UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended:
or
For the transition period from ___________________________ to __________________________________
Commission
File Number:
(n/k/a PHILUX GLOBAL GROUP INC)
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer identification Number) | |
| (Address of principal executive offices) | (Zip Code) |
| (Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of exchange on which registered | ||
| OTC Pink |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | ||
| ☐ | Smaller reporting company |
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of May 22, 2023, there were shares of the registrant’s $0.001 par value Common Stock issued and outstanding and 600,000 shares of the registrant’s $0.001 par value Class B Series I Preferred Stock issued and outstanding.
PHI GROUP, INC.
INDEX TO FORM 10-Q
| 2 |
PART I - FINANCIAL INFORMATION
ITEM 1- CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED
PHI GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| March 31, | June 30, | |||||||
| 2023 | 2022 | |||||||
| AUDITED | ||||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Marketable securities | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Other assets: | ||||||||
| Investments | ||||||||
| Total Assets | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | ||||||||
| Sub-fund obligations & Commitments | ||||||||
| Accrued expenses | ||||||||
| Short-term loans and notes payable | ||||||||
| Convertible Promissory Notes | ||||||||
| Due to officers | ||||||||
| Advances from customers and client deposits | ||||||||
| Derivative liabilities and Note Discount | ||||||||
| Total Liabilities | ||||||||
| Stockholders’ deficit: | ||||||||
| Preferred Stock, $ par value; shares authorized. shares and shares Class B Series I issued and outstanding as of 3/31/2023 and 06/30/2022 respectively. Par value: | ||||||||
| APIC - Class B Series I | ||||||||
| Total Preferred Stock | ||||||||
| Common stock, $ par value; billion shares authorized; shares issued and outstanding on 3/31/2023; billion shares authorized and shares issued and outstanding on 6/30/2022, respectively, adjusted for | ||||||||
| APIC - Common Stock | ||||||||
| Common Stock to be issued | ||||||||
| Common Stock to be cancelled | ( | ) | ( | ) | ||||
| Treasury stock: shares as of 3/31/23 and 6/30/22, respectively - cost method. | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Acc. Other Comprehensive Income (Loss) | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes form an integral part of these audited consolidated financial statements
| F-1 |
PHI GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net revenues | ||||||||||||||||
| Total revenues | $ | $ | $ | $ | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Salaries and wages | ||||||||||||||||
| Professional services, including non-cash compensation | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | $ | $ | $ | $ | ||||||||||||
| Income (loss) from operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other income and expenses | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net other income (expenses) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share: | ||||||||||||||||
| Basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average number of shares outstanding: | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
The accompanying notes form an integral part of these consolidated financial statements
| F-2 |
PHI GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 31, 2023 AND 2022
(UNAUDITED)
| MARCH 31, | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) from operations | $ | ( | ) | $ | ( | ) | ||
| Changes in derivatives and mark-to-market | ( | ) | ( | ) | ||||
| Stock issuance for services and cancellation of debts | ||||||||
| Adjustment for funds in transit | ||||||||
| Adjustments to reconcile net income to net cash used in operating activities | ||||||||
| (Increase) decrease in assets and prepaid expenses | ||||||||
| Deferred financing costs | ||||||||
| Other (increase) decrease in assets and prepaid expenses | ||||||||
| Increase (decrease) in accounts payable and accrued expenses | ||||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Accrued expenses (net) | ||||||||
| Sub-fund obligations and contingency commitments | ||||||||
| Advances from customers and client deposits | ( | ) | ||||||
| Net cash provided by (used in) operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Net cash provided by (used in) investing activities | ||||||||
| Investments: Asia Diamond Exchange | ( | ) | ||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Common Stock | ||||||||
| Common Stock to be issued | ||||||||
| Loans and Notes Payable | ||||||||
| CO2-1-0 (Carbon) Corp tokens | ||||||||
| Net cash provided by (used in) financing activities | ||||||||
| Net decrease in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
The accompanying notes form an integral part of these consolidated financial statements
| F-3 |
PHI GROUP, INC. AND SUBSIDIARIES
STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE YEAR ENDED JUNE 30, 2022 (AUDITED) AND
THE QUARTER ENDED MARCH 31, 2023 (UNAUDITED)
Common Stock | Additional Paid-in | Preferred Stock | Additional Paid-in | Treasury Stock | Common Stock to be | Common Stock to be | Other Comprehensive | Accumulated | Total Shareholders’ | |||||||||||||||||||||||||||||||||||||||||||
| Shares | Par Value | Capital | Shares | Par Value | Capital | Shares | Amount | Cancelled | issued | Gain (loss) | Deficit | Deficit | ||||||||||||||||||||||||||||||||||||||||
| Balance at Fiscal Year Ended June 30, 2022 | $ | $ | $ | | $ | ( | ) | ( | ) | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Common Shares issued for conversions of promissory notes during the quarter ended September 30, 2022 | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Common Shares issued for exercise of warrants during the quarter ended September 30, 2022 | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Shares cancelled during quarter ended September 30, 2022 | - | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2022 | $ | $ | $ | ( | ) | ( | ) | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||||
| Common Shares issued for conversions of promissory notes during the quarter ended March 31, 2023 | ( | ) | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Common Shares issued for cash during the quarter ended March 31, 2023 | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Shares issued for contractual obligation during the quarter ended March 31, 2023 | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2023 | ( | ) | ( | ) | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||
The accompanying notes form an integral part of these consolidated financial statements
| F-4 |
PHI GROUP, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – NATURE OF BUSINESS
INTRODUCTION
PHI Group, Inc. (n/k/a Philux Global Group Inc) (the “Company” or “PHI”) (www.philuxglobal.com) is primarily engaged in mergers and acquisitions, advancing PHILUX Global Funds, SCA, SICAV-RAIF, a “Reserved Alternative Investment Fund” (“RAIF”) under the laws of Luxembourg, and developing the Asia Diamond Exchange in Vietnam. Besides, the Company provides corporate finance services, including merger and acquisition advisory and consulting services for client companies through our wholly owned subsidiary PHILUX Capital Advisors, Inc. (formerly PHI Capital Holdings, Inc.) (www.philuxcapital.com) and invests in selective industries and special situations aiming to potentially create significant long-term value for our shareholders. PHILUX Global Funds intends to include a number of sub-funds for investment in select growth opportunities in the areas of 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 various transactions in connection with mergers and acquisitions advisory and consulting services, real estate and hospitality development, mining, oil and gas, telecommunications, technology, healthcare, private equity, and special situations. In October 2011, the Company discontinued the operations of Providential Vietnam Ltd., Philand Ranch Limited, a United Kingdom corporation (together with its subsidiaries Philand Ranch - Singapore, Philand Corporation - US, and Philand Vietnam Ltd. - Vietnam), PHI Gold Corporation (formerly PHI Mining Corporation, a Nevada corporation), and PHI Energy Corporation (a Nevada corporation), and mainly focused on acquisition and development opportunities in energy and natural resource businesses.
The Company is currently focused on PHILUX Global Funds, SCA, SICAV-RAIF by launching Philux Global Select Growth Fund and potentially other sub-funds for investment in real estate, renewable energy, infrastructure, agriculture, healthcare and the Asia Diamond Exchange in Vietnam. In addition, PHILUX Capital Advisors, Inc. (formerly Capital Holdings, Inc.), a wholly owned subsidiary of the Company, continues to provide corporate and project finance services, including merger and acquisition (M&A) advisory and consulting services for U.S. and international companies. The Company has also formed Philux Global Advisors, Inc. to serve as the investment advisor to PHILUX Global Funds and other potential fund clients in the future.
The Company had signed agreements to acquire majority equity interests in Kota Construction LLC and Kota Energy Group LLC (“KOTA”) which are engaged in solar energy business (https://www.kotasolar.com), Tin Thanh Group, a Vietnamese joint stock company (www.tinthanhgroup.vn) (“TTG”) and Van Phat Dat Joint Stock Company, a Vietnamese joint stock company. Whereas the scheduled closing dates for the KOTA and TTG transactions already expired, the Company has continued to discuss with these companies and intends to renegotiate an revised agreement for acquisition with them when the Company successfully closes one or more of the pending financing and investment management agreements with certain lenders and investor groups. In addition, the Company is in the process of amending the Purchase and Sale Agreement that was originally signed on January 18, 2022 with Five-Grain Treasure Spirits Co., Ltd., a Chinese baiju distiller, to collaborate in launching American-made baiju products through Empire Spirits, Inc., a subsidiary of the Company. The Company will also relocate CO2-1-0 (CARBON) Corp., a subsidiary of the Company engaged in carbon emission mitigation using blockchain and crypto technologies, to the United Arab Emirates. These activities are disclosed in greater detail elsewhere in this report. No assurances can be made that the Company will be successful in achieving its plans.
| F-5 |
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.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The
consolidated financial statements include the accounts of PHI Group, Inc. (a/k/a Philux Global Group, Inc.) and its active wholly
owned subsidiaries: (1) PHILUX Capital Advisors, Inc., a Wyoming corporation (
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. These statements should be read in conjunction with the audited financial statements for the year ended June 30, 2022. In the opinion of management, all adjustments consisting of normal reoccurring accruals have been made to the financial statements. The results of operation for the three and nine months ended March 31, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2023.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents.
MARKETABLE SECURITIES
The Company’s securities are classified as available-for-sale and, as such, are carried at fair value. Securities classified as available-for-sale may be sold in response to changes in interest rates, liquidity needs, and for other purposes.
| F-6 |
Typically, each investment in marketable securities represents less than twenty percent (%) of the outstanding common stock and stock equivalents of the investee, and each security is quoted on either the OTC Markets or other public exchanges. As such, each investment is accounted for in accordance with the provisions of SFAS No. 115.
Unrealized
holding gains and losses for available-for-sale securities are excluded from earnings and reported as a separate component of stockholder’s
equity. Realized gains and losses for securities classified as available-for-sale are reported in earnings based upon the adjusted cost
of the specific security sold. On March 31, 2023, the marketable securities were recorded at $
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.
| F-7 |
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. On March 31, 2023, the Company did not have any nonfinancial assets or nonfinancial liabilities that are recognized or disclosed at fair value. ASC 820 requires that financial assets and liabilities that are reported at fair value be categorized as one of the types of investments based upon the methodology mentioned in Level 1, Level 2 and Level 3 above for determining fair value.
Assets measured at fair value on a recurring basis are summarized below. The Company also has convertible notes and derivative liabilities as disclosed in this report that are measured at fair value on a regular basis until paid off or exercised.
Available-for-sale securities
The Company uses various approaches to measure fair value of available-for-sale securities, while applying the three-level valuation hierarchy for disclosures, specified in ASC 820. Our Level 1 securities were measured using the quoted prices in active markets for identical assets and liabilities.
| F-8 |
The company’s policy regarding the transfers in and/or out of Level 3 depends on the trading activity of the security, the volatility of the security, and other observable units which clearly represents the fair value of the security. If a level 3 security can be measured using a more fairly represented fair value, we will transfer these securities either into Level 1 or Level 2, depending on the type of inputs.
ACCOUNTS RECEIVABLE
Management reviews the composition of accounts receivable and analyzes historical bad debts. As of March 31, 2023, the Company did not have any accounts receivable.
PROPERTIES AND EQUIPMENT
Property
and equipment are carried at cost less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated
useful life of the assets from to
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.
| F-9 |
- 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.
STOCK-BASED COMPENSATION
Effective July 1, 2006, the Company adopted ASC 718-10-25 (previously SFAS 123R) and accordingly has adopted the modified prospective application method. Under this method, ASC 718-10-25 is applied to new awards and to awards modified, repurchased, or cancelled after the effective date. Additionally, compensation cost for the portion of awards that are outstanding as of the date of adoption for which the requisite service has not been rendered (such as unvested options) is recognized over a period of time as the remaining requisite services are rendered.
RISKS AND UNCERTAINTIES
In the normal course of business, the Company is subject to certain risks and uncertainties. The Company provides its service and receives marketable securities upon execution of transactions. Consequently, the value of the securities received from customers can be affected by economic fluctuations and each customer’s business growth. The actual realized value of these securities could be significantly different than recorded value.
RECENT ACCOUNTING PRONOUNCEMENTS
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06-Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)-Accounting For Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for annual and interim periods beginning after December 15, 2022, and early adoption is permitted for fiscal years beginning after December 15, 2020. This pronouncement should not affect the accounting for the Company’s debt instruments for the quarter ended March 31, 2023.
Update No. 2018-13 – August 2018
Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement
Modifications: The following disclosure requirements were modified in Topic 820:
1. In lieu of a roll-forward for Level 3 fair value measurements, a non-public entity is required to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities.
2. For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly.
3. The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date.
| F-10 |
Additions: The following disclosure requirements were added to Topic 820; however, the disclosures are not required for non-public entities:
1. The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period.
2. The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements.
The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.
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.
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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 – MARKETABLE EQUITY SECURITIES AVAILABLE FOR SALE
The Company’s marketable securities are classified as available-for-sale and, as such, are carried at fair value. All of the securities are comprised of shares of common stock of the investee. Securities classified as available-for-sale may be sold in response to changes in interest rates, liquidity needs, and for other purposes. These marketable securities are quoted on the OTC Markets or other public exchanges and are accounted for in accordance with the provisions of SFAS No. 115.
Marketable
securities held by the Company and classified as available for sale as of March 31, 2023 consisted of shares of Myson Group, Inc.
(formerly Vanguard Mining Corporation) which are quoted on the OTC Markets (Trading symbols “MYSN”). The fair value of the
shares recorded as of March 31, 2023 was $
| Securities available for sale | Level 1 | Level 2 | Level 3 | Total | ||||||||||
| March 31, 2023 | $ | $ | $ | |||||||||||
| June 30, 2022 | $ | $ | $ | |||||||||||
NOTE 4 – PROPERTIES AND EQUIPMENT
The Company did not have any properties or equipment as of March 31, 2023.
NOTE 5 – OTHER ASSETS
Other Assets comprise of the following as of March 31, 2023 and June 30, 2022
| March 31, 2023 | June 30, 2022 | |||||||
| Investment in PHILUX Global Funds, SCA, SICAV-RAIF | $ | $ | ||||||
| Investment in AQuarius Power, Inc. | $ | $ | ||||||
| Total Other Assets | $ | $ | ||||||
Other
Assets as of March 31, 2023 consist of a $
For
the investments in PHILUX Global Funds, as of March 31, 2023, PHI Luxembourg Development SA, a Luxembourg corporation and wholly-owned
subsidiary of PHI Group, Inc. held ordinary shares of PHILUX Global Funds valued at EUR
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The Company has treated all development costs of the Asia Diamond Exchange as expenses and exchanged for common shares in Asia Diamond Exchange, Inc., a Wyoming corporation.
