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 November 20, 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)
| September 30, | June 30, | |||||||
| 2023 | 2023 | |||||||
| 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 | ||||||||
| 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 of Class B Series I issued and outstanding as of 9/30/2023 and 6/30/2023 respectively. Par value: | ||||||||
| APIC - Class B Series I | ||||||||
| Total Preferred Stock | ||||||||
| Common stock, $
par value;
billion shares authorized;
shares issued and outstanding on 9/30/2023;
billion shares authorized and
shares issued and outstanding on 6/30/2023, respectively, adjusted for | ||||||||
| APIC - Common Stock | ||||||||
| Common Stock to be issued | ||||||||
| Common Stock to be cancelled | ( | ) | ( | ) | ||||
| Treasury stock: shares as of 9/30/23 and 6/30/23, 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
| SEP 30, | ||||||||
| 2023 | 2022 | |||||||
| Net revenues | ||||||||
| Consulting, advisory and management services | $ | $ | ||||||
| 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 | ||||||||
| Other income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Other expenses | ( | ) | ( | ) | ||||
| 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 THREE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(UNAUDITED)
| SEPTEMBER 30, | ||||||||
| 2022 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) from operations | $ | ( | ) | $ | ( | ) | ||
| Mark-to-market adjustments | ( | ) | ||||||
| Net change due to non-cash issuances of stock | ||||||||
| Cash in transit | ||||||||
| Derivative liabilities | ( | ) | ||||||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
| (Increase) decrease in assets and prepaid expenses | ||||||||
| Total deferred financing costs | ( | ) | ||||||
| Total (increase) decrease in assets and prepaid expenses | ( | ) | ||||||
| Increase (decrease) in accounts payable and accrued expenses | ||||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Sub-fund obligations | ||||||||
| Accrued expenses | ||||||||
| Advances from customers | ( | ) | ||||||
| Total increase (decrease) in accounts payable and accrued expenses | ||||||||
| Net cash provided by (used in) operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Net cash provided by (used in) investing activities | ||||||||
| Cash flows from financing activities: | ||||||||
| Loans from Directors/Officers | ( | ) | ( | ) | ||||
| Loans and Notes payable | ( | ) | ||||||
| Common Stock to be issued | ||||||||
| 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 audited consolidated financial statements
| F-3 |
PHI GROUP, INC. AND SUBSIDIARIES
STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE QUARTER ENDED SEPTEMBER 30, 2023 (UNAUDITED)
| Additional | Preferred | Stock | Additional | Common Stock | Common Stock | Other | Total | |||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Paid-in | Stock | Par | Paid-in | Treasury | Stock | to be | to be | Comprehensive | Accumulated | Shareholder | |||||||||||||||||||||||||||||||||||||||||
| Shares | Par Value | Capital | Shares | Value | Capital | Shares | Amount | cancelled | issued | Gain (loss) | Deficit | Deficit | ||||||||||||||||||||||||||||||||||||||||
| Balance at Fiscal Year Ended June 30, 2022 | $ | $ | $ | $ | ( | ) | ( | ) | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Common Shares issued for conversions of promissory notes durng 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 durng 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 | ( | ) | ( | ) | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||
| Common Shares issued for conversion of notes | - | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Shares issued for cash | - | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at fiscal year ended June 30, 2023 | ( | ) | ( | ) | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||
| Common shares issued for conversion of notes by Brin Financial Corporation during 9/30/23 quarter | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Shares issued for exercise of warrants by Mast Hill Fund LP during 9/30/23 quarter | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Common shares issued for conversion of note by 1800 Diagonal Lending LLC during 9/30/23 quarter | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at quarter ended September 30, 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 renewable energy, real estate, infrastructure, healthcare, agriculture, and the Asia Diamond Exchange in conjunction with the International Financial Center in Vietnam.
BACKGROUND
Originally incorporated on June 8, 1982 as JR Consulting, Inc., a Nevada corporation, the Company applied for a Certificate of Domestication and filed Articles of Domestication to become a Wyoming corporation on September 20, 2017. In the beginning, the Company was foremost engaged in mergers and acquisitions and had an operating subsidiary, Diva Entertainment, Inc., which operated two modeling agencies, one in New York and one in California. In January 2000, the Company changed its name to Providential Securities, Inc., a Nevada corporation, following a business combination with Providential Securities, Inc., a California-based financial services company. In February 2000, the Company then changed its name to Providential Holdings, Inc. In October 2000, Providential Securities withdrew its securities brokerage membership and ceased its financial services business. Subsequently, in April 2009, the Company changed its name to PHI Group, Inc. From October 2000 to October 2011, the Company and its subsidiaries were engaged in various transactions in connection with mergers and acquisitions advisory and consulting services, real estate and hospitality development, mining, oil and gas, telecommunications, technology, healthcare, private equity, and special situations. In October 2011, the Company discontinued the operations of Providential Vietnam Ltd., Philand Ranch Limited, a United Kingdom corporation (together with its subsidiaries Philand Ranch - Singapore, Philand Corporation - US, and Philand Vietnam Ltd. - Vietnam), PHI Gold Corporation (formerly PHI Mining Corporation, a Nevada corporation), and PHI Energy Corporation (a Nevada corporation), and mainly focused on acquisition and development opportunities in energy and natural resource businesses.
The Company is currently 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 International Financial Center and Asia Diamond Exchange in Vietnam. In addition, Philux Capital Advisors, Inc., a wholly owned subsidiary of the Company, continues to provide corporate and project finance services, including merger and acquisition (M&A) advisory and consulting services for U.S. and international companies. The Company has also formed Philux Global Advisors, Inc. to serve as the investment advisor to Philux Global Funds and other potential fund clients in the future.
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), and Tin Thanh Group, a Vietnamese joint stock company (www.tinthanhgroup.vn) (“TTG”). 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 with each of them when the Company successfully closes one or more of the pending asset management agreements and financing with certain investor groups and lenders.
The Company intends to amend 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.
In February 2023, the Company signed a comprehensive business cooperation agreement with Dr. Tri Viet Do, a German-trained electromagnetic energy and quantum physics expert, to jointly develop and commercialize a number of key products using proprietary intellectual properties by him, with initial focus on clean energy generation and transportation.
In addition, in May 2023, the company signed a business cooperation agreement with SSE Global JSC, a Vietnamese joint stock company, to establish SSE Global Group, Inc., a Wyoming corporation, (www.sseglobalgroup.com) to commercialize a self-sustainable energy technology. The Company intends to integrate Dr. Tri Viet Do’s and SSE Global Group, Inc.’s technologies in the new subsidiary to be established in United Arab Emirates which will replace its former subsidiary CO2-1-0 (CARBON) Corp. to continue engaging in carbon emission mitigation using blockchain and crypto technologies.
Moreover, in June 2023 the Company signed a business cooperation agreement with Saphia Alkali JSC, a Vietnamese joint stock company, to form Sapphire Alkali Global Group in the United States to finance, manufacture, sell and distribute Saphia Alkali’s proprietary products on a worldwide basis.
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.
| F-5 |
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, 2023. 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 months ended September 30, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2024.
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 September 30, 2023, the marketable securities were recorded at $
| F-6 |
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.
| F-7 |
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 September 30, 202â, 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 September 30, 2023, the Company did not have any accounts receivable.
| F-8 |
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.
- Significant judgments, and changes in judgments, made in applying the requirements to those contracts.
Additionally, Section 340-40-50 requires an entity to provide quantitative and/or qualitative information about assets recognized from the costs to obtain or fulfill a contract with a customer.
The Company’s revenue recognition policies are in compliance with ASC 606-10. The Company recognizes consulting and advisory fee revenues in accordance with the above-mentioned guidelines and expenses are recognized in the period in which the corresponding liability is incurred.
| F-9 |
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, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020. The Company intends to adopt ASU 2020-06 for the quarter beginning January 1, 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.
| F-10 |
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.
| F-11 |
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 September 30, 2023 consisted of shares of Mag Mile Capital
Inc., formerly Myson Group, Inc., which is quoted on the OTC Markets (Trading symbols “MMCP”). The fair value of the shares
recorded as of September 30, 2023 was $
| Securities available for sale | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| September 30, 2023 | $ | $ | $ | |||||||||||||
| June 30, 2023 | $ | $ | $ | |||||||||||||
NOTE 4 – PROPERTIES AND EQUIPMENT
The Company did not have any properties or equipment as of September 30, 2023.
NOTE 5 – OTHER ASSETS
Other Assets as of September 30, 2023 and June 30, 2023 comprise of:
| September 30, 23 | June 30, 2023 | |||||||
| Investment in PHILUX Global Funds, SCA, SICAV-RAIF | $ | $ | ||||||
| Total Other Assets | $ | 32,598 | $ | 32,604 | ||||
For
the investments in PHILUX Global Funds, as of September 30, 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
The Company has treated all development costs of the Asia Diamond Exchange as expenses which will be capitalized as 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 September 30, 2023 and June 30, 2023.
| Current Liabilities | September 30, 2023 | June 30, 2023 | ||||||
| Accounts payable | ||||||||
| Sub-fund obligations | ||||||||
| 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 | ||||||||
ACCRUED
EXPENSES: Accrued expenses as of September 30, 2023 totaling $
NOTES
PAYABLE: As of September 30, 2023, Notes Payable consist of $
ADVANCES FROM CUSTOMERS AND DEPOSITS FROM CLIENTS:
As
of September 30, 2023, the Company recorded $
SUB-FUND
OBILGATIONS: 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 September 30, 2023 and June 30, 2023, the balances were $
| Officers/Directors | Sep 30, 2023 | Jun 30, 2023 | ||||||
| Henry Fahman | $ | |||||||
| Tam Bui | $ | |||||||
| Total | $ | $ | ||||||
| F-12 |
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.
As
of September 30, 2023, the Company had a total of $
B. CONVERTIBLE PROMISSORY NOTES OUTSTANDING AS OF SEPTEMBER 30, 2023
As
of September 30, 2023, the Company had a net balance of $
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 September 30, 2023 were the same since the inclusion of Common stock equivalents is anti-dilutive.
NOTE 10 – STOCKHOLDER’S EQUITY
As of September 30, 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 September 30, 2023 was shares valued at $
COMMON STOCK
During
the quarter ended September 30, 2023, the Company issued a total of
As of September 30, 2023, there were shares of the Company’s common stock issued and outstanding.
PREFERRED STOCK
CLASS B SERIES I PREFERRED STOCK
As of September 30, 2023, there were shares of Class B Series Preferred Stock issued and outstanding.
| F-13 |
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, 2023 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: $ | $ | ||||||||||||||
These stock options expired on 9/23/2023.
