CONVERTIBLE PROMISSORY NOTES:
As of June 30, 2021, the principal balance of the outstanding convertible notes was $220,230 with total derivative liabilities of $489,509. The Company relies on professional third-party valuation to record the value of derivative liabilities, discounts, and changes in fair value of derivatives in connection with these convertible notes and warrants, if any, that are related to the convertible notes.
NOTE 9 - PAYROLL TAX LIABILITIES
As of June 30, 2021, payroll tax liabilities were $5,747.
NOTE 10 - 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, 2020 were the same since the inclusion of Common stock equivalents is anti-dilutive.
NOTE 11 - Domestication in the State of Wyoming
On September 20, 2017, the Company applied for a Certificate of Domestication and filed Articles of Domestication with the office of the Secretary of State of Wyoming to re-domicile the Company’s jurisdiction to the State of Wyoming.
On September 20, 2017, the Company filed Articles of Amendment with the Wyoming Secretary of State to amend the authorized capital of the Company as follows:
“The total number of shares into which the authorized capital stock of the corporation is divided is one billion shares, consisting of: nine hundred million shares of voting Common Stock with a par value of $0.001 per share; fifty million shares of non-voting Class A Series I Preferred Stock with a par value of $5.00 per share; twenty-five million shares of non-voting Class A Series II Preferred Stock with a par value of $5.00 per share; twenty million shares of non-voting Class A Series III Preferred Stock with a par value of $5.00 per share and five million shares of voting Class A Series IV Preferred Stock with a par value of $5.00 per share. The relative rights, preferences, limitations and restrictions associated with the afore-mentioned shares of Class A Preferred Stock will be determined by the Board of Directors of the corporation.”
On June 25, 2020, the Company filed Articles of Amendment with the Wyoming Secretary of State to amend Article 10 of the Articles of Domestication to authorize Forty Billion (40,000,000,000) shares of Common Stock with a par value of $0.001 per share and Five Hundred Million (500,000,000) shares of Preferred Stock with a par value of $0.001 per share and to designate Classes A and B and the Series of those classes of Preferred Stock as following:
I. Class A Preferred Stock
A. DESIGNATIONS, AMOUNTS AND DIVIDENDS
1. Class A Series I Cumulative Convertible Redeemable Preferred Stock
a. Designation: Fifty million (50,000,000) shares of the authorized 500,000,000 shares of Preferred Stock, with a par value of $0.001 per share, are designated as Class A Series I Cumulative Convertible Redeemable Preferred Stock
b. Number of Shares: The number of shares of Class A Series I Preferred Stock authorized shall be fifty million (50,000,000) shares.
c. Dividends: Each holder of Class A Series I Preferred Stock is entitled to receive ten percent (10%) non-compounding cumulative dividends per annum, payable semi-annually.
2. Class A Series II Cumulative Convertible Redeemable Preferred Stock
a. Designation. Two hundred million (200,000,000) shares of the authorized 500,000,000 shares of Preferred Stock, with a par value of $0.001 per share, are designated Class A Series II Cumulative Convertible Redeemable Preferred Stock (the “Class A Series II Preferred Stock”).
c. Number of Shares. The number of shares of Class A Series II Preferred Stock authorized shall be two hundred million (200,000,000) shares.
c. Dividends: Each holder of Class A Series II Preferred Stock is entitled to receive eight percent (8%) cumulative dividends per annum, payable semi-annually.
3. Class A Series III Cumulative Convertible Redeemable Preferred Stock
a. Designation. Fifty million (50,000,000) shares of the authorized 500,000,000 shares of Preferred Stock, with a par value of $0.001 per share, are designated as Class A Series III Cumulative Convertible Redeemable Preferred Stock (the “Class A Series III Preferred Stock”).
b. Number of Shares. The number of shares of Class A Series III Preferred Stock authorized shall be fifty million (50,000,000) shares.
c. Dividends: Each holder of Class A Series III Preferred Stock is entitled to receive eight percent (8%) cumulative dividends per annum, payable semi-annually.
4. Class A Series IV Cumulative Convertible Redeemable Preferred Stock
a. Designation. One hundred ninety-nine million (199,000,000) shares of the authorized 500,000,000 shares of Preferred Stock, with a par value of $0.001 per share, are designated as Class A Series IV Cumulative Convertible Redeemable Preferred Stock (the “Class A Series IV Preferred Stock”).
b. Number of Shares. The number of shares of Class A Series III Preferred Stock authorized shall be one hundred ninety-nine million (199,000,000) shares.
c. Dividends: To be determined by the Corporation’s Board of Directors.
B. CONVERSION
1. Conversion of Series I, Series II and/or Series IV Class A Preferred Stock into Common Stock of PHI Group, Inc.
Each share of the Class A Preferred Stock, either Series I, Series II or Series IV shall be convertible into the Company’s Common Stock any time after two years from the date of issuance at a Variable Conversion Price (as defined herein) of the Common Stock. The “Variable Conversion Price” shall mean 75% multiplied by the Market Price (as defined herein) (representing a discount rate of 25%). “Market Price” means the average Trading Price for the Company’s Common Stock during the ten (10) trading-day period ending one trading day prior to the date the Conversion Notice is sent by the Holder of the Class A Preferred Stock to the Company via facsimile or email (the “Conversion Date”). “Trading Price” means, for any security as of any date, the closing price on the OTC Markets, OTCQB, NASDAQ Stock Markets, or applicable trading market as reported by a reliable reporting service (“Reporting Service”) mutually acceptable to the Company and Holder of the Class A Preferred Stock.
2. Conversion of Series I, Series II and/or Series IV Class A Preferred Stock into Common Stock of a subsidiary of PHI Group, Inc.’s.
Alternatively, each share of the Class A Preferred Stock, either Series I, Series II and/or Series IV may be convertible into Common Stock of a subsidiary of PHI Group, Inc.’s, to be determined by the Company’s Board of Directors, any time after such subsidiary has become a fully-reporting publicly traded company for at least three months, at a Variable Conversion Price (as defined herein). The Variable Conversion Price to be used in connection with the conversion into Common Stock of a subsidiary of PHI Group, Inc.’s shall mean 50% multiplied by the Market Price (as defined herein), representing a discount rate of 50%, of that Common Stock. “Market Price” means the average Trading Price for the Common Stock of said subsidiary of PHI Group, Inc.’s during the ten (10) trading-day period ending one trading day prior to the date the Conversion Notice is sent by the Holder of the Preferred Stock to the Company via facsimile or email (the “Conversion Date”). “Trading Price” means, for any security as of any date, the closing price on the OTC Markets, OTCQB, NASDAQ Stock Markets, NYSE or applicable trading market as reported by a reliable reporting service (“Reporting Service”) mutually acceptable to the Company, said subsidiary and Holder of the Class A Preferred Stock.”
3. Conversion of Class A Series III Preferred Stock of PHI Group, Inc. into Common Stock of American Pacific Plastics, Inc., a subsidiary of PHI Group, Inc.’s.
The entire Class A Series III Preferred Stock of PHI Group, Inc. (i.e. fifty million (50,000,000) shares) may be convertible into eighty percent (80%) American Pacific Plastics, Inc.’s Common Stock which will have been issued and outstanding immediately after such conversion or exchange on a pro rata basis.
4. Conversion Shares.
The amount of shares of Common Stock of PHI Group, Inc., or alternatively, of a subsidiary of PHI Group, Inc.’s, to be received by Holder at the time of conversion of Class A Series I or Series II Preferred Stock of PHI Group, Inc. will be based on the following formula:
Where
CS: Common Shares of PHI Group, Inc.,
Amount of CS =
or alternatively, of a subsidiary of PHI Group, Inc.’s.
OIP + AUD
VCP
OIP: Original Issue Price of Class A Series I or Series II Preferred Stock of PHI Group, Inc.
AUD: Accrued and Unpaid Dividends.
VCP: Variable Conversion Price of PHI Common Stock or of a subsidiary of PHI Group, Inc.’s as defined above.