NOTE 6 – CURRENT LIABILITIES
Current Liabilities of the Company consist of the followings as of March 31, 2023 and June 30, 2022.
| Current Liabilities | 31-Mar-23 | 30-Jun-22 | ||||||
| Accounts payable | $ | $ | ||||||
| Sub-fund obligations and commitments | ||||||||
| Accrued expenses | ||||||||
| Short-term loans and notes payable | ||||||||
| Convertible Promissory Notes | ||||||||
| Due to officers | ||||||||
| Advances from customers | ||||||||
| Derivative liabilities and Note Discount | ||||||||
| Total Current Liabilities | $ | $ | ||||||
ACCRUED
EXPENSES: Accrued expenses as of March 31, 2023 totaling $
NOTES
PAYABLE: As of March 31, 2023, Notes Payable consist of $
ADVANCES FROM CUSTOMERS AND CLIENT’S DEPOSIT:
As
of March 31, 2023, the Company recorded $
SUB-FUND
OBILGATIONS AND COMMITMENT RETAINER: The Company has recorded a total of $
NOTE 7 – DUE TO OFFICERS
Due
to officer, represents loans and advances made by officers and directors of the Company and its subsidiaries, unsecured and due on demand.
As of March 31, 2023 and June 30, 2022, the balances were $
| Officers/Directors | Mar 31, 2023 | Jun 30, 2022 | ||||||
| Henry Fahman | $ | |||||||
| Tam Bui | $ | |||||||
| Total | $ | $ | ||||||
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NOTE 8 – LOANS AND PROMISSORY NOTES
A. SHORT TERM NOTES PAYABLE:
In the course of its business, the Company has obtained short-term loans from individuals and institutional investors.
NOTES
PAYABLE: As of March 31, 2023, Notes Payable consist of $
B. CONVERTIBLE PROMISSORY NOTES OUTSTANDING AS OF MARCH 31, 2023
As
of March 31, 2023, the Company had a net balance of $
NOTE 9 – PAYROLL TAX LIABILITIES
As
of March 31, 2023, payroll tax liabilities were $
Net loss per share is calculated in accordance with SFAS No. 128, “Earnings per Share”. Under the provision of SFAS No. 128, basic net loss per share is computed by dividing the net loss for the period by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock outstanding for the period and common stock equivalents outstanding at the end of the period. Basic and diluted weighted average numbers of shares for the period ended March 31, 2023 were the same since the inclusion of Common stock equivalents is anti-dilutive.
NOTE 11 – STOCKHOLDER’S EQUITY
As of March 31, 2023, the total number of authorized capital stock of the Company consisted of billion shares of voting Common Stock with a par value of $ per share and shares of Preferred Stock with a par value of $ per share. The rights and terms associated with the Preferred Stock will be determined by the Board of Directors of the Company.
TREASURY STOCK
The
balance of treasury stock as of March 31, 2023 was shares valued at $
COMMON STOCK
During
the quarter ended March 31, 2023, the Company issued the following amounts of Common Stock:
As of March 31, 2023, there were shares of the Company’s Common Stock issued and outstanding.
PREFERRED STOCK
CLASS B SERIES I PREFERRED STOCK
As of March 31, 2023, there were shares of Class B Series Preferred Stock issued and outstanding.
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1. On February March 18, 2015, the Company adopted an Employee Benefit Plan to set aside shares of common stock for eligible employees and independent contractors of the Company and its subsidiaries. As of September 30, 2022 the Company has not issued any stock in lieu of cash under this plan.
2. On September 23, 2016, the Company issued incentive stock options and nonqualified stock options to certain key employee(s) (Henry Fahman – CEO/CFO) and directors (Tam Bui, Henry Fahman, and Frank Hawkins constitute the Board of Directors) as deferred compensation. The options allow the holders to acquire the Company’s Common Stock at the fair exercise price of the Company’s Common Stock on the grant date of each option at $ 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 . The options terminate from the date of grant and become vested and exercisable after 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 | % | |||
| Expected life | ||||
| Expected volatility | % | |||
| 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 | Fixed price: $ | $ | ||||||||||||
| Frank Hawkins | Fixed price: $ | $ | ||||||||||||
| Henry Fahman | Fixed price: $ | $ | ||||||||||||
3. On September 9, 2022, the Company adopted the PHI Group 2022 Employee Benefit Plan and set aside shares of its common stock to provide a means of non-cash remuneration to selected eligible employees and independent contractors (“Eligible Participants”) of the Company and its subsidiaries. On September 17, 2022, the Company filed Form S-8 Registration Statement under the Securities Act of 1933 with the Securities and Exchange Commission to register these shares for the above-mentioned plan. As of March 31, 2023 the Company has issued a total of shares for consulting services and salaries under the PHI Group 2022 Employee Benefit Plan.
NOTE 13– RELATED PARTY TRANSACTIONS
As
of March 31, 2023, the Company has recognized a total of $
Henry Fahman, Chairman and Chief Executive Officer, and Tam Bui, a member of the Board of Directors and Chief Operating Officer, of the Company from time to time lend money to the Company. These loans are without interest and payable upon demand.
As of March 31, 2023, the Company still owed the following amounts to Related Parties:
| No. | Name: | Title: | Amount: | Description: | ||||||
| 1) | Tam Bui | Director/COO | $ | Accrued salaries | ||||||
| $ | Loans | |||||||||
| 2) | Henry Fahman | Chairman/CEO | $ | Accrued salaries | ||||||
| $ | Loans | |||||||||
| 3) | Tina Phan | Secretary/Treasurer | $ | Accrued salaries | ||||||
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NOTE 14 – CONTRACTS AND COMMITMENTS
1. 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. INVESTMENT AGREEMENTS AND MEMORANDUM OF UNDERSTANDING
The Company and its subsidiaries have entered into loan financing agreements, investment management agreements, joint venture agreement, and memorandum of understanding with six international investor groups for a total six billion three hundred million U.S. dollars, as reported in various 8-K filings with the Securities and Exchange Commission. The Company has been working regularly with these investor groups and expects to begin receiving capital through these sources in the near future to support its acquisition and investment programs.
3. DEVELOPMENT OF THE MULTI-COMMODITIES CENTER, ASIA DIAMOND EXCHANGE AND LOGISTICS CENTER IN VIETNAM
Along
with the establishment of PHILUX Global Funds, since March 2018 the Company has worked 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
in principle to allocate more than
On June 04, 2022 the Company incorporated Asia Diamond Exchange, Inc., a Wyoming corporation, ID number 2022-001010234, as the holding company for the development of the Asia Diamond Exchange in Vietnam.
In
addition, 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. The Company has submitted a request for
4. AGREEMENT WITH FIVE-GRAIN TREASURE SPIRITS CO., LTD.
On
January 18, 2022 PHI Group entered into an Agreement of Purchase and Sale with Five Grain Treasure Spirits Co., Ltd. (“FGTS) and
the majority shareholders of FGTS (the “Majority Shareholders”) to acquire seventy percent (
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5. AGREEMENT OF PURCHASE AND SALE WITH KOTA CONSTRUCTION LLC AND KOTA ENERGY GROUP LLC
Effective
January 26, 2022, PHI Group, Inc. signed Agreements of Purchase and Sale with KOTA Construction LLC and KOTA Energy Group LLC, both of
which are California limited liability companies (collectively referred to as “KOTA”), to acquire
KOTA, operating under two legal entities as Kota Energy Group LLC (‘KEG”) and Kota Construction LLC (“KCCO”), provides solutions for solar energy to residential and commercial customers, with unique competitive advantages. As one of the fastest growing sales and installation engines in the country, KOTA prioritizes itself to have the best employee and customer experience possible, through its high standard of installation quality, its industry leading technology platforms, which enable increased sales volume, while maintaining fast, and transparent project timelines. It’s strategic partnerships with key players in the solar industry, have increased margins, while delivering top tier products to customers, without sacrificing quality. KOTA’s guiding core values of “Become, Create, Give” have been the driving factor in decision making that have led it to become the most highly sought-after solar company to work with in the solar industry. Website: KOTA Energy Group: https://www.kotasolar.com.
In
the second and latest amendment signed on August 3, 2022 to the Agreements of Purchase and Sale with KOTA, the concerned parties have
agreed that PHI Group, Inc. would pay Fifteen Million Six Hundred Fifty-Five Thousand Two Hundred Forty-Eight U.S. Dollars ($
Whereas the scheduled closing date for the KOTA transaction already expired, the Company intends to renegotiate an revised agreement for acquisition when the Company successfully closes one or more of the pending financing and investment management agreements with certain lenders and investor groups.
6. JOINT VENTURE AGREEMENT WITH DANANG RUBBER JSC AND TIN THANH GROUP
In
June 2022, the Company signed an joint venture agreement with Danang Rubber Joint Stock Company (DRC) (https://drctire.com/) and Tin
Thanh Group (TTG) (https://tinthanhgroup.vn/en/) to cooperate in increasing DRC’s tire production and executing an innovative sales
and marketing program targeting annual revenues of
The DRC-TTG truck tire leasing service program with complete multi-function and insurance package is designed to provide the following features and benefits to the consumers:
| 1. | Smart tires with mounted chips to track and manage journey. | |
| 2. | Saving of 10-20% compared to buying tires. | |
| 3. | No cost to change tires. | |
| 4. | No environmental fees when replacing old tires. | |
| 5. | No need to pay for periodic tire maintenance checks. | |
| 6. | No need to pay for buying tires when changing new tires. | |
| 7. | No need to pay for tire insurance. | |
| 8. | No increase in fuel or lubricant consumption compared to before using this service. | |
| 9. | Tires use clean and renewable energy thus also benefiting the environment. |
| F-17 |
7. JOINT VENTURE/PARTNERSHIP AGREEMENT (FUND MANAGEMENT MOU) BETWEEN AN INVESTOR IN THE GULF COOPERATION COUNCIL REGION AND PHILUX GLOBAL GROUP, INC. (A/K/A PHI GROUP, INC.)
On
July 08, 2022, the registrant signed a Joint Venture/Partnership Agreement (Fund Management MOU) with an investor in the Gulf Cooperation
Council region to manage an initial amount of Three Billion United States Dollars (USD
8. AGREEMENT WITH TIN THANH GROUP
Effective
August 13, 2022, the Company signed a Stock Transfer Agreement with Tin Thanh Group Joint Stock Company, a joint stock company organized
and existing by virtue of the laws of Socialist Republic of Vietnam, with principal business address at 71 Pho Quang Street, Ward 2,
Tan Binh District, Ho Chi Minh City, Vietnam, hereinafter referred to as “TTG” and Mr. Tran Dinh Quyen, the holder of at
least fifty-one percent (
The closing date of this transaction would be the date on which the closing actually occurs, which was last extended to March 15, 2023 based on the fifth amendment to the Stock Transfer Agreement signed by both parties on February 14, 2023. On March 20, 2023 Tin Thanh Group sent a notice to terminate this Stock Transfer Agreement. However, both companies have continued discussing and agreed to renegotiate an revised agreement whereby the Company will co-invest in Tin Thanh’s Smart-tire program in South Carolina, USA and cooperate in other the business activities in Vietnam and abroad when the Company successfully closes one or more of the pending financing and investment management agreements with certain lenders and investor groups.
9. AGREEMENT WITH VAN PHAT DAT JOINT STOCK COMPANY
Effective
August 16, 2022, PHI Group, Inc. (a/k/a PHILUX GLOBAL GROUP INC.) (“the Registrant”) signed an Agreement of Purchase and
Sale with Van Phat Dat Export Joint Stock Company, a joint stock company organized and existing by virtue of the laws of Socialist Republic
of Vietnam, with principal business address at 316 Le Van Sy Street, Ward 1, Tan Binh District, Ho Chi Minh City, Vietnam, hereinafter
referred to as “VPD,” and the holder of at least fifty-one percent (
On September 30, 2022 PHI Group, Inc. entered into a Closing Memorandum for the Agreement of Purchase and Sale dated August 16, 2022 with and among Van Phat Dat Export Joint Stock Company and Mr. Huynh Ngoc Vu, an individual and the majority shareholder of VPD.
| F-18 |
10. STRATEGIC BUSINESS COOPERATION WITH TIN THANH GROUP AND PETROVIETNAM MARINE SHIPYARD JSC
On September 03, 2022, the Company signed a strategic business cooperation with Tin Thanh Group (www.tinthanhgroup.vn/en/) and PetroVietnam Marine Shipyard JSC (https://www.pvshipyard.com.vn/) whereby PetroVietnam Marine Shipyard (“PVMS”) will increase charter capital to allow Tin Thanh Group and Philux Global Group to become its strategic and majority shareholders. The companies will deploy their collective resources to expand PVMS’s scope of business and undertake major offshore and onshore, domestic and international projects that may be substantially beneficial for all parties, including but not limited to ship-building, yacht-building, drilling rigs, refineries and petrochemical plants, power plants, wind farms, ship dismantlement, Tin Thanh Group’s waste-to-energy plants and multiple processing facilities as well as Philux Global Group’s Asia Diamond Exchange project, industrial logistic zone and multi-commodities center in Vietnam.
Founded in 2007, PVMS has been providing (EPC) Engineering, Procurement, Fabrication, Construction and Commissioning for drilling units, floating facilities, modules and steel structures as well as up-grading, repair and maintenance services for MODU. Its onshore projects include steel fabrication, erection and commissioning for power plants, petrochemical plants, fertilizers plants, gas terminals and particularly onshore E-House, process module design, estimation & construction.
11. ISSUANCES OF SHORT-TERM CONVERTIBLE NOTES
On
March 3, 2023, the Company issued a Convertible Promissory Note to Diagonal Lending LLC, a Virginia limited liability company, for
$
On
March 14, 2023, the Company issued a Convertible Promissory Note to Mast Hill Fund, L.P., a De a Delaware limited partnership, for $
12. AGREEMENT FOR COMPREHENSIVE COOPERATION WITH DR. TRI VIET DO
On February 10, 2023, the Company signed an agreement for comprehensive cooperation with Dr. Tri Viet Do, a German-trained expert in electromagnetic energy and quantum physics, to jointly cooperate in the development and commercialization of a number of key products using proprietary intellectual properties already developed by him. The scope of study and development includes: 1) Producing generators using electromagnetic and quantum fields extracted from the energy absorbed from the earth; 2) Producing engines (spaceships, airplanes, ships, cars, trains, motorcycles, etc.) powered by electromagnetic and quantum energy; 3) Machines to kill harmful bacteria and viruses, including covid-19 and variants; 4) Medicines to treat 25 types of infectious diseases and cancers using atomic nuclear energy, super-matter and antimatter; 5) Desalination of seawater, separating minerals, medicines and rare metals from sea water; 6) Environmental technology for treating and sterilizing wastewater to become clean water; 7) Waste treatment by automatic classification of wastes into various categories; 8) Clean agriculture with electromagnetic and quantum fields for use in farming; and 9) Aquatic poultry farming by treating the rearing environment with electromagnetic and quantum fields and providing food energy for poultry and aquatic products.
| F-19 |
13. TERMINATION OF AGREEMENT FOR PARTICIPATION IN INFRASTRUCTURE FUND WITH THANH NAM LONG CONSTRUCTION COMPANY
On February 09, 2023, the Company sent a notice to Thanh Nam Long Construction Co., Ltd. (“TNLC”), a Vietnam limited company, with its main address at Lot C10-18, street No. 5, Tay Bac urban area, Vinh Quang Ward, Rach Gia City, Kien Giang Province, Vietnam, to terminate the Agreement for Participation in PHILUX Infrastructure Fund dated February 02, 2023 due to TNLC’s failure to fulfill its obligations as agreed in Article 2 of said Agreement.