3. On September 9, 2021, the Company adopted the PHI Group 2021 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, 2021, 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 September 30, 2023 the Company has issued a total of shares for consulting services and salaries under the PHI Group 2021 Employee Benefit Plan.
NOTE 12– RELATED PARTY TRANSACTIONS
The
Company recognized a total of $
Henry Fahman, Chairman and Chief Executive Officer of the Company from time to time lend smoney to the Company. These loans are without interest and payable upon demand.
As of September 30, 2023, the Company still owed the following amounts to Related Parties:
| No. | Name: | Title: | Amount: | Description: | ||||||
| 1) | Henry Fahman | Chairman/CEO | $ | Accrued salaries | ||||||
| $ | Loans | |||||||||
| 3) | Tina Phan | Secretary/Treasurer | $ | Accrued salaries | ||||||
| F-14 |
NOTE 13 – CONTRACTS AND COMMITMENTS
1. EQUITY LINE OF CREDIT WITH INSTITUTIONAL INVESTOR
On March 01, 2022, the Company entered into an equity purchase agreement with Mast Hill Fund LP (“The Investor”) as follows:
The
Investor will provide an equity line of up to $
The pricing period of each put will be the 7 trading days immediately following receipt of the Put Shares (the “Pricing Period”).
There shall be a 7 trading day period between the receipt of the Put Shares and the next put.
The Company intends to file an S-1 Registration Statement with the Securities and Exchange Commission for this Equity Line of Credit as part of its alternative financing plan.
2. 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 $
3. INVESTMENT AGREEMENTS AND MEMORANDUM OF UNDERSTANDING
As
of September 30, 2023, the Company and its subsidiaries have seven active agreements for loan financing, asset management, partnership,
joint venture, and memorandum of understanding with international investor groups for a total of
4. DEVELOPMENT OF THE ASIA DIAMOND EXCHANGE AND INTERNATIONAL FINANCIAL CENTER IN VIETNAM
Along with the establishment of Philux Global Funds, the Company has worked with the Authority of Chu Lai Open Economic Zone in Central Vietnam and the Provinces of Quang Nam and Dong Nai, Vietnam, to develop the Asia Diamond Exchange for lab-grown, rough and polished diamond together with a multi-commodities logistics center.
Mr. Ben Smet, who successfully established the Dubai Diamond Exchange in 2002-2005, has been leading fulltime a group of experts for the setup of the Asian Diamond Exchange since January 2018. He has brought together the 11 main trading players in the rough diamond industry to come to Vietnam. He has established a partnership with the biggest player in the rough trading and polishing group, the Mehta Family Group. Other main international diamond trading groups as the Mody Group, Diamac etc. have joined the overall venture.
| F-15 |
Furthermore,
together with the groups, a full Kimberly Process Certification Scheme (KPC) to prevent ‘conflicting diamond’ trading was
established and is aligned from time to time. Also, the new lab grown diamond KPC scheduling is already implemented. A unique and KPC
approved structure has been established where under the PHI Vietnam umbrella, in collaboration with KPC Mum- bai (India), a ‘Public-Private-Partnership
(PPP)’ is established in which the Vietnamese authorities hold
The Company has taken the decision to move the greater part of the ADE rough and polishing venture, first to an Industrial Zone to be established close to the new international Airport in Long Thanh District, Dong Nai Province, Vietnam and this year to the Thanh Da Island. This location change has caused that the entire KPC Process and administration had to be adapted and redone with renewed financial input, mostly carried by Mr. Smet.
A
rough diamond trading export flow to Vietnam was negotiated and concluded by Mr. Smet with the DMCC and Dubai Diamond Exchange. This
year, an international diamond trading platform was created by Mr. Smet to unify the trading efforts of Alrosa and De Beers/Bonas. Mr.
Smet was advised and counselled thereto by Mr. A. Mehta, the senior board member of the Alrosa Group. Together with Mr. A. Mehta, Mr.
Smet has also covered the financial backbone of the diamond trading venture via the setup of a financial institution in Botswana. It
is the intention of Mr. Smet to donate
Mr. Smet had also established a collaboration partnership with the Antwerp Diamond Exchange (Belgium), the Dubai Diamond Exchange and the Tel-Aviv Diamond Exchange. Negotiations have started to involve a new economic free-zone in Jordan into the ongoing project.
Recently, Mr. Smet has started a structuring project, in order for PHI to set up and establish an International Financial Center on the Thanh Da Island in connection with the Asian Diamond Exchange. This will be similar as what Mr. Smet has established successfully for Dubai in 2002-2005 and is now incorporating the international changes of the last decade.
Once the Company has effectuated all budgeting and all financial requirements and obligations, the ongoing process will effectively materialize and Mr. Smet then shall transfer the entire venture to Philux Global Group, Inc.
On June 04, 2022 the Company incorporated Asia Diamond Exchange, Inc., a Wyoming corporation, ID number 2022-001010234, as the holding company for this venture.
5. 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 (
6. CONVERTIBLE PROMISSORY NOTE WITH 1800 DIAGONAL LENDING LLC.
On
June 1, 2023, the Company issued a Convertible Promissory Note to 1800 Diagonal Lending LLC, a Virginia limited liability company, for
$
| F-16 |
7. 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.
As of the date of this report, Dr. Do has successfully designed and set up a prototype for power generation and intends to file a patent before commercializing this product.
8. Investment Commitment AgreementS 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
| F-17 |
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.
On June 05, 2023, Philux Global Vietnam Investment and Development Co. Ltd., a subsidiary of Philux Global Group Inc. (f/k/a PHI Group, Inc.), and Saigon Silicon City JSC signed an Agreement to terminate the Investment Commitment Agreement previously entered into by the two parties on February 21, 2023 in its entirety.
On
June 05, 2023 Philux Global Group Inc. (a/k/a PHI Group, Inc.) (the “Investor”/”Provider”) signed an Investment
Commitment Agreement with Saigon Silicon City Joint Stock Company (the “Company”) whereby the Investor/Provider is committed
to providing or causing to be provided up to one and half billion U.S. dollars (USD
According to the Investment Commitment Agreement, upon the signing of this Agreement, the Company shall make a deposit of Five Hundred Thousand U.S. Dollars (USD ) with the Investor/Provider 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/Provider fails to fulfill its commitment as mentioned in the Agreement
Within
thirty days after the deposit of at least two hundred thousand U.S. dollars (USD
The foregoing description of the Investment Commitment Agreement by and between Philux Global Group Inc. and Saigon Silicon City JSC dated June 5, 2023 is qualified in its entirety by reference to the full text of said Agreement, which is filed as Exhibit 10.1 to the Current Report on Form 8-K on June 13, 2023.
The Company intends to use part of the capital from the financing and asset management agreements to invest in Saigon Silicon City.
9. PURCHASE AND SALE AGREEMENT WITH JINSHAN LTD. CO.
On
June 27, 2023, Premier Enterprises Group Inc., a Wyoming corporation and subsidiary of PHI Group, Inc. (/n/k/a Philux Global Group Inc.),
(the “Registrant”) entered into an Agreement of Purchase and Sale with Jinshan Limited Liability Company, a limited liability
company organized and existing by virtue of the laws of Socialist Republic of Vietnam, with principal business address at 37 Road No.
4, Do Thanh Housing Complex, Ward 4, District 3, Ho Chi Minh City, Vietnam, hereinafter referred to as “JSH,” the Majority
Member(s) of JSH, hereinafter referred to as the “Majority Member(s),” (both JSH and the Majority Member(s) are referred
to as the “Seller”), to acquire fifty-one percent (
The
value of JSH’s fifty-one percent (
The Closing of this transaction is subject to PEG’s being listed and traded on a U.S. stock exchange at least one month prior to the Closing date.
The foregoing description of the Agreement of Purchase and Sale dated June 27, 2023 among Premier Enterprises Group Inc., a subsidiary of PHI Group, Inc., Jinshan Limited Liability Company and the Majority Member(s) of JSH is qualified in its entirety by reference to the full text of said Agreement, which was filed as Exhibit 10.1 to the Form 8-K on June 28, 2023.
| F-18 |
10. BUSINESS COOPERATION AGREEMENT WITH SSE GLOBAL JSC
In May 2023, the Company signed a Business Cooperation Agreement with SSE Group JSC, a Vietnamese joint stock company, to jointly cooperate in the areas of energy efficiency and mitigation of global greenhouse gas (GHG) emissions by using SSE Group’s proprietary technologies.
According to the agreement, SSE Group JSC and Philux Global Group Inc. have incorporated “SSE Global Group Inc.,” a Wyoming corporation, Registration ID 2023-00127, (www.sseglobalgroup.com) to apply SSE Group’s breakthrough technologies for the energy industry, especially to improve fuel efficiency and mitigate global GHG emissions.
Global GHG emissions have been steadily increasing over the years, primarily due to human activities such as burning fossil fuels, deforestation, industrial processes, and agriculture. Carbon dioxide (CO2) is the most significant GHG, accounting for the majority of emissions. The main sectors contributing to GHG emissions are energy production, transportation, industry, agriculture, and land use change. Emerging economies, such as China and India, have witnessed significant increases in emissions due to rapid industrialization and urbanization. Rising GHG emissions lead to the greenhouse effect, causing global warming and climate change. This phenomenon contributes to various environmental and socio-economic challenges, including extreme weather events, sea-level rise, disrupted ecosystems, and threats to human health and food security.
SSE
Group’s proprietary technologies are a self-sustaining energy system created by absolute interactions with the air condition of
the atmosphere. Test results have shown that this system can enhance and extend the burning time of traditional fuels such as gasoline,
diesel and coal by
11. BUSINESS COOPERATION AGREEMENT WITH SAPHIA ALKALI JOINT STOCK COMPANY
On June 27, 2023, SAPHIA ALKALI JOINT STOCK COMPANY, a Vietnamese joint stock company with principal business address at No 27, Sub-alley 1, Alley 104, Viet Hung Street, Viet Hung Ward, Long Bien District, Hanoi City, Vietnam, represented by Mrs. Nguyen Phuong Dung, its Chairperson, hereinafter referred to as “SAP,” and PHI GROUP INC. (/n/k/a PHILUX GLOBAL GROUP INC, hereinafter referred to as “PGG,” signed a Business Cooperation Agreement and agreed to undertake the followings:
- SAP and PGG agree to jointly cooperate primarily in the areas of alkali technologies as well as any other business that may be considered mutually beneficial.