C. REDEMPTION RIGHTS
The Corporation, after a period of two years from the date of issuance, may at any time or from time to time redeem the Class A Preferred Stock, either Series I, Series II, Series III or Series IV in whole or in part, at the option of the Company’s Board of Directors, at a price equal to one hundred twenty percent (120%) of the original purchase price of the Class A Preferred Stock or of a unit consisting of any shares of Class A Preferred Stock and any warrants attached thereto, plus, in each case, accumulated and unpaid dividends to the date fixed for redemption.
D. LIQUIDATION
Upon the occurrence of a Liquidation Event (as defined below), the holders of Class A Preferred Stock are entitled to receive net assets on a pro rata basis. As used herein, “Liquidation Event” means (i) the liquidation, dissolution or winding-up, whether voluntary or involuntary, of the Corporation, (ii) the purchase or redemption by the Corporation of shares of any class of stock or the merger or consolidation of the Corporation with or into any other corporation or corporations, unless (a) the holders of the Class A Preferred Stock receive securities of the surviving corporation having substantially similar rights as the Class A Preferred Stock and the stockholders of the Corporation immediately prior to such transaction are holders of at least a majority of the voting securities of the successor corporation immediately thereafter (the “Permitted Merger”), unless the holders of the shares of Class A Preferred Stock elect otherwise or (b) the sale, license or lease of all or substantially all, or any material part of, the Corporation’s assets, unless the holders of Class A Preferred Stock elect otherwise.
E. RANK
All shares of the Class A Preferred Stock shall rank (i) senior to the Corporation’s Common Stock and any other class or series of capital stock of the Corporation hereafter created, (ii) pari passu with any class or series of capital stock of the Corporation hereafter created and specifically ranking, by its terms, on par with the Class A Preferred Stock and (iii) junior to any class or series of capital stock of the Corporation hereafter created specifically ranking, by its terms, senior to the Class A Preferred Stock, in each case as to distribution of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary.
F. VOTING RIGHTS
1. Class A Series I, II, III and IV Preferred Stock of PHI Group, Inc. shall have no voting rights.
G. PROTECTION PROVISIONS
So long as any shares of Class A Preferred Stock are outstanding, the Corporation shall not, without first obtaining the majority written consent of the holders of Class A Preferred Stock, alter or change the rights, preferences or privileges of the Class A Preferred Stock so as to affect adversely the holders of Class A Preferred Stock.
H. MISCELLANEOUS
1. Status of Redeemed Stock: In case any shares of Class A Preferred Stock shall be redeemed or otherwise repurchased or reacquired, the shares so redeemed, repurchased, or reacquired shall resume the status of authorized but unissued shares of preferred stock, and shall no longer be designated as Class A Preferred Stock.
2. Lost or Stolen Certificates: Upon receipt by the Corporation of (i) evidence of the loss, theft, destruction or mutilation of any Preferred Stock Certificate(s) and (ii) in the case of loss, theft or destruction, indemnity (with a bond or other security) reasonably satisfactory to the Corporation, or in the case of mutilation, the Preferred Stock Certificate(s) (surrendered for cancellation), the Corporation shall execute and deliver new Preferred Stock Certificates. However, the Corporation shall not be obligated to reissue such lost, stolen, destroyed or mutilated Preferred Stock Certificates if the holder of Class A Preferred Stock contemporaneously requests the Corporation to convert such holder’s Class A Preferred Stock into Common Stock.
3. Waiver: Notwithstanding any provision in this Certificate of Designation to the contrary, any provision contained herein and any right of the holders of Class A Preferred granted hereunder may be waived as to all shares of Class A Preferred Stock (and the holders thereof) upon the majority written consent of the holders of the Class A Preferred Stock.
4. Notices: Any notices required or permitted to be given under the terms hereof shall be sent by certified or registered mail (return receipt requested) or delivered personally, by nationally recognized overnight carrier or by confirmed facsimile transmission, and shall be effective five (5) days after being placed in the mail, if mailed, or upon receipt or refusal of receipt, if delivered personally or by nationally recognized overnight carrier or confirmed facsimile transmission, in each case addressed to a party as set forth below, or such other address and telephone and fax number as may be designated in writing hereafter in the same manner as set forth in this Section.
If to the Corporation:
PHI GROUP, INC.
N Gould Street, Suite R
Sheridan, WY 82801
Facsimile: 702-472-8556
Email: info@phiglobal.com
If to the holders of Class Preferred Stock, to the address to be listed in the Corporation’s books and Records.
II. Class B Preferred Stock
1. Class B Series I Preferred Stock
a. Designation: One million (1,000,000) shares of the authorized 500,000,000 shares of Preferred Stock, with a par value of $0.001 per share, are designated as Class B Series I Preferred Stock.
b. Number of Shares: The number of shares of Class B Series I Preferred Stock authorized will be one million (1,000,000) shares.
c. Dividend: None
d. Voting rights: Except as provided by law, the shares of Class B Series I Preferred Stock shall have the same right to vote or act on all matters on which the holders of Common Stock have the right to vote or act and the holders of the shares of Class B Series I shall be entitled to notice of any stockholders’ meeting or action as to such matters on the same basis as the holders of Common Stock, and the holders of Common Stock and shares of Class B Series I shall vote together or act together thereon as if a single class on all such matters; provided, in such voting or action each one share of Class B Series I shall be entitled to one hundred thousand (100,000) votes.
NOTE 12. DISSOLUTION OF NEVADA CORPORATION AND OPERATING AS A WYOMING CORPORATION.
On June 30, 2020, the Company filed a Certificate of Dissolution/Withdrawal with the Nevada Secretary of State to cease its corporate registration and dissolve PHI Group, Inc. in the State of Nevada. A Certificate of Dissolution/Withdrawal was issued by the Nevada Secretary of State on June 30, 2020, Filing number 20200754868. The Company currently maintains its corporate registration with the State of Wyoming pursuant to the Articles of Domestication filed with the Wyoming Secretary of State on September 20, 2017 and operates as a Wyoming corporation. The Company filed a Form 8-K to report this event with the Securities and Exchange Commission on June 30, 2020.
NOTE 13. STOCKHOLDER’S EQUITY
As of June 30, 2021, the total number of authorized capital stock of the Company consisted of Forty 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, 2021 was 487,767 shares valued at $44,170 based on cost basis.
Common Stock
During the fiscal year ended June 30, 2021, the Company issued the following shares of its Common Stock:
Issued for conversion of notes during quarter ended September 30, 2020 239,611,455
Issued for conversion of notes during quarter ended December 31, 2020 991,987,513
Issued for conversion of notes during quarter ended March 31, 2021 8,781,230,346
Issued for conversion of notes during quarter ended June 30, 2021 1,514,851,203
Issued for cash during quarter ended June 30, 2021 867,049,520
Issued for conversion of preferred stock in quarter ended June 30, 2021 213,651,293
Issued for investment during quarter ended June 30, 2021 235,478,810
Issued for note agreement during quarter ended June 30, 2021 5,000,000
Total issued during fiscal year ended June 30, 2021: 12,848,860,140
As of June 30, 2021, there were 26,081,268,895 shares of the Company’s common stock issued and outstanding.
Preferred Stock
As of June 30, 2021, the following amounts of Preferred Stock were issued and outstanding:
Class B Series I Preferred Stock: 180,000 shares.
NOTE 14 - STOCK-BASED COMPENSATION PLANS
On February March 18, 2015, the Company adopted an Employee Benefit Plan to set aside 1,000,000 shares of common stock for eligible employees and independent contractors of the Company and its subsidiaries. As of June 30, 2021 the Company has not issued any stock in lieu of cash under this plan.