14. Investment Commitment Agreement WITH Saigon Silicon City JSC
On
February 21, 2023, Philux Global Group Inc. (a/k/a PHI Group, Inc.) and its subsidiaries Philux Global Funds SCA, SICAV-RAIF and Philux
Global Vietnam Investment and Development Company, Ltd., (collectively referred to as “the Investor”) signed an Investment
Commitment Agreement with Saigon Silicon City Joint Stock Company (the “Company”) whereby the Investor is committed to providing
or causing to be provided a total of five hundred million U.S. dollars (USD
According
to the Investment Commitment Agreement, within thirty days of the signing of this Agreement, the Investor will provide or cause to be
provided fifty million U.S. dollars (USD
Effective
March 21, 2023, the Company and Saigon Silicon City JSC signed an amendment to amend Article 2 of the afore-mentioned Investment Commitment
Agreement as follows: “Time frame. Due to additional administrative and legal requirements in connection with the Investor’s
release of funds, within thirty days of the signing of this Amendment, the Investor will provide or cause to be provided fifty million
U.S. dollars (USD
On April 21, 2023, both parties signed an amendment to extend the delivery of the first investment tranche to Saigon Silicon City JSC within forty-five days commencing April 21, 2023.
15. Termination of Agreement for Participation in Philux Global Real Estate Fund with AZ Holdings Joint Stock Company
On March 24, 2023, the Company sent a notice to AZ Holdings Investment Joint Stock Company, a Vietnamese joint stock company (“AZHC”), with principal address at No. 36, Sub-alley 3, Alley 83, Nguyen Khang Street, Yen Hoa Ward, Cau Giay District, Hanoi, Vietnam, to terminate the Agreement for Participation in Philux Global Real Estate Fund dated July 18, 2022 due to AZHC’s failure to fulfill its obligations as agreed in Article 2 of said Agreement.
16. COMMON STOCK TO BE ISSUED
During
the quarter ended March 31, 2023 the Company recorded $
NOTE 15 - GOING CONCERN UNCERTAINTY
As
shown in the accompanying consolidated financial statements, the Company has accumulated deficit of $
NOTE 16 – SUBSEQUENT EVENT
These financial statements were approved by management and available for issuance on or about May 22, 2023. Subsequent events have been evaluated through this date.
ISSUANCE OF COMMON SHARES FOR CONVERSION OF PROMISSORY NOTE
On April 24, 2023 the Company issued shares of Common Stock to Mast Hill Fund L.P. for the conversion of a convertible promissory that was issued to this investor on April 4, 2022.
| F-20 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Except for the audited historical information contained herein, this report specifies forward-looking statements of management of the Company within the meaning of Section 27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act of 1934 (“forward-looking statements”) including, without limitation, forward-looking statements regarding the Company’s expectations, beliefs, intentions and future strategies. Forward-looking statements are statements that estimate the happening of future events and are not based on historical facts. Forward- looking statements may be identified by the use of forward-looking terminology, such as “could”, “may”, “will”, “expect”, “shall”, “estimate”, “anticipate”, “probable”, “possible”, “should”, “continue”, “intend” or similar terms, variations of those terms or the negative of those terms. The forward-looking statements specified in this report have been compiled by management of the Company on the basis of assumptions made by management and considered by management to be reasonable. Future operating results of the Company, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking statements. The assumptions used for purposes of the forward-looking statements specified in this report represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. In addition, those forward-looking statements have been compiled as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this report. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in this report are accurate and the Company assumes no obligation to update any such forward-looking statements.
NATURE OF BUSINESS
PHI Group, Inc. (n/k/a Philux Global Group Inc) (the “Company” or “PHI”) (www.philuxglobal.com) is primarily engaged in mergers and acquisitions, advancing PHILUX Global Funds, SCA, SICAV-RAIF, a “Reserved Alternative Investment Fund” (“RAIF”) under the laws of Luxembourg, and developing the Asia Diamond Exchange in Vietnam. Besides, the Company provides corporate finance services, including merger and acquisition advisory and consulting services for client companies through our wholly owned subsidiary PHILUX Capital Advisors, Inc. (formerly PHI Capital Holdings, Inc.) (www.philuxcapital.com) and invests in selective industries and special situations aiming to potentially create significant long-term value for our shareholders. PHILUX Global Funds intends to include a number of sub-funds for investment in select growth opportunities in the areas of 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 various transactions in connection with mergers and acquisitions advisory and consulting services, real estate and hospitality development, mining, oil and gas, telecommunications, technology, healthcare, private equity, and special situations. In October 2011, the Company discontinued the operations of Providential Vietnam Ltd., Philand Ranch Limited, a United Kingdom corporation (together with its subsidiaries Philand Ranch - Singapore, Philand Corporation - US, and Philand Vietnam Ltd. - Vietnam), PHI Gold Corporation (formerly PHI Mining Corporation, a Nevada corporation), and PHI Energy Corporation (a Nevada corporation), and mainly focused on acquisition and development opportunities in energy and natural resource businesses.
| 3 |
The Company is currently focused on PHILUX Global Funds, SCA, SICAV-RAIF by launching Philux Global Select Growth Fund and potentially other sub-funds for investment in real estate, renewable energy, infrastructure, agriculture, healthcare and the Asia Diamond Exchange in Vietnam. In addition, PHILUX Capital Advisors, Inc. (formerly Capital Holdings, Inc.), a wholly owned subsidiary of the Company, continues to provide corporate and project finance services, including merger and acquisition (M&A) advisory and consulting services for U.S. and international companies. The Company has also formed Philux Global Advisors, Inc. to serve as the investment advisor to PHILUX Global Funds and other potential fund clients in the future.
The Company had signed agreements to acquire majority equity interests in Kota Construction LLC and Kota Energy Group LLC (“KOTA”) which are engaged in solar energy business (https://www.kotasolar.com), Tin Thanh Group, a Vietnamese joint stock company (www.tinthanhgroup.vn) (“TTG”) and Van Phat Dat Joint Stock Company, a Vietnamese joint stock company. Whereas the scheduled closing dates for the KOTA and TTG transactions already expired, the Company has continued to discuss with these companies and intends to renegotiate an revised agreement for acquisition with them when the Company successfully closes one or more of the pending financing and investment management agreements with certain lenders and investor groups. In addition, the Company is in the process of amending the Purchase and Sale Agreement that was originally signed on January 18, 2022 with Five-Grain Treasure Spirits Co., Ltd., a Chinese baiju distiller, to collaborate in launching American-made baiju products through Empire Spirits, Inc., a subsidiary of the Company. The Company will also relocate CO2-1-0 (CARBON) Corp., a subsidiary of the Company engaged in carbon emission mitigation using blockchain and crypto technologies, to the United Arab Emirates. These activities are disclosed in greater detail elsewhere in this report. No assurances can be made that the Company will be successful in achieving its plans.
BUSINESS STRATEGY
PHI’s strategy is to:
1. Identify, build, acquire, commit and deploy valuable resources with distinctive competitive advantages;
2. Identify, evaluate, acquire, participate and compete in attractive businesses that have large, growing market potential;
3. Build an attractive investment that includes points of exit for investors through capital appreciation or spin-offs of business units.
SUBSIDIARIES:
As of March 31, 2023, 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) PHILUX Global Funds SCA, SICAV-RAIF, a Luxembourg Reserved Alternative Investment Fund (100%), (4) PHILUX Capital Advisors, Inc., a Wyoming corporation (100%), (5) PHI Luxembourg Development S.A., a Luxembourg corporation (100%), (6) PHILUX Global General Partners SA, a Luxembourg corporation (100%), (7) PHI Luxembourg Holding SA, a Luxembourg corporation (100%), (8) Philux Global Vietnam Investment and Development Company Ltd., a Vietnamese limited liability company (100%), (9) Phivitae Healthcare, Inc. (100%), (10) American Pacific Resources, Inc., a Wyoming corporation (100%), (11) Philux Fidelity Global Group, a Wyoming corporation, (12) and Philux Global Trade Inc., a Wyoming corporation.
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ASIA DIAMOND EXCHANGE AND THE DEVELOPMENT OF MULTI-COMMODITIES AND LOGISTICS CENTER IN VIETNAM
Along with the establishment of PHILUX Global Funds, since March 2018 the Company has worked 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 in principle 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. The Company plans to establish the first laboratory-grown diamond exchange in Chu Lai in conjunction with several prominent international partners.
On June 04, 2022 the Company incorporated Asia Diamond Exchange, Inc., a Wyoming corporation, ID number 2022-001010234, as the holding company for the development of the Asia Diamond Exchange in Vietnam.
In addition, 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. The Company has submitted a request for 1,000 hectares of land close to the new Long Thanh International Airport to develop the Long Thanh Multi-Commodities Logistics Center (LMLC) together with the Industrial Zone and is currently working with the Dong Nai Provincial People’s Committee and the relevant ministries of the Vietnamese central government on this project.
EMPIRE SPIRITS, INC. (FORMERLY PROVIMEX, INC.)
Provimex, Inc. was originally incorporated as a Nevada corporation on September 23, 2004, Entity Number C25551-4, as a subsidiary of the Company to engage in international trade. On 9/26/2022, Provimex, Inc. changed its name to Empire Spirits, Inc. as the holding company for the acquisition of a majority ownership in Five-Grain Treasure Spirits Company, Ltd., a baiju distiller in Jilin Province. The Company is in the process of amending the Purchase and Sale Agreement that was originally signed on January 18, 2022 with Five-Grain Treasure Spirits Co. Ltd., to collaborate in launching American-made baiju products through Empire Spirits, Inc.
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 had been engaged to support the Fund’s operations: a) Custodian Bank: Hauck & Aufhauser Privatbankiers AG, b) Administrative Registrar & Transfer Agent: Hauck & Aufhauser Alternative Investment Services S.A., c) Fund Manager: Hauck & Aufhauser Fund Services S.A., d) Fund Attorneys: DLP Law Firm SARL and VCI Legal, e) Investment Advisor: PHILUX Capital Advisors, Inc., f) Fund Auditors: E&Y Luxembourg and E&Y Vietnam, g) Fund Tax Advisor: ATOZ Tax Management, Luxembourg, h) Fund Independent Asset Valuator: Cushman & Wakefield, Vietnam. Currently the Fund is in the process of changing the custodian bank, administrative registrar & transfer agent, investment advisor and the fund manager.
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The Fund is an umbrella fund intended to contain one or more sub-fund compartments for investing in select opportunities in the areas of real estate, infrastructure, renewable energy, agriculture, healthcare and especially the Asia Diamond Exchange and Multi-Commodities and Logistics Center in Vietnam.
Other subsidiaries of the Company that are established in conjunction with PHILUX Global Funds include PHI Luxembourg Development S.A., PHILUX Global General Partners SA, and PHI Luxembourg Holding SA. Website: www.philuxfunds.com.
PHILUX CAPITAL ADVISORS, INC.
PHILUX Capital Advisors, Inc. was originally incorporated under the name of “Providential Capital, Inc.” in 2004 as a Nevada corporation and wholly owned subsidiary of the Company to provide merger and acquisition (M&A) advisory services, consulting services, project financing, and capital market services to clients in North America and Asia. In May 2010, Providential Capital, Inc. changed its name to PHI Capital Holdings, Inc. It was re-domiciled as a Wyoming corporation on September 20, 2017 and changed its name to “PHILUX Capital Advisors, Inc.” on June 03, 2020. This subsidiary has successfully managed merger plans for a number of privately held and publicly traded companies and continues to focus on serving the Pacific Rim markets in the foreseeable future. This subsidiary also arranges debt financing for international clients. Website: www.philuxcapital.com.
CO2-1-0 (CARBON) CORP
In August 2022, 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, 2022 CO2-1-0 (CARBON) CORP was incorporated as a Wyoming corporation to manage this program. During the fiscal year ended June 30, 2022, PHI Group, Inc. has contributed a major portion of the development budget for CO2-1-0 (CARBON) CORP) and hold 50.1% shares of CO2-1-0 (CARBON). The Company is in the process of relocating CO2-1-0 (CARBON) CORP to the United Arab Emirates.
AMERICAN PACIFIC RESOURCES, INC.
American Pacific Resources, Inc. (“APR”) is a Wyoming corporation established in April 2016 as a subsidiary of the Company to serve as a holding company for various natural resource projects. On September 2, 2017, APR entered into an Agreement of Purchase and Sale with Rush Gold Royalty, Inc. (“RGR”), a Wyoming corporation, to acquire a 51% ownership in twenty-one mining claims over an area of approximately 400 acres in Granite Mining District, Grant County, Oregon, U.S.A., in exchange for a total purchase price of twenty-five million U.S. Dollars ($US 25,000,000) to be paid in a combination of cash, convertible demand promissory note and PHI Group, Inc.’s Class A Series II Convertible Cumulative Redeemable Preferred Stock (“Preferred Stock”). This transaction was closed effective October 3, 2017. Following the first amendment dated April 19, 2018 and the second amendment dated September 29, 2018 retroactively effective April 20, 2018, to the afore-mentioned Agreement of Purchase and Sale, PHI Group, Inc. paid ten million shares of its Class A Series II Convertible Cumulative Redeemable Preferred Stock to Rush Gold Royalty, Inc.. As of June 30, 2020, the Company recorded $462,000 paid for this transaction as expenses for research and development in connection with the Granite Mining Claims project. The value of these mining claims is expected to be adjusted later after a new valuation of these mining assets is conducted by an independent third-party valuator.
The Company has passed several resolutions with respect to the declaration of a twenty percent (20%) special stock dividend in American Pacific Resources, Inc. to shareholders of Common Stock of the Company. Due to the continued adverse effects of the coronavirus pandemic and other factors that have delayed the development of APR, it deems necessary for the Company to suspend the distribution of the APR special stock dividend until later on in order to allow APR additional time to reach certain milestones that would make the spin-off of APR and this special stock dividend distribution economically beneficial for the Company’s shareholders. The Company will provide an update regarding the new Record Date for this special dividend when certain conditions are met.
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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”), a 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 in the process of entering into a strategic alliance with a Vietnam-based medical supply company.
On February 13, 2023, the Company incorporated a new company under the name of “Philux Global Healthcare Inc.” with the State of Wyoming to consolidate all of its healthcare-related businesses under this entity.
PHILUX GLOBAL ENERGY, INC.
On January 3, 2022, the Company filed “Profit Corporation Articles of Incorporation” with the Wyoming Secretary of State to incorporate “PHILUX GLOBAL ENERGY, INC.” – Original ID: 2020-001066221, as a wholly-owned subsidiary of the Company to serve as the holding company for the contemplated acquisition of fifty-point one percent (50.10%) ownership in both Kota Energy Group LLC and Kota Construction LLC, both of which are California limited liability companies.
PHILUX FIDELITY GLOBAL GROUP
PHILUX FIDELITY GLOBAL GROUP, a Wyoming corporation, was incorporated on June 30, 2022 with the intention to serve as the holding company for business cooperation between Tin Thanh Group (www.tinthanhgroup.vn) and the Company.
CRITICAL ACCOUNTING POLICIES
The Company’s financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in the external disclosures of the Company including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. Valuations based on estimates are reviewed by us for reasonableness and conservatism on a consistent basis throughout the Company. Primary areas where financial information of the Company is subject to the use of estimates, assumptions and the application of judgment include acquisitions, valuation of long-lived and intangible assets, recoverability of deferred tax and the valuation of shares issued for services. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions.