- Specifically, SAP and PGG will initially focus on forming a company in the United States (“NewCo”) to finance, manufacture, sell and distribute SAP’s proprietary alkali products on a worldwide basis, except Vietnam and certain territories that are handled directly by SAP.
- SAP will initially make available and transfer certain technologies as may be needed to NewCo to serve the needs of this Business Cooperation Agreement.
| F-19 |
- The relationship established between SAP and PGG by this Agreement shall be exclusive with respect to the areas of SAP’s proprietary technologies outside of Vietnam.
- The Parties shall agree on the roles, responsibilities and benefits of each party in connection with NewCo or other particular business undertakings, which shall be detailed in a separate definitive agreement.
-
In particular, PGG will be responsible for providing or causing to be provided three hundred million U.S. dollars (USD
- The parties herein shall determine the capital structure of NewCo in a separate subsequent addendum to this Business Cooperation Agreement.
- The Business Cooperation Agreement shall be effective upon signing and shall terminate in writing by the Parties.
The foregoing description of the Business Cooperation Agreement dated June 27, 2023 between Saphia Alkali Joint Stock Company and Philux Global Group Inc. is qualified in its entirety by reference to the full text of said Agreement, which was filed as Exhibit 10.1 to the Current Report on Form 8-K July 3, 2023.
12. EXTENSION FOR REPURCHASE OF THE COMPANY’S COMMON STOCK
On June 29, 2023, the Company’s Board of Directors passed a corporate resolution to extend the time period for the repurchase of its own shares of common stock from the open market from time to time in accordance with the terms mentioned below and subject to liquidity conditions, satisfaction of certain open contractual obligations and the judgment of the Company’s Board of Directors and Management with respect to optimal use of potentially available funds in the future:
| 1. | Purpose of Repurchase: To enhance future shareholder returns. |
| 2. | Details of Planned Repurchase: |
| a. | Class of shares to be repurchased: Common Stock of PHI Group, Inc. (n/k/a Philux Global Group Inc.) | |
| b. | Amount of repurchasable shares: As many as economically conducive and optimal for the Company. | |
| c. | Total repurchase dollar amount: To be determined by prevalent market prices at the times of transaction. | |
| d. | Methods of repurchase: Open market purchase and/or negotiated transactions. | |
| e. | Repurchase period: As soon as practical until December 31, 2023. | |
| f. | The Company intends to fund the proposed share repurchase program with proceeds from long-term financing programs, future earnings, disposition of non-core assets and other potential sources, subject to liquidity, availability of funds, comparative judgment of optimal use of available cash in the future, and satisfaction of certain open contractual obligations. | |
| g. | The share repurchase program will be in full compliance with state and federal laws and certain covenants with the Company’s creditors and may be terminated at any time based on future circumstances and judgment of the Company. |
13. DEVELOPMENT OF PHILUX GLOBAL TRADE, INC.
On August 19, 2022, the Company established Philux Global Trade, Inc., a Wyoming corporation, to engage in international trade.
14. COMMON STOCK TO BE ISSUED
As
of September 30, 2023, the Company recorded $
NOTE 14 - GOING CONCERN UNCERTAINTY
As
shown in the accompanying consolidated financial statements, the Company has accumulated deficit of $as of September 30, 2023 and total
stockholders’ deficit of $
NOTE 15 – SUBSEQUENT EVENT
The financial statements included in this Form 10-Q were approved by management and available for issuance on or about November 20, 2023. Subsequent events have been evaluated through this date.
1. ISSUANCE OF CONVERTIBLE PROMISSORY NOTE
On
November 9, 2023, the Company issued a Convertible Promissory Note to 1800 Diagonal Lending LLC, a Virginia limited liability company,
for $
| 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.
INTRODUCTION
PHI Group, Inc. (n/k/a Philux Global Group Inc) (the “Company” or “PHI”) (www.philuxglobal.com) is primarily engaged in mergers and acquisitions, advancing Philux Global Funds, SCA, SICAV-RAIF, a “Reserved Alternative Investment Fund” (“RAIF”) under the laws of Luxembourg, and developing the Asia Diamond Exchange in Vietnam. Besides, the Company provides corporate finance services, including merger and acquisition advisory and consulting services for client companies through our wholly owned subsidiary Philux Capital Advisors, Inc. (formerly PHI Capital Holdings, Inc.) (www.philuxcapital.com) and invests in selective industries and special situations aiming to potentially create significant long-term value for our shareholders. Philux Global Funds intends to include a number of sub-funds for investment in select growth opportunities in the areas of renewable energy, real estate, infrastructure, healthcare, agriculture and the Asia Diamond Exchange in together with the International Financial Center in Vietnam.
BACKGROUND
Originally incorporated on June 8, 1982 as JR Consulting, Inc., a Nevada corporation, the Company applied for a Certificate of Domestication and filed Articles of Domestication to become a Wyoming corporation on September 20, 2017. In the beginning, the Company was foremost engaged in mergers and acquisitions and had an operating subsidiary, Diva Entertainment, Inc., which operated two modeling agencies, one in New York and one in California. In January 2000, the Company changed its name to Providential Securities, Inc., a Nevada corporation, following a business combination with Providential Securities, Inc., a California-based financial services company. In February 2000, the Company then changed its name to Providential Holdings, Inc. In October 2000, Providential Securities withdrew its securities brokerage membership and ceased its financial services business. Subsequently, in April 2009, the Company changed its name to PHI Group, Inc. From October 2000 to October 2011, the Company and its subsidiaries were engaged in various transactions in connection with mergers and acquisitions advisory and consulting services, real estate and hospitality development, mining, oil and gas, telecommunications, technology, healthcare, private equity, and special situations. In October 2011, the Company discontinued the operations of Providential Vietnam Ltd., Philand Ranch Limited, a United Kingdom corporation (together with its subsidiaries Philand Ranch - Singapore, Philand Corporation - US, and Philand Vietnam Ltd. - Vietnam), PHI Gold Corporation (formerly PHI Mining Corporation, a Nevada corporation), and PHI Energy Corporation (a Nevada corporation), and mainly focused on acquisition and development opportunities in energy and natural resource businesses.
The Company is currently focused on Philux Global Funds, SCA, SICAV-RAIF by launching Philux Global Select Growth Fund and potentially other sub-funds for investment in real estate, renewable energy, infrastructure, agriculture, healthcare and the Asia Diamond Exchange and International Financial Center in Vietnam. In addition, Philux Capital Advisors, Inc. (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), and Tin Thanh Group, a Vietnamese joint stock company (www.tinthanhgroup.vn) (“TTG”). 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 with each of them when the Company successfully closes one or more of the pending asset management agreements and financing with certain investor groups and lenders. In addition, the Company intends to amend 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 is in the process of establishing a subsidiary in the Dubai Multi-Commodities Centre in United Arab Emirates to replace its former subsidiary CO2-1-0 (CARBON) Corp. to continue engaging in carbon emission mitigation using blockchain and crypto technologies. In May 2023, the company signed a business cooperation agreement with SSE Global JSC, a Vietnamese joint stock company, to establish SSE Global Group, Inc., a Wyoming corporation, (www.sseglobalgroup.com) to commercialize a self-sustainable energy technology. In addition, in June 2023 the Company signed a business cooperation agreement with Saphia Alkali JSC, a Vietnamese joint stock company, to form Sapphire Alkali Global Group in the United States to finance, manufacture, sell and distribute Saphia Alkali’s proprietary products on a worldwide basis. 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.
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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 November 20, 2023, the Company has the following subsidiaries: (1) Asia Diamond Exchange, Inc., a Wyoming corporation (100%), (2) American Pacific Resources, Inc., a Wyoming corporation (100%, (3) Empire Spirits, Inc., a Nevada corporation (85% - formerly Provimex, Inc.) (4) Philux Global Funds SCA, SICAV-RAIF, a Luxembourg Reserved Alternative Investment Fund (100%), (5) Philux Luxembourg Development S.A., a Luxembourg corporation (100%), (6) PHI Luxembourg Holding SA, a Luxembourg corporation (100%), (7) Philux Global General Partners SA, a Luxembourg corporation (100%), (8) Philux Capital Advisors, Inc., a Wyoming corporation (100%), (9) Philux Global Advisors, Inc., a Wyoming corporation (100%), (10) Philux Global Healthcare, Inc., a Wyoming corporation (100%), (11) Philux Global Trade Inc., a Wyoming corporation (100%), (12) Philux Global Energy Inc., a Wyoming corporation (100%), and (13) Philux Global Vietnam Investment and Development Company Ltd., a Vietnamese limited liability company (100%).
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 has deemed 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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ASIA DIAMOND EXCHANGE AND INTERNATIONAL FINANCIAL CENTER IN VIETNAM
Along with the establishment of Philux Global Funds, the Company has worked with the Authority of Chu Lai Open Economic Zone in Central Vietnam and the Provinces of Quang Nam and Dong Nai, Vietnam, to develop the Asia Diamond Exchange for lab-grown, rough and polished diamond together with a multi-commodities and logistics centers.
Mr. Ben Smet who successfully established the Dubai Diamond Exchange in 2002-2005 has been leading fulltime a group of experts for the setup of the Asian Diamond Exchange since January 2018. He has brought together the 11 main trading players in the rough diamond industry to come to Vietnam. He has established a partnership with the biggest player in the rough trading and polishing group, the Mehta Family Group. Other main international diamond trading groups as the Mody Group, Diamac etc. have joined the overall venture.
Furthermore, together with the groups, a full Kimberly Process Certification Scheme (KPC) to prevent ‘conflicting diamond’ trading was established and is aligned from time to time. Also, the new lab grown diamond KPC scheduling is already implemented. A unique and KPC approved structure has been established where under the PHI Vietnam umbrella, in collaboration with KPC Mum- bai (India), a ‘Public-Private-Partnership (PPP)’ is established in which the Vietnamese authorities hold 15% and PHI (or its local corporate entity) holds 85% of the voting rights. For the lab grown diamond segment, this will be in the Chu Lai Free Economic Zone and for the Rough and Polished Diamond Parcel Trade, this is being planned to be on Thanh Da Island, about 5 kilometers from the center of Ho Chi Minh City, Vietnam.
The Company has taken the decision to move the greater part of the ADE rough and polishing venture, first to an Industrial Zone to be established close to the new international Airport in Long Thanh District, Dong Nai Province, Vietnam and this year to the Thanh Da Island. This location change has caused that the entire KPC Process and administration had to be adapted and redone with renewed financial input, mostly carried by Mr. Smet.
