NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE
1 – NATURE OF BUSINESS
PHI
Group, Inc. (n/k/a Philux Global Group Inc) (the “Company” or “PHI”) (www.philuxglobal.com) is primarily
engaged in mergers and acquisitions, advancing PHILUX Global Funds, SCA, SICAV-RAIF, a “Reserved Alternative Investment Fund”
(“RAIF”) under the laws of Luxembourg, and establishing the Asia Diamond Exchange in Vietnam. Besides, the Company provides
corporate finance services, including merger and acquisition advisory and consulting services for client companies through our wholly
owned subsidiary PHILUX Capital Advisors, Inc. (formerly PHI Capital Holdings, Inc.) (www.philuxcapital.com) and invests in selective
industries and special situations aiming to potentially create significant long-term value for our shareholders. PHILUX Global Funds
intends to include a number of sub-funds for investment in select growth opportunities in the areas of agriculture, renewable energy,
real estate, infrastructure, and the Asia Diamond Exchange in Vietnam.
BACKGROUND
Originally
incorporated on June 8, 1982 as JR Consulting, Inc., a Nevada corporation, the Company applied for a Certificate of Domestication and
filed Articles of Domestication to become a Wyoming corporation on September 20, 2017. In the beginning, the Company was foremost engaged
in mergers and acquisitions and had an operating subsidiary, Diva Entertainment, Inc., which operated two modeling agencies, one in New
York and one in California. In January 2000, the Company changed its name to Providential Securities, Inc., a Nevada corporation, following
a business combination with Providential Securities, Inc., a California-based financial services company. In February 2000, the Company
then changed its name to Providential Holdings, Inc. In October 2000, Providential Securities withdrew its securities brokerage membership
and ceased its financial services business. Subsequently, in April 2009, the Company changed its name to PHI Group, Inc. From October
2000 to October 2011, the Company and its subsidiaries were engaged in various transactions in connection with mergers and acquisitions
advisory and consulting services, real estate and hospitality development, mining, oil and gas, telecommunications, technology, healthcare,
private equity, and special situations. In October 2011, the Company discontinued the operations of Providential Vietnam Ltd., Philand
Ranch Limited, a United Kingdom corporation (together with its subsidiaries Philand Ranch - Singapore, Philand Corporation - US, and
Philand Vietnam Ltd. - Vietnam), PHI Gold Corporation (formerly PHI Mining Corporation, a Nevada corporation), and PHI Energy Corporation
(a Nevada corporation), and mainly focused on acquisition and development opportunities in energy and natural resource businesses.
The
Company is currently focused on PHILUX Global Funds, SCA, SICAV-RAIF by launching Philux Global Select Growth Fund and potentially other
sub-funds for investment in real estate, renewable energy, infrastructure, agriculture and healthcare and the Asia Diamond Exchange in
Vietnam. In addition, PHILUX Capital Advisors, Inc. (formerly Capital Holdings, Inc.), a wholly owned subsidiary of the Company, continues
to provide corporate and project finance services, including merger and acquisition (M&A) advisory and consulting services for U.S.
and international companies. The Company has signed agreements to acquire majority equity interests in Kota Construction LLC and Kota
Energy Group LLC which are engaged in solar energy business (https://www.kotasolar.com), Tin Thanh Group, a Vietnamese joint stock
company (www.tinthanhgroup.vn) and Van Phat Dat Joint Stock Company, a Vietnamese joint stock company. In addition, the Company
is in the process of amending the Purchase and Sale Agreement that was originally signed on January 18, 2022 with Five-Grain Treasure
Spirits Co., Ltd., a Chinese baiju distiller, to collaborate in launching American-made baiju products through Empire Spirits, Inc.,
a subsidiary of the Company. The Company will relocate CO2-1-0 (CARBON) Corp., a subsidiary of the Company engaged in carbon emission
mitigation using blockchain and crypto technologies, to the United Arab Emirates. These activities are disclosed in greater detail elsewhere
in this report. No assurances can be made that the Company will be successful in achieving its plans.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES
OF CONSOLIDATION
The
consolidated financial statements include the accounts of (1) PHI Group, Inc., its subsidiaries including (2) PHILUX Global Funds SCA,
SICAV-RAIF, a Luxembourg bank fund designed to hold a number of subfund compartments for investing in various selective industries, (3)
PHI Luxembourg Development S.A., the mother holding company for PHILUX Global Funds, (4) PHI Luxembourg Holding S.A., (5) PHILUX Global
General Partner S.A., (6) Asia Diamond Exchange, Inc., a Wyoming corporation (100%), (7) PHILUX Capital Advisors, Inc., a Wyoming corporation
(100%), and (8) CO2-1-0 (CARBON) Corp., collectively referred to as the “Company.” The other subsidiaries of the Company
were not active during the fiscal year ended June 30, 2022. All significant inter-company transactions have been eliminated in consolidation.
USE
OF ESTIMATES
The
preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
CASH
AND CASH EQUIVALENTS
The
Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible
into cash to be cash equivalents.
MARKETABLE
SECURITIES
The
Company’s securities are classified as available-for-sale and, as such, are carried at fair value. Securities classified as available-for-sale
may be sold in response to changes in interest rates, liquidity needs, and for other purposes.
Each
investment in marketable securities typically represents less than twenty percent (20%) of the outstanding common stock and stock equivalents
of the investee, and each security is quoted on a national exchange or on the OTC Markets. As such, each investment is accounted for
in accordance with the provisions of ASC 320 (previously SFAS No. 115).
Unrealized
holding gains and losses for available-for-sale securities are excluded from earnings and reported as a separate component of stockholder’s
equity. Realized gains and losses for securities classified as available-for-sale are reported in earnings based upon the adjusted cost
of the specific security sold. On June 30, 2022 and 2021 the marketable securities have been recorded at $546 and $385,457, respectively,
based upon the fair value of the marketable securities at that time.
ACCOUNTS
RECEIVABLE
Management
reviews the composition of accounts receivable and analyzes historical bad debts. There was no account receivable or bad debt during
the fiscal ended June 30, 2022.
IMPAIRMENT
OF LONG-LIVED ASSETS
Effective
January 1, 2002, the Company adopted ASC 350 (Previously SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”),
which addresses financial accounting and reporting for the impairment or disposal of long-lived assets and supersedes SFAS No. 121, “Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,” and the accounting and reporting provisions
of APB Opinion No. 30, “Reporting the Results of Operations for a Disposal of a Segment of a Business.” The Company periodically
evaluates the carrying value of long-lived assets to be held and used in accordance with ASC 350. ASC 350 requires impairment losses
to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount
by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined
in a similar manner, except that fair market values are reduced for the cost of disposal.