Valuation of Long-Lived and Intangible Assets
The recoverability of long-lived assets requires considerable judgment and is evaluated on an annual basis or more frequently if events or circumstances indicate that the assets may be impaired. As it relates to definite life intangible assets, we apply the impairment rules as required by SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and Assets to Be Disposed Of” as amended by SFAS No. 144, which also requires significant judgment and assumptions related to the expected future cash flows attributable to the intangible asset. The impact of modifying any of these assumptions can have a significant impact on the estimate of fair value and, thus, the recoverability of the asset.
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Income Taxes
We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities. We regularly review our deferred tax assets for recoverability and establish a valuation allowance based upon historical losses, projected future taxable income and the expected timing of the reversals of existing temporary differences. As of March 31, 2023, we estimated the allowance on net deferred tax assets to be one hundred percent of the net deferred tax assets.
RESULTS OF OPERATIONS
The following is a discussion and analysis of our results of operations for the three-month and nine-month periods ended March 31, 2023 and 2022, our financial condition on March 31, 2023 and factors that we believe could affect our future financial condition and results of operations. Historical results may not be indicative of future performance.
This discussion and analysis should be read in conjunction with our consolidated financial statements and the notes thereto included elsewhere in this Form 10-Q. Our consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”). All references to dollar amounts in this section are in United States dollars.
Three months ended March 31, 2023 compared to the three months ended March 31, 2022
Total Revenues:
During the quarter ended March 31, 2023, the Company primarily focused on developing the Asia Diamond Exchange and working with several investor groups to complete the requirements in order to close the pending financing and investment management agreements. The Company did not generate any revenues from consulting services for the quarter ended March 31, 2023 as compared to $5,000 of revenues from consulting services for the corresponding quarter ended March 31, 2022.
Total Operating Expenses:
Total operating expenses were $307,065 and $294,542 for the three months ended March 31, 2023, and 2022, respectively. An increase of $12,523 in total operating expenses between the two periods was mainly due to an increase of $35,461 in general and administrative expenses, offset by a decrease of $22,938 in professional services.
Loss from Operations:
Loss from operations for the quarter ended March 31, 2023 was $307,065, as compared to loss from operations of $289,542 for the corresponding period ended March 31, 2022. An increase of $12,523 in total operating expenses between the two periods was mainly due to an increase of $35,461 in general and administrative expenses, offset by a decrease of $22,938 in professional services as mentioned above.
Other Income and Expenses:
The Company had a net other expenses of $1,471,647 for the three months ended March 31, 2023, as compared to net other expenses of $1,762,812 for the three months ended March 31, 2022. The decrease in other expenses of $291,165 between the two periods was mainly due to an increase in interest expense of $288,007 and a decrease in other expenses with no loss on warrant exercise for the current period whereas there was a loss on warrant exercise in the amount of $877,484 for the previous corresponding period. Also there was a decrease in loss due to issuance of stock with $233,065 for the current period as compared to $371,152 for the previous corresponding period. ended March 31, 2022.
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Net Income (Loss):
Net loss for the three months ended March 31, 2023 was $1,778,713 , as compared to a net loss of $2,052,354 for the same period in 2022, which is equivalent to ($0.00) per share for the current period and ($0.00) per share for the corresponding period ended March 31, 2022, based on the weighted average number of basic and diluted shares outstanding at the end of each corresponding period.
Nine months ended March 31, 2023 compared to the nine months ended March 31, 2022
Total Revenues:
The Company generated $25,000 from consulting services for the nine months ended March 31, 2023 as compared to $30,000 in revenues from consulting services for the same period ended March 31, 2022. During these periods the Company primarily focused on the launching of PHILUX Global Funds SCA, SICAV-RAIF and the development of Asia Diamond Exchange and did not generate any significant revenues from advisory and consulting services.
Total Operating Expenses:
Total operating expenses were $809,045 and $15,496,610 for the nine months ended March 31, 2023, and 2022, respectively. A decrease of $14,687,565 in total operating expenses between the two periods was mainly due to a decrease in professional services of $14,678,401 related to the costs for the development of the blockchain and crypto platform for digital assets paid by the issuance of the Company’s stock in lieu of cash, and a decrease in general and administrative expenses of $6,124 between the two periods.
Loss from Operations:
Loss from operations for the nine months ended March 31, 2023 was $784,045, as compared to loss from operations of $15,466,610 for the corresponding period ended March 31, 2022. A decrease of 14,682,565 in the loss from operations between the two nine-month periods was mainly due to a decrease in professional services of $14,678,401 related to the costs for the development of the blockchain and crypto platform for digital assets paid by the issuance of the Company’s stock in lieu of cash, and a decrease in general and administrative expenses of $6,124 between the two periods as mentioned above.
Other Income and Expenses:
The Company had a net other expenses of $3,432,624 for the nine months ended March 31, 2023, as compared to net other expenses of $3,137,553 for the nine months ended March 31, 2022. The increase in other expenses of $295,071 between the two nine-month periods was mainly due to an increase of $514,108 in connection with the costs to process the financing and investment management agreements, offset by a decrease of $219,038 in interest expenses.
Net Income (Loss):
Net loss for the nine months ended March 31, 2023 was $4,216,669 as compared to net loss of $18,604,163 for the same period in 2022, which is equivalent to ($0.00) per share for the current period and ($0.00) per share for the corresponding period ended March 31, 2022, based on the weighted average number of basic and diluted shares outstanding at the end of each corresponding period.
CASH FLOWS
The Company’s cash and cash equivalents balance were $39,424 and $23,592 as of March 31, 2023 and March 31, 2022, respectively.
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Net cash used in the Company’s operating activities during the nine months ended March 31, 2023 was $1,357,190, as compared to net cash used in operating activities of $554,878 during the corresponding period ended March 31, 2022. This represents a variance of $802,312 in net cash used in operating activities between the two periods. The underlying reasons for the variance were primarily due to a decrease of $14,387,494 in loss from operations, a difference in negative impact from derivatives and mark-to-market of $1,082,731, offset by a decrease in stock issuance for service and cancellation of debts in the amount of $14,626,172, an increase in deferred financing cost of $113,400, a decrease in accounts payable in the amount of $67,763, an increase in accrued expenses of $74,710, an increase in subfund obligations and contingency commitments of $108,684, and an increase in advance from customer in the mount of $145,000.
Net cash used in investing activities during the nine months ended March 31, 2023 was $0.00 as compared with net cash used in investing activities of $502,798 in the development of Asia Diamond Exchange that was recognized as such during the corresponding period ended March 31, 2022.
Cash provided by financing activities was $1,328,719 for the nine months ended March 31, 2023, as compared to cash provided by financing activities in the amount of $985,924 for the same period ended March 31, 2022. The primary reasons for an increase of $342,795 in cash provided by financing activities between the two corresponding periods were due to an increase in Common Stock issuance for cash in the amount of $251,800, and increase in Common Stock to be issued in the amount of $396,000, a decrease in loans and notes of $205,005 and the absence of cash received from CO2-1-0 (Carbon) Corp tokens during the current period as compared to $100,000 received from the previous corresponding nine-month period ended March 31, 2022.
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, including merchant cash advances, 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.
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%.
COMPANY’S PLAN OF OPERATION FOR THE FOLLOWING 12 MONTHS
In the next twelve months the Company’s goals are to advance the Philux Global Select Growth Fund under PHILUX Global Funds SCA, SICAV-RAIF, develop the Asia Diamond Exchange in Vietnam as well as consummate and integrate some pending acquisitions that should add critical mass to the Company. The Company has been intensely focused on closing the pending financing and investment management agreements, which are expected to provide substantial amounts of capital for the Company to fulfill its business plan. At the same time, the Company will continue to carry out its merger and acquisition program by acquiring target companies for a roll-up strategy and also invest in special situations. We will also continue to provide advisory and consulting services to international clients through our wholly owned subsidiary PHILUX Capital Advisors, Inc. (formerly known as PHI Capital Holdings, Inc.).
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, 2023 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.
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AVAILABLE FUTURE FINANCING ARRANGEMENTS: The Company may use various sources of funds, including short-term loans, long-term debt, equity capital, project financing and investment management contracts as may be necessary. The Company believes it will be able to secure the required capital to implement its business plan.
ITEM 3. 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 operations are conducted in other countries whose official currencies are not U.S. dollars. However, the effect of the fluctuations of exchange rates is considered minimal to our business operations.
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 a part of our assets is in the form of marketable securities, the value of our assets may fluctuate significantly depending on the market value of the securities we hold.
ITEM 4. 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 March 31, 2023, based on the material weaknesses defined below.
Internal Control over Financial Reporting
Management’s 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, |
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| - | 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 March 31, 2023 based on the framework set forth in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We have identified material weaknesses in our internal control over financial reporting:
| (i) | inadequate segregation of duties consistent with control objectives; | |
| (ii) | ineffective controls over period-end financial disclosure and reporting processes. |
If we fail to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in our company.
Based on this assessment, management concluded that the Company’s internal control over financial reporting was not effective as of March 31, 2023.
Management’s Remediation Plan
We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes in the future:
| (i) | appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and |
| (ii) | adopt sufficient written policies and procedures for accounting and financial reporting. |
The remediation efforts set out in (i) are largely dependent upon our company securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.
Management believes that despite our material weaknesses set forth above, our consolidated financial statements for the quarterly report ended March 31, 2023 are fairly stated, in all material respects, in accordance with US GAAP.
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Attestation Report of the Registered Accounting Firm
This Quarterly 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 Quarterly 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 fiscal quarter ended March 31, 2023 that have materially affected, or are likely to materially affect, the Company’s internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Except for some merchant cash advance cases that are in the process of being settled, the Company is not a party to any material pending legal proceedings and, to the best of its knowledge, no such action by or against Company has been threatened.
ITEM 1A. 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 successfully integrate 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.
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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.
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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.
| 15 |
These requirements may restrict the ability of broker/dealers to sell our securities, and may affect the ability to resell our securities.
Our compliance with the Sarbanes-Oxley Act and SEC rules concerning internal controls may be time consuming, difficult and costly for us.
It may be time consuming, difficult and costly for us to develop and implement the internal controls and reporting procedures required by the Sarbanes-Oxley Act. We may need to hire additional financial reporting, internal controls and other finance staff in order to develop and implement appropriate internal controls and reporting procedures. If we are unable to comply with the internal controls requirements of the Sarbanes-Oxley Act, we may not be able to obtain the independent accountant certifications that the Sarbanes-Oxley Act requires publicly traded companies to obtain.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None, except as noted elsewhere in this report.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None, except as may be noted elsewhere in this report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None, except as may be noted elsewhere in this report.
ITEM 6. EXHIBITS
The following exhibits are filed as part of this report:
| 16 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| PHI GROUP, INC. | |||
| (Registrant) | |||
| Date: | May 22, 2023 | By: | /s/ Henry D. Fahman |
| Henry D. Fahman | |||
| President and Chief Executive Officer | |||
| (Principal Executive Officer) | |||
| Date: | May 22, 2023 | By: | /s/ Henry D. Fahman |
| Henry D. Fahman | |||
| Acting Chief Financial Officer | |||
| (Principal Financial and Accounting Officer) | |||
| 17 |
SUBSIDIARIES OF REGISTRANT
As of May 22, 2013, the Company has the following subsidiaries:
| 1) | PHILUX Global Funds SCA, SICAV-RAIF, a Luxembourg corporation |
| Percentage of ownership: 100% | |
| Business activity: Luxembourg bank master fund. | |
| 2) | PHI Luxembourg Development SA, a Luxembourg corporation |
| Percentage of ownership: 100% owned by PHI Group, Inc. | |
| Business activity: mother holding company for Luxembourg bank funds. | |
| 3) | PHI Luxembourg Holding SA, a Luxembourg corporation |
| Percentage of ownership: 100% owned by PHI Luxembourg Development SA. | |
| Business activity: holding company for participating shares in sub-funds of PHILUX Global Funds. | |
| 4) | PHILUX Global General Partner SA, a Luxembourg corporation |
| Percentage of ownership: 100% | |
| Business activity: holding management shares in PHILUX Global Funds. | |
| 5) | PHILUX Capital Advisors, Inc., a Wyoming corporation |
| Percentage of ownership: 100% | |
| Business activity: investment advisory and M&A consulting services. | |
| 6) | Philux Global Vietnam Investment & Development Co., Ltd., a Vietnamese limited liability company |
| Percentage of ownership: 100% | |
| Business activity: direct investments, consulting services | |
| 7) | Asia Diamond Exchange, Inc., a Wyoming corporation |
| Percentage of ownership: 100% | |
| Business activity: holding company for the Asia Diamond Exchange to be established in Vietnam. | |
| 8) | American Pacific Resources, Inc., a Wyoming corporation |
| Percentage of ownership: 100% | |
| Business activity: holding company for mineral and natural resources business (inactive). | |
| 9) | Philux Global Healthcare, Inc., a Wyoming corporation |
| Percentage of ownership: 100% | |
| Business activity: medical and healthcare business, startup. | |
| 10) | Empire Spirits, Inc., a Nevada corporation |
| Percentage of ownership (to be determined). | |
| Business activity: manufacturing and sale of American-made baijiu. | |
| 11) | Philux Fidelity Global Group, a Wyoming corporation |
| Percentage of ownership: 100% | |
Business activity: holding company for acquisition of and collaboration with Tin Thanh Group Joint Stock Company, startup. | |
| 12) | Philux Global Trade Inc., a Wyoming corporation |
| Percentage of ownership: 100% | |
| Business activity: holding company for acquisition of Van Phat Dat JSC, startup. | |
| 13) | Philux Global Energy Inc., a Wyoming corporation |
| Percentage of ownership: 100% | |
Business activity: intended to be the holding company for acquisition of majority interest in Kota Construction LLC and Kota Energy Group LLC. |