A rough diamond trading export flow to Vietnam was negotiated and concluded by Mr. Smet with the DMCC and Dubai Diamond Exchange. This year, an international diamond trading platform was created by Mr. Smet to unify the trading efforts of Alrosa and De Beers/Bonas. Mr. Smet was advised and counselled thereto by Mr. A. Mehta, the senior board member of the Alrosa Group. Together with Mr. A. Mehta, Mr. Smet has also covered the financial backbone of the diamond trading venture via the setup of a financial institution in Botswana. It is the intention of Mr. Smet to donate 50% of his own voting shares of the institution to PHI the moment all budgets for the venture are arranged by PHI and all financial obligations and reimbursements by PHI to him are met. It is the intention of the parties involved to establish a subsidiary of the financial institution in the ADE Vietnam and have local banking partners join this initiative.
Mr. Smet had also established a collaboration partnership with the Antwerp Diamond Exchange (Belgium), the Dubai Diamond Exchange and the Tel-Aviv Diamond Exchange. Negotiations have started to involve a new economic free-zone in Jordan into the ongoing project.
Recently, Mr. Smet has started a structuring project, in order for PHI to set up and establish an International Financial Center on the Thanh Da Island in connection with the Asian Diamond Exchange. This will be similar as what Mr. Smet has established successfully for Dubai in 2002-2005 and this now incorporating the international changes of the last decade.
Once the Company has effectuated all budgeting and all financial requirements and obligations, the ongoing process will effectively materialize and Mr. Smet then shall transfer the entire venture to Philux Global Group, Inc.
The Company has incorporated Asia Diamond Exchange, Inc., a Wyoming corporation, ID number 2021-001010234, as the holding company for the development of the Asia Diamond Exchange in Vietnam.
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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 9/26/2021, 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.
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.
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PHILUX GLOBAL ADVISORS, INC.
Incorporated in April 2022 as a Wyoming corporation, Philux Global Advisors, Inc. will serve as the investment advisor for Philux Global Funds SCA SICAV-RAIF.
PHILUX GLOBAL HEALTHCARE, INC.
Philux Global Healthcare, Inc., a Wyoming corporation, was established in February 2023 to replace Phivitae Healthcare, Inc., as a subsidiary of the Company to cooperate with Dr. Dung Anh Hoang of Belgium and his affiliates to develop a software management system for intensive care units in Vietnam and launch medical bioplastic products that have ready buyers in Europe and Africa. The Company intends to use this subsidiary as a holding company to acquire and consolidate targets in the healthcare industry.
PHILUX GLOBAL ENERGY, INC.
On January 3, 2022, the Company 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. The Company intends to develop its energy-related business with SSE Global Group, Inc. and Dr. Tri Viet Do through this subsidiary in the future.
PHILUX FIDELITY GLOBAL GROUP
Philux Fidelity Global Group is a Wyoming corporation incorporated on June 30, 2022 with the intent to serve as the holding company for business cooperation between Tin Thanh Group and the Company.
PHILUX GLOBAL TRADE INC.
Established on August 19, 2022 in Wyoming, USA as a subsidiary of the Company to serve as the holding company for the acquisition of Vietnam-based Van Phat Dat JSC, Philux Global Trade Inc. is currently developing trade commerce between Vietnam and other countries.
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.
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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.
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 September 30, 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 periods ended September 30, 2023 and 2022, our financial condition on September 30, 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.
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Three months ended September 30, 2023 compared to the three months ended September 30, 2023
Total Revenues:
During the quarter ended September 30, 2023, the Company primarily focused on developing the Asia Diamond Exchange in conjunction with the International Financial Center in Vietnam, working with SSE Global Group, Inc. and Dr. Tri Viet Do on the new self-sustainable energy technologies, developing international trade opportunities between Vietnam and Africa through Philux Global Trade, Inc. and devoting time and resources to concentrate on closing the $100 million Investment Funding Partnership Agreement, $200 million loan agreement and $250 million asset management agreement that have been signed with certain international investor groups. The Company recognizes the importance of closing of one or more of these and other financing agreements as the catalyst for executing its overall business plan. The Company did not generate any revenue during the quarter ended September 30, 2023 as compared to $25,000 in revenues from consulting services for the quarter ended September 30, 2022.
Total Operating Expenses:
Total operating expenses were $245,731 and $286,804 for the three months ended September 30, 2023, and 2022, respectively. The decrease of $41,073 in total operating expenses between the two periods was mainly due to a decrease of $37,500 in salaries, a decrease of $32,061 in professional services and an increase of $28,488 in general and administrative expenses between the two periods.
Loss from Operations:
Loss from operations for the quarter ended September 30, 2023 was $245,731, as compared to loss from operations of as $261,804 for the corresponding period ended September 30, 2022. The decrease of $16,073 in the loss from operations between the two periods was mainly due to a decrease of $41,073 in total operating expenses as mentioned above and the presence of consulting revenue of $25,000 for the period ended September 30, 2022.
Other Income and Expenses:
The Company had a net other expenses of $2,744,173 for the three months ended September 30, 2023, as compared to net other expenses of $$1,559,209 for the three months ended September 30, 2022. The increase in other expenses of $1,184,964 between the two periods was mainly due to an increase of $1,44,068 in other expenses due to the incurrences of $475,500 in extension fees, $419,647 in financing costs and $1,756,320 in loss from warrant exercises by a lender, offset by a decrease of $259,456 in interest expenses.
Net Income (Loss):
Net loss for the three months ended September 30, 2023 was $2,989,904, as compared to net loss of $$1,821,013 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 September 30, 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 balances were $3,778 and $13,926 as of September 30, 2023 and September 30, 2021, respectively.
Net cash used in the Company’s operating activities during the three months ended September 30, 2023 was $622,470, as compared to net cash used in operating activities of $407,228 during the corresponding period ended September 30, 2022. This represents an increase of $215,242 in net cash used in operating activities between the two periods. The underlying reasons for the variance were primarily due to an increase of $1,168,891 in loss from operations, net decrease in non-cash stock issuances of $278,710, a variance in derivative liability of $613,309, a decrease in deferred financing costs of $185,965 and a total increase in accounts payable and accrued expenses of $442,399 between the two periods.
There was no net cash provided by or used in investing activities during the three months ended September 30, 2023 or in the corresponding period ended September 30, 2022.
Cash provided by financing activities was $606,483 for the three months ended September 30, 2023, as compared to cash provided by financing activities in the amount of $353,258 for the same period ended September 30, 2022. The primary underlying reasons for an increase of $253,225 in cash provided by financing activities between the two corresponding periods were primarily due to a decrease in loans and notes payable in the amount of $483,878, an increase in loans from officers of $16,041 and an increase in Common Stock to be issued of $721,062.
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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 close the seven active agreements for loan financing, asset management, partnership, joint venture, and memorandum of understanding with international investor groups for a total of 4.99 billion U.S. dollars, advance the Philux Global Select Growth Fund under Philux Global Funds SCA, SICAV-RAIF, develop the Asia Diamond Exchange in Vietnam in conjunction with International Financial Center, commercialize the self-sustainable energy technologies with Dr. Tri Viet Do and SSE Global Group, Inc., develop international trade between Vietnam and Africa, implement the business cooperation agreement with Saphia Alkali JSC, as well as consummate and integrate some acquisitions and invest in targets that should add critical mass to the Company. In addition, 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.
MATERIAL CASH REQUIREMENTS: We must raise substantial amounts of capital to fulfill our plans for Philux Global Funds and for acquisitions. Besides the seven financing agreements mentioned above, 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 management fees, operations, sale of marketable securities and additional financing. The Company plans to generate revenues from its consulting services, merger and acquisition advisory services, and acquisitions of target companies with cash flows.
AVAILABLE FUTURE FINANCING ARRANGEMENTS: The Company may use various sources of funds, including investment management agreements, short-term loans, long-term debt, equity capital, and project financing as may be necessary. The Company believes it will be able to secure the required capital to implement its business plan.
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.
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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 September 30, 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, | |
| - | 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 September 30, 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 September 30, 2023.
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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 September 30, 2023 are fairly stated, in all material respects, in accordance with US GAAP.
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 September 30, 2023 that have materially affected, or are likely to materially affect, the Company’s internal control over financial reporting.
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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.
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.
| 13 |
Risks associated with private equity (PE) funds
There are, broadly, five key risks to private equity investing:
1. Operational risk: The risk of loss resulting from inadequate processes and systems supporting the organization. It is a key consideration for investors regardless of the asset classes that funds invest into.
2. Funding risk: This is the risk that investors are not able to provide their capital commitments and is effectively the ‘investor default risk’. PE funds typically do not call upon all the committed investor capital and only draw capital once they have identified investments. Funding risk is closely related to liquidity risk, as when investors are faced with a funding shortfall, they may be forced to sell illiquid assets to meet their commitments.
3. Liquidity risk: This refers to an investor’s inability to redeem their investment at any given time. PE investors are ‘locked-in’ for between five and ten years, or more, and are unable to redeem their committed capital on request during that period. Additionally, given the lack of an active market for the underlying investments, it is difficult to estimate when the investment can be realized and at what valuation.
4. Market risk: There are many forms of market risk affecting PE investments, such as broad equity market exposure, geographical/sector exposure, foreign exchange, commodity prices, and interest rates. Unlike in public markets where prices fluctuate constantly and are marked-to-market, PE investments are subject to infrequent valuations and are typically valued quarterly and with some element of subjectivity inherent in the assessment. However, the market prices of publicly listed equities at the time of sale of a portfolio company will ultimately impact realization value.
5. Capital risk: The capital at risk is equal to the net asset value of the unrealized portfolio plus the future undrawn commitments. In theory, there is a risk that all portfolio companies could experience a decline in their current value, and in the worst-case drop to a valuation of zero. Capital risk is closely related to market risk. Whilst market risk is the uncertainty associated with unrealized gains or losses, capital risk is the possibility of having a realized loss of the original capital at the end of a fund’s life.
There are two main ways that capital risk brings itself to bear - through the failure of underlying companies within the PE portfolio and suppressed equity prices which make exits less attractive. The former is impacted by the quality of the fund manager, i.e. their ability to select portfolio companies with good growth prospects and to create value, hence why fund manager selection is key for investors. The condition, method, and timing of the exit are all factors that can affect how value can be created for investors.
Risks Associated with Building and Operating a Diamond Exchange
Fundamentally, the key requirements for a successful diamond exchange include the following:
1. Supply: One of the most important things for a successful trading hub is the ability to secure ample, stable, and sustainable supply of commodities. In the case of a diamond exchange, adequate supply of rough diamond must be secured to make it successful.