On September 23, 2016, the Company issued incentive stock options and nonqualified stock options to certain key employee(s) (Henry Fahman - CEO/CFO) and directors (Tam Bui, Henry Fahman, and Frank Hawkins constitute the Board of Directors) as deferred compensation. The options allow the holders to acquire the Company’s Common Stock at the fair exercise price of the Company’s Common Stock on the grant date of each option at $0.24 per share, based on the 10-days’ volume-weighted average price prior to the grant date. The number of options is equal to a total of 6,520,000. The options terminate seven years from the date of grant and become vested and exercisable after one year from the grant date. The following assumptions were used in the Monte Carlo analysis by Doty Scott Enterprises, Inc., an independent valuation firm, to determine the fair value of the stock options:
Risk-free interest rate 1.18 %
Expected life 7 years
Expected volatility 239.3 %
Vesting is based on a one-year cliff from grant date.
Annual attrition rates were used in the valuation since ongoing employment was condition for vesting the options.
The fair value of the Company’s Stock Options as of issuance valuation date is as follows:
Holder Issue Date Maturity
Date
Stock Options Exercise Price Fair Value at Issuance
Tam Bui 9/23/2016 9/23/2023 875,000 Fixed price: $0.24 $ 219,464
Frank Hawkins 9/23/2016 9/23/2023 875,000 Fixed price: $0.24 $ 219,464
Henry Fahman 9/23/2016 9/23/2023 4,770,000 Fixed price: $0.24 $ 1,187,984
NOTE 15 - OTHER INCOME (EXPENSE)
Net Other Income (Expense) for the fiscal year ended June 30, 2021 consists of the following:
OTHER INCOME (EXPENSES) FY ended
June 30, 2021
Interest expense (356,199 )
Other income 104,356
Net other income/expense (5,860,341 )
NET OTHER INCOME (EXPENSES) (6,112,184 )
NOTE 16 - RELATED PARTY TRANSACTIONS
The Company recognized a total of $247,500 in salaries for the President, Chief Operating Officer and Secretary of the Company during the year ended June 30, 2021.
NOTE 17 - INCOME TAXES
No provision was made for income tax since the Company has significant net operating loss carry forward. Through June 30, 2021, the Company incurred net operating losses for tax purposes of approximately $50,671,629. The net operating loss carry forward may be used to reduce taxable income through the year 2035. Net operating loss for carry forwards for the State of California is generally available to reduce taxable income through the year 2025. The availability of the Company’s net operating loss carry-forward is subject to limitation if there is a 50% or more positive change in the ownership of the Company’s stock.
“Under section 6501(a) of the Internal Revenue Code (Tax Code) and section 301.6501(a)-1(a) of the Income Tax Regulations (Tax Regulations), the IRS is required to assess tax within 3 years after the tax return was filed with the IRS.”
NOTE 18 - CONTRACTS AND COMMITMENTS
BUSINESS CONSULANCY AND STRUCTURING AGENCY AGREEMENT TO SET UP INSTITUTIONAL BANK FUNDS IN LUXEMBOURG
On November 30, 2017, the Company signed an agreement with a structuring agent and legal experts to set up a bank fund in Luxembourg in order to provide financing for the Company’s and its clients’ projects.
The Reserved Alternative Investment Fund (RAIF) can be established under the form of common funds (“FCP”), investment companies with variable capital (“SICAV”) or under the form that does not have to have the legal form of a SICAV or an FCP. There will be no restriction in terms of eligible assets. RAIFs are free to introduce any kind of assets and financial instruments in their investment policy. According to the Luxembourg Law of July 12, 2013, RAIFs must entrust their assets to a Luxembourg custodian bank for safekeeping and must appoint an approved statutory auditor.
One of the distinctive advantages of RAIF is that it may have various sub-funds, each corresponding to a distinct part of the assets and liabilities of the RAIF. As such, sub-funds can be established under a RAIF umbrella to target different investment opportunities in a variety of industries as desired.
On February 21, 2018, the Company signed an amendment to the Business Consultancy and Structuring Agency Agreement to be solely responsible for all the costs of Euros 3,500,000 associated with establishing the RAIF. On October 4, 2018, a Payment Agreement was signed by the structuring agent and the Company calling for an extra amount of Euros 1,500,000 to be paid to the structuring agent by November 15, 2018. The master Luxembourg RAIF fund named “PHILUX Global Funds SCA, SICAV - RAIF” was registered and activated with the Luxembourg Commission de Surveillance du Secteur Financier (CSSF) on June 11, 2020, Registration No. B244952.
ACQUISITION OF 51% EQUITY INTEREST IN VINAFILMS JOINT STOCK COMPANY
On August 06, 2018, signed a Business Cooperation Agreement with Vinafilms JSC (Công ty Cổ phần Màng Bao Bì Tân Vinh Nam Phát), a Vietnamese joint stock company, with principal business address at Lot G9, Road No. 9, Tan Do Industrial Zone, Duc Hoa Ha Village, Duc Hoa District, Long An Province, Vietnam, hereinafter referred to as “VNF” and its majority shareholder, to exchange fifty-one percent ownership in VNF for Preferred Stock of PHI. According to the Agreement, PHI will be responsible for filing a S-1 Registration Statement with the Securities and Exchange Commission for American Pacific Plastics, Inc., a subsidiary of PHI that holds the 51% equity ownership in VNF, to become a fully-reporting public company in the U.S. Stock Market.
On September 20, 2018, a Stock Swap Agreement was signed by and between Ms. Do Thi Nghieu, the majority shareholder holding 76% of ownership in VNF, and PHI to exchange 3,060,000 shares of ordinary stock of VNF owned by Ms. Do Thi Nghieu for 50 million shares of Class A Series III Cumulative, Convertible, Redeemable Preferred Stock of PHI. Though this transaction was technically closed on September 28, 2018, the Company did not recognize the operations of Vinafilms JSC in its consolidated financial statements as of June 30, 2021 and will only do so when a GAAP audit of Vinafilms JSC financial statements is conducted and completed by a PCAOB-registered auditing firm. Due to the Covid-19 pandemic the Company has not been able to complete the financial audits of Vinafilms JSC.
CONSULTING SERVICE AGREEMENT WITH GLINK APPS JSC
On December 23, 2019, PHI Capital Holdings, Inc., a subsidiary of the Company, (name changed to PHILUX Capital Advisors, Inc. effective June 03, 2020) signed a Consulting Service Agreement to provide consulting service to Glink Apps JSC, a Wyoming corporation, and assist the latter to become a publicly traded company in the U.S. According to the agreement, Glink Apps JSC will pay PHI Capital Holdings, Inc. $88,500 in cash and five million (5,000,000) shares of its common stock for the consulting service to be rendered.
BUSINESS COOPERATION AGREEMENT WITH NATURAL WELL TECHNICAL LTD.
On April 27, 2020, the Company signed a Business Cooperation Agreement with Natural Well Technical Ltd. (“NWTL”), a company organized and existing under the laws of Republic of China and engaged in research and development of innovative biotechnologies that may have significant applications for healthcare, beauty supply, agriculture and industry.
NWTL and the Company agree to jointly cooperate in the research and development activities of pertinent technologies that have been initiated and continue to be carried out by NWTL and applying them to produce commercial products and services in the fields of healthcare, beauty supply, agriculture and industry, as the case may be, as well as any other business activities deemed mutually beneficial.
In particular, NWTL and the Company will initially focus on the following activities:
a. Developing and implementing a comprehensive plan to increase the production, marketing and sale of the “Super Green” High Energy Drop Drink and “Mistyrious” Fine Mist Spray products on a large scale worldwide;
b. Developing and implementing a plan to increase the production, marketing and sale of “Super Cassava” and “Uni-Wash” Engine Booster products as well as other products related to the fields of agriculture and energy that have been studied and developed by NWTL;
c. Continuing to conduct research and accumulate clinical data for NWTL’s biotechnologies in order to obtain U.S. FDA’s approval of cancer treatments and other healthcare products. In addition, both parties also develop, produce and market beauty supply products.
d. Designing a financial plan and providing the required funding for NWTL to execute its business plan.