PROPERTY
AND EQUIPMENT
Property
and equipment are stated at cost. Maintenance and repair costs are charged to expense as incurred; costs of major additions and betterments
are capitalized. When property and equipment are sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated
from the accounts and any resulting gain or loss is reflected in income. Depreciation is computed using the straight-line method over
the estimated useful lives of the assets, ranging from three to ten years.
DEPRECIATION
AND AMORTIZATION
The
cost of property and equipment is depreciated over the estimated useful lives of the related assets. Depreciation and amortization of
fixed assets are computed on a straight-line basis.
NET
EARNINGS (LOSS) PER SHARE
The
Company adopted the provisions of ASC 260 (previously SFAS 128). ASC 260 eliminates the presentation of primary and fully diluted earnings
per share (“EPS”) and requires presentation of basic and diluted EPS. Basic EPS is computed by dividing income (loss) available
to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average
number of shares of common stock outstanding for the period and common stock equivalents outstanding at the end of the period.
The
net earnings (loss) per share is computed as follows:
Schedule
of Net Earnings (Loss) Per Share
| Basic
and diluted loss per share: | |
2022 | | |
2021 | |
| Numerator: | |
| | | |
| | |
| Net
income (loss): | |
$ | (21,154,443 | ) | |
$ | (6,553,178 | ) |
| Denominator: | |
| | | |
| | |
| Basic
weighted average number of common shares outstanding: | |
| 28,448,615,941 | | |
| 17,386,377,288 | |
| Basic
net income per share | |
| - | | |
| - | |
| | |
| | | |
| | |
| Diluted weighted
average number of common shares outstanding: | |
| | | |
| | |
| Diluted
net income (loss) per share: | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
STOCK-BASED
COMPENSATION
Effective
July 1, 2006, the Company adopted ASC 718-10-25 (previously SFAS 123R) and accordingly has adopted the modified prospective application
method. Under this method, ASC 718-10-25 is applied to new awards and to awards modified, repurchased, or cancelled after the effective
date. Additionally, compensation cost for the portion of awards that are outstanding as of the date of adoption for which the requisite
service has not been rendered (such as unvested options) is recognized over a period of time as the remaining requisite services are
rendered.
FAIR
VALUE OF FINANCIAL INSTRUMENTS
Fair
Value - Definition and Hierarchy
Fair
value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether or not the
inputs are observable in the market and the degree that the inputs are observable. The categorization of financial assets and liabilities
within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
A
fair value hierarchy for inputs is used in measuring fair value that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by requiring that the most observable inputs are to be used when available.
Valuation
techniques that are consistent with the market or income approach are used to measure fair value. The fair value hierarchy is categorized
into three levels based on the inputs as follows:
Level
1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability
to access.
Level
2 - Valuations based on inputs other than quoted prices included in Level 1 that are observable, either directly or indirectly.
Level
3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
Fair
value is a market-based measure, based on assumptions of prices and inputs considered from the perspective of a market participant that
are current as of the measurement date, rather than an entity-specific measure. Therefore, even when market assumptions are not readily
available, the Company’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability
at the measurement date. The availability of valuation techniques and observable inputs can vary from investment to investment and are
affected by a wide variety of factors, including; type of investment, whether the investment is new and not yet established in the marketplace,
the liquidity of markets, and other characteristics particular to the transaction.
To
the extent that valuation is based upon models or inputs that are less observable or unobservable in the market, the determination of
fair value requires more judgment. Because of the inherent uncertainty of valuation, those estimated values may be materially higher
or lower than the values that would have been used had a ready market for the investments existed. Accordingly, the degree of judgment
exercised by the Fund in determining fair value is greatest for investments categorized in Level 3. In certain cases, the inputs used
to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy
in which the fair value measurement falls in its entirety is determined based upon the lowest level input that is significant to the
fair value measurement.
Fair
Value - Valuation Techniques and Inputs
The
Company holds and may invest public securities traded on public exchanges or over-the-counter (OTC), private securities, real estate,
convertible securities, interest bearing securities and other types of securities and has adopted specific techniques for their respective
valuations.
Equity
Securities in Public Companies
Unrestricted
The
Company values investments in securities that are freely tradable and listed on major securities exchanges at their last reported sales
price as of the valuation date. To the extent these securities are actively traded and valuation adjustments are not applied, they are
categorized in Level 1 of the fair value hierarchy.
Securities
traded on inactive markets or valued by reference to similar instruments are generally categorized in Level 2 or 3 of the fair value
hierarchy.
Restricted
Securities
traded on public exchanges or over-the-counter (OTC) where there are formal restrictions that limit (i.e. Rule 144 holding periods and
underwriter’s lock-ups) their sale shall be valued at the closing price on the date of valuation less applicable discounts. The
Company may apply a discount to securities with Rule 144 restrictions. Additional discounts may be assessed if the Company believes there
are other mitigating factors which warrant the additional discounting. When determining potential additional discounts, factors that
will be taken into consideration include, but are not limited to; securities’ trading characteristics, volume, length and overall
impact of the restriction as well as other macro-economic factors. Valuations should be discounted appropriately until the securities
may be freely traded.
If
it has been determined that the exchange or OTC listed price does not accurately reflect fair market value, the Company may elect to
treat the security as a private company and apply an alternative valuation method.
Investments
in restricted securities of public companies may be included in Level 2 of the fair value hierarchy. However, to the extent that significant
inputs used to determine liquidity discounts are not observable, investments in restricted securities in public companies may be categorized
in Level 3 of the fair value hierarchy.
The
Company’s financial instruments primarily consist of cash and cash equivalents, accounts receivable, marketable securities, short-term
notes payable, convertible notes, derivative liability and accounts payable.
As
of the balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying
values as presented on the balance sheet. This is primarily attributed to the short maturities of these instruments.
Effective
July 1, 2008, the Company adopted ASC 820 (previously SFAS 157), Fair Value Measurements and adopted this Statement for the assets
and liabilities shown in the table below. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value,
establishes a fair value hierarchy based on the inputs used to measure fair value, and expands disclosures about the use of fair value
measurements. The adoption of ASC 820 did not have a material impact on our fair value measurements. ASC 820 permits the Company to defer
the recognition and measurement of the nonfinancial assets and nonfinancial liabilities until January 1, 2010. At June 30, 2022, the
Company did not have any nonfinancial assets or nonfinancial liabilities that are recognized or disclosed at fair value. ASC 820 requires
that financial assets and liabilities that are reported at fair value be categorized as one of the types of investments based upon the
methodology mentioned in Level 1, Level 2 and Level 3 above for determining fair value.