2. Capital: Besides the infrastructure, facilities, systems, and amenities to operate the diamond exchange, the organizers must be able to arrange very large amounts of capital to facilitate the trade and other business activities related to the exchange.
3. Participants: The organizers must be able to attract a large number of international diamonteers to participate in the exchange. There is no guarantee that people will come when the exchange is built.
4. Venue: The venue must be able to provide competitive advantages compared with existing diamond exchanges in the world in terms of (a) modern facilities, latest technologies and state-of-the-art provisions, (b) tax relief, (c) financial facilitating network from big investors, (d) retail banking, lending institutions and foreign exchange facilities, (e) licenses and registrations, (f) global multi-commodities trading flatform, and (g) other amenities.
| 14 |
Risks Associated with International Markets
As some of our business activities are currently involved with international markets, any adverse change to the economy or business environment in these countries could significantly affect our operations, which would lead to lower revenues and reduced profitability.
Some of our business activities are currently involved with non-US countries. Because of this presence in specific geographic locations, we are susceptible to fluctuations in our business caused by adverse economic or other conditions in this region, including stock market fluctuation. A stagnant or depressed economy in these countries generally, or in any of the other markets that we serve, could adversely affect our business, results of operations and financial condition.
Risks Related to Our Securities
Insiders have substantial control over the company, and they could delay or prevent a change in our corporate control, even if our other stockholders wanted such a change to occur.
Though our executive officers and directors as of the date of this report, in the aggregate, only hold a small portion of our outstanding common stock, we have the majority voting rights associated with the Company’s Class B Series I Preferred Stock, which decision may allow the Board of Directors to exercise significant control over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This could delay or prevent an outside party from acquiring or merging with us even if our other stockholders wanted it to occur.
The price at which investors purchase our common stock may not be indicative of the prevailing market price.
The stock market often experiences significant price fluctuations that are unrelated to the operating performance of the specific companies whose stock is traded. These market fluctuations could adversely affect the trading price of our shares. Investors may be unable to sell their shares of common stock at or above their purchase price, which may result in substantial losses.
Since we do not currently meet the requirements for our stock to be quoted on NASDAQ, NYSE MKT LLC or any other senior exchange, the tradability in our securities will be limited under the penny stock regulations.
Under the rules of the Securities and Exchange Commission, as the price of our securities on the OTCQB or OTC Markets is below $5.00 per share, our securities are within the definition of a “penny stock.” As a result, it is possible that our securities may be subject to the “penny stock” rules and regulations. Broker-dealers who sell penny stocks to certain types of investors are required to comply with the Commission’s regulations concerning the transfer of penny stock. These regulations require broker-dealers to:
*Make a suitability determination prior to selling penny stock to the purchaser;
*Receive the purchaser’s written consent to the transaction; and
*Provide certain written disclosures to the purchaser.
These requirements may restrict the ability of broker/dealers to sell our securities, and may affect the ability to resell our securities.
Our compliance with the Sarbanes-Oxley Act and SEC rules concerning internal controls may be time consuming, difficult and costly for us.
It may be time consuming, difficult and costly for us to develop and implement the internal controls and reporting procedures required by the Sarbanes-Oxley Act. We may need to hire additional financial reporting, internal controls and other finance staff in order to develop and implement appropriate internal controls and reporting procedures. If we are unable to comply with the internal controls requirements of the Sarbanes-Oxley Act, we may not be able to obtain the independent accountant certifications that the Sarbanes-Oxley Act requires publicly traded companies to obtain.
| 15 |
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: | November 20, 2023 | By: | /s/ Henry D. Fahman |
| Henry D. Fahman | |||
| President and Chief Executive Officer | |||
| (Principal Executive Officer) | |||
| Date: | November 20, 2023 | By: | /s/ Henry D. Fahman |
| Henry D. Fahman | |||
| Acting Chief Financial Officer | |||
| (Principal Financial and Accounting Officer) | |||
| 17 |
Exhibit No. 21.1
SUBSIDIARIES OF REGISTRANT
As of November 20, 2013, the Company has the following subsidiaries:
1.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.
2. American Pacific Resources, Inc., a Wyoming corporation
Percentage of ownership: 100%
Business activity: holding company for mineral and natural resources business (inactive).
3. Empire Spirits, Inc., a Nevada corporation
Percentage of ownership (to be determined).
Business activity: manufacturing and sale of American-made baijiu.
4. Philux Global Funds SCA, SICAV-RAIF, a Luxembourg corporation
Percentage of ownership: 100%
Business activity: Luxembourg bank master fund.
5. 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.
6. 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.
7. Philux Global General Partner SA, a Luxembourg corporation
Percentage of ownership: 100%
Business activity: holding management shares in PHILUX Global Funds.
8. Philux Capital Advisors, Inc., a Wyoming corporation
Percentage of ownership: 100%
Business activity: M&A consulting services.
9. Philux Global Advisors, Inc., a Wyoming corporation.
Percentage of ownership: 100%
Business activity: Investment advisory services (startup)
10. Philux Global Healthcare, Inc., a Wyoming corporation
Percentage of ownership: 100%
Business activity: medical and healthcare business (startup).
11. Philux Global Trade Inc., a Wyoming corporation
Percentage of ownership: 100%
Business activity: international trade.
12. Philux Global Energy Inc., a Wyoming corporation
Percentage of ownership: 100%
Business activity: holding company for prospective energy portfolio.
13. Philux Global Vietnam Investment & Development Co., Ltd., a Vietnamese limited liability company
Percentage of ownership: 100%
Business activity: direct investments, consulting services.
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 September 30, 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 September 30, 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: November 20, 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 September 30, 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 September 30, 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: | November 20, 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 September 30, 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: November 20, 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 September 30, 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: November 20, 2023
| By: | /s/ Henry D. Fahman | |
| Henry D. Fahman | ||
| Acting Chief Financial Officer |
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 12 Months Ended |
|---|---|---|
Sep. 30, 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 | 42,705,215,171 | 39,414,493 |
| Common stock, shares outstanding | 42,705,215,171 | 39,414,493 |
| 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 | |
|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Net revenues | ||
| Consulting, advisory and management services | $ 25,000 | |
| Total revenues | 25,000 | |
| Operating expenses: | ||
| Salaries and wages | 52,500 | 90,000 |
| Professional services, including non-cash compensation | 151,854 | 183,915 |
| General and administrative | 41,377 | 12,889 |
| Total operating expenses | 245,731 | 286,804 |
| Income (loss) from operations | (245,731) | (261,804) |
| Other income and expenses | ||
| Other income | 18 | 370 |
| Interest expense | (43,677) | (303,133) |
| Other expenses | (2,700,514) | (1,256,446) |
| Net other income (expenses) | (2,744,173) | (1,559,209) |
| Net income (loss) | $ (2,989,904) | $ (1,821,013) |
| Net loss per share: | ||
| Basic | $ (0.00) | $ (0.00) |
| Diluted | $ (0.00) | $ (0.00) |
| Weighted average number of shares outstanding: | ||
| Basic | 41,055,882,399 | 32,373,704,704 |
| Diluted | 41,055,882,399 | 32,373,704,704 |
NATURE OF BUSINESS |
3 Months Ended |
|---|---|
Sep. 30, 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 renewable energy, real estate, infrastructure, healthcare, agriculture, and the Asia Diamond Exchange in conjunction with the International Financial Center in Vietnam.
BACKGROUND
Originally incorporated on June 8, 1982 as JR Consulting, Inc., a Nevada corporation, the Company applied for a Certificate of Domestication and filed Articles of Domestication to become a Wyoming corporation on September 20, 2017. In the beginning, the Company was foremost engaged in mergers and acquisitions and had an operating subsidiary, Diva Entertainment, Inc., which operated two modeling agencies, one in New York and one in California. In January 2000, the Company changed its name to Providential Securities, Inc., a Nevada corporation, following a business combination with Providential Securities, Inc., a California-based financial services company. In February 2000, the Company then changed its name to Providential Holdings, Inc. In October 2000, Providential Securities withdrew its securities brokerage membership and ceased its financial services business. Subsequently, in April 2009, the Company changed its name to PHI Group, Inc. From October 2000 to October 2011, the Company and its subsidiaries were engaged in various transactions in connection with mergers and acquisitions advisory and consulting services, real estate and hospitality development, mining, oil and gas, telecommunications, technology, healthcare, private equity, and special situations. In October 2011, the Company discontinued the operations of Providential Vietnam Ltd., Philand Ranch Limited, a United Kingdom corporation (together with its subsidiaries Philand Ranch - Singapore, Philand Corporation - US, and Philand Vietnam Ltd. - Vietnam), PHI Gold Corporation (formerly PHI Mining Corporation, a Nevada corporation), and PHI Energy Corporation (a Nevada corporation), and mainly focused on acquisition and development opportunities in energy and natural resource businesses.
The Company is currently 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 International Financial Center and Asia Diamond Exchange in Vietnam. In addition, Philux Capital Advisors, Inc., a wholly owned subsidiary of the Company, continues to provide corporate and project finance services, including merger and acquisition (M&A) advisory and consulting services for U.S. and international companies. The Company has also formed Philux Global Advisors, Inc. to serve as the investment advisor to Philux Global Funds and other potential fund clients in the future.
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), and Tin Thanh Group, a Vietnamese joint stock company (www.tinthanhgroup.vn) (“TTG”). 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 with each of them when the Company successfully closes one or more of the pending asset management agreements and financing with certain investor groups and lenders.
The Company intends to amend 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.
In February 2023, the Company signed a comprehensive business cooperation agreement with Dr. Tri Viet Do, a German-trained electromagnetic energy and quantum physics expert, to jointly develop and commercialize a number of key products using proprietary intellectual properties by him, with initial focus on clean energy generation and transportation.
In addition, in May 2023, the company signed a business cooperation agreement with SSE Global JSC, a Vietnamese joint stock company, to establish SSE Global Group, Inc., a Wyoming corporation, (www.sseglobalgroup.com) to commercialize a self-sustainable energy technology. The Company intends to integrate Dr. Tri Viet Do’s and SSE Global Group, Inc.’s technologies in the new subsidiary to be established in United Arab Emirates which will replace its former subsidiary CO2-1-0 (CARBON) Corp. to continue engaging in carbon emission mitigation using blockchain and crypto technologies.
Moreover, in June 2023 the Company signed a business cooperation agreement with Saphia Alkali JSC, a Vietnamese joint stock company, to form Sapphire Alkali Global Group in the United States to finance, manufacture, sell and distribute Saphia Alkali’s proprietary products on a worldwide basis.