Exhibit 31.1
Certification of Principal Executive Officer
Pursuant to pursuant to Rule 13a-14(a) or Rule 15d-14(a)
of the Securities Exchange Act of 1934, as amended
I, Henry Fahman, Principal Executive Officer of PHI Group, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-Q of PHI Group, Inc. for the quarter ended March 31, 2023;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in Form 10-Q for the period ended March 31, 2023, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in the referenced Form 10-Q and in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| PHI GROUP, INC. | |
| /s/ Henry Fahman | |
| Henry Fahman, Principal Executive Officer | |
| Dated: May 22, 2023 |
Exhibit 31.2
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Henry D. Fahman, Acting Principal Financial Officer, PHI Group, Inc., certify that:
1. I have reviewed the quarterly report on Form 10-Q of PHI Group, Inc. for the quarter ended March 31, 2023;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in Form 10-Q for the period ended March 31, 2023, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in the referenced Form 10-Q;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Dated: | May 22, 2023 | By: | /s/ Henry Fahman |
| Henry Fahman | |||
| Acting Chief Financial Officer | |||
| (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTIONS 1350 AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACTS OF 2002
In connection with the Quarterly Report of PHI Group, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Henry D. Fahman, Chief Executive Officer of the Company, certifies to the best of his knowledge, pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: May 22, 2023
| By: | /s/ Henry D. Fahman | |
| Henry D. Fahman | ||
| Chief Executive Officer |
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTIONS 1350 AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACTS OF 2002
In connection with the Quarterly Report of PHI Group, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Henry D. Fahman, Acting Chief Financial Officer of the Company, certifies to the best of his knowledge, pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: May 22, 2023
| By: | /s/ Henry D. Fahman | |
| Henry D. Fahman | ||
| Acting Chief Financial Officer |
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
9 Months Ended | 12 Months Ended |
|---|---|---|
Mar. 31, 2023 |
Jun. 30, 2022 |
|
| Preferred stock, par value | $ 0.001 | $ 0.001 |
| Preferred stock, shares authorized | 500,000,000 | 500,000,000 |
| Common stock, par value | $ 0.001 | $ 0.001 |
| Common stock, shares authorized | 60,000,000,000 | 60,000,000,000 |
| Common stock, shares issued | 36,349,939,124 | 31,429,380,453 |
| Common stock, shares outstanding | 36,349,939,124 | 31,429,380,453 |
| Reverse stock split | 1 for 1,500 reverse split | 1 for 1,500 reverse split |
| Treasury stock, shares | 484,767 | 484,767 |
| Class B Series I Preferred Stock [Member] | ||
| Preferred stock, shares issued | 600,000 | 600,000 |
| Preferred stock, shares outstanding | 600,000 | 600,000 |
Consolidated Statement of Operations (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Net revenues | ||||
| Consulting, advisory and management services | $ 5,000 | $ 25,000 | $ 30,000 | |
| Revenue, Product and Service [Extensible Enumeration] | Investment Advisory, Management and Administrative Service [Member] | Investment Advisory, Management and Administrative Service [Member] | Investment Advisory, Management and Administrative Service [Member] | |
| Total revenues | $ 5,000 | $ 25,000 | $ 30,000 | |
| Operating expenses: | ||||
| Salaries and wages | 90,000 | 90,000 | 270,000 | 273,040 |
| Professional services, including non-cash compensation | 157,462 | 180,400 | 436,226 | 15,114,627 |
| General and administrative | 59,603 | 24,142 | 102,819 | 108,943 |
| Total operating expenses | 307,065 | 294,542 | 809,045 | 15,496,610 |
| Income (loss) from operations | (307,065) | (289,542) | (784,045) | (15,466,610) |
| Other income and expenses | ||||
| Interest expense | (377,009) | (89,002) | (822,905) | (1,041,943) |
| Other income (expense) | (1,094,638) | (1,673,810) | (2,609,718) | (2,095,610) |
| Net other income (expenses) | (1,471,647) | (1,762,812) | (3,432,624) | (3,137,553) |
| Net income (loss) | $ (1,778,713) | $ (2,052,354) | $ (4,216,669) | $ (18,604,163) |
| Net loss per share: | ||||
| Basic | $ (0.00) | $ (0.00) | $ (0.00) | $ (0.00) |
| Diluted | $ (0.00) | $ (0.00) | $ (0.00) | $ (0.00) |
| Weighted average number of shares outstanding: | ||||
| Basic | 34,018,394,095 | 28,319,126,230 | 34,018,394,095 | 28,319,126,230 |
| Diluted | 34,018,394,095 | 28,319,126,230 | 34,018,394,095 | 28,319,126,230 |
Statement of Stockholders' Equity (Deficit) (Unaudited) - USD ($) |
Common Stock [Member] |
Common Stock Including Additional Paid in Capital [Member] |
Preferred Stock [Member] |
Preferred Stock Including Additional Paid in Capital [Member] |
Treasury Stock Common And Preferred [Member] |
Common Stock to be Cancelled [Member] |
Common Stock To Be Issued [Member] |
AOCI Attributable to Parent [Member] |
Retained Earnings [Member] |
Total |
|---|---|---|---|---|---|---|---|---|---|---|
| Balance at Jun. 30, 2022 | $ 31,429,381 | $ 34,394,912 | $ 600 | $ 1,840 | $ (44,170) | $ (35,000) | $ 572,591 | $ (71,717,973) | $ (6,543,502) | |
| Balance, shares at Jun. 30, 2022 | 31,429,380,289 | 600,000 | (484,767) | |||||||
| Common Shares issued for conversions of promissory notes during the quarter | $ 392,097 | (158,483) | 233,614 | |||||||
| Common Shares issued for conversions of promissory notes durng the quarter, shares | 392,096,775 | |||||||||
| Common Shares issued for exercise of warrants during the quarter ended September 30, 2022 | $ 2,279,167 | 115,913 | 2,395,080 | |||||||
| Common Shares issued for exercise of warrants during the quarter ended September 30, 2022, shares | 2,279,166,666 | |||||||||
| Common Shares cancelled during quarter ended September 30, 2022 | $ (454,758) | 90,952 | (545,710) | |||||||
| Common Shares cancelled during quarter ended September 30, 2022, shares | (454,758,300) | |||||||||
| Balance at Dec. 31, 2022 | $ 33,645,886 | 34,261,391 | $ 600 | 1,840 | $ (44,170) | (35,000) | 16,000 | (572,022) | (74,155,929) | 6,881,906 |
| Balance, shares at Dec. 31, 2022 | 33,645,885,430 | 600,000 | (484,767) | |||||||
| Balance at Jun. 30, 2022 | $ 31,429,381 | 34,394,912 | $ 600 | 1,840 | $ (44,170) | (35,000) | 572,591 | (71,717,973) | (6,543,502) | |
| Balance, shares at Jun. 30, 2022 | 31,429,380,289 | 600,000 | (484,767) | |||||||
| Balance at Mar. 31, 2023 | $ 36,349,940 | 33,943,377 | $ 600 | 1,840 | $ (44,170) | (35,000) | 396,000 | (2,966,071) | (75,932,642) | (8,286,628) |
| Balance, shares at Mar. 31, 2023 | 36,349,939,124 | 60,000 | (484,767) | |||||||
| Balance at Dec. 31, 2022 | $ 33,645,886 | 34,261,391 | $ 600 | 1,840 | $ (44,170) | (35,000) | 16,000 | (572,022) | (74,155,929) | 6,881,906 |
| Balance, shares at Dec. 31, 2022 | 33,645,885,430 | 600,000 | (484,767) | |||||||
| Common Shares issued for conversions of promissory notes during the quarter | $ 1,909,744 | (333,569) | 1,576,175 | |||||||
| Common Shares issued for conversions of promissory notes durng the quarter, shares | 1,909,744,449 | |||||||||
| Common Shares issued for cash during the quarter ended March 31, 2023 | $ 609,309 | 15,556 | 624,865 | |||||||
| Common Shares issued for cash during the quarter ended March 31, 2023, shares | 609,309,245 | |||||||||
| Common Shares issued for contractual obligation during the quarter ended March 31, 2023 | $ 185,000 | $ 185,000 | ||||||||
| Common Shares issued for contractual obligation during the quarter ended March 31, 2023, shares | 185,000,000 | 185,000,000 | ||||||||
| Balance at Mar. 31, 2023 | $ 36,349,940 | $ 33,943,377 | $ 600 | $ 1,840 | $ (44,170) | $ (35,000) | $ 396,000 | $ (2,966,071) | $ (75,932,642) | $ (8,286,628) |
| Balance, shares at Mar. 31, 2023 | 36,349,939,124 | 60,000 | (484,767) |
NATURE OF BUSINESS |
9 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| NATURE OF BUSINESS | NOTE 1 – NATURE OF BUSINESS
INTRODUCTION
PHI Group, Inc. (n/k/a Philux Global Group Inc) (the “Company” or “PHI”) (www.philuxglobal.com) is primarily engaged in mergers and acquisitions, advancing PHILUX Global Funds, SCA, SICAV-RAIF, a “Reserved Alternative Investment Fund” (“RAIF”) under the laws of Luxembourg, and developing the Asia Diamond Exchange in Vietnam. Besides, the Company provides corporate finance services, including merger and acquisition advisory and consulting services for client companies through our wholly owned subsidiary PHILUX Capital Advisors, Inc. (formerly PHI Capital Holdings, Inc.) (www.philuxcapital.com) and invests in selective industries and special situations aiming to potentially create significant long-term value for our shareholders. PHILUX Global Funds intends to include a number of sub-funds for investment in select growth opportunities in the areas of 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 various transactions in connection with mergers and acquisitions advisory and consulting services, real estate and hospitality development, mining, oil and gas, telecommunications, technology, healthcare, private equity, and special situations. In October 2011, the Company discontinued the operations of Providential Vietnam Ltd., Philand Ranch Limited, a United Kingdom corporation (together with its subsidiaries Philand Ranch - Singapore, Philand Corporation - US, and Philand Vietnam Ltd. - Vietnam), PHI Gold Corporation (formerly PHI Mining Corporation, a Nevada corporation), and PHI Energy Corporation (a Nevada corporation), and mainly focused on acquisition and development opportunities in energy and natural resource businesses.
The Company is currently focused on PHILUX Global Funds, SCA, SICAV-RAIF by launching Philux Global Select Growth Fund and potentially other sub-funds for investment in real estate, renewable energy, infrastructure, agriculture, healthcare and the Asia Diamond Exchange in Vietnam. In addition, PHILUX Capital Advisors, Inc. (formerly Capital Holdings, Inc.), a wholly owned subsidiary of the Company, continues to provide corporate and project finance services, including merger and acquisition (M&A) advisory and consulting services for U.S. and international companies. The Company has also formed Philux Global Advisors, Inc. to serve as the investment advisor to PHILUX Global Funds and other potential fund clients in the future.
The Company had signed agreements to acquire majority equity interests in Kota Construction LLC and Kota Energy Group LLC (“KOTA”) which are engaged in solar energy business (https://www.kotasolar.com), Tin Thanh Group, a Vietnamese joint stock company (www.tinthanhgroup.vn) (“TTG”) and Van Phat Dat Joint Stock Company, a Vietnamese joint stock company. Whereas the scheduled closing dates for the KOTA and TTG transactions already expired, the Company has continued to discuss with these companies and intends to renegotiate an revised agreement for acquisition with them when the Company successfully closes one or more of the pending financing and investment management agreements with certain lenders and investor groups. In addition, the Company is in the process of amending the Purchase and Sale Agreement that was originally signed on January 18, 2022 with Five-Grain Treasure Spirits Co., Ltd., a Chinese baiju distiller, to collaborate in launching American-made baiju products through Empire Spirits, Inc., a subsidiary of the Company. The Company will also relocate CO2-1-0 (CARBON) Corp., a subsidiary of the Company engaged in carbon emission mitigation using blockchain and crypto technologies, to the United Arab Emirates. These activities are disclosed in greater detail elsewhere in this report. No assurances can be made that the Company will be successful in achieving its plans.
BUSINESS STRATEGY
PHI’s strategy is to:
1. Identify, build, acquire, commit and deploy valuable resources with distinctive competitive advantages;
2. Identify, evaluate, acquire, participate and compete in attractive businesses that have large, growing market potential;
3. Build an attractive investment that includes points of exit for investors through capital appreciation or spin-offs of business units.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
9 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Accounting Policies [Abstract] | |
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of PHI Group, Inc. (a/k/a Philux Global Group, Inc.) and its active wholly owned subsidiaries: (1) PHILUX Capital Advisors, Inc., a Wyoming corporation (100%), (2) PHI Luxembourg Development S.A., a Luxembourg corporation (100%), (3) PHILUX Global Funds SCA, SICAV-RAIF, a Luxembourg Reserved Alternative Investment Fund (100%), (4) PHILUX Global General Partners SA, a Luxembourg corporation (100%), (5) PHI Luxembourg Holding SA, a Luxembourg corporation (100%), (6) Asia Diamond Exchange, Inc., a Wyoming corporation (100%), and (7) CO2-1-0 (CARBON) Corp., collectively referred to as the “Company.” All significant inter-company transactions have been eliminated in consolidation.
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. These statements should be read in conjunction with the audited financial statements for the year ended June 30, 2022. In the opinion of management, all adjustments consisting of normal reoccurring accruals have been made to the financial statements. The results of operation for the three and nine months ended March 31, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2023.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents.
MARKETABLE SECURITIES
The Company’s securities are classified as available-for-sale and, as such, are carried at fair value. Securities classified as available-for-sale may be sold in response to changes in interest rates, liquidity needs, and for other purposes.
Typically, each investment in marketable securities represents less than twenty percent (%) of the outstanding common stock and stock equivalents of the investee, and each security is quoted on either the OTC Markets or other public exchanges. As such, each investment is accounted for in accordance with the provisions of SFAS No. 115.
Unrealized holding gains and losses for available-for-sale securities are excluded from earnings and reported as a separate component of stockholder’s equity. Realized gains and losses for securities classified as available-for-sale are reported in earnings based upon the adjusted cost of the specific security sold. On March 31, 2023, the marketable securities were recorded at $420 based upon the fair value of the marketable securities at that time.
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. On March 31, 2023, the Company did not have any nonfinancial assets or nonfinancial liabilities that are recognized or disclosed at fair value. ASC 820 requires that financial assets and liabilities that are reported at fair value be categorized as one of the types of investments based upon the methodology mentioned in Level 1, Level 2 and Level 3 above for determining fair value.
Assets measured at fair value on a recurring basis are summarized below. The Company also has convertible notes and derivative liabilities as disclosed in this report that are measured at fair value on a regular basis until paid off or exercised.
Available-for-sale securities
The Company uses various approaches to measure fair value of available-for-sale securities, while applying the three-level valuation hierarchy for disclosures, specified in ASC 820. Our Level 1 securities were measured using the quoted prices in active markets for identical assets and liabilities.
The company’s policy regarding the transfers in and/or out of Level 3 depends on the trading activity of the security, the volatility of the security, and other observable units which clearly represents the fair value of the security. If a level 3 security can be measured using a more fairly represented fair value, we will transfer these securities either into Level 1 or Level 2, depending on the type of inputs.
ACCOUNTS RECEIVABLE
Management reviews the composition of accounts receivable and analyzes historical bad debts. As of March 31, 2023, the Company did not have any accounts receivable.
PROPERTIES AND EQUIPMENT
Property and equipment are carried at cost less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful life of the assets from to five years. Expenditures for maintenance and repairs are charged to expense as incurred.
REVENUE RECOGNITION STANDARDS
ASC 606-10 provides the following overview of how revenue is recognized from an entity’s contracts with customers: An entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
Step 1: Identify the contract(s) with a customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price – The transaction price is the amount of consideration in a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer.
Step 4: Allocate the transaction price to the performance obligations in the contract – Any entity typically allocates the transaction price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or service promised in the contract.
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation – An entity recognizes revenue when (or as) it satisfies a performance obligation by transferring a promised good or service to a customer (which is when the customer obtains control of that good or service).
The amount of revenue recognized is the amount allocated to the satisfied performance obligation. A performance obligation may be satisfied at a point in time (typically for promises to transfer goods to a customer) or over time (typically for promises to transfer service to a customer). For performance obligations satisfied over time, an entity recognizes revenue over time by selecting an appropriate method for measuring the entity’s progress toward complete satisfaction of that performance obligation. (Paragraphs 606-10 25-23 through 25-30).