Assets
measured at fair value on a recurring basis are summarized below. The Company also has convertible notes and derivative liabilities as
disclosed in this report that are measured at fair value on a regular basis until paid off or exercised.
The
Company uses various approaches to measure fair value of available-for-sale securities, while applying the three-level valuation hierarchy
for disclosures, specified in ASC 820. Our Level 1 securities were measured using the quoted prices in active markets for identical assets
and liabilities.
The
company’s policy regarding the transfers in and/or out of Level 3 depends on the trading activity of the security, the volatility
of the security, and other observable units which clearly represents the fair value of the security. If a level 3 security can be measured
using a more fairly represented fair value, we will transfer these securities either into Level 1 or Level 2, depending on the type of
inputs.
REVENUE
RECOGNITION STANDARDS
ASC
606-10 provides the following overview of how revenue is recognized from an entity’s contracts with customers: An entity recognizes
revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services.
Step
1: Identify the contract(s) with a customer.
Step
2: Identify the performance obligations in the contract.
Step
3: Determine the transaction price – The transaction price is the amount of consideration in a contract to which an entity expects
to be entitled in exchange for transferring promised goods or services to a customer.
Step
4: Allocate the transaction price to the performance obligations in the contract – Any entity typically allocates the transaction
price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or service promised
in the contract.
Step
5: Recognize revenue when (or as) the entity satisfies a performance obligation – An entity recognizes revenue when (or as) it
satisfies a performance obligation by transferring a promised good or service to a customer (which is when the customer obtains control
of that good or service).
The
amount of revenue recognized is the amount allocated to the satisfied performance obligation. A performance obligation may be satisfied
at a point in time (typically for promises to transfer goods to a customer) or over time (typically for promises to transfer service
to a customer). For performance obligations satisfied over time, an entity recognizes revenue over time by selecting an appropriate method
for measuring the entity’s progress toward complete satisfaction of that performance obligation. (Paragraphs 606-10 25-23 through
25-30).
In
addition, ASC 606-10 contains guidance on the disclosures related to revenue, and notes the following:
It
also includes a cohesive set of disclosure requirements that would result in an entity providing users of financial statements with comprehensive
information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the entity’s contracts with
customers. Specifically, Section 606-10-50 requires an entity to provide information about:
-
Revenue recognized from contracts with customers, including disaggregation of revenue into appropriate categories.
-
Contract balances, including the opening and closing balances of receivables, contract assets, and contract liabilities.
-
Performance obligations, including when the entity typically satisfies its performance obligations and the transaction prices is that
is allocated to the remaining performance obligations in a contract.
-
Significant judgments, and changes in judgments, made in applying the requirements to those contracts.
Additionally,
Section 340-40-50 requires an entity to provide quantitative and/or qualitative information about assets recognized from the costs to
obtain or fulfill a contract with a customer.
The
Company’s revenue recognition policies are in compliance with ASC 606-10. The Company recognizes consulting and advisory fee revenues
in accordance with the above-mentioned guidelines and expenses are recognized in the period in which the corresponding liability is incurred.
ADVERTISING
The
Company expenses advertising costs as incurred. Advertising costs for the years ended June 30, 2022 and 2021 were $8,700 and $0, respectively.
The Company incurred $8,700 advertising and investor relations expenses during the fiscal year ended June 30, 2022.
COMPREHENSIVE
INCOME (LOSS)
ASC
220-10-45 (previously SFAS 130, Reporting Comprehensive Income) establishes standards for reporting and display of comprehensive income,
its components and accumulated balances. Comprehensive income is defined to include all changes in equity, except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS No. 130 requires that all items that are required to
be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed
with the same prominence as other financial statements. As of June 30, 2022 and 2021, respectively, accumulated other comprehensive income
(loss) of $(570,530) and $ $86,923 are presented on the accompanying consolidated balance sheets.
INCOME
TAXES
The
Company accounts for income taxes in accordance with ASC 740 (previously SFAS No. 109, “Accounting for Income Taxes”). Deferred
taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred
tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts
of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities
are adjusted for the effects of changes in tax laws and rates on the date of enactment.
REPORTING
OF SEGMENTS
ASC
280 (previously Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information),
which supersedes Statement of Financial Accounting Standards No. 14, Financial Reporting for Segments of a Business Enterprise, establishes
standards for the way that public enterprises report information about operating segments in annual financial statements and requires
reporting of selected information about operating segments in interim financial statements regarding products and services, geographic
areas and major customers. ASC 280 defines operating segments as components of an enterprise about which separate financial information
is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing
performance. The Company operated in one revenue-generating segment during the years ended June 30, 2022 and June 30, 2021.
RISKS
AND UNCERTAINTIES
In
the normal course of business, the Company is subject to certain risks and uncertainties. The Company provides its service and receives
marketable securities upon execution of transactions. Consequently, the value of the securities received from customers can be affected
by economic fluctuations and each customer’s business growth. The actual realized value of these securities could be significantly
different than recorded value.
RECENT
ACCOUNTING PRONOUNCEMENTS
In
August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06-Debt-Debt
with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)-Accounting
For Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments
by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as
a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions
that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify
for it. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for annual
and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December 15,
2020. The Company intends to adopt ASU 2020-06 for the quarter beginning January 1, 2022.
Update
No. 2018-13 – August 2018
Fair
Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement
Modifications:
The following disclosure requirements were modified in Topic 820:
1.
In lieu of a rollforward for Level 3 fair value measurements, a nonpublic entity is required to disclose transfers into and out of Level
3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities.
2.
For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an
investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to
the entity or announced the timing publicly.
3.
The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement
as of the reporting date.
Additions:
The following disclosure requirements were added to Topic 820; however, the disclosures are not required for nonpublic entities:
1.
The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements
held at the end of the reporting period.
2.
The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable
inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average
if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution
of unobservable inputs used to develop Level 3 fair value measurements.
The
amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after
December 15, 2019.
Update
No. 2018-07 – June 2018
Compensation
– Stock Compensation (Topic 718)
Improvements
to Nonemployee Share-Based Payment Accounting
Main
Provisions: The amendments in this Update expand the scope of Topic 718 to include share-based payment transactions for acquiring goods
and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance
on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest
and the pattern of cost recognition over that period). The amendments specify that Topic 718 applies to all share-based payment transactions
in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment
awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to
the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under
Topic 606, Revenue from Contracts with Customers.
The
amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim
periods within that fiscal year.
Update
No. 2017-13 - September 2017
Revenue
Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606)
FASB
Accounting Standards Updates No. 2014-09, Revenue from Contracts with Customers (Topic 606), issued in May 2014 and codified in ASC Topic
606, Revenue from Contracts with Customers, and No. 2016-02.