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 |
3 Months Ended |
|---|---|
Sep. 30, 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) Philux Global Advisors, Inc., a Wyoming corporation (100%), (3) PHI Luxembourg Development S.A., a Luxembourg corporation (100%), (4) Philux Global Funds SCA, SICAV-RAIF, a Luxembourg Reserved Alternative Investment Fund (100%), (5) Philux Global General Partners SA, a Luxembourg corporation (100%), and (6) PHI Luxembourg Holding SA, a Luxembourg corporation (100%), 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, 2023. 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 months ended September 30, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2024.
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 September 30, 2023, the marketable securities were recorded at $5 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 September 30, 202â, 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 September 30, 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, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020. The Company intends to adopt ASU 2020-06 for the quarter beginning January 1, 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 September 30, 2023 consisted of shares of Mag Mile Capital Inc., formerly Myson Group, Inc., which is quoted on the OTC Markets (Trading symbols “MMCP”). The fair value of the shares recorded as of September 30, 2023 was $5.
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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 September 30, 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 as of September 30, 2023 and June 30, 2023 comprise of:
For the investments in PHILUX Global Funds, as of September 30, 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 $32,598 as of September 30, 2023 based on the prevalent exchange rate at that time.
The Company has treated all development costs of the Asia Diamond Exchange as expenses which will be capitalized as common shares in Asia Diamond Exchange, Inc., a Wyoming corporation.
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CURRENT LIABILITIES |
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| Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CURRENT LIABILITIES | NOTE 6 – CURRENT LIABILITIES
Current Liabilities of the Company consist of the followings as of September 30, 2023 and June 30, 2023.
ACCRUED EXPENSES: Accrued expenses as of September 30, 2023 totaling $2,048,642 consist of $1,080,595 in accrued salaries and payroll liabilities, $371,158 in accrued interest from notes and loans, $3,764 from American Express and $593,125 in other accrued expenses due to administrative and extension fees from short-term notes.
NOTES PAYABLE: As of September 30, 2023, Notes Payable consist of $1,490,198 in short-term loans and notes payable, $43,750 in PPP loan, $218,167 in convertible promissory notes and $138,437 in Merchant Cash Advance loans.
ADVANCES FROM CUSTOMERS AND DEPOSITS FROM CLIENTS:
As of September 30, 2023, the Company recorded $819,038 as Advances from Customers for consulting fees previously received from a client plus mutually agreed accrued interest and $260,000 of retainer deposits from two other clients for project financing agreements.
SUB-FUND OBILGATIONS: The Company has recorded a total of $1,624,775 from four partners/investors towards the expenses 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.
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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 September 30, 2023 and June 30, 2023, the balances were $339,141 and $1,027,782, respectively. Following the resignation of Tam Bui, $663,350 owed to him that was previously recognized as Due to Officers was reclassified as a regular note.
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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.
As of September 30, 2023, the Company had a total of $1,490,198 in short-term notes payable with $$371,158 in accrued and unpaid interest, $593,125 in accrued administrative and extension fees, $43,750 SBA PPP loan with $1,493 in accrued and unpaid interest and $138,437 in merchant cash advances. The interest rates on these notes vary.
B. CONVERTIBLE PROMISSORY NOTES OUTSTANDING AS OF SEPTEMBER 30, 2023
As of September 30, 2023, the Company had a net balance of $218,167 in convertible promissory notes.
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BASIC AND DILUTED NET PROFIT (LOSS) PER SHARE |
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| 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 September 30, 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 10 – STOCKHOLDER’S EQUITY
As of September 30, 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 September 30, 2023 was shares valued at $44,170 according to cost method.
COMMON STOCK
During the quarter ended September 30, 2023, the Company issued a total of 3,290,721,896 shares of its Common Stock for conversion of convertible promissory notes and exercise of warrants.
As of September 30, 2023, there were shares of the Company’s common stock issued and outstanding.
PREFERRED STOCK
CLASS B SERIES I PREFERRED STOCK
As of September 30, 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, 2023 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:
These stock options expired on 9/23/2023.
3. On September 9, 2021, the Company adopted the PHI Group 2021 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, 2021, 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 September 30, 2023 the Company has issued a total of shares for consulting services and salaries under the PHI Group 2021 Employee Benefit Plan.
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RELATED PARTY TRANSACTIONS |
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| RELATED PARTY TRANSACTIONS | NOTE 12– RELATED PARTY TRANSACTIONS
The Company recognized a total of $52,500 in salaries for the President and the Secretary & Treasurer of the Company during the quarter ended September 30, 2023.
Henry Fahman, Chairman and Chief Executive Officer of the Company from time to time lend smoney to the Company. These loans are without interest and payable upon demand.
As of September 30, 2023, the Company still owed the following amounts to Related Parties:
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CONTRACTS AND COMMITMENTS |
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| Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||
| CONTRACTS AND COMMITMENTS | NOTE 13 – CONTRACTS AND COMMITMENTS
1. EQUITY LINE OF CREDIT WITH INSTITUTIONAL INVESTOR
On March 01, 2022, the Company entered into an equity purchase agreement with Mast Hill Fund LP (“The Investor”) as follows:
The Investor will provide an equity line of up to $10,000,000 to the Company, pursuant to which the Company has the right, but not the obligation, during the 24 months after an effective registration of the underlying shares, to issue a notice to the Investor (each a “Drawdown Notice”) which shall specify the amount of registered shares of common stock of the Company (the “Put Shares”) that the Company elects to sell to the Investor, from time to time, up to an aggregate amount equal to $10,000,000.
The pricing period of each put will be the 7 trading days immediately following receipt of the Put Shares (the “Pricing Period”).
The purchase price per share shall mean 90% of the average of the 2 lowest volume-weighted average prices of the Common Stock during the Pricing Period, less clearing fees, brokerage fees, other legal, and transfer agent fees incurred in the deposit (the “Net Purchase Amount”). The Investor shall pay the Net Purchase Amount to the Company by wire for each Drawdown Notice within 2 business days of the end of the Pricing Period.
The put amount in each Drawdown Notice shall not be less than $50,000 and shall not exceed the lesser of (i) $500,000 or (ii) 200% of the average dollar trading volume of the Common Stock during the 7 trading days immediately before the Put Date, subject to Beneficial Ownership cap.
There shall be a 7 trading day period between the receipt of the Put Shares and the next put.
The Company intends to file an S-1 Registration Statement with the Securities and Exchange Commission for this Equity Line of Credit as part of its alternative financing plan.
2. 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 June 30, 2023, Tecco Group has paid a total of $156,366.25 towards the total agreed amount.
3. INVESTMENT AGREEMENTS AND MEMORANDUM OF UNDERSTANDING
As of September 30, 2023, the Company and its subsidiaries have seven active agreements for loan financing, asset management, partnership, joint venture, and memorandum of understanding with international investor groups for a total of 4.99 billion U.S. dollars, as reported in various 8-K filings with the Securities and Exchange Commission. The Company has been working closely with these investor groups and expects to begin receiving capital through these sources in the near future to support its acquisition and investment programs.
4. DEVELOPMENT OF THE ASIA DIAMOND EXCHANGE AND INTERNATIONAL FINANCIAL CENTER IN VIETNAM
Along with the establishment of Philux Global Funds, the Company has worked with the Authority of Chu Lai Open Economic Zone in Central Vietnam and the Provinces of Quang Nam and Dong Nai, Vietnam, to develop the Asia Diamond Exchange for lab-grown, rough and polished diamond together with a multi-commodities logistics center.
Mr. Ben Smet, who successfully established the Dubai Diamond Exchange in 2002-2005, has been leading fulltime a group of experts for the setup of the Asian Diamond Exchange since January 2018. He has brought together the 11 main trading players in the rough diamond industry to come to Vietnam. He has established a partnership with the biggest player in the rough trading and polishing group, the Mehta Family Group. Other main international diamond trading groups as the Mody Group, Diamac etc. have joined the overall venture.
Furthermore, together with the groups, a full Kimberly Process Certification Scheme (KPC) to prevent ‘conflicting diamond’ trading was established and is aligned from time to time. Also, the new lab grown diamond KPC scheduling is already implemented. A unique and KPC approved structure has been established where under the PHI Vietnam umbrella, in collaboration with KPC Mum- bai (India), a ‘Public-Private-Partnership (PPP)’ is established in which the Vietnamese authorities hold 15% and PHI (or its local corporate entity) holds 85% of the voting rights. For the lab grown diamond segment, this will be in the Chu Lai Free Economic Zone and for the Rough and Polished Diamond Parcel Trade, this is being planned to be on Thanh Da Island, about 5 kilometers from the center of Ho Chi Minh City, Vietnam.
The Company has taken the decision to move the greater part of the ADE rough and polishing venture, first to an Industrial Zone to be established close to the new international Airport in Long Thanh District, Dong Nai Province, Vietnam and this year to the Thanh Da Island. This location change has caused that the entire KPC Process and administration had to be adapted and redone with renewed financial input, mostly carried by Mr. Smet.
A rough diamond trading export flow to Vietnam was negotiated and concluded by Mr. Smet with the DMCC and Dubai Diamond Exchange. This year, an international diamond trading platform was created by Mr. Smet to unify the trading efforts of Alrosa and De Beers/Bonas. Mr. Smet was advised and counselled thereto by Mr. A. Mehta, the senior board member of the Alrosa Group. Together with Mr. A. Mehta, Mr. Smet has also covered the financial backbone of the diamond trading venture via the setup of a financial institution in Botswana. It is the intention of Mr. Smet to donate 50% of his own voting shares of the institution to PHI the moment all budgets for the venture are arranged by PHI and all financial obligations and reimbursements by PHI to him are met. It is the intention of the parties involved to establish a subsidiary of the financial institution in the ADE Vietnam and have local banking partners join this initiative.
Mr. Smet had also established a collaboration partnership with the Antwerp Diamond Exchange (Belgium), the Dubai Diamond Exchange and the Tel-Aviv Diamond Exchange. Negotiations have started to involve a new economic free-zone in Jordan into the ongoing project.
Recently, Mr. Smet has started a structuring project, in order for PHI to set up and establish an International Financial Center on the Thanh Da Island in connection with the Asian Diamond Exchange. This will be similar as what Mr. Smet has established successfully for Dubai in 2002-2005 and is now incorporating the international changes of the last decade.
Once the Company has effectuated all budgeting and all financial requirements and obligations, the ongoing process will effectively materialize and Mr. Smet then shall transfer the entire venture to Philux Global Group, Inc.
On June 04, 2022 the Company incorporated Asia Diamond Exchange, Inc., a Wyoming corporation, ID number 2022-001010234, as the holding company for this venture.
5. 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.