In addition, ASC 606-10 contains guidance on the disclosures related to revenue, and notes the following:
It also includes a cohesive set of disclosure requirements that would result in an entity providing users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. Specifically, Section 606-10-50 requires an entity to provide information about:
- Revenue recognized from contracts with customers, including disaggregation of revenue into appropriate categories. - Contract balances, including the opening and closing balances of receivables, contract assets, and contract liabilities. - Performance obligations, including when the entity typically satisfies its performance obligations and the transaction prices is that is allocated to the remaining performance obligations in a contract.
- Significant judgments, and changes in judgments, made in applying the requirements to those contracts.
Additionally, Section 340-40-50 requires an entity to provide quantitative and/or qualitative information about assets recognized from the costs to obtain or fulfill a contract with a customer.
The Company’s revenue recognition policies are in compliance with ASC 606-10. The Company recognizes consulting and advisory fee revenues in accordance with the above-mentioned guidelines and expenses are recognized in the period in which the corresponding liability is incurred.
STOCK-BASED COMPENSATION
Effective July 1, 2006, the Company adopted ASC 718-10-25 (previously SFAS 123R) and accordingly has adopted the modified prospective application method. Under this method, ASC 718-10-25 is applied to new awards and to awards modified, repurchased, or cancelled after the effective date. Additionally, compensation cost for the portion of awards that are outstanding as of the date of adoption for which the requisite service has not been rendered (such as unvested options) is recognized over a period of time as the remaining requisite services are rendered.
RISKS AND UNCERTAINTIES
In the normal course of business, the Company is subject to certain risks and uncertainties. The Company provides its service and receives marketable securities upon execution of transactions. Consequently, the value of the securities received from customers can be affected by economic fluctuations and each customer’s business growth. The actual realized value of these securities could be significantly different than recorded value.
RECENT ACCOUNTING PRONOUNCEMENTS
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06-Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)-Accounting For Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for annual and interim periods beginning after December 15, 2022, and early adoption is permitted for fiscal years beginning after December 15, 2020. This pronouncement should not affect the accounting for the Company’s debt instruments for the quarter ended March 31, 2023.
Update No. 2018-13 – August 2018
Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement
Modifications: The following disclosure requirements were modified in Topic 820:
1. In lieu of a roll-forward for Level 3 fair value measurements, a non-public entity is required to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities.
2. For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly.
3. The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date.
Additions: The following disclosure requirements were added to Topic 820; however, the disclosures are not required for non-public entities:
1. The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period.
2. The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements.
The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.
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.
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MARKETABLE EQUITY SECURITIES AVAILABLE FOR SALE |
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| Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| MARKETABLE EQUITY SECURITIES AVAILABLE FOR SALE | NOTE 3 – MARKETABLE EQUITY SECURITIES AVAILABLE FOR SALE
The Company’s marketable securities are classified as available-for-sale and, as such, are carried at fair value. All of the securities are comprised of shares of common stock of the investee. Securities classified as available-for-sale may be sold in response to changes in interest rates, liquidity needs, and for other purposes. These marketable securities are quoted on the OTC Markets or other public exchanges and are accounted for in accordance with the provisions of SFAS No. 115.
Marketable securities held by the Company and classified as available for sale as of March 31, 2023 consisted of shares of Myson Group, Inc. (formerly Vanguard Mining Corporation) which are quoted on the OTC Markets (Trading symbols “MYSN”). The fair value of the shares recorded as of March 31, 2023 was $420.
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PROPERTIES AND EQUIPMENT |
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| Property, Plant and Equipment [Abstract] | |
| PROPERTIES AND EQUIPMENT | NOTE 4 – PROPERTIES AND EQUIPMENT
The Company did not have any properties or equipment as of March 31, 2023.
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OTHER ASSETS |
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| Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
| OTHER ASSETS | NOTE 5 – OTHER ASSETS
Other Assets comprise of the following as of March 31, 2023 and June 30, 2022
Other Assets as of March 31, 2023 consist of a $5,000 investment in AQuarius Power, Inc., a Texas renewable energy technology company, and $32,601 in PHILUX Global Funds.
For the investments in PHILUX Global Funds, as of March 31, 2023, PHI Luxembourg Development SA, a Luxembourg corporation and wholly-owned subsidiary of PHI Group, Inc. held ordinary shares of PHILUX Global Funds valued at EUR 28,000, PHI Luxembourg Holding SA, a Luxembourg corporation 100% owned by PHI Group, Inc. as the ultimate beneficiary owner (UBO), held one participating share of PHILUX Global Funds valued at EUR 1,000, and PHILUX Global General Partner SA, a Luxembourg corporation 100% owned by PHI Group, Inc. as the ultimate beneficiary owner (UBO), held one management share of PHILUX Global Funds valued at EUR 1,000. The total holdings in PHILUX Global Funds were equivalent to $32,601 as of March 31, 2023 based on the prevalent exchange rate at that time.
The Company has treated all development costs of the Asia Diamond Exchange as expenses and exchanged for common shares in Asia Diamond Exchange, Inc., a Wyoming corporation.
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CURRENT LIABILITIES |
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| CURRENT LIABILITIES | NOTE 6 – CURRENT LIABILITIES
Current Liabilities of the Company consist of the followings as of March 31, 2023 and June 30, 2022.
ACCRUED EXPENSES: Accrued expenses as of March 31, 2023 totaling $1,261,565 consist of $943,842 in accrued salaries and payroll liabilities and $308,723 in accrued interest from short-term notes and convertible notes.
NOTES PAYABLE: As of March 31, 2023, Notes Payable consist of $814,348 in short-term notes payable, $43,750 in PPP loan, $572,500 in convertible promissory notes and $186,363 in Merchant Cash Advance loans.
ADVANCES FROM CUSTOMERS AND CLIENT’S DEPOSIT:
As of March 31, 2023, the Company recorded $660,434 as Advances from Customers for consulting fees previously received from a client plus mutually agreed accrued interest and $100,000 deposit for a financing agreement from another client/partner.
SUB-FUND OBILGATIONS AND COMMITMENT RETAINER: The Company has recorded a total of $1,586,619 from partners/investors towards the expenses and capitalization for setting up sub-funds under the master PHILUX Global Funds. These amounts are currently booked as liabilities until these sub-funds are set up and activated, at which time the sub-fund participants will receive their respective percentages of the general partners’ portion of ownership in the relevant sub-funds based on their actual total contributions. In addition, the Company recorded $96,840 as commitment retainer during the quarter ended March 31, 2023 for money received from a client in connection with a project financing agreement.
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DUE TO OFFICERS |
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| DUE TO OFFICERS | NOTE 7 – DUE TO OFFICERS
Due to officer, represents loans and advances made by officers and directors of the Company and its subsidiaries, unsecured and due on demand. As of March 31, 2023 and June 30, 2022, the balances were $1,045,210 and $1,077,218, respectively.
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LOANS AND PROMISSORY NOTES |
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| Debt Disclosure [Abstract] | |
| LOANS AND PROMISSORY NOTES | NOTE 8 – LOANS AND PROMISSORY NOTES
A. SHORT TERM NOTES PAYABLE:
In the course of its business, the Company has obtained short-term loans from individuals and institutional investors.
NOTES PAYABLE: As of March 31, 2023, Notes Payable consist of $814,348 in short-term notes payable with $284,475 in accrued interest, $43,750 in PPP loan with $1,274 in accrued interest, and $186,363 in Merchant Cash Advance loans.
B. CONVERTIBLE PROMISSORY NOTES OUTSTANDING AS OF MARCH 31, 2023
As of March 31, 2023, the Company had a net balance of $572,500 in convertible promissory notes with $21,973 in accrued interest,
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PAYROLL TAX LIABILITIES |
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| Payroll Tax Liabilities | |
| PAYROLL TAX LIABILITIES | NOTE 9 – PAYROLL TAX LIABILITIES
As of March 31, 2023, payroll tax liabilities were $5,747.
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BASIC AND DILUTED NET PROFIT (LOSS) PER SHARE |
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Mar. 31, 2023 | |
| Earnings Per Share [Abstract] | |
| BASIC AND DILUTED NET PROFIT (LOSS) PER SHARE |
Net loss per share is calculated in accordance with SFAS No. 128, “Earnings per Share”. Under the provision of SFAS No. 128, basic net loss per share is computed by dividing the net loss for the period by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock outstanding for the period and common stock equivalents outstanding at the end of the period. Basic and diluted weighted average numbers of shares for the period ended March 31, 2023 were the same since the inclusion of Common stock equivalents is anti-dilutive.
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STOCKHOLDER’S EQUITY |
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| Equity [Abstract] | |
| STOCKHOLDER’S EQUITY | NOTE 11 – STOCKHOLDER’S EQUITY
As of March 31, 2023, the total number of authorized capital stock of the Company consisted of billion shares of voting Common Stock with a par value of $ per share and shares of Preferred Stock with a par value of $ per share. The rights and terms associated with the Preferred Stock will be determined by the Board of Directors of the Company.
TREASURY STOCK
The balance of treasury stock as of March 31, 2023 was shares valued at $44,170 according to cost method.
COMMON STOCK
During the quarter ended March 31, 2023, the Company issued the following amounts of Common Stock: 1,909,744,449 shares for conversion of convertible debts, shares for cash with existing shareholders of the Company and shares in connection with a financing contractual obligation.
As of March 31, 2023, there were shares of the Company’s Common Stock issued and outstanding.
PREFERRED STOCK
CLASS B SERIES I PREFERRED STOCK
As of March 31, 2023, there were shares of Class B Series Preferred Stock issued and outstanding.
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STOCK-BASED COMPENSATION PLAN |
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| STOCK-BASED COMPENSATION PLAN |
1. On February March 18, 2015, the Company adopted an Employee Benefit Plan to set aside shares of common stock for eligible employees and independent contractors of the Company and its subsidiaries. As of September 30, 2022 the Company has not issued any stock in lieu of cash under this plan.
2. On September 23, 2016, the Company issued incentive stock options and nonqualified stock options to certain key employee(s) (Henry Fahman – CEO/CFO) and directors (Tam Bui, Henry Fahman, and Frank Hawkins constitute the Board of Directors) as deferred compensation. The options allow the holders to acquire the Company’s Common Stock at the fair exercise price of the Company’s Common Stock on the grant date of each option at $ 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 . The options terminate from the date of grant and become vested and exercisable after 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:
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:
3. On September 9, 2022, the Company adopted the PHI Group 2022 Employee Benefit Plan and set aside shares of its common stock to provide a means of non-cash remuneration to selected eligible employees and independent contractors (“Eligible Participants”) of the Company and its subsidiaries. On September 17, 2022, the Company filed Form S-8 Registration Statement under the Securities Act of 1933 with the Securities and Exchange Commission to register these shares for the above-mentioned plan. As of March 31, 2023 the Company has issued a total of shares for consulting services and salaries under the PHI Group 2022 Employee Benefit Plan.
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RELATED PARTY TRANSACTIONS |
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| RELATED PARTY TRANSACTIONS | NOTE 13– RELATED PARTY TRANSACTIONS
As of March 31, 2023, the Company has recognized a total of $815,595 in accrued and unpaid salaries for the President, the Chief Operating Officer and the Secretary & Treasurer of the Company.
Henry Fahman, Chairman and Chief Executive Officer, and Tam Bui, a member of the Board of Directors and Chief Operating Officer, of the Company from time to time lend money to the Company. These loans are without interest and payable upon demand.
As of March 31, 2023, the Company still owed the following amounts to Related Parties:
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CONTRACTS AND COMMITMENTS |
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| CONTRACTS AND COMMITMENTS | NOTE 14 – CONTRACTS AND COMMITMENTS
1. 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 March 31, 2023, Tecco Group has paid a total of $156,366.25 towards the total agreed amount.
2. INVESTMENT AGREEMENTS AND MEMORANDUM OF UNDERSTANDING
The Company and its subsidiaries have entered into loan financing agreements, investment management agreements, joint venture agreement, and memorandum of understanding with six international investor groups for a total six billion three hundred million U.S. dollars, as reported in various 8-K filings with the Securities and Exchange Commission. The Company has been working regularly with these investor groups and expects to begin receiving capital through these sources in the near future to support its acquisition and investment programs.
3. DEVELOPMENT OF THE MULTI-COMMODITIES CENTER, ASIA DIAMOND EXCHANGE AND LOGISTICS CENTER IN VIETNAM
Along with the establishment of PHILUX Global Funds, since March 2018 the Company has worked 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 in principle 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. The Company plans to establish the first laboratory-grown diamond exchange in Chu Lai in conjunction with several prominent international partners.
On June 04, 2022 the Company incorporated Asia Diamond Exchange, Inc., a Wyoming corporation, ID number 2022-001010234, as the holding company for the development of the Asia Diamond Exchange in Vietnam.
In addition, 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. The Company has submitted a request for 1,000 hectares of land close to the new Long Thanh International Airport to develop the Long Thanh Multi-Commodities Logistics Center (LMLC) together with the Industrial Zone and is currently working with the Dong Nai Provincial People’s Committee and the relevant ministries of the Vietnamese central government on this project.
4. AGREEMENT WITH FIVE-GRAIN TREASURE SPIRITS CO., LTD.
On January 18, 2022 PHI Group entered into an Agreement of Purchase and Sale with Five Grain Treasure Spirits Co., Ltd. (“FGTS) and the majority shareholders of FGTS (the “Majority Shareholders”) to acquire seventy percent (70%) of ownership in FGTS for the total purchase price of one hundred million U.S. dollars, to be paid in three tranches. The Company has renegotiated with Five-Grain to revise the Agreement of Purchase and Sale and to cooperate in producing American-made baijiu products through its subsidiary Empire Spirits, Inc. in the US. The details of the renegotiated transactions will be officially announced upon signing by the two parties.
5. AGREEMENT OF PURCHASE AND SALE WITH KOTA CONSTRUCTION LLC AND KOTA ENERGY GROUP LLC
Effective January 26, 2022, PHI Group, Inc. signed Agreements of Purchase and Sale with KOTA Construction LLC and KOTA Energy Group LLC, both of which are California limited liability companies (collectively referred to as “KOTA”), to acquire 50.10% of Kota Energy Group LLC for $12,524,469 and 50.10% of Kota Construction LLC for $51,600,531, totaling $64,125,000, to be paid in cash. The closing date of these transactions shall be the date on which the closing actually occurs, which is expected to happen as soon as possible and no later than forty-five days from the effective day.
KOTA, operating under two legal entities as Kota Energy Group LLC (‘KEG”) and Kota Construction LLC (“KCCO”), provides solutions for solar energy to residential and commercial customers, with unique competitive advantages. As one of the fastest growing sales and installation engines in the country, KOTA prioritizes itself to have the best employee and customer experience possible, through its high standard of installation quality, its industry leading technology platforms, which enable increased sales volume, while maintaining fast, and transparent project timelines. It’s strategic partnerships with key players in the solar industry, have increased margins, while delivering top tier products to customers, without sacrificing quality. KOTA’s guiding core values of “Become, Create, Give” have been the driving factor in decision making that have led it to become the most highly sought-after solar company to work with in the solar industry. Website: KOTA Energy Group: https://www.kotasolar.com.