The
transition provisions in ASC Topic 606 require that a public business entity and certain other specified entities adopt ASC Topic 606
for annual reporting 3 periods beginning after December 15, 2017, including interim reporting periods within that reporting period. FN2
All other entities are required to adopt ASC Topic 606 for annual reporting periods beginning after December 15, 2018, and interim reporting
periods within annual reporting periods beginning after December 15, 2019.
Update
No. 2016-10 - April 2016
Revenue
from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing
The
core principle of the guidance in Topic 606 is that an entity should recognize revenue to depict the transfer of promised goods or services
to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
To achieve that core principle, an entity should apply the following steps:
1.
Identify the contract(s) with a customer.
2.
Identify the performance obligations in the contract.
3.
Determine the transaction price.
4.
Allocate the transaction price to the performance obligations in the contract.
5.
Recognize revenue when (or as) the entity satisfies a performance obligation.
The
amendments in this Update do not change the core principle of the guidance in Topic 606. Rather, the amendments in this Update clarify
the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining
the related principles for those areas.
The
Company has either evaluated or is currently evaluating the implications, if any, of each of these pronouncements and the possible impact
they may have on the Company’s financial statements. In most cases, management has determined that the implementation of these
pronouncements would not have a material impact on the financial statements taken as a whole.
NOTE
3 – OTHER CURRENT ASSETS
The
Company’s marketable securities are classified as available-for-sale and, as such, are carried at fair value. All of the securities
are comprised of shares of common stock of the investee. Securities classified as available-for-sale may be sold in response to changes
in interest rates, liquidity needs, and for other purposes. Each investment in marketable securities represents less than twenty percent
(20%) of the outstanding common stock and stock equivalents of the investee, and each security is nationally quoted on the National Association
of Securities Dealers OTC Bulletin Board (“OTCBB”) or the OTC Markets. As such, each investment is accounted for in accordance
with the provisions of SFAS No. 115.
Marketable
securities owned by the Company and classified as available for sale as of June 30, 2022 consisted of 905,000 shares of Myson Group,
Inc. (formerly Vanguard Mining Corporation) traded on the OTC Markets (Trading symbols MYSN). The fair value of the marketable securities
recorded as of June 30, 2022 was $546. During the fiscal year ended June 30, 2022, the Company transferred 292,050,000 shares of Sports
Pouch Beverage Company to David Truong, Chief Executive Officer of Glink Global Group, Inc., for $25,000 pursuant to an agreement between
PHILUX Capital Advisors, Inc. and Mr. David Truong whereby PHILUX Capital Advisors, Inc. would receive five million (5,000,000) shares
of post 500-for-1 split stock of SPBV and ninety thousand dollars (USD $90,000) for services rendered in connection with a Business Combination
Agreement between SPBV and an operating company.
SCHEDULE OF FAIR VALUE OF INVESTMENTS MARKETABLE EQUITY SECURITIES
| Securities
available for sale | |
Level
1 | | |
Level
2 | | |
Level
3 | | |
Total | |
| June
30, 2022 | |
| - | | |
$ | 546 | | |
$ | - | | |
$ | 385,457 | |
| June
30, 2021 | |
$ | - | | |
$ | 5,792 | | |
$ | 379,665 | | |
$ | 385,457 | |
During
the fiscal year ended June 30, 2022, there was no transfer of securities from level 3 to level 2.
NOTE
4 – OTHER ASSETS
The
Other Assets comprise of the following as of June 30, 2022 and 2021
SCHEDULE
OF OTHER ASSETS
| | |
2022 | | |
2021 | |
| | |
| | |
| |
| Investment
in Philux Global Funds | |
| 31,161 | | |
| 35,568 | |
| Investment
in AQuarius Power, Inc. | |
| 5,000 | | |
| 5,000 | |
| Total
Other Assets | |
$ | 36,161 | | |
$ | 446,995 | |
Investments
as of June 30, 2022 consist of a $5,000
investment in AQuarius Power, Inc., a renewable energy technology company, and $31,161
in the initial General Partner, Limited and Ordinary Shares of Philux Global Funds SCA, SICAV-RAIF.
NOTE
5 – PROPERTY AND EQUIPMENT
As
of June 30, 2022 the Company did not have any property or equipment.
NOTE
6 – CURRENT LIABILITIES
Current
liabilities of the Company consist of the followings as of June 30, 2022 and 2021:
SCHEDULE
OF CURRENT LIABILITIES
| Current
Liabilities | |
30-Jun-22 | | |
June
30 2021 | |
| Accounts
payable | |
| 615,805 | | |
| 608,521 | |
Sub-fund obligations | |
| 1,574,775 | | |
| 1,474,775 | |
| Accrued
expenses | |
| 931,417 | | |
| 1,993,478 | |
Short-term loans and notes payable | |
| 676,888 | | |
| 325,621 | |
| Convertible
Promissory Notes | |
| 756,250 | | |
| 220,230 | |
| Due
to officers | |
| 1,077,218 | | |
| 1,720,323 | |
| Advances
from customers | |
| 665,434 | | |
| 582,237 | |
| Derivative liabilities and Note Discount | |
| 715,677 | | |
| - | |
| Total
Current Liabilities | |
| 7,013,465 | | |
| 6,925,185 | |
ACCRUED
EXPENSES: Accrued expenses as of June 30, 2022 consist of $673,842 in accrued salaries and payroll taxes and $257,575 in accrued interest
from notes and loans.
NOTES
PAYABLE (NET): Notes payable consist of $676,888
in short-term notes and loans payable and $756,250 in convertible promissory notes.
ADVANCES
FROM CUSTOMERS
Advances
from Customers were $665,434 and $582,237 as of June 30, 2022 and June 30, 2021, respectively.
SUB-FUND
OBILGATIONS: As of June 30, 2022, the Company has received $800,000 from European Plastic Joint Stock Company towards the expenses for
setting up the energy sub-fund, $518,409 from Saigon Pho Palace Joint Stock Company and $100,000 from Sinh Nguyen Co., Ltd. towards the
expenses for setting up the real estate sub-fund, and $156,366.25 from TECCO Group towards the expenses for setting up the infrastructure
sub-fund, respectively, under the master PHILUX Global Funds. The Company recorded these amounts as liabilities until these sub-funds
are set up and capitalized, at which time the sub-fund participants will receive 49% of the general partners’ portion of ownership
in the relevant sub-funds for a total contribution of $2,000,000 each. The Company recorded a total of $1,574,775 as of June 30, 2022
and $1,474,775 as of June 30, 2021 as sub-fund obligations.
NOTE
7- DUE TO OFFICERS AND DIRECTORS
Due
to officer, represents loans and advances made by officers and directors of the Company and its subsidiaries, unsecured and due on demand.