INVESTMENT ADVISORY AGREEMENT AMONG PHILUX CAPITAL ADVISORS, INC., HAUCK & AUFHAUSER FUND SERVICES S.A. AND PHILUX GLOBAL FUNDS SCA, SICAV-RAIF
On June 11, 2020, PHILUX CAPITAL ADVISORS, INC. (the “Investment Advisor”) signed an Investment Advisory Agreement among Hauck & Aufhauser Fund Services S.A.(the “AIFM”) and PHILUX Global Funds SCA, SICAV-RAIF an umbrella-fund composed of one or more sub-funds (the “Fund”) to serve as the Investment Advisor for PHILUX Global Funds. According to the Agreement, the Investment Advisor will cooperate in the definition of the investment strategy and its implementation in an advisory capacity, develop proposals for specific investment policy of the Fund, advise and support the AIFM in the selection of the investments and to make investment recommendations, carry out due diligence process, present suitable investments selected in consideration of the investment policy and investment restrictions of the Fund, provide support in the conclusion of purchase and sale transactions, observe and analyze relevant markets and potential investments, provide advice and support to the AIFM and give recommendations in the event of a sale of investments, support investors of the Fund in onboarding management, granting information on Fund-relevant issues, as well as channeling and answering all investor questions, support the AIFM in its performance of risk control and with the completion of subscription agreements. The Investment Advisor shall receive from the General Partner of the Fund a remuneration as stated in the fees annex to the Investment Advisory Agreement.
AGREEMENT WITH TECCO GROUP FOR PARTICIPATION IN PHILUX INFRASTRUCTURE FUND COMPARTMENT OF PHILUX GLOBAL FUNDS
On August 10, 2020, Tecco Group, a Vietnamese company, signed an agreement with PHI Luxembourg Development SA, a subsidiary of the Company, to participate in the proposed infrastructure fund compartment of PHILUX Global Funds SCA, SICAV-RAIF. According to the agreement, Tecco Group will contribute $2,000,000 for 49% ownership of the general partners’ portion of said infrastructure fund compartment. As of October 11, 2021, Tecco Group has paid a total of $156,366.25 towards the total agreed amount.
AGREEMENT WITH PHAT VAN HUNG CO. LTD. FOR PARTICIPATION IN PHILUX REAL ESTATE FUND COMPARTMENT OF PHILUX GLOBAL FUNDS
On November 09, 2020, Phat Van Hung Co. Ltd. signed an agreement with PHI Luxembourg Development SA, a subsidiary of the Company, to participate in the real estate fund compartment of PHILUX Global Funds SCA, SICAV-RAIF. According to the agreement, Phat Van Hung Co. Ltd. will contribute $2,000,000 for 49% ownership of the general partners’ portion of said real estate fund compartment. As of October 11, 2021, Phat Van Hung has not made any payment towards the agreed amount.
AGREEMENT WITH XUAN QUYNH LLC FOR PARTICIPATION IN PHILUX INFRASTRUCTURE FUND COMPARTMENT OF PHILUX GLOBAL FUNDS
On November 20, 2020, Xuan Quynh LLC, a Vietnamese company, signed an agreement with PHI Luxembourg Development SA, a subsidiary of the Company, to participate in the proposed infrastructure fund compartment of PHILUX Global Funds SCA, SICAV-RAIF. According to the agreement, Xuan Quynh LLC will contribute $2,000,000 for 49% ownership of the general partners’ portion said infrastructure fund compartment. As of October 11, 2021, Xuan Quynh LLC has not made any payment towards the agreed amount.
INVESTMENT AGREEMENTS AND MEMORANDUM OF UNDERSTANDING
From August 24, 2020 to November 11, 2020, the Company through its Luxembourg bank fund mother holding company PHI Luxembourg Development SA and PHILUX Global Funds SCA, SICAV-RAIF has signed investment agreements and memorandum of understanding with three non-US entities for total investments of more than one billion U.S. dollars. However, as of the date of this report, the Company has not received any money from these investment agreements and there is no guarantee that any money will be received from these agreements and memorandum of understanding in the future.
ISSUANCE OF CONVERTIBLE PROMISSORY NOTES
On March 23, 2021, the Company issued a Promissory Note to EMA Financial LLC, a Delaware limited liability company, in the amount of $100,000 at an interest rate of 6% per annum. This note will mature twelve months from the Issue Date and may be convertible into shares of common stock of the Company at a fixed conversion price of $0.001 per share or may be prepaid on or prior to the 180th calendar day after the Issue Date at a Prepayment Factor of 115%. As of the date of this report, the Company prepaid 50% this note in cash.
On June 7, 2021, the Company issued a Promissory Note to EMA Financial LLC, a Delaware limited liability company, in the amount of $100,000 at an interest rate of 6% per annum. This note will mature twelve months from the Issue Date and may be convertible into shares of common stock of the Company at a fixed conversion price of $0.001 per share or may be prepaid on or prior to the 180th calendar day after the Issue Date at a Prepayment Factor of 115%. The Company plans to prepay this note in cash prior to the 180th calendar day after the Issue Date.
NOTE 19 - GOING CONCERN UNCERTAINTY
As shown in the accompanying consolidated financial statements, the Company has accumulated deficit of $51,010,719 and total stockholders’ deficit of $6,798,392 as of June 30, 2021. These factors as well as the uncertain conditions that the Company faces in its day-to-day operations with respect to cash flows create an uncertainty as to the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. Management has taken action to strengthen the Company’s working capital position and generate sufficient cash to meet its operating needs through June 30, 2022 and beyond.
NOTE 20 - SUBSEQUENT EVENTS
These financial statements were approved by management and available for issuance on October 11, 2021. Subsequent events have been evaluated through this date.
1. ISSUANCES AND CANCELLATIONS OF COMMON STOCK OF THE COMPANY
From July 01, 2021 through October 11, 2021, the Company issued/cancelled the following amounts of its Common Stock:
A. Total Common Stock issued: 1,860,102,837 shares, consisting of:
- 103,279,112 shares for conversion of $500,000 loan.
- 222,823,725 shares for $1,113,465.34 accrued and unpaid salaries.
- 1,534,000,000 shares for consulting services.
B. Total Common Stock cancelled: 236,263,059 shares, consisting of:
- 784,249 shares cancelled from the amount of shares previously issued to Luan Ngo for conversion of note.
- 235,478,810 shares cancelled from the total amount of shares previously issued to PHILUX Global Funds SCA, SICAV-RAIF for initial capitalization.
2. AGREEMENTS
A. LETTER OF INTENT WITH CHOKY F. SIMANJUNTAK (CYFS Group)
On August 02, 2021, the Company signed a Letter of Intent with Indonesia-based CYFS Group, headed by Mr. Choky Fernando Simanjuntak, to sponsor and co-found CO2-1-0 (CARBON) CORP to implement a new disruptive carbon mitigation initiative through environmentally sustainable projects starting in Indonesia, Vietnam, other ASEAN countries, and worldwide. On September 21, 2021 CO2-1-0 (CARBON) CORP was incorporated as a Wyoming corporation to manage this program. PHI Group will contribute a major portion of the development budget and will hold 50.1% shares of CO2-1-0 (CARBON).
According to the United Nation Framework Convention on Climate Change (UNFCCC), together with the Paris agreement and Kyoto protocol in 2016, where Indonesia has actively participated and agreed to maintain the earth temperature not to exceed by 1,5 degrees Celsius by 2030. The greenhouse gases (GHG), mainly CO2, CH4, N2O, SF6, HFCs, PFCs, are the root cause of global climate change, each of which can be calculated as CER (CO2 Emission Reduction) equivalent. The target for Indonesia is 834 million tonnes of CER by 2030.
CO2-1-0 (CARBON) aims to provide a solution in disruptive decentralized new carbon market system using blockchain technology which will be empowering environmentally sustainable projects (renewable energy/ waste/ agriculture/ forestry/ etc.) starting in Indonesia, Vietnam, other ASEAN countries and worldwide. It has a clear and systematic product development roadmap, and the ultimate milestones of the products estimated to be launched in the near future. The solution, methodology, and improved TACCC (transparent, accurate, consistent, complete, and comparable) business process originally introduced by CO2-1-0 (CARBON) CORP are expected to bring full impact to better environment and life of millions.