In the second and latest amendment signed on August 3, 2022 to the Agreements of Purchase and Sale with KOTA, the concerned parties have agreed that PHI Group, Inc. would pay Fifteen Million Six Hundred Fifty-Five Thousand Two Hundred Forty-Eight U.S. Dollars ($15,655,248) to Kota Energy Group LLC (“KEG”), in exchange for fifty point one percent (50.10%) of the equity ownership in KEG, and Sixty-Four Million Five Hundred Four Thousand Seven Hundred Fifty-Two U.S. Dollars ($64,504,752) to KCCO, in exchange for fifty point one percent (50.10%) of the equity ownership in KCCO.
Whereas the scheduled closing date for the KOTA transaction already expired, the Company intends to renegotiate an revised agreement for acquisition when the Company successfully closes one or more of the pending financing and investment management agreements with certain lenders and investor groups.
6. JOINT VENTURE AGREEMENT WITH DANANG RUBBER JSC AND TIN THANH GROUP
In June 2022, the Company signed an joint venture agreement with Danang Rubber Joint Stock Company (DRC) (https://drctire.com/) and Tin Thanh Group (TTG) (https://tinthanhgroup.vn/en/) to cooperate in increasing DRC’s tire production and executing an innovative sales and marketing program targeting annual revenues of 5.5 billion dollars by 2025.
The DRC-TTG truck tire leasing service program with complete multi-function and insurance package is designed to provide the following features and benefits to the consumers:
7. JOINT VENTURE/PARTNERSHIP AGREEMENT (FUND MANAGEMENT MOU) BETWEEN AN INVESTOR IN THE GULF COOPERATION COUNCIL REGION AND PHILUX GLOBAL GROUP, INC. (A/K/A PHI GROUP, INC.)
On July 08, 2022, the registrant signed a Joint Venture/Partnership Agreement (Fund Management MOU) with an investor in the Gulf Cooperation Council region to manage an initial amount of Three Billion United States Dollars (USD 3,000,000,000) for investment in different transactions chosen and advised by the registrant for a period of ten years. According to the Agreement, after the first twenty four months of investment implementation, the registrant will be allocated 40% of the net profit from these investments. The Company is currently working with this investor group to close this transaction as soon as possible.
8. AGREEMENT WITH TIN THANH GROUP
Effective August 13, 2022, the Company signed a Stock Transfer Agreement with Tin Thanh Group Joint Stock Company, a joint stock company organized and existing by virtue of the laws of Socialist Republic of Vietnam, with principal business address at 71 Pho Quang Street, Ward 2, Tan Binh District, Ho Chi Minh City, Vietnam, hereinafter referred to as “TTG” and Mr. Tran Dinh Quyen, the holder of at least fifty-one percent (51.00%) of equity ownership in TTG (the “Majority Shareholder”), hereinafter referred to as “Seller,” to acquire Twenty-Two Million Thirty-Two Thousand () Shares of Ordinary Stock of TTG, which is equivalent to Fifty-One Percent (51.00%) of all the issued and outstanding Ordinary Stock of TTG for a total purchase price of Sixty Million U.S. Dollars ($US 60,000,000) in cash.
The closing date of this transaction would be the date on which the closing actually occurs, which was last extended to March 15, 2023 based on the fifth amendment to the Stock Transfer Agreement signed by both parties on February 14, 2023. On March 20, 2023 Tin Thanh Group sent a notice to terminate this Stock Transfer Agreement. However, both companies have continued discussing and agreed to renegotiate an revised agreement whereby the Company will co-invest in Tin Thanh’s Smart-tire program in South Carolina, USA and cooperate in other the business activities in Vietnam and abroad when the Company successfully closes one or more of the pending financing and investment management agreements with certain lenders and investor groups.
9. AGREEMENT WITH VAN PHAT DAT JOINT STOCK COMPANY
Effective August 16, 2022, PHI Group, Inc. (a/k/a PHILUX GLOBAL GROUP INC.) (“the Registrant”) signed an Agreement of Purchase and Sale with Van Phat Dat Export Joint Stock Company, a joint stock company organized and existing by virtue of the laws of Socialist Republic of Vietnam, with principal business address at 316 Le Van Sy Street, Ward 1, Tan Binh District, Ho Chi Minh City, Vietnam, hereinafter referred to as “VPD,” and the holder of at least fifty-one percent (51.00%) of equity ownership in VPD, hereinafter referred to as “Seller,” to acquire Five Million One Hundred Thousand () Shares of Ordinary Stock of VPD, which is equivalent to Fifty-One percent (51.00%) of all the issued and outstanding Ordinary Stock of VPD for a total purchase price of Six Million One Hundred Twenty-Seven Thousand Eight Hundred Ninety-Five U.S. Dollars ($US 6,127,895) in form of a convertible promissory note to be issued by Philux Global Trade Inc., a Wyoming corporation and wholly-owned subsidiary of the Registrant. The closing date of this transaction shall be the date on which the closing actually occurs, which is expected to happen as soon as possible within sixty days following the signing of the Agreement of Purchase and Sale, unless extended in writing by the Parties to said Agreement.
The convertible promissory note, which will be guaranteed by Philux Global Group Inc. and carries no interest, will be due and payable 180 days commencing the date of issuance and may be converted into common stock of Philux Global Trade Inc. any time after this subsidiary becomes a publicly traded company in the United States. The conversion price will be 50% of the average closing price during the ten trading-day period ending one trading day prior to the date of conversion.
On September 30, 2022 PHI Group, Inc. entered into a Closing Memorandum for the Agreement of Purchase and Sale dated August 16, 2022 with and among Van Phat Dat Export Joint Stock Company and Mr. Huynh Ngoc Vu, an individual and the majority shareholder of VPD.
10. STRATEGIC BUSINESS COOPERATION WITH TIN THANH GROUP AND PETROVIETNAM MARINE SHIPYARD JSC
On September 03, 2022, the Company signed a strategic business cooperation with Tin Thanh Group (www.tinthanhgroup.vn/en/) and PetroVietnam Marine Shipyard JSC (https://www.pvshipyard.com.vn/) whereby PetroVietnam Marine Shipyard (“PVMS”) will increase charter capital to allow Tin Thanh Group and Philux Global Group to become its strategic and majority shareholders. The companies will deploy their collective resources to expand PVMS’s scope of business and undertake major offshore and onshore, domestic and international projects that may be substantially beneficial for all parties, including but not limited to ship-building, yacht-building, drilling rigs, refineries and petrochemical plants, power plants, wind farms, ship dismantlement, Tin Thanh Group’s waste-to-energy plants and multiple processing facilities as well as Philux Global Group’s Asia Diamond Exchange project, industrial logistic zone and multi-commodities center in Vietnam.
Founded in 2007, PVMS has been providing (EPC) Engineering, Procurement, Fabrication, Construction and Commissioning for drilling units, floating facilities, modules and steel structures as well as up-grading, repair and maintenance services for MODU. Its onshore projects include steel fabrication, erection and commissioning for power plants, petrochemical plants, fertilizers plants, gas terminals and particularly onshore E-House, process module design, estimation & construction.
11. ISSUANCES OF SHORT-TERM CONVERTIBLE NOTES
On March 3, 2023, the Company issued a Convertible Promissory Note to Diagonal Lending LLC, a Virginia limited liability company, for $55,000.00, with interest rate of eight percent (8%) per annum. Any Principal Amount or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) from the due date thereof until the same is paid (“Default Interest”). The per share conversion price into which Principal Amount and interest (including any Default Interest) under this Note shall be convertible into shares of Common Stock hereunder (the “Conversion Price”) shall equal $0.001 during the one hundred eighty days following the issuance date, or 61% multiplied by the market price any time after the first one hundred eighty days. Market price is defined as the average of the two lowest trading prices for the Company’s Common Stock during the ten trading day period ending on the latest trading day prior to the conversion date.
On March 14, 2023, the Company issued a Convertible Promissory Note to Mast Hill Fund, L.P., a De a Delaware limited partnership, for $185,000.00, with interest rate of twelve percent (12%) per annum. Any Principal Amount or interest on this Note which is not paid when due shall bear interest at the rate of the lesser of (i) sixteen percent (16%) per annum and (ii) the maximum amount permitted by law from the due date thereof until the same is paid (“Default Interest”). The per share conversion price into which Principal Amount and interest (including any Default Interest) under this Note shall be convertible into shares of Common Stock hereunder (the “Conversion Price”) shall equal $0.001, subject to adjustment as provided in this Note.
12. AGREEMENT FOR COMPREHENSIVE COOPERATION WITH DR. TRI VIET DO
On February 10, 2023, the Company signed an agreement for comprehensive cooperation with Dr. Tri Viet Do, a German-trained expert in electromagnetic energy and quantum physics, to jointly cooperate in the development and commercialization of a number of key products using proprietary intellectual properties already developed by him. The scope of study and development includes: 1) Producing generators using electromagnetic and quantum fields extracted from the energy absorbed from the earth; 2) Producing engines (spaceships, airplanes, ships, cars, trains, motorcycles, etc.) powered by electromagnetic and quantum energy; 3) Machines to kill harmful bacteria and viruses, including covid-19 and variants; 4) Medicines to treat 25 types of infectious diseases and cancers using atomic nuclear energy, super-matter and antimatter; 5) Desalination of seawater, separating minerals, medicines and rare metals from sea water; 6) Environmental technology for treating and sterilizing wastewater to become clean water; 7) Waste treatment by automatic classification of wastes into various categories; 8) Clean agriculture with electromagnetic and quantum fields for use in farming; and 9) Aquatic poultry farming by treating the rearing environment with electromagnetic and quantum fields and providing food energy for poultry and aquatic products.
13. TERMINATION OF AGREEMENT FOR PARTICIPATION IN INFRASTRUCTURE FUND WITH THANH NAM LONG CONSTRUCTION COMPANY
On February 09, 2023, the Company sent a notice to Thanh Nam Long Construction Co., Ltd. (“TNLC”), a Vietnam limited company, with its main address at Lot C10-18, street No. 5, Tay Bac urban area, Vinh Quang Ward, Rach Gia City, Kien Giang Province, Vietnam, to terminate the Agreement for Participation in PHILUX Infrastructure Fund dated February 02, 2023 due to TNLC’s failure to fulfill its obligations as agreed in Article 2 of said Agreement.
14. Investment Commitment Agreement WITH Saigon Silicon City JSC
On February 21, 2023, Philux Global Group Inc. (a/k/a PHI Group, Inc.) and its subsidiaries Philux Global Funds SCA, SICAV-RAIF and Philux Global Vietnam Investment and Development Company, Ltd., (collectively referred to as “the Investor”) signed an Investment Commitment Agreement with Saigon Silicon City Joint Stock Company (the “Company”) whereby the Investor is committed to providing or causing to be provided a total of five hundred million U.S. dollars (USD 500,000,000) for investment in Saigon Silicon City for the first phase of construction and subsequent additional capital as needed to complete the Company’s entire development and investment program over a 52-hectare of land at Lot I6 & I7, Road D1, Saigon High Technology Park, Long Thanh My Ward, District 9, Ho Chi Minh City, Vietnam.
According to the Investment Commitment Agreement, within thirty days of the signing of this Agreement, the Investor will provide or cause to be provided fifty million U.S. dollars (USD 50,000,000) for the Company to resume the implementation of its building plan. Additional tranches of fifty million U.S. dollars (USD ) will be released to the Company at regular intervals as needed to ensure uninterrupted construction progress. Both Parties shall determine and stipulate the terms and conditions for the Investment Commitment in writing prior to the release of funds to the Company. Upon the signing of this Agreement, the Company shall make a deposit of Five Hundred Thousand U.S. Dollars (USD 500,000) with the Investor as earnest money for legal, administrative and processing fees in connection with the Investment Commitment Agreement. This amount will be fully refundable to the Company if the Investor fails to fulfill its commitment as mentioned in the Agreement. The Investor intends to use a portion of the USD 4,500,000,000 financing commitments from certain international institutional and ultra-high net worth investors which are expected to be released during the first quarter of 2023 for investment in Saigon Silicon City and select projects in Vietnam and elsewhere.
Effective March 21, 2023, the Company and Saigon Silicon City JSC signed an amendment to amend Article 2 of the afore-mentioned Investment Commitment Agreement as follows: “Time frame. Due to additional administrative and legal requirements in connection with the Investor’s release of funds, within thirty days of the signing of this Amendment, the Investor will provide or cause to be provided fifty million U.S. dollars (USD 50,000,000) for the Company to resume the implementation of its building plan. Additional amounts of capital will be provided to the Company by the Investor at various intervals as needed to ensure uninterrupted construction until the completion of the project.”
On April 21, 2023, both parties signed an amendment to extend the delivery of the first investment tranche to Saigon Silicon City JSC within forty-five days commencing April 21, 2023.
15. Termination of Agreement for Participation in Philux Global Real Estate Fund with AZ Holdings Joint Stock Company
On March 24, 2023, the Company sent a notice to AZ Holdings Investment Joint Stock Company, a Vietnamese joint stock company (“AZHC”), with principal address at No. 36, Sub-alley 3, Alley 83, Nguyen Khang Street, Yen Hoa Ward, Cau Giay District, Hanoi, Vietnam, to terminate the Agreement for Participation in Philux Global Real Estate Fund dated July 18, 2022 due to AZHC’s failure to fulfill its obligations as agreed in Article 2 of said Agreement.
16. COMMON STOCK TO BE ISSUED
During the quarter ended March 31, 2023 the Company recorded $396,000 as Common Stock to be issued for cash amounts that the Company has received from four current shareholders of the Company in connection with stock purchase agreements under Rule 144.
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GOING CONCERN UNCERTAINTY |
9 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| GOING CONCERN UNCERTAINTY | NOTE 15 - GOING CONCERN UNCERTAINTY
As shown in the accompanying consolidated financial statements, the Company has accumulated deficit of $75,932,642 as of March 31, 2023 and total stockholders’ deficit of $8,286,628. For the quarter ended March 31, 2023, the Company incurred a net loss of $1,778,713 as compared to a net loss of $2,052,354 during the same period ended March 31, 2022. 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, 2023 and beyond.
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SUBSEQUENT EVENT |
9 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENT | NOTE 16 – SUBSEQUENT EVENT
These financial statements were approved by management and available for issuance on or about May 22, 2023. Subsequent events have been evaluated through this date.
ISSUANCE OF COMMON SHARES FOR CONVERSION OF PROMISSORY NOTE
On April 24, 2023 the Company issued shares of Common Stock to Mast Hill Fund L.P. for the conversion of a convertible promissory that was issued to this investor on April 4, 2022. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
9 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Accounting Policies [Abstract] | |
| PRINCIPLES OF CONSOLIDATION | PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of PHI Group, Inc. (a/k/a Philux Global Group, Inc.) and its active wholly owned subsidiaries: (1) PHILUX Capital Advisors, Inc., a Wyoming corporation (100%), (2) PHI Luxembourg Development S.A., a Luxembourg corporation (100%), (3) PHILUX Global Funds SCA, SICAV-RAIF, a Luxembourg Reserved Alternative Investment Fund (100%), (4) PHILUX Global General Partners SA, a Luxembourg corporation (100%), (5) PHI Luxembourg Holding SA, a Luxembourg corporation (100%), (6) Asia Diamond Exchange, Inc., a Wyoming corporation (100%), and (7) CO2-1-0 (CARBON) Corp., collectively referred to as the “Company.” All significant inter-company transactions have been eliminated in consolidation.