As of June 30, 2022 and 2021 , the balances were $1,077,218 and $1,720,333, respectively.
Schedule
of Components of Due to Officers and Directors
| Officers/Directors | |
June
30, 2022 | | |
June
30, 2021 | |
| Henry
Fahman | |
| 413,868 | | |
| 1,056,973 | |
| Tam
Bui | |
| 663,350 | | |
| 663,350 | |
| Total | |
$ | 1,077,218 | | |
$ | 1,720,333 | |
NOTE
8 – LOANS AND PROMISSORY NOTES
SHORT
TERM NOTES PAYABLE:
In the course of its business, the Company has obtained short-term loans from individuals and institutional investors and from time to
time raised money by issuing restricted common stock of the Company under the auspices of Rule 144. As of June 30, 2022, the Company
had $341,421 in short-term notes payable consisting of $297,670 of regular short-term notes and $43,750 SBA loan, and $ 291,717 merchant
cash advance including a total of $87,475 in deferred interest. These notes bear interest rates ranging from 0% to 36% per annum.
CONVERTIBLE
PROMISSORY NOTES:
As
of June 30, 2022, the principal balance of the outstanding convertible notes was $756,250 with total derivative liabilities of $715,677.
The Company relies on professional third-party valuation to record the value of derivative liabilities, discounts, and changes in fair
value of derivatives in connection with these convertible notes and warrants, if any, that are related to the convertible notes.
NOTE
9 – PAYROLL TAX LIABILITIES
As
of June 30, 2022, payroll tax liabilities were $5,747.
NOTE
10 – BASIC AND DILUTED NET LOSS PER SHARE
Net
loss per share is calculated in accordance with SFAS No. 128, “Earnings per Share”. Under the provision of SFAS No. 128,
basic net loss per share is computed by dividing the net loss for the period by the weighted-average number of common shares outstanding
for the period. Diluted EPS is based on the weighted-average number of shares of common stock outstanding for the period and common stock
equivalents outstanding at the end of the period. Basic and diluted weighted average numbers of shares for the year ended June 30, 2022
were the same since the inclusion of Common stock equivalents is anti-dilutive.
NOTE
11 – Domestication in the State of Wyoming
On
September 20, 2017, the Company applied for a Certificate of Domestication and filed Articles of Domestication with the office of the
Secretary of State of Wyoming to re-domicile the Company’s jurisdiction to the State of Wyoming.
On
September 20, 2017, the Company filed Articles of Amendment with the Wyoming Secretary of State to amend the authorized capital of the
Company as follows:
“The
total number of shares into which the authorized capital stock of the corporation is divided is one billion shares, consisting of: nine
hundred million shares of voting Common Stock with a par value of $0.001 per share; fifty million shares of non-voting Class A Series
I Preferred Stock with a par value of $5.00 per share; twenty-five million shares of non-voting Class A Series II Preferred Stock with
a par value of $5.00 per share; twenty million shares of non-voting Class A Series III Preferred Stock with a par value of $5.00 per
share and five million shares of voting Class A Series IV Preferred Stock with a par value of $5.00 per share. The relative rights, preferences,
limitations and restrictions associated with the afore-mentioned shares of Class A Preferred Stock will be determined by the Board of
Directors of the corporation.”
On
June 25, 2020, the Company filed Articles of Amendment with the Wyoming Secretary of State to amend Article 10 of the Articles of Domestication
to authorize Forty Billion (40,000,000,000) shares of Common Stock with a par value of $0.001 per share and Five Hundred Million (500,000,000)
shares of Preferred Stock with a par value of $0.001 per share and to designate Classes A and B and the Series of those classes of Preferred
Stock as following:
I.
Class A Preferred Stock
A.
DESIGNATIONS, AMOUNTS AND DIVIDENDS
1.
Class A Series I Cumulative Convertible Redeemable Preferred Stock
a.
Designation: Fifty million (50,000,000) shares of the authorized 500,000,000 shares of Preferred Stock, with a par value of $0.001 per
share, are designated as Class A Series I Cumulative Convertible Redeemable Preferred Stock
b.
Number of Shares: The number of shares of Class A Series I Preferred Stock authorized shall be fifty million (50,000,000) shares.
c.
Dividends: Each holder of Class A Series I Preferred Stock is entitled to receive ten percent (10%) non-compounding cumulative dividends
per annum, payable semi-annually.
2.
Class A Series II Cumulative Convertible Redeemable Preferred Stock
a.
Designation. Two hundred million (200,000,000) shares of the authorized 500,000,000 shares of Preferred Stock, with a par value of $0.001
per share, are designated Class A Series II Cumulative Convertible Redeemable Preferred Stock (the “Class A Series II Preferred
Stock”).
c.
Number of Shares. The number of shares of Class A Series II Preferred Stock authorized shall be two hundred million (200,000,000) shares.
c.
Dividends: Each holder of Class A Series II Preferred Stock is entitled to receive eight percent (8%) cumulative dividends per annum,
payable semi-annually.
3.
Class A Series III Cumulative Convertible Redeemable Preferred Stock
a.
Designation. Fifty million (50,000,000) shares of the authorized 500,000,000 shares of Preferred Stock, with a par value of $0.001 per
share, are designated as Class A Series III Cumulative Convertible Redeemable Preferred Stock (the “Class A Series III Preferred
Stock”).
b.
Number of Shares. The number of shares of Class A Series III Preferred Stock authorized shall be fifty million (50,000,000) shares.
c.
Dividends: Each holder of Class A Series III Preferred Stock is entitled to receive eight percent (8%) cumulative dividends per annum,
payable semi-annually.
4.
Class A Series IV Cumulative Convertible Redeemable Preferred Stock
a.
Designation. One hundred ninety-nine million (199,000,000) shares of the authorized 500,000,000 shares of Preferred Stock, with a par
value of $0.001 per share, are designated as Class A Series IV Cumulative Convertible Redeemable Preferred Stock (the “Class
A Series IV Preferred Stock”).
b.
Number of Shares. The number of shares of Class A Series III Preferred Stock authorized shall be one hundred ninety-nine million (199,000,000)
shares.
c.
Dividends: To be determined by the Corporation’s Board of Directors.
B.
CONVERSION
1.
Conversion of Series I, Series II and/or Series IV Class A Preferred Stock into Common Stock of PHI Group, Inc.