B. MEMORANDUM OF UNDERSTANDING WITH FIVE-GRAIN TREASURE SPIRITS CO., LTD.
On September 16, 2021, PHI Group, Inc. entered into a Memorandum of Understanding (“MOU”) with Five-Grain Treasure Spirits Co., Ltd. (“FGTS”), a baiju distilling company with principal business address at Jigu Road Economic Zone, Shulan City, Jilin Province, China, to acquire seventy percent (70%) of ownership in FGTS and provide the additional required capital for FGTS to implement its business plan. The total budget for the purchase price and the additional required capital is one hundred million U.S. dollars (USD 100,000,000), whose terms and conditions for payment will be stipulated in a Definitive Agreement to be signed by both parties after satisfactory due diligence of FGTS by the Company.
Completion of this transaction will be conditioned, among other matters, upon:
(a) Upon signing of this MOU, FGTS will cooperate with and accommodate PHIL and/or its representative(s) for further due diligence review of FGTS’s business, including but not limited to its assets, liabilities, property, plant and equipment, technologies, operations, books and records, and business plan.
(b) The signing of the Definitive Agreement by the parties within forty-five days following the signing of this MOU and the closing of this transaction by December 31, 2021, unless extended by the consent of both parties in writing.
(c) The establishment of a special purpose vehicle (SPV) as the holding company for the seventy percent (70%) ownership in FGTS.
PHI Group, Inc. changed the name of its subsidiary “Provimex, Inc.”, a Nevada corporation established on September 23, 2004, Entity Number C25551-4, to Empire Spirits, Inc. as the holding company for the acquisition of seventy percent (70%) ownership in Five-Grain Treasure Spirits Company, Ltd.
Baijiu is a white spirit distilled from sorghum. It is similar to vodka but with a fragrant aroma and taste. It is currently the most consumed spirit in the world. Mainly consumed in China, it is gaining popularity in the rest of the world.
Five-Grain specializes in the production and sales of spirits and the development of proprietary spirit production processes. It also possesses a patented technology to grow red sorghum for baiju manufacturing. The patented grain produces superior yield and quality. Five-Grain is a reputable bulk alcohol supplier to some of the largest spirits companies in the world.
C. ISSUANCES OF CONVERTIBLE PROMISSORY NOTES
On July 22, 2021, the Company issued a 8% convertible promissory note to Power Up Lending Group Ltd., a Virginia corporation, for $80,000. This note matures one year from the date of issuance and is convertible to Common Stock of the Company at a discount rate of 39% of the average of the two lowest trading prices for the Common Stock during the ten (10) trading day period immediately prior to the conversion date. The Company can elect to prepay the note within 180 days of the issuance date at a premium raging from 125% to 139% of the principal balance amount plus accrued and unpaid interest. The Company intends to prepay this note during the allowable prepayment period.
On August 10, 2021, the Company issued a 8% convertible promissory note to Power Up Lending Group Ltd., a Virginia corporation, for $53,750. This note matures one year from the date of issuance and is convertible to Common Stock of the Company at a discount rate of 39% of the average of the two lowest trading prices for the Common Stock during the ten (10) trading day period immediately prior to the conversion date. The Company can elect to prepay the note within 180 days of the issuance date at a premium raging from 125% to 139% of the principal balance amount plus accrued and unpaid interest. The Company intends to prepay this note during the allowable prepayment period.
On August 31, 2021, the Company issued a 6% convertible note to EMA Financial LLC, a Delaware limited liability company, for $100,000. This note matures one year from the date of issuance and is convertible to Common Stock of the Company at $0.001 per share. The Company can elect to prepay this note within 180 days of the issuance date at a premium of 115% of the principal balance amount plus accrued and unpaid interest. The Company intends to prepay this note during the allowable prepayment period.
On September 1, 2021, the Company issued a 8% convertible promissory note to Power Up Lending Group Ltd., a Virginia corporation, for $43,750. This note matures one year from the date of issuance and is convertible to Common Stock of the Company at a discount rate of 39% of the average of the two lowest trading prices for the Common Stock during the ten (10) trading day period immediately prior to the conversion date. The Company can elect to prepay the note within 180 days of the issuance date at a premium raging from 125% to 139% of the principal balance amount plus accrued and unpaid interest. The Company intends to prepay this note during the allowable prepayment period.
On September 15, 2021, the Company issued a 12% convertible promissory note to Mast Hill Fund, L.P., a Delaware limited partnership, for $550,000. This note matures one year from the date of issuance and is convertible to Common Stock of the Company at $0.0061 per share. The Company can elect to prepay the note within 180 days of the issuance date in cash with an amount equal to the sum of: 100% multiplied by the principal amount then outstanding plus accrued and unpaid interest on the principal amount and $750.00 to reimburse the noteholder for administrative fees. The Company intends to prepay this note during the allowable prepayment period.
On September 27, 2021, the Company issued a 12% convertible promissory note to Firstfire Global Opportunities Fund LLC, a Delaware limited liability, for $275,000. This note matures one year from the date of issuance and is convertible to Common Stock of the Company at $0.0061 per share. The Company can elect to prepay the note within 180 days of the issuance date in cash with an amount equal to the sum of the principal amount then outstanding plus any accrued and unpaid interest, fees and defaults, and there shall be no prepayment penalty. The Company intends to prepay this note during the allowable prepayment period.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

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ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management carried out an evaluation, with the participation of our Chief Executive Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) of the Exchange Act), as of the period covered by this report. Disclosure controls and procedures are defined as controls and other procedures that are designed to ensure that information required to be disclosed by us in reports filed with the SEC under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based upon their evaluation, our management (including our Chief Executive Officer) concluded that our disclosure controls and procedures were not effective as of June 30, 2021, based on the material weaknesses defined below.
Internal Control over Financial Reporting
Management’s Annual Report on Internal Control of Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a set of processes designed by, or under the supervision of, a company’s principal executive and principal financial officers, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:
● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of our assets,
● provide reasonable assurance that our transactions are recorded as necessary to permit preparation of our financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors, and
● provide reasonable assurance regarding prevention or timely detection of authorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. It should be noted that any system of internal control, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. Also, projections of 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.
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 June 30, 2021 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.
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.
The material weaknesses related to a lack of a full segregation of duties and to our lack of sufficient personnel in our accounting and financial reporting functions with sufficient experience and expertise with respect to the application of U.S. GAAP and related financial reporting.
Based on this assessment, management concluded that the Company’s internal control over financial reporting was not effective as of June 30, 2021.
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 annual report on Form 10-K, 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 fiscal year ended June 30, 2021 are fairly stated, in all material respects, in accordance with US GAAP.
Attestation Report of the Registered Accounting Firm
This Annual Report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to Rule 308(b) of Regulation S-K, which permits the Company to provide only management’s report in this Annual Report.
Changes in Internal Control over Financial Reporting
No changes in the Company’s internal control over financial reporting have come to management’s attention during the Company’s last fiscal quarter that have materially affected, or are likely to materially affect, the Company’s internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION
ITEM 9B. OTHER MATTERS
None.
PART III

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS, COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The following table sets forth certain information as of June 30, 2021, with respect to the Directors and Executive Officers of the Company.
NAME
AGE
POSITION
Henry D. Fahman
Chairman of the Board, President, Acting CFO
Tina T. Phan
Treasurer, Secretary
Tam T. Bui
Director
Frank Hawkins
Director
Directors are elected at the annual meeting of shareholders and hold office until the following annual meeting and until their successors are elected and qualified. All Executive Officers serve at the discretion of the Board of Directors. The Company’s securities are not registered under Section 12(g) of the Exchange Act. Accordingly, the Directors and Executive Officers of the Company are not required to file reports under Section 16(a) of that act.