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| INTERIM CONSOLIDATED FINANCIAL STATEMENTS | INTERIM CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. These statements should be read in conjunction with the audited financial statements for the year ended June 30, 2022. In the opinion of management, all adjustments consisting of normal reoccurring accruals have been made to the financial statements. The results of operation for the three and nine months ended March 31, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2023.
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| USE OF ESTIMATES | USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
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| Cash and Cash Equivalents | 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.
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| MARKETABLE SECURITIES | MARKETABLE SECURITIES
The Company’s securities are classified as available-for-sale and, as such, are carried at fair value. Securities classified as available-for-sale may be sold in response to changes in interest rates, liquidity needs, and for other purposes.
Typically, each investment in marketable securities represents less than twenty percent (%) of the outstanding common stock and stock equivalents of the investee, and each security is quoted on either the OTC Markets or other public exchanges. As such, each investment is accounted for in accordance with the provisions of SFAS No. 115.
Unrealized holding gains and losses for available-for-sale securities are excluded from earnings and reported as a separate component of stockholder’s equity. Realized gains and losses for securities classified as available-for-sale are reported in earnings based upon the adjusted cost of the specific security sold. On March 31, 2023, the marketable securities were recorded at $420 based upon the fair value of the marketable securities at that time.
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| FAIR VALUE OF FINANCIAL INSTRUMENTS | 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. On March 31, 2023, the Company did not have any nonfinancial assets or nonfinancial liabilities that are recognized or disclosed at fair value. ASC 820 requires that financial assets and liabilities that are reported at fair value be categorized as one of the types of investments based upon the methodology mentioned in Level 1, Level 2 and Level 3 above for determining fair value.
Assets measured at fair value on a recurring basis are summarized below. The Company also has convertible notes and derivative liabilities as disclosed in this report that are measured at fair value on a regular basis until paid off or exercised.
Available-for-sale securities
The Company uses various approaches to measure fair value of available-for-sale securities, while applying the three-level valuation hierarchy for disclosures, specified in ASC 820. Our Level 1 securities were measured using the quoted prices in active markets for identical assets and liabilities.
The company’s policy regarding the transfers in and/or out of Level 3 depends on the trading activity of the security, the volatility of the security, and other observable units which clearly represents the fair value of the security. If a level 3 security can be measured using a more fairly represented fair value, we will transfer these securities either into Level 1 or Level 2, depending on the type of inputs.
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| ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE
Management reviews the composition of accounts receivable and analyzes historical bad debts. As of March 31, 2023, the Company did not have any accounts receivable.
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| PROPERTIES AND EQUIPMENT | PROPERTIES AND EQUIPMENT
Property and equipment are carried at cost less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful life of the assets from to five years. Expenditures for maintenance and repairs are charged to expense as incurred.
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| REVENUE RECOGNITION STANDARDS | 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.
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| STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION
Effective July 1, 2006, the Company adopted ASC 718-10-25 (previously SFAS 123R) and accordingly has adopted the modified prospective application method. Under this method, ASC 718-10-25 is applied to new awards and to awards modified, repurchased, or cancelled after the effective date. Additionally, compensation cost for the portion of awards that are outstanding as of the date of adoption for which the requisite service has not been rendered (such as unvested options) is recognized over a period of time as the remaining requisite services are rendered.
|
| RISKS AND UNCERTAINTIES | 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 | 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, 2022, and early adoption is permitted for fiscal years beginning after December 15, 2020. This pronouncement should not affect the accounting for the Company’s debt instruments for the quarter ended March 31, 2023.
Update No. 2018-13 – August 2018
Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement
Modifications: The following disclosure requirements were modified in Topic 820:
1. In lieu of a roll-forward for Level 3 fair value measurements, a non-public entity is required to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities.
2. For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly.
3. The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date.
Additions: The following disclosure requirements were added to Topic 820; however, the disclosures are not required for non-public entities:
1. The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period.
2. The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements.
The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.
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. |
MARKETABLE EQUITY SECURITIES AVAILABLE FOR SALE (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
| Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF FAIR VALUE OF INVESTMENTS MARKETABLE EQUITY SECURITIES |
|
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OTHER ASSETS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||
| Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
| SCHEDULE OF OTHER ASSETS | Other Assets comprise of the following as of March 31, 2023 and June 30, 2022
|
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CURRENT LIABILITIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF CURRENT LIABILITIES | Current Liabilities of the Company consist of the followings as of March 31, 2023 and June 30, 2022.
|
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DUE TO OFFICERS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||
| Due To Officers | |||||||||||||||||||||||||||||||||||||
| SCHEDULE OF COMPONENTS OF DUE TO OFFICERS |
|
||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION PLAN (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF FAIR VALUE OF STOCK OPTION ASSUMPTIONS |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF FAIR VALUE OF STOCK OPTION ISSUANCE DATE | The fair value of the Company’s Stock Options as of issuance valuation date is as follows:
|
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RELATED PARTY TRANSACTIONS (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF RELATED PARTIES | As of March 31, 2023, the Company still owed the following amounts to Related Parties:
|
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SCHEDULE OF FAIR VALUE OF INVESTMENTS MARKETABLE EQUITY SECURITIES (Details) - USD ($) |
Mar. 31, 2023 |
Jun. 30, 2022 |
|---|---|---|
| Platform Operator, Crypto-Asset [Line Items] | ||
| Marketable securities | $ 420 | $ 546 |
| Fair Value, Inputs, Level 1 [Member] | ||
| Platform Operator, Crypto-Asset [Line Items] | ||
| Marketable securities | 0 | 0 |
| Fair Value, Inputs, Level 2 [Member] | ||
| Platform Operator, Crypto-Asset [Line Items] | ||
| Marketable securities | 420 | 546 |
| Fair Value, Inputs, Level 3 [Member] | ||
| Platform Operator, Crypto-Asset [Line Items] | ||
| Marketable securities | $ 0 | $ 0 |
MARKETABLE EQUITY SECURITIES AVAILABLE FOR SALE (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | |
|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2023 |
Jun. 30, 2022 |
|
| Marketable Securities [Line Items] | |||
| Sale of stock | 185,000,000 | ||
| Marketable securities, fair value | $ 420 | $ 420 | $ 546 |
| Myson Group, Inc., [Member] | OTC Markets [Member] | |||
| Marketable Securities [Line Items] | |||
| Sale of stock | 91 |
SCHEDULE OF OTHER ASSETS (Details) - USD ($) |
Mar. 31, 2023 |
Jun. 30, 2022 |
|---|---|---|
| Total Other Assets | $ 37,601 | $ 36,161 |
| PHILUX Global Funds [Member] | ||
| Total Other Assets | 32,601 | 31,161 |
| A Quarius Power, Inc [Member] | ||
| Total Other Assets | $ 5,000 | $ 5,000 |
OTHER ASSETS (Details Narrative) |
3 Months Ended | 9 Months Ended | |
|---|---|---|---|
|
Mar. 31, 2023
USD ($)
shares
|
Mar. 31, 2023
USD ($)
shares
|
Mar. 31, 2023
EUR (€)
shares
|
|
| Shares issued, value | $ | $ 185,000 | ||
| PHI Luxembourg Development S.A. [Member] | |||
| Ownership interest | 100.00% | 100.00% | 100.00% |
| PHI Luxembourg Holding SA [Member] | |||
| Ownership interest | 100.00% | 100.00% | 100.00% |
| A Quarius Power, Inc [Member] | |||
| Investments | $ | $ 5,000 | $ 5,000 | |
| PHILUX Global Funds [Member] | |||
| Shares issued, value | $ | $ 32,601 | ||
| Value of shares held | € | € 1,000 | ||
| PHI Luxembourg Development S.A. [Member] | |||
| Number of shares held | shares | 28 | 28 | 28 |
| Value of shares held | € | € 28,000 | ||
| PHILUX Global General Partner SA [Member] | |||
| Value of shares held | € | € 1,000 |
SCHEDULE OF CURRENT LIABILITIES (Details) - USD ($) |
Mar. 31, 2023 |
Jun. 30, 2022 |
|---|---|---|
| Payables and Accruals [Abstract] | ||
| Accounts payable | $ 615,405 | $ 615,805 |
| Sub-fund obligations and commitments | 1,683,459 | 1,574,775 |
| Accrued expenses | 1,261,565 | 931,417 |
| Short-term loans and notes payable | 1,044,461 | 676,888 |
| Convertible Promissory Notes | 572,500 | 756,250 |
| Due to officers | 1,045,210 | 1,077,218 |
| Advances from customers | 760,434 | 665,434 |
| Derivative liabilities and Note Discount | 1,623,460 | 715,677 |
| Total Current Liabilities | $ 8,606,494 | $ 7,013,465 |
CURRENT LIABILITIES (Details Narrative) - USD ($) |
9 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Jun. 30, 2022 |
|
| Short-Term Debt [Line Items] | ||
| Accrued expenses | $ 1,261,565 | $ 931,417 |
| Accrued salaries | 943,842 | |
| Accrued interest | 308,723 | |
| Short-term notes payable | 814,348 | |
| Short-term loans and notes payable | 1,044,461 | 676,888 |
| Convertible notes payable | 572,500 | 756,250 |
| Advances from customers | 660,434 | |
| Deposits | 100,000 | |
| Sub - fund obligations | 1,683,459 | $ 1,574,775 |
| commitment | 96,840 | |
| PHILUX Global Funds [Member] | ||
| Short-Term Debt [Line Items] | ||
| Sub - fund obligations | 1,586,619 | |
| PPP Loan [Member] | ||
| Short-Term Debt [Line Items] | ||
| Accrued interest | 1,274 | |
| Short-term loans and notes payable | 43,750 | |
| Convertible Promissory Notes [Member] | ||
| Short-Term Debt [Line Items] | ||
| Accrued interest | 21,973 | |
| Convertible notes payable | 572,500 | |
| Merchant Cash [Member] | ||
| Short-Term Debt [Line Items] | ||
| Convertible notes payable | $ 186,363 |
SCHEDULE OF COMPONENTS OF DUE TO OFFICERS (Details) - USD ($) |
Mar. 31, 2023 |
Jun. 30, 2022 |
|---|---|---|
| Related Party Transaction [Line Items] | ||
| Duo to Officers | $ 1,045,210 | $ 1,077,218 |
| Henry Fahman [Member] | ||
| Related Party Transaction [Line Items] | ||
| Duo to Officers | 360,089 | 413,868 |
| Tam Bui [Member] | ||
| Related Party Transaction [Line Items] | ||
| Duo to Officers | $ 663,350 | $ 663,350 |
DUE TO OFFICERS (Details Narrative) - USD ($) |
Mar. 31, 2023 |
Jun. 30, 2022 |
|---|---|---|
| Due To Officers | ||
| Due to officers | $ 1,045,210 | $ 1,077,218 |
LOANS AND PROMISSORY NOTES (Details Narrative) - USD ($) |
Mar. 31, 2023 |
Jun. 30, 2022 |
|---|---|---|
| Short-Term Debt [Line Items] | ||
| Short-term notes payable | $ 814,348 | |
| Accrued interest | 308,723 | |
| Short term loan and notes payable | 1,044,461 | $ 676,888 |
| Convertible promissory notes | 572,500 | $ 756,250 |
| Short-term Notes Payable [Member] | ||
| Short-Term Debt [Line Items] | ||
| Short-term notes payable | 814,348 | |
| Accrued interest | 284,475 | |
| PPP Loan [Member] | ||
| Short-Term Debt [Line Items] | ||
| Accrued interest | 1,274 | |
| Short term loan and notes payable | 43,750 | |
| Merchant Cash [Member] | ||
| Short-Term Debt [Line Items] | ||
| Convertible promissory notes | 186,363 | |
| Convertible Promissory Notes [Member] | ||
| Short-Term Debt [Line Items] | ||
| Accrued interest | 21,973 | |
| Convertible promissory notes | $ 572,500 |
PAYROLL TAX LIABILITIES (Details Narrative) |
Mar. 31, 2023
USD ($)
|
|---|---|
| Payroll Tax Liabilities | |
| Payroll tax liabilities | $ 5,747 |
STOCKHOLDER’S EQUITY (Details Narrative) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Jun. 30, 2022 |
|
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Common stock shares authorized | 60,000,000,000 | 60,000,000,000 |
| Common stock, par value | $ 0.001 | $ 0.001 |
| Preferred stock, shares authorized | 500,000,000 | 500,000,000 |
| Preferred stock, par value | $ 0.001 | $ 0.001 |
| Treasury stock, shares | 484,767 | |
| Treasury stock, value | $ 44,170 | $ 44,170 |
| Stock issued for coversion of convertible debts | $ 1,909,744,449 | |
| Number of shares issued for service | 609,309,245 | |
| Number of new shares issued | 185,000,000 | |
| Common stock, shares issued | 36,349,939,124 | 31,429,380,453 |
| Common stock, shares outstanding | 36,349,939,124 | 31,429,380,453 |
| Class B Series I Preferred Stock [Member] | ||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Preferred stock, shares issued | 600,000 | |
| Preferred stock, shares outstanding | 600,000 |
SCHEDULE OF FAIR VALUE OF STOCK OPTION ASSUMPTIONS (Details) |
9 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Share-Based Payment Arrangement [Abstract] | |
| Risk-free interest rate | 1.18% |
| Expected life | 7 years |
| Expected volatility | 239.30% |
STOCK-BASED COMPENSATION PLAN (Details Narrative) - $ / shares |
3 Months Ended | 9 Months Ended | |||
|---|---|---|---|---|---|
Sep. 09, 2021 |
Sep. 23, 2016 |
Mar. 31, 2023 |
Mar. 31, 2023 |
Mar. 18, 2015 |
|
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
| Employee benefit plan shares of common stock for eligible employees | 1,000,000 | ||||
| Number of shares issued for services | 609,309,245 | ||||
| 2021 Employee Benefit Plan [Member] | |||||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
| Number of shares issued for employee benefit plan | 2,600,000,000 | ||||
| Number of shares issued for services | 2,407,196,586 | ||||
| Henry Fahman [Member] | |||||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
| Option grant date exercise price per share | $ 0.24 | ||||
| Number of option shares | 6,520,000 | ||||
| Number of options outstanding term | 7 years | ||||
| Number of options exercisable term | 1 year |
RELATED PARTY TRANSACTIONS (Details Narrative) |
Mar. 31, 2023
USD ($)
|
|---|---|
| President, Chief Operating Officer and Secretary [Member] | |
| Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
| Accrued salaries | $ 815,595 |
GOING CONCERN UNCERTAINTY (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | ||||
|---|---|---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
Jun. 30, 2022 |
|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
| Accumulated deficit | $ 75,932,642 | $ 75,932,642 | $ 71,717,973 | |||
| Stockhlders equity | 8,286,628 | 8,286,628 | $ (6,881,906) | $ 6,543,502 | ||
| Net loss | $ 1,778,713 | $ 2,052,354 | $ 4,216,669 | $ 18,604,163 | ||
SUBSEQUENT EVENT (Details Narrative) |
Apr. 24, 2023
shares
|
|---|---|
| Subsequent Event [Member] | Mast Hill Fund LP [Member] | |
| Subsequent Event [Line Items] | |
| Common stock for conversion of convertible promissory note | 709,353,966 |
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