Each
share of the Class A Preferred Stock, either Series I, Series II or Series IV shall be convertible into the Company’s Common Stock
any time after two years from the date of issuance at a Variable Conversion Price (as defined herein) of the Common Stock. The “Variable
Conversion Price” shall mean 75% multiplied by the Market Price (as defined herein) (representing a discount rate of 25%). “Market
Price” means the average Trading Price for the Company’s Common Stock during the ten (10) trading-day period ending one trading
day prior to the date the Conversion Notice is sent by the Holder of the Class A Preferred Stock to the Company via facsimile or email
(the “Conversion Date”). “Trading Price” means, for any security as of any date, the closing price on the OTC
Markets, OTCQB, NASDAQ Stock Markets, or applicable trading market as reported by a reliable reporting service (“Reporting Service”)
mutually acceptable to the Company and Holder of the Class A Preferred Stock.
2.
Conversion of Series I, Series II and/or Series IV Class A Preferred Stock into Common Stock of a subsidiary of PHI Group, Inc.’s.
Alternatively,
each share of the Class A Preferred Stock, either Series I, Series II and/or Series IV may be convertible into Common Stock of a subsidiary
of PHI Group, Inc.’s, to be determined by the Company’s Board of Directors, any time after such subsidiary has become a fully-reporting
publicly traded company for at least three months, at a Variable Conversion Price (as defined herein). The Variable Conversion Price
to be used in connection with the conversion into Common Stock of a subsidiary of PHI Group, Inc.’s shall mean 50% multiplied by
the Market Price (as defined herein), representing a discount rate of 50%, of that Common Stock. “Market Price” means the
average Trading Price for the Common Stock of said subsidiary of PHI Group, Inc.’s during the ten (10) trading-day period ending
one trading day prior to the date the Conversion Notice is sent by the Holder of the Preferred Stock to the Company via facsimile or
email (the “Conversion Date”). “Trading Price” means, for any security as of any date, the closing price on the
OTC Markets, OTCQB, NASDAQ Stock Markets, NYSE or applicable trading market as reported by a reliable reporting service (“Reporting
Service”) mutually acceptable to the Company, said subsidiary and Holder of the Class A Preferred Stock.”
3.
Conversion of Class A Series III Preferred Stock of PHI Group, Inc. into Common Stock of American Pacific Plastics, Inc., a subsidiary
of PHI Group, Inc.’s.
The
entire Class A Series III Preferred Stock of PHI Group, Inc. (i.e. fifty million (50,000,000) shares) may be convertible into eighty
percent (80%) American Pacific Plastics, Inc.’s Common Stock which will have been issued and outstanding immediately after such
conversion or exchange on a pro rata basis.
4.
Conversion Shares.
The
amount of shares of Common Stock of PHI Group, Inc., or alternatively, of a subsidiary of PHI Group, Inc.’s, to be received by
Holder at the time of conversion of Class A Series I or Series II Preferred Stock of PHI Group, Inc. will be based on the following formula:
| |
|
Where
|
CS: |
Common
Shares of PHI Group, Inc., |
| Amount
of CS = |
|
|
|
or
alternatively, of a subsidiary of PHI Group, Inc.’s. |
| OIP
+ AUD |
|
|
|
| VCP |
|
OIP: |
Original
Issue Price of Class A Series I or Series II Preferred Stock of PHI Group, Inc. |
| |
|
|
AUD: |
Accrued
and Unpaid Dividends. |
| |
|
|
VCP: |
Variable
Conversion Price of PHI Common Stock or of a subsidiary of PHI Group, Inc.’s as defined above. |
C.
REDEMPTION RIGHTS
The
Corporation, after a period of two years from the date of issuance, may at any time or from time to time redeem the Class A Preferred
Stock, either Series I, Series II, Series III or Series IV in whole or in part, at the option of the Company’s Board of Directors,
at a price equal to one hundred twenty percent (120%) of the original purchase price of the Class A Preferred Stock or of a unit consisting
of any shares of Class A Preferred Stock and any warrants attached thereto, plus, in each case, accumulated and unpaid dividends to the
date fixed for redemption.
D.
LIQUIDATION
Upon
the occurrence of a Liquidation Event (as defined below), the holders of Class A Preferred Stock are entitled to receive net assets on
a pro rata basis. As used herein, “Liquidation Event” means (i) the liquidation, dissolution or winding-up, whether
voluntary or involuntary, of the Corporation, (ii) the purchase or redemption by the Corporation of shares of any class of stock or the
merger or consolidation of the Corporation with or into any other corporation or corporations, unless (a) the holders of the Class A
Preferred Stock receive securities of the surviving corporation having substantially similar rights as the Class A Preferred Stock and
the stockholders of the Corporation immediately prior to such transaction are holders of at least a majority of the voting securities
of the successor corporation immediately thereafter (the “Permitted Merger”), unless the holders of the shares of
Class A Preferred Stock elect otherwise or (b) the sale, license or lease of all or substantially all, or any material part of, the Corporation’s
assets, unless the holders of Class A Preferred Stock elect otherwise.
E.
RANK
All
shares of the Class A Preferred Stock shall rank (i) senior to the Corporation’s Common Stock and any other class or series of
capital stock of the Corporation hereafter created, (ii) pari passu with any class or series of capital stock of the Corporation
hereafter created and specifically ranking, by its terms, on par with the Class A Preferred Stock and (iii) junior to any class or series
of capital stock of the Corporation hereafter created specifically ranking, by its terms, senior to the Class A Preferred Stock, in each
case as to distribution of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary.
F.
VOTING RIGHTS
1.
Class A Series I, II, III and IV Preferred Stock of PHI Group, Inc. shall have no voting rights.
G.
PROTECTION PROVISIONS
So
long as any shares of Class A Preferred Stock are outstanding, the Corporation shall not, without first obtaining the majority written
consent of the holders of Class A Preferred Stock, alter or change the rights, preferences or privileges of the Class A Preferred Stock
so as to affect adversely the holders of Class A Preferred Stock.
H.
MISCELLANEOUS
1.
Status of Redeemed Stock: In case any shares of Class A Preferred Stock shall be redeemed or otherwise repurchased or reacquired,
the shares so redeemed, repurchased, or reacquired shall resume the status of authorized but unissued shares of preferred stock, and
shall no longer be designated as Class A Preferred Stock.
2.
Lost or Stolen Certificates: Upon receipt by the Corporation of (i) evidence of the loss, theft, destruction or mutilation of any
Preferred Stock Certificate(s) and (ii) in the case of loss, theft or destruction, indemnity (with a bond or other security) reasonably
satisfactory to the Corporation, or in the case of mutilation, the Preferred Stock Certificate(s) (surrendered for cancellation), the
Corporation shall execute and deliver new Preferred Stock Certificates. However, the Corporation shall not be obligated to reissue such
lost, stolen, destroyed or mutilated Preferred Stock Certificates if the holder of Class A Preferred Stock contemporaneously requests
the Corporation to convert such holder’s Class A Preferred Stock into Common Stock.