6. CONVERTIBLE PROMISSORY NOTE WITH 1800 DIAGONAL LENDING LLC.
On June 1, 2023, the Company issued a Convertible Promissory Note to 1800 Diagonal Lending LLC, a Virginia limited liability company, for $52,805.00, with a one-time interest charge of seventeen percent (17%) to be applied on the issuance date to the principal amount. 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”). Accrued, unpaid Interest and outstanding principal, subject to adjustment, shall be paid in eight (8) payments with the first six (6) payments each in the amount of $9,256.17; and the final two (2) payments each in the amount of $2,000.00 (a total payback to the Holder of $59,537.00). At any time following an Event of Default, the Holder shall have the right, to convert all or any part of the outstanding and unpaid amount of this Note into fully paid and non-assessable shares of Common Stock at the conversion price equal to 58% multiplied by the lowest trading price for the Common Stock during the twenty (20) Trading Days prior to the conversion date. As of November 10, 2023, the Company paid off this note in full.
7. 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.
As of the date of this report, Dr. Do has successfully designed and set up a prototype for power generation and intends to file a patent before commercializing this product.
8. Investment Commitment AgreementS 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 financing commitments from certain international institutional and ultra-high net worth investors for investment in Saigon Silicon City.
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.
On June 05, 2023, Philux Global Vietnam Investment and Development Co. Ltd., a subsidiary of Philux Global Group Inc. (f/k/a PHI Group, Inc.), and Saigon Silicon City JSC signed an Agreement to terminate the Investment Commitment Agreement previously entered into by the two parties on February 21, 2023 in its entirety.
On June 05, 2023 Philux Global Group Inc. (a/k/a PHI Group, Inc.) (the “Investor”/”Provider”) signed an Investment Commitment Agreement with Saigon Silicon City Joint Stock Company (the “Company”) whereby the Investor/Provider is committed to providing or causing to be provided up to one and half billion U.S. dollars (USD 1,500,000,000) as may be 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, upon the signing of this Agreement, the Company shall make a deposit of Five Hundred Thousand U.S. Dollars (USD ) with the Investor/Provider 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/Provider fails to fulfill its commitment as mentioned in the Agreement
Within thirty days after the deposit of at least two hundred thousand U.S. dollars (USD 200,000) of the refundable earnest money as mentioned above, the Investor/Provider will provide or cause to be provided fifty million U.S. dollars (USD ) for the Company to resume the implementation of its building plan. Additional tranches of funds 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. The Investor/Provider intends to use a portion of the financing commitments from certain international institutional and ultra-high net worth investors for investment in Saigon Silicon City.
The foregoing description of the Investment Commitment Agreement by and between Philux Global Group Inc. and Saigon Silicon City JSC dated June 5, 2023 is qualified in its entirety by reference to the full text of said Agreement, which is filed as Exhibit 10.1 to the Current Report on Form 8-K on June 13, 2023.
The Company intends to use part of the capital from the financing and asset management agreements to invest in Saigon Silicon City.
9. PURCHASE AND SALE AGREEMENT WITH JINSHAN LTD. CO.
On June 27, 2023, Premier Enterprises Group Inc., a Wyoming corporation and subsidiary of PHI Group, Inc. (/n/k/a Philux Global Group Inc.), (the “Registrant”) entered into an Agreement of Purchase and Sale with Jinshan Limited Liability Company, a limited liability company organized and existing by virtue of the laws of Socialist Republic of Vietnam, with principal business address at 37 Road No. 4, Do Thanh Housing Complex, Ward 4, District 3, Ho Chi Minh City, Vietnam, hereinafter referred to as “JSH,” the Majority Member(s) of JSH, hereinafter referred to as the “Majority Member(s),” (both JSH and the Majority Member(s) are referred to as the “Seller”), to acquire fifty-one percent (51%) of equity ownership in JSH for a purchase price to be determined as follows:
The value of JSH’s fifty-one percent (51%) equity ownership as at the date of signing this contract shall be (a) provisionally calculated as Five Million One Hundred Ninety Four Thousand Seven Hundred Fourteen United States Dollars (US$5,194,714), which is equivalent to fifty-one percent (51%) of twice the equity of JSH according to the audit report of JSH issued by Viet Dragon Auditing and Consulting Co., Ltd. made for the year ended December 31, 2022, based on the exchange rate of foreign currency transfer by Eximbank Vietnam as at the end of June 26, 2023, (b) or an amount equivalent to fifty-one percent (51%) of the value of JSH independently valued by a qualified professional valuation firm mutually acceptable on or before the Closing Date of this transaction, whichever is greater, (c) or a number of shares of PEG with a market value of twice the greater amount between the two cases above, based on the average ten-day closing price of PEG shares in the U.S. Stock Market immediately prior to the Closing date after PEG has become a publicly traded company in the U.S. for at least one month, according to the final agreement between the Parties prior to or on the Closing date.
The Closing of this transaction is subject to PEG’s being listed and traded on a U.S. stock exchange at least one month prior to the Closing date.
The foregoing description of the Agreement of Purchase and Sale dated June 27, 2023 among Premier Enterprises Group Inc., a subsidiary of PHI Group, Inc., Jinshan Limited Liability Company and the Majority Member(s) of JSH is qualified in its entirety by reference to the full text of said Agreement, which was filed as Exhibit 10.1 to the Form 8-K on June 28, 2023.
10. BUSINESS COOPERATION AGREEMENT WITH SSE GLOBAL JSC
In May 2023, the Company signed a Business Cooperation Agreement with SSE Group JSC, a Vietnamese joint stock company, to jointly cooperate in the areas of energy efficiency and mitigation of global greenhouse gas (GHG) emissions by using SSE Group’s proprietary technologies.
According to the agreement, SSE Group JSC and Philux Global Group Inc. have incorporated “SSE Global Group Inc.,” a Wyoming corporation, Registration ID 2023-00127, (www.sseglobalgroup.com) to apply SSE Group’s breakthrough technologies for the energy industry, especially to improve fuel efficiency and mitigate global GHG emissions.
Global GHG emissions have been steadily increasing over the years, primarily due to human activities such as burning fossil fuels, deforestation, industrial processes, and agriculture. Carbon dioxide (CO2) is the most significant GHG, accounting for the majority of emissions. The main sectors contributing to GHG emissions are energy production, transportation, industry, agriculture, and land use change. Emerging economies, such as China and India, have witnessed significant increases in emissions due to rapid industrialization and urbanization. Rising GHG emissions lead to the greenhouse effect, causing global warming and climate change. This phenomenon contributes to various environmental and socio-economic challenges, including extreme weather events, sea-level rise, disrupted ecosystems, and threats to human health and food security.
SSE Group’s proprietary technologies are a self-sustaining energy system created by absolute interactions with the air condition of the atmosphere. Test results have shown that this system can enhance and extend the burning time of traditional fuels such as gasoline, diesel and coal by 50% or more and eliminate toxic emissions surpassing Euro6 standards of harmful exhaust. It also cleans the carbon in the internal combustion engine and stabilizes the burning temperature of the engine chamber for optimal performance. For use in vehicles, the installation is fast and inexpensive and does not require any additional power supply or batteries. SSE Global Group intends to launch products for internal combustion engines and fossil fuel power plants to save input fuels and eliminate toxic emissions.
11. BUSINESS COOPERATION AGREEMENT WITH SAPHIA ALKALI JOINT STOCK COMPANY
On June 27, 2023, SAPHIA ALKALI JOINT STOCK COMPANY, a Vietnamese joint stock company with principal business address at No 27, Sub-alley 1, Alley 104, Viet Hung Street, Viet Hung Ward, Long Bien District, Hanoi City, Vietnam, represented by Mrs. Nguyen Phuong Dung, its Chairperson, hereinafter referred to as “SAP,” and PHI GROUP INC. (/n/k/a PHILUX GLOBAL GROUP INC, hereinafter referred to as “PGG,” signed a Business Cooperation Agreement and agreed to undertake the followings:
- SAP and PGG agree to jointly cooperate primarily in the areas of alkali technologies as well as any other business that may be considered mutually beneficial.
- Specifically, SAP and PGG will initially focus on forming a company in the United States (“NewCo”) to finance, manufacture, sell and distribute SAP’s proprietary alkali products on a worldwide basis, except Vietnam and certain territories that are handled directly by SAP.
- SAP will initially make available and transfer certain technologies as may be needed to NewCo to serve the needs of this Business Cooperation Agreement.
- The relationship established between SAP and PGG by this Agreement shall be exclusive with respect to the areas of SAP’s proprietary technologies outside of Vietnam.
- The Parties shall agree on the roles, responsibilities and benefits of each party in connection with NewCo or other particular business undertakings, which shall be detailed in a separate definitive agreement.
- In particular, PGG will be responsible for providing or causing to be provided three hundred million U.S. dollars (USD 300,000,000), or more, from time to time to NewCo as may be needed to implement the latter’s business plan in connection with this Business Cooperation Agreement. Hereby, a group of shareholders appointed by PGG will own 40% of NewCo’s equity interest and a group of shareholders appointed by SAP will own 60% of NewCo’s equity interest.
- The parties herein shall determine the capital structure of NewCo in a separate subsequent addendum to this Business Cooperation Agreement.
- The Business Cooperation Agreement shall be effective upon signing and shall terminate in writing by the Parties.
The foregoing description of the Business Cooperation Agreement dated June 27, 2023 between Saphia Alkali Joint Stock Company and Philux Global Group Inc. is qualified in its entirety by reference to the full text of said Agreement, which was filed as Exhibit 10.1 to the Current Report on Form 8-K July 3, 2023.
12. EXTENSION FOR REPURCHASE OF THE COMPANY’S COMMON STOCK
On June 29, 2023, the Company’s Board of Directors passed a corporate resolution to extend the time period for the repurchase of its own shares of common stock from the open market from time to time in accordance with the terms mentioned below and subject to liquidity conditions, satisfaction of certain open contractual obligations and the judgment of the Company’s Board of Directors and Management with respect to optimal use of potentially available funds in the future:
13. DEVELOPMENT OF PHILUX GLOBAL TRADE, INC.
On August 19, 2022, the Company established Philux Global Trade, Inc., a Wyoming corporation, to engage in international trade.