Henry D. Fahman has more than 30 years’ experience in general management, finance, investments and corporate strategy. He has been President and Chairman of the Board of PHI Group, Inc. since January 2000, and is currently Acting Financial Officer of the Company. Mr. Fahman served as President and Chairman of the Board of Providential Securities, Inc. from its inception in October 1992 to October 2000. He holds a B.S., magna cum laude, in business administration from the University of California at Berkeley, with emphasis in finance and economic analysis and policy, and is a graduate of the Advanced Management Program (AMP166) from Harvard Business School. He has also attended other Executive Education programs at Harvard Business School and Stanford University, including Mergers and Acquisitions, Creating Competitive Advantage, and Advanced General Management. Previously, he served as a Resettlement Coordinator for the United Nations High Commissioner for Refugees. Mr. Fahman also serves as Chairman/Managing Director of PHILUX Capital Advisors, Inc., a wholly owned subsidiary of the Company, Chairman of PHILUX Global Funds SCA, SICAV-RAIF, and interim Chief Executive Officer of American Laser Healthcare Corporation, a Delaware corporation. Mr. Fahman is the husband of Tina T. Phan, our Secretary and Treasurer.
Tam Bui has been a Director of the Company since April 2009 and served as a Chief Technology Officer from May 2002 to April 2009. Mr. Bui holds Bachelor and Master of Science degrees from the University of Minnesota and has attended continuing Education at the University of California, Los Angeles. He has over 25 years of experience with Northrop Grumman, Honeywell, Inc. and TRW in various capacities such Project Director, Project Manager, Department Manager, Program Manager and Implementation Manager. One of Mr. Bui’s major responsibilities has been the construction of dual Emergency Command Control Communication (ECCC) centers and implementation of the Los Angeles Police Department ECCC Systems. He has a broad knowledge and experience in the areas of information technology, intranet/internet technology, inventory management, material resource planning, enterprise resource planning, human resource management, investment management, real estate, and international business. Mr. Bui also serves as Vice-Chairman of PHILUX Capital Advisors, Inc., a wholly-owned subsidiary of the Company and a member of the Board of Directors of PHILUX Global Funds, a Luxembourg bank fund. Mr. Bui was appointed to serve as Chief Operating Officer for the Company effective July 01, 2021.
Frank Hawkins, Director has been a Director of the Company since April 2009 and Mr. Hawkins is a founder and CEO of Hawk Associates with 30 years of award-winning investor relations experience, Mr. Hawkins has earned the wide respect of Wall Street’s investment community for straight talk and integrity. He was formerly vice president/corporate relations and planning and head of the investor relations program at Knight-Ridder, Inc. in Miami. Mr. Hawkins started his career as an agent handler in clandestine collection operations for the Defense Intelligence Agency in Germany and went on to become a foreign and war correspondent, international businessman, senior corporate executive and president of the Access Asia Group in Hong Kong. He has lived in eight countries. He has been involved in stock listings in Tokyo and Frankfurt and company presentations in London, Zurich, Geneva and Singapore. Fluent in German, he is a graduate of Cornell University and author of “Ritter’s Gold,” an adventure novel published in several languages by the New American Library. He is a member of the Association of Former Intelligence Officers and the Audubon Society and is listed in Who’s Who in America and Who’s Who in the World. He serves on the board of the Florida Keys Electric Cooperative.
Tina T. Phan has been Treasurer of the Company since April 2009. She served as a Director and Secretary of the Company from January 2000 to April 10, 2009 and was Vice President of Operations of Providential Securities, Inc. from 1995 to 2000. Mrs. Phan holds a B.S. in management information system from California State University, Los Angeles. Currently Mrs. Phan serves as Treasurer and Secretary of the Company and a member of the Board of Directors of PHI Luxembourg Development S.A., the mother holding company of PHILUX Global Funds. Mrs. Phan is the wife of Henry D. Fahman.

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ITEM 11. EXECUTIVE COMPENSATION
ITEM 11. EXECUTIVE COMPENSATION
(a) Any compensation received by officers, directors, and management personnel of the Company will be determined and approved from time to time by the Board of Directors of the Company as it deems appropriate and reasonable. Officers, directors, and management personnel of the Company will be reimbursed for any out-of-pocket expenses incurred on behalf of the Company.
Except for any non-cash payments mentioned in this report, there was no monetary compensation paid to any officers of the Company during the year ended June 30, 2021.
(b) There are no annuity, pension or retirement benefits proposed to be paid to officers, directors, or employees of the Company in the event of retirement at normal retirement date as there is no existing plan provided for or contributed to by the Company.
(c) All members of the Company’s Board of Directors, whether officers of the Company or not, may receive an amount yet to be determined annually for their participation in meetings of the Board and will be required to attend a minimum of four meetings per fiscal year. The Company reimburses all expenses for meeting attendance or out of pocket expenses connected directly with their Board participation.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial ownership of shares of the Company’s common stock as of October 07, 2021 by (i) all shareholders known to the Company to be beneficial owners of more than 5% of the outstanding common stock; and (ii) all directors and executive officers of the Company, and as a group (out of 27,705,108,673 shares issued and outstanding):
Title of Class Name and Address of Beneficial Owner (1) Amount of
Beneficial Ownership
Percent of Class
Common Stock Henry D. Fahman (2) 15272
Flintridge Lane Huntington
Beach, CA 92647
322,803,414 1.165 %
Common Stock Natalie Bui (3)
9132 Helm Avenue
Fountain Valley, CA 92708
1,032,502 0.004 %
Common Stock Tam Bui
9132 Helm Avenue
Fountain Valley, CA 92708
956,881 0.003 %
Common Stock Tina T. Phan (4) 15272
Flintridge Lane Huntington
Beach, CA 92647
51,887,055 0.187 %
Common Stock Frank Hawkins
14543 Topsail Drive
Naples, FL 34114
**
Common Stock Shares of all directors
and executive officers as a group (4
persons):
375,647,550 1.3559 %
(1) Each person has sole voting power and sole dispositive power as to all of the shares shown as beneficially owned by them.
(2)
Certain of these shares have been pledged to secure certain obligations of the Company.
(3)
Natalie Bui is the spouse of Tam Bui.
(4)
Tina Phan is the spouse of Henry Fahman.
**: Less than 0.0001%.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Henry D. Fahman, Chairman and Chief Executive Officer of the Company, has from time to time made cash advances to the Company. The advances are unsecured, interest free and payable on demand.
Certain of the officers and directors of the Company are engaged in other businesses, either individually or through partnerships and corporations in which they have an interest, hold an office, or serve on a board of directors. As a result, certain conflicts of interest may arise between the Company and its officers and directors. The Company will attempt to resolve such conflicts of interest in favor of the Company. The officers and directors of the Company are accountable to it and its shareholders as fiduciaries, which require that such officers and directors exercise good faith and integrity in handling the Company’s affairs. A shareholder may be able to institute legal action on behalf of the Company or on behalf of itself and other similarly situated shareholders to recover damages or for other relief in cases of the resolution of conflicts is in any manner prejudicial to the Company.
Henry D. Fahman, Chairman and Chief Executive Officer of the Company, also serves as Interim Chief Executive Officer of American Laser Healthcare Corp., a Delaware corporation and a client of PHILUX Capital Advisors, Inc.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
The negotiated package fees billed by M.S. Madhava Rao, an independent accountancy firm, are $19,500 for the audit of the Company’s annual consolidated financial statements for the fiscal year ended June 30, 2021 and for the review of unaudited financial statements for the quarters ending 9/30/2021, 12/31/2021 and 3/31/2022.
All Other Fees
The Company did not pay M.S. Madhava Rao any fees that are not related to audit and/or review of its financial statements for fiscal year 2021 or 2020.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES
Financial Statements
The following consolidated financial statements of PHI Group, Inc. and its subsidiaries are included:
Report of Independent Registered Public Accounting Firm M.S. Madhava Rao.
Consolidated Balance Sheets - June 30, 2021 and 2020.