3.
Waiver: Notwithstanding any provision in this Certificate of Designation to the contrary, any provision contained herein and any
right of the holders of Class A Preferred granted hereunder may be waived as to all shares of Class A Preferred Stock (and the holders
thereof) upon the majority written consent of the holders of the Class A Preferred Stock.
4.
Notices: Any notices required or permitted to be given under the terms hereof shall be sent by certified or registered mail (return
receipt requested) or delivered personally, by nationally recognized overnight carrier or by confirmed facsimile transmission, and shall
be effective five (5) days after being placed in the mail, if mailed, or upon receipt or refusal of receipt, if delivered personally
or by nationally recognized overnight carrier or confirmed facsimile transmission, in each case addressed to a party as set forth below,
or such other address and telephone and fax number as may be designated in writing hereafter in the same manner as set forth in this
Section.
If
to the Corporation:
PHI
GROUP, INC.
30
N Gould Street, Suite R
Sheridan,
WY 82801
Facsimile:
702-472-8556
Email:
info@phiglobal.com
If
to the holders of Class Preferred Stock, to the address to be listed in the Corporation’s books and Records.
II.
Class B Preferred Stock
1.
Class B Series I Preferred Stock
a.
Designation: One million (1,000,000) shares of the authorized 500,000,000 shares of Preferred Stock, with a par value of $0.001 per share,
are designated as Class B Series I Preferred Stock.
b.
Number of Shares: The number of shares of Class B Series I Preferred Stock authorized will be one million (1,000,000) shares.
c.
Dividend: None
d.
Voting rights: Except as provided by law, the shares of Class B Series I Preferred Stock shall have the same right to vote or act on
all matters on which the holders of Common Stock have the right to vote or act and the holders of the shares of Class B Series I shall
be entitled to notice of any stockholders’ meeting or action as to such matters on the same basis as the holders of Common Stock,
and the holders of Common Stock and shares of Class B Series I shall vote together or act together thereon as if a single class on all
such matters; provided, in such voting or action each one share of Class B Series I shall be entitled to one hundred thousand (100,000)
votes.
NOTE
12. DISSOLUTION OF NEVADA CORPORATION AND OPERATING AS A WYOMING CORPORATION.
On
June 30, 2020, the Company filed a Certificate of Dissolution/Withdrawal with the Nevada Secretary of State to cease its corporate registration
and dissolve PHI Group, Inc. in the State of Nevada. A Certificate of Dissolution/Withdrawal was issued by the Nevada Secretary of State
on June 30, 2020, Filing number 20200754868. The Company currently maintains its corporate registration with the State of Wyoming pursuant
to the Articles of Domestication filed with the Wyoming Secretary of State on September 20, 2017 and operates as a Wyoming corporation.
The Company filed a Form 8-K to report this event with the Securities and Exchange Commission on June 30, 2020.
NOTE
13. STOCKHOLDER’S EQUITY
As
of June 30, 2022, the total number of authorized capital stock of the Company consisted of Sixty Billion shares of voting Common Stock
with a par value of $0.001 per share and Five Hundred Million shares of Preferred Stock with a par value of $0.001 per share.
Treasury
Stock
The
balance of treasury stock as of June 30, 2022 was 487,767 shares valued at $44,170 based on cost basis.
Common
Stock
During
the fiscal year ended June 30, 2022, the Company issued/cancelled the following shares of its Common Stock for cash, conversion of promissory
notes, loan payments, salaries, warrants, and consulting services:
SCHEDULE
OF CONVERSIONS OF COMMON STOCK
| 7/1/21 | |
Beginning
balance | |
| Issuances/Cancellations | | |
| 26,081,268,895 | |
| 7/7/21 | |
Cancel
784,249 shares from Luan Ngo | |
| -784,249 | | |
| 26,080,484,646 | |
| 8/20/21 | |
Henry
Fahman | |
| 103,279,112 | | |
| 26,183,763,758 | |
| 8/25/21 | |
Henry
Fahman | |
| 114,672,922 | | |
| 26,298,436,680 | |
| 8/25/21 | |
Tina
Phan | |
| 45,347,928 | | |
| 26,343,784,608 | |
| 9/27/21 | |
Johnny
Park | |
| 767,000,000 | | |
| 27,110,784,608 | |
| 9/30/21 | |
Henry
Fahman | |
| 62,802,875 | | |
| 27,173,587,483 | |
| 10/4/21 | |
PHILUX
Global Funds SCA, SICAV-RAIF | |
| -235,478,810 | | |
| 26,938,108,673 | |
| 10/4/21 | |
Whankuk
Je | |
| 767,000,000 | | |
| 27,705,108,673 | |
| 10/18/21 | |
EMA
Financial LLC | |
| 54,750,000 | | |
| 27,759,858,673 | |
| 10/19/21 | |
Henry
Fahman | |
| 52,196,586 | | |
| 27,812,055,259 | |
| 11/19/21 | |
Whankuk
Je | |
| 383,000,000 | | |
| 28,195,055,259 | |
| 11/19/21 | |
Johnny
Park | |
| 383,000,000 | | |
| 28,578,055,259 | |
| 12/8/21 | |
EMA
Financial LLC | |
| 94,949,495 | | |
| 28,673,004,754 | |
| 12/28/21 | |
Craig
Mauk | |
| 30,000,000 | | |
| 28,703,004,754 | |
| 12/29/21 | |
Mast
Hill Fund LP | |
| 71,493,624 | | |
| 28,774,498,378 | |
| 1/25/22 | |
Mast
Hill Fund LP | |
| 57,883,838 | | |
| 28,832,382,216 | |
| 1/27/22 | |
Power
Up Lending Group Ltd | |
| 36,173,913 | | |
| 28,868,556,129 | |
| 2/10/22 | |
Power
Up Lending Group Ltd | |
| 15,909,091 | | |
| 28,884,465,220 | |
| 2/10/22 | |
Power
Up Lending Group Ltd | |
| 9,500,000 | | |
| 28,893,965,220 | |
| 2/25/22 | |
Henry
Fahman | |
| 30,000,000 | | |
| 28,923,965,220 | |
| 2/25/22 | |
Tina
Phan | |
| 25,000,000 | | |
| 28,948,965,220 | |
| 3/2/22 | |
Mast
Hill Fund LP | |
| 70,000,000 | | |
| 29,018,965,220 | |
| 3/4/22 | |
EMA
Financial LLC | |
| 101,750,000 | | |
| 29,120,715,220 | |
| 3/11/22 | |
EMA
Financial LLC | |
| 92,592,593 | | |
| 29,213,307,813 | |
| 3/14/22 | |
EMA
Financial LLC | |
| 79,966,120 | | |
| 29,293,273,933 | |
| 3/18/22 | |
Mast
Hill Fund LP | |
| 584,659,580 | | |
| 29,877,933,513 | |
| 4/19/22 | |
FirstFire
Global Opportunities Fund | |
| 303,000,000 | | |
| 30,180,933,513 | |
| 5/12/22 | |
1800
Diagonal Lending LLC | |
| 92,857,143 | | |
| 30,273,790,656 | |
| 6/7/22 | |
Mast
Hill Fund LP | |
| 500,000,000 | | |
| 30,773,790,656 | |
| 6/16/22 | |
Mast
Hill Fund LP | |
| 645,589,633 | | |
| 31,419,380,289 | |
| 6/7/22 | |
Thai
Kieu Trinh | |
| 10,000,000 | | |
| 31,429,380,289 | |
| | |
BALANCE
AS OF JUNE 30, 2022 | |
| | | |
| 31,429,380,289 | |
As
of June 30, 2022, there were 31,429,380,289 shares of the Company’s common stock issued and outstanding.