14. COMMON STOCK TO BE ISSUED
As of September 30, 2023, the Company recorded $759,562 as Common Stock to be issued to a number of current shareholders of the Company in connection with stock purchase agreements under Rule 144
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GOING CONCERN UNCERTAINTY |
3 Months Ended |
|---|---|
Sep. 30, 2023 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| GOING CONCERN UNCERTAINTY | NOTE 14 - GOING CONCERN UNCERTAINTY
As shown in the accompanying consolidated financial statements, the Company has accumulated deficit of $as of September 30, 2023 and total stockholders’ deficit of $8,540,992. For the quarter ended September 30, 2023, the Company incurred a net loss of $2,989,904 as compared to a net loss of $1,821,013 during the same period ended September 30, 2023. 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, 2024 and beyond.
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SUBSEQUENT EVENT |
3 Months Ended |
|---|---|
Sep. 30, 2023 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENT | NOTE 15 – SUBSEQUENT EVENT
The financial statements included in this Form 10-Q were approved by management and available for issuance on or about November 20, 2023. Subsequent events have been evaluated through this date.
1. ISSUANCE OF CONVERTIBLE PROMISSORY NOTE
On November 9, 2023, the Company issued a Convertible Promissory Note to 1800 Diagonal Lending LLC, a Virginia limited liability company, for $58,500.00, with a one-time interest charge of seventeen percent (17%) to be applied on the issuance date to the principal amount. 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”). Accrued, unpaid Interest and outstanding principal, subject to adjustment, shall be paid in eight (8) payments with the first six (6) payments each in the amount of $10,326.34; and the final two (2) payments each in the amount of $2,000.00 (a total payback to the Holder of $65,958.00). At any time following an Event of Default, the Holder shall have the right, to convert all or any part of the outstanding and unpaid amount of this Note into fully paid and non-assessable shares of Common Stock at the conversion price equal to 58% multiplied by the lowest trading price for the Common Stock during the twenty (20) Trading Days prior to the conversion date. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
3 Months Ended |
|---|---|
Sep. 30, 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) Philux Global Advisors, Inc., a Wyoming corporation (100%), (3) PHI Luxembourg Development S.A., a Luxembourg corporation (100%), (4) Philux Global Funds SCA, SICAV-RAIF, a Luxembourg Reserved Alternative Investment Fund (100%), (5) Philux Global General Partners SA, a Luxembourg corporation (100%), and (6) PHI Luxembourg Holding SA, a Luxembourg corporation (100%), 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, 2023. 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 months ended September 30, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2024.
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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 September 30, 2023, the marketable securities were recorded at $5 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 September 30, 202â, 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 September 30, 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.
|
| 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.
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| 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, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020. The Company intends to adopt ASU 2020-06 for the quarter beginning January 1, 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) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF FAIR VALUE OF INVESTMENTS MARKETABLE EQUITY SECURITIES |
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OTHER ASSETS (Tables) |
3 Months Ended | |||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||
| Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||
| SCHEDULE OF OTHER ASSETS | Other Assets as of September 30, 2023 and June 30, 2023 comprise of:
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CURRENT LIABILITIES (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF CURRENT LIABILITIES | Current Liabilities of the Company consist of the followings as of September 30, 2023 and June 30, 2023.
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DUE TO OFFICERS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||
| Due To Officers | |||||||||||||||||||||||||||||||||||||
| SCHEDULE OF COMPONENTS OF DUE TO OFFICERS AND DIRECTORS |
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STOCK-BASED COMPENSATION PLAN (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF FAIR VALUE OF STOCK OPTION ASSUMPTIONS |
|
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| 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) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF RELATED PARTIES | As of September 30, 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 ($) |
Sep. 30, 2023 |
Jun. 30, 2023 |
|---|---|---|
| Platform Operator, Crypto-Asset [Line Items] | ||
| Marketable securities | $ 5 | $ 420 |
| 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 | 5 | 420 |
| 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 | |
|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
|
| Marketable Securities [Line Items] | ||
| Marketable securities, fair value | $ 5 | $ 420 |
| Myson Group, Inc., [Member] | OTC Markets [Member] | ||
| Marketable Securities [Line Items] | ||
| Sale of stock | 91 |
SCHEDULE OF OTHER ASSETS (Details) - USD ($) |
Sep. 30, 2023 |
Jun. 30, 2023 |
|---|---|---|
| Investment in PHILUX Global Funds, SCA, SICAV-RAIF | $ 32,598 | $ 32,604 |
| P H I L U X Global Funds [Member] | ||
| Investment in PHILUX Global Funds, SCA, SICAV-RAIF | $ 32,598 | $ 32,604 |
OTHER ASSETS (Details Narrative) |
3 Months Ended | ||
|---|---|---|---|
|
Sep. 30, 2023
USD ($)
|
Mar. 31, 2023
USD ($)
|
Sep. 30, 2023
EUR (€)
shares
|
|
| Shares issued, value | $ | $ 185,000 | ||
| P H I Luxembourg Development S A [Member] | |||
| Ownership interest | 100.00% | ||
| P H I Luxembourg Development S A [Member] | |||
| Number of shares held | shares | 28 | ||
| Value of shares held | € 28,000 | ||
| P H I L U X Global Funds [Member] | |||
| Value of shares held | 1,000 | ||
| Shares issued, value | $ | $ 32,598 | ||
| P H I L U X Global General Partner S A [Member] | |||
| Value of shares held | € 1,000 | ||
SCHEDULE OF CURRENT LIABILITIES (Details) - USD ($) |
Sep. 30, 2023 |
Jun. 30, 2023 |
|---|---|---|
| Payables and Accruals [Abstract] | ||
| Accounts payable | $ 616,075 | $ 616,245 |
| Sub-fund obligations | 1,624,775 | 1,624,775 |
| Accrued expenses | 2,048,642 | 1,485,310 |
| Short-term loans and notes payable | 1,672,386 | 1,164,685 |
| Convertible Promissory Notes | 218,167 | 297,805 |
| Due to officers | 339,141 | 1,027,782 |
| Advances from customers and client deposits | 1,079,038 | 1,079,038 |
| Derivative liabilities and Note Discount | 1,220,576 | 1,220,576 |
| Total Liabilities | $ 8,818,800 | $ 8,516,217 |
CURRENT LIABILITIES (Details Narrative) - USD ($) |
3 Months Ended | |
|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
|
| Accrued expenses | $ 2,048,642 | $ 1,485,310 |
| Accrued salaries and payroll liabilities | 1,080,595 | |
| Accrued interest | 371,158 | |
| Short-term notes payable | 1,490,198 | |
| Short-term loans and notes payable | 1,672,386 | 1,164,685 |
| Convertible notes payable | 218,167 | 297,805 |
| Advances from customers for consulting fees | 819,038 | |
| Deposits | 260,000 | |
| Sub - fund obligations | 1,624,775 | $ 1,624,775 |
| Administrative And Extension Fees [Member] | ||
| Accrued interest | 593,125 | |
| PPP Loan [Member] | ||
| Short-term loans and notes payable | 43,750 | |
| Convertible Promissory Notes [Member] | ||
| Convertible notes payable | 218,167 | |
| Merchant Cash [Member] | ||
| Merchant cash advance loan | 138,437 | |
| American Express [Member] | ||
| Accrued interest | 3,764 | |
| P H I L U X Global Funds [Member] | ||
| Sub - fund obligations | $ 1,624,775 |
SCHEDULE OF COMPONENTS OF DUE TO OFFICERS AND DIRECTORS (Details) - USD ($) |
Sep. 30, 2023 |
Jun. 30, 2023 |
|---|---|---|
| Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
| Total | $ 339,141 | $ 1,027,782 |
| Related Party [Member] | ||
| Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
| Total | 339,141 | 1,027,782 |
| Henry Fahman [Member] | Related Party [Member] | ||
| Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
| Total | 339,141 | 364,432 |
| Tam Bui [Member] | Related Party [Member] | ||
| Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
| Total | $ 0 | $ 663,350 |
DUE TO OFFICERS (Details Narrative) - USD ($) |
Sep. 30, 2023 |
Jun. 30, 2023 |
|---|---|---|
| Defined Benefit Plan Disclosure [Line Items] | ||
| Due to Officers | $ 339,141 | $ 1,027,782 |
| Related Party [Member] | ||
| Defined Benefit Plan Disclosure [Line Items] | ||
| Due to Officers | 339,141 | 1,027,782 |
| Related Party [Member] | Tam Bui [Member] | ||
| Defined Benefit Plan Disclosure [Line Items] | ||
| Due to Officers | $ 0 | $ 663,350 |
LOANS AND PROMISSORY NOTES (Details Narrative) - USD ($) |
3 Months Ended | |
|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
|
| Short-Term Debt [Line Items] | ||
| Short-term notes payable | $ 1,490,198 | |
| Interest payable | 371,158 | |
| Convertible promissory notes | 218,167 | $ 297,805 |
| Short-term Notes Payable [Member] | ||
| Short-Term Debt [Line Items] | ||
| Short-term notes payable | 1,490,198 | |
| Interest payable | 371,158 | |
| Administrative And Extension Fees [Member] | ||
| Short-Term Debt [Line Items] | ||
| Interest payable | 593,125 | |
| S B A Paycheck Protection Program Loan [Member] | ||
| Short-Term Debt [Line Items] | ||
| Interest payable | 1,493 | |
| Notes payable | 43,750 | |
| Merchant cash advance | 138,437 | |
| Convertible Promissory Notes [Member] | ||
| Short-Term Debt [Line Items] | ||
| Convertible promissory notes | $ 218,167 |
STOCKHOLDER’S EQUITY (Details Narrative) - USD ($) |
3 Months Ended | ||
|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 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 | |
| Teasury stock value | $ 44,170 | $ 44,170 | |
| Stock issued for coversion of convertible debts | $ 3,290,721,896 | ||
| Common stock shares issued | 42,705,215,171 | 39,414,493 | |
| Common stock shares outstanding | 42,705,215,171 | 39,414,493 | |
| Treasury Stock, Common [Member] | |||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
| Teasury stock, shares | 484,767 | ||
| 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) |
3 Months Ended |
|---|---|
Sep. 30, 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 | |||
|---|---|---|---|---|
Sep. 09, 2021 |
Sep. 23, 2016 |
Sep. 30, 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 | |||
| 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) |
Sep. 30, 2023
USD ($)
|
|---|---|
| Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
| Accrued salaries | $ 1,080,595 |
| President And Secretary And Treasurer [Member] | |
| Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
| Accrued salaries | $ 52,500 |
GOING CONCERN UNCERTAINTY (Details Narrative) - USD ($) |
3 Months Ended | |||||
|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
Jun. 30, 2022 |
|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
| Total stockholders deficit | $ 8,540,992 | $ 8,222,002 | $ 8,286,628 | $ 6,881,906 | $ 6,543,502 | |
| Net loss | $ 2,989,904 | $ 1,821,013 | ||||