Consolidated Statements of Operations - For the fiscal years ended June 30, 2021 and 2020.
Consolidated Statement of Cash Flows - For the fiscal years ended June 30, 2021 and 2020.
Consolidated Statements of Changes in Owners’ Equity - For the fiscal years ended June 30, 2021 and 2020.
Notes to Consolidated Financial Statements
EXHIBIT INDEX
Exhibit No.
Exhibit Description
2.1
Plan of Exchange between the Company and Prima Eastwest Model Management, Inc. (incorporated by reference to Exhibit 2 to the Form 8-K filed on March 1, 1996)
2.2
Corporate Combination Agreement between the Company and Providential Securities, Inc., effective on January 14, 2000 (incorporated by reference to Exhibit 10.12 to the Form 10-KSB filed on January 10, 2000).
3.1
Articles of Incorporation (1)
3.2
Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.1 of the Form 10-KSB for the fiscal year ended June 30, 1995).
3.3
Amendment to Articles of Incorporation (6)
3.4
Certificate of Amendment to Articles of Incorporation (6)
3.5
Bylaws, as amended (6)
4.1
Form of Series 1 Bridge Notes Purchase and Security Agreement between the Company and investors, dated March 27, 2000 (6)
4.2
Form of Series 1 Bridge Note executed by the Company issued by the Company to Investors. (6)
4.3
Form of Common Stock Purchase Warrant issued by the Company to investors. (6)
4.4
Form of Re-pricing Warrant issued by the Company to investors. (6)
4.5
Form of Registration Rights Agreement between the Company and investors, dated March 27, 2000 (6)
4.6
Form of Common Stock Purchase Warrant to be issued by the Company to Sovereign Capital Advisors, LLC (6)
4.7
Form of Convertible Promissory Note issued by the Company to preferred shareholders of Providential Securities, Inc. (6)
5.1
Opinion Re Validity of Agreements (6) 10.1 Benatone Exchange Agreement, with Creditors (2)
10.2
Benatone Share Acquisition Agreement (for Weldnow Enterprise, Ltd.) (2)
10.3
Benatone Share Acquisition Agreement (Dynedeem Limited) (2)
10.4
Benatone Exchange Agreement (2)
10.5
Benatone Asset Sale Agreement (2)
10.6
Benatone Royalty Agreement (2)
10.7
Benatone Consultancy Agreement (2)
10.8
Benatone Deed (2)
10.9
Autokraft Stock Purchase Agreement (3)
10.10
Autokraft Stock Subscription Agreement (3)
10.11
Prima Agreement and Plan of Merger (4)
10.12
Escrow Agreement between the Company and Warshaw Burstein Cohen Schelsinger & Kuh, LLP, dated March 28, 2000. (6)
10.13
Placement Agency Agreement between the Company and Sovereign Capital Advisors, LLC, dated March 28, 2000. (6)
10.14
Guaranty Agreement between Henry Fahman and SovCap Equity Partners, Ltd, dated March 28, 2000. (6)
10.15
Pledge Agreement between Henry Fahman and SovCap Equity Partners, Ltd, dated March 28, 2000. (6)
10.16
Partnership Purchase Agreement between the Company and Holt Collins, dated May 31, 2000. (6)
10.17
Memorandum of Agreement between DataLogic Consulting, Inc. and PHI Group, Inc., dated April 25, 2001. (5)
10.18.1
Letter of Intent between PHI Group, Inc. and Epicenter, Inc., dated October 30, 2000. (5)
10.18.2
Amendment to Letter of Intent between PHI Group, Inc. and Epicenter, Inc., dated November 30, 2000. (5)
10.18.3
Amendment to Letter of Intent between PHI Group, Inc. and Epicenter, Inc., dated January 12, 2001. (5)
10.18.4
Amendment to Letter of Intent between PHI Group, Inc. and Epicenter, Inc., dated June 26, 2001. (5)
10.18.5
Amendment to Letter of Intent between PHI Group, Inc. and Epicenter, Inc., dated October 02, 2001. (5)
10.19
Joint Venture Agreement between Providential Holdings, Inc and Boxo, Inc., dated January 1, 2001. (5)
10.20
License of Manna Technologies Joint Venture Company, dated March 21, 2001. (5)
10.21
Memorandum of Agreement between International Consulting and Training Center, Ministry of Trade, Vietnam and the Company, dated March 24, 2001. (5)
10.22
Memorandum of Agreement among General Transportation Company No. 5, Chu Lai Industrial Zone and the Company, dated March 25, 2001. (5)
10.23
Letter of Intent between PHI Group, Inc. and Global Systems and Technologies, Corp. dated October 18, 2001. (6)
10.24
Letter of Intent between PHI Group, Inc. and Estate Planning and Investment Company dated November 7, 2001. (6)
10.25
Joint Venture Agreement between PHI Group, Inc. and Mimi Ban dated November 23, 2001. (6)
10.26
Plan of acquisition of Nettel Global Communication Corp. (incorporated by reference to the Company’s Current Report on Form 8-K filed May 3, 2002)
10.27
Joint Venture Agreement with Vietnam’s Minh Hieu Joint Stock Company. (7)
10.28
Memorandum of Agreement with HDT Enterprises, LLC dated March 15, 2002. (7)
10.29
Memorandum of Agreement and Principal Contract with Vietnam’s Center of Telecom Technology. (7)
10.30
Stock Purchase Agreement with SlimTech, Inc. (incorporated by reference to the Company’s Current Report on Form 8-K, filed May 1, 2002).
10.31
Stock Purchase Agreement with ATC Technology Corp. (incorporated by reference to the Company’s Current Report on Form 8-K, Filed September 17, 2002)
10.32
Mutual Rescission of Stock Purchase Agreement with Nettel Global Communication Corp. (8).
10.33
Business Consulting Agreement with Nettel Global Communication Corp. (8)
10.34
Business Consulting Agreement with Medical Career College (8)
10.35
Mutual Rescission of Stock Purchase Agreement with SlimTech (8)
10.36
Mutual Rescission of Stock Purchase Agreement with Clear Pass, Inc. (8).
10.37
Mutual Rescission of Joint Venture Agreement with HTV CO, Ltd. (8).
10.38
Mutual Rescission of Stock Purchase Agreement with Real ID Technology (8).
10.39
Business Consulting Agreement with Lexor Incorporated (8).
10.40
Amended Closing Memorandum with ATC Technology Corp. (8)
10.41
Stock Purchase Agreement with Tangshan YutianSaw Corporation (incorporated by reference to the Company’s Current Report on Form 8-K filed June 15, 2004)
10.42
Asset Purchase Agreement with Western Medical, Inc. (incorporated by reference to the Company’s Current Report on Form 8-K, file June 2, 2006)
10.43
Principle Business Cooperation Agreement with Cavico Vietnam Joint Stock Corporation (incorporated by reference to the Company’s Current Report on Form 8-K, filed October 2, 2006)
16.1
Notification of Change of Accountants, Kabani & Co. appointed (incorporated by reference to exhibits filed with Form 8-K/A, filed September 10, 2001)
17.1
Resignation of Nhi T. Le as director and officer and appointment of Thorman Hwinn as Director (incorporated by reference to exhibits filed with Form 8-K, filed July 9, 2001)
17.2
Resignation of Tam Bui as Director (incorporated by reference to the Company’s Current Report on Form 8-K, filed September 30, 2004).
17.3
Resignation of Gene M. Bennett as Chief Financial Officer (incorporated by reference to the Company’s Current Report on Form 8-K, filed March 23, 2005).
17.4
Resignation of Robert Stevenson as Director (incorporated by reference to the Company’s Current Report on Form 8-K, filed July 18, 2006).
17.5
Resignation of Ghanshyam Dass as Director (incorporated by reference to the Company’s Current Report on Form 8-K, filed September 29, 2010).
17.6
Resignation of Paul Nguyen as Director (incorporated by reference to the Company’s Annual Report for the Fiscal Year ended June 30, 2012 as filed with the Securities and Exchange Commission on June 2, 2014).