Preferred
Stock
As
of June 30, 2022, the following amounts of Preferred Stock were issued and outstanding:
Class
B Series I Preferred Stock: 600,000 shares.
NOTE
14 – STOCK-BASED COMPENSATION PLANS
On
February March 18, 2015, the Company adopted an Employee Benefit Plan to set aside 1,000,000 shares of common stock for eligible employees
and independent contractors of the Company and its subsidiaries. As of June 30, 2022 the Company has not issued any stock in lieu of
cash under this plan.
On
September 23, 2016, the Company issued incentive stock options and nonqualified stock options to certain key employee(s) (Henry Fahman
– CEO/CFO) and directors (Tam Bui, Henry Fahman, and Frank Hawkins constitute the Board of Directors) as deferred compensation.
The options allow the holders to acquire the Company’s Common Stock at the fair exercise price of the Company’s Common Stock
on the grant date of each option at $0.24 per share, based on the 10-days’ volume-weighted average price prior to the grant date.
The number of options is equal to a total of 6,520,000. The options terminate seven years from the date of grant and become vested and
exercisable after one year from the grant date. The following assumptions were used in the Monte Carlo analysis by Doty Scott Enterprises,
Inc., an independent valuation firm, to determine the fair value of the stock options:
SCHEDULE OF FAIR VALUE OF STOCK OPTION ASSUMPTIONS
| Risk-free
interest rate | |
| 1.18 | % |
| Expected
life | |
| 7
years | |
| Expected
volatility | |
| 239.3 | % |
Vesting
is based on a one-year cliff from grant date.
Annual
attrition rates were used in the valuation since ongoing employment was condition for vesting the options.
The
fair value of the Company’s Stock Options as of issuance valuation date is as follows:
SCHEDULE OF FAIR VALUE OF STOCK OPTION ISSUANCE DATE
| Holder | |
Issue
Date | |
Maturity
Date | |
Stock
Options | | |
Exercise
Price | |
Fair
Value at
Issuance | |
| | |
| |
| |
| | |
| |
| |
| Tam
Bui | |
9/23/2016 | |
9/23/2023 | |
| 875,000 | | |
Fixed
price: $0.24 | |
$ | 219,464 | |
| Frank
Hawkins | |
9/23/2016 | |
9/23/2023 | |
| 875,000 | | |
Fixed
price: $0.24 | |
$ | 219,464 | |
| Henry
Fahman | |
9/23/2016 | |
9/23/2023 | |
| 4,770,000 | | |
Fixed
price: $0.24 | |
$ | 1,187,984 | |
NOTE
15 – OTHER INCOME (EXPENSE)
Net
Other Income (Expense) for the fiscal year ended June 30, 2022 consists of the following:
SCHEDULE OF OTHER INCOME (EXPENSE)
| OTHER
INCOME (EXPENSES) | |
FY
ended June
30, 2022 | |
| Interest
expense | |
| (1,592,557 | ) |
| Other
income | |
| 1,118,195 | |
| Net
other income/expense | |
| (3,780,153 | ) |
| NET
OTHER INCOME (EXPENSES) | |
| (4,254,515 | ) |
NOTE
16 – RELATED PARTY TRANSACTIONS
The
Company recognized a total of $360,000 in salaries for the President and Chief Executive Officer, the Chief Operating Officer and the
Secretary and Treasurer of the Company during the year ended June 30, 2022.
NOTE
17 – INCOME TAXES
No
provision was made for income tax since the Company has significant net operating loss carry forward. Through June 30, 2022, the Company
incurred net operating losses for tax purposes of approximately $71,717,973. The net operating loss carry forward may be used to reduce
taxable income through the year 2036. Net operating loss for carry forwards for the State of California is generally available to reduce
taxable income through the year 2026. The availability of the Company’s net operating loss carry-forward is subject to limitation
if there is a 50% or more positive change in the ownership of the Company’s stock.
“Under
section 6501(a) of the Internal Revenue Code (Tax Code) and section 301.6501(a)-1(a) of the Income Tax Regulations (Tax Regulations),
the IRS is required to assess tax within 3 years after the tax return was filed with the IRS.”
NOTE
18 – CONTRACTS AND COMMITMENTS
ACQUISITION
OF 51% EQUITY INTEREST IN VINAFILMS JOINT STOCK COMPANY
On
August 06, 2018, signed a Business Cooperation Agreement with Vinafilms JSC (Công ty Cổ phần Màng Bao Bì
Tân Vinh Nam Phát), a Vietnamese joint stock company, with principal business address at Lot G9, Road No. 9, Tan Do Industrial
Zone, Duc Hoa Ha Village, Duc Hoa District, Long An Province, Vietnam, hereinafter referred to as “VNF” and its majority
shareholder, to exchange fifty-one percent ownership in VNF for Preferred Stock of PHI. According to the Agreement, PHI will be responsible
for filing a S-1 Registration Statement with the Securities and Exchange Commission for American Pacific Plastics, Inc., a subsidiary
of PHI that holds the 51% equity ownership in VNF, to become a fully-reporting public company in the U.S. Stock Market.
On
September 20, 2018, a Stock Swap Agreement was signed by and between Ms. Do Thi Nghieu, the majority shareholder holding 76% of ownership
in VNF, and PHI to exchange 3,060,000 shares of ordinary stock of VNF owned by Ms. Do Thi Nghieu for 50 million shares of Class A Series
III Cumulative, Convertible, Redeemable Preferred Stock of PHI. Though this transaction was technically closed on September 28, 2018,
the Company did not recognize the operations of Vinafilms JSC in its consolidated financial statements as of June 30, 2022