17.7
Unregistered Sale of Equity Securities (incorporated by reference to Company’s Current Report on Form 8-K, filed on December 23, 2016).
17.8
Unregistered Sale of Equity Securities (incorporated by reference to Company’s Current Report on Form 8-K, filed on December 29, 2016).
17.9
Investment Agreement with Azure Capital (incorporated by reference to Company’s Current Report on Form 8-K, filed on March 7, 2017).
17.10
Unregistered Sale of Equity Securities (incorporated by reference to Company’s Current Report on Form 8-K, filed on April 10, 2017).
17.11
Private Stock Purchase and Sale Agreement with Maxagro Farm SRL (incorporated by reference to Company’s Current Report on Form 8-K, filed on June 1, 2017).
17.12
Contract for Transfer of Shares” to purchase 51% of equity ownership in Constructii SA (incorporated by reference to Company’s Current Report on Form 8-K, filed on June 30, 2017).
17.13
Unregistered Sale of Equity Securities (incorporated by reference to Company’s Current Report on Form 8-K, filed on July 27, 2017).
17.14
Amendment to Private Stock Purchase and Sale Agreement with Maxagro Farm SRL (incorporated by reference to Company’s Current Report on Form 8-K, filed on August 9, 2017).
17.15
Agreement of Purchase and Sale with Rush Gold Royalty Inc, a Wyoming corporation, to acquire a 51% ownership in twenty-one mining claims over an area of approximately 400 acres in Granite Mining District, Grant County, Oregon, U.S.A. (incorporated by reference to Company’s Current Report on Form 8-K, filed on September 7, 2017).
17.16
Registration Statements in connection with Azure Capital Investment Agreement (incorporated by reference to Company’s S-1 Registration Statement filed on April 3, 2017,
17.17
Withdrawal of Registration Statement filed on August 7, 2017, new S-1 Registration Statement filed on August 7, 2017 and S-1/A filed on September 15, 2017).
17.18
Closing Memorandum for the Agreement of Purchase and Sale with Rush Gold Royalty Inc, a Wyoming corporation, to acquire a 51% ownership in twenty-one mining claims over an area of approximately 400 acres in Granite Mining District, Grant County, Oregon, U.S.A. (incorporated by reference to Company’s Current Report on Form 8-K, filed on October 9, 2017).
(1) Incorporated by reference to the Company’s Registration Statement on Form S-18, declared effective August 10, 1982 (SEC File No. 2-78335-NY), and to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 1995.
(2) Incorporated by reference to the Company’s Current Report on Form 8-K, dated September 7, 1995
(3) Incorporated by reference to the Company’s Current Report on Form 8-K/A, dated September 12, 1995.
(4) Incorporated by reference to the Company’s Current Report on Form 8-K, dated March 1, 1996.
(5) Incorporated reference to Form 10KSB for the year ended June 30, 2000 filed October 16, 2001.
(6) Incorporated by reference to Form 10KSB for the year ended June 30, 2001 filed December 17, 2001.
(7) Incorporated by reference to Form 10QSB for the quarter ended March 31, 2002 filed May 14, 2002.
(8) Incorporated by reference to Form 10KSB for the year ended June 30, 2003, filed October 17, 2003.
EXHIBIT INDEX (CONTINUED).
Incorporation by reference
Filed or
Furnished
Exhibit No.
Exhibit Description
Form
File Number
Exhibit
Filing Date
Herewith
3.6
Articles of Amendment to Articles of Domestication
8-K
001-38255
10.1; Item 7.01
2020-06-30
3.7
Certificate of Dissolution/Withdrawal from Nevada Secretary of State
8-K
001-38255
10.2; 10.2
2020-06-30
3.8
Articles of Amendment to Articles of Domestication and Designations of Preferred Stock.
10-K
001-38255
3.8
2021-03-11
10.44
Entry Into a Material Definitive Agreement
8-K
001-38255
99.1; 99.2
2018-07-25
10.45
Business Cooperation Agreement with Vinafilms Joint Stock Company
8-K
001-38255
10.1; 10.2
2018-08-10
10.46
Completion of Acquisition or Disposition of Assets - Vinafilms Joint Stock Company
8-K
001-38255
10.1
2018-10-10
16.2
Changes in Registrant’s Certifying Accountant
8-K
001-38255
16.1
2018-07-30
16.3
Changes in Registrant’s Certifying Accountant
8-K
001-38255
16.1
2020-05-07
16.4
Changes in Registrant’s Certifying Accountant
8-K
001-38255
16.1
2020-09-30
17.19
Declaration of Special Common Stock Dividend from Issuer’s Subsidiary
8-K
001-38255
10.1
2018-05-01
17.20
Extension of Record Date for Special Common Stock Dividend from Issuer’s Subsidiary
8-K
001-38255
10.1
2018-05-31
17.21
Extension of Record Date for Special Common Stock Dividend from Issuer’s Subsidiary
8-K
001-38255
10.1
2018-11-13
17.22
Extension of Record Date for Special Common Stock Dividend from Issuer’s Subsidiary
8-K
001-38255
10.1
2019-02-28
17.23
Extension of Record Date for Special Common Stock Dividend from Issuer’s Subsidiary
8-K
001-38255
10.1
2019-03-01
17.24
PHI Group, Inc. Approves Stock Repurchase Program
8-K
001-38255
10.1
2019-03-26
17.25
Extension of Record Date for Special Common Stock Dividend from Issuer’s Subsidiary
8-K
001-38255
10.1
2019-05-31
17.26
Extension of Record Date for Special Common Stock Dividend from Issuer’s Subsidiary
8-K
001-38255
10.1; 10.2
2019-09-25
17.27
Extension of Record Date for Special Common Stock Dividend from Issuer’s Subsidiary
8-K
001-38255
10.1
2019-12-30
17.28
Extension of Repurchase Date for the Company’s Common Stock
8-K
001-38255
10.1
2020-03-05
17.29
Relying on Order for Reporting Relief
8-K
001-38255
N/A
2020-05-15
17.30
Extension of Repurchase Date for the Company’s Common Stock and Extension of Record Date For Special Stock Dividend Distribution
8-K
001-38255
10.1; 10.2
2020-06-30
17.31
Extension of Repurchase Date for the Company’s Common Stock and Extension of Record Date For Special Stock Dividend Distribution
8-K
001-38255
10.1; 10.2
2020-12-29
17.32
Amendment to Promissory Notes dated April 01, 2019 between Luan Ngo and the Company
10-K/A
001-38255
17.32
2021-06-30
17.33
Amendment to Articles of Domestication
8-K
001-38255
10.1
2020-06-30
17.34
Withdrawal from State of Nevada
8-K
001-38255
10.1; 10.2
200-06-30
17.35
Change in Registrant’s Certifying Accountant
8-K
001-38255
16.1
2020-09-30
17.36
Extension of Purchase Date for Common Stock and Extension of Record Date for Special Stock Dividend Distribution.
8-K
001-38255
10.1; 10.2
2021-06-28
17.37
Memorandum of Understanding with Five-Grain Treasure Spirits Co., Ltd
8-K
001-38255
10.1; 99.1
2021-09-17
17.38
Securities to be offered in Employee Benefit Plan
S-8
333-259633
4.1 et al.
2021-09-17
17.39
Asia Diamond Exchange, Inc. and the Asia Diamond Exchange
8-K
001-38255
10.1 et al.
2021-10-01
17.40
Name change of Provimex, Inc. to Empire Spirits, Inc.
8-K
001-38255
10.1 et al.
2021-10-04
21.1
Subsidiaries of Registrant
31.1- 32.2
Certifications in Accordance with Sections 302 and 906 of the Sarbanes-Oxley Act of 2002.
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
SIGNATURES
Pursuant to the requirement of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.
PHI GROUP, INC.
Dated: October 13, 2021
By: /s/ Henry D. Fahman
Henry D. Fahman, President
In accordance with the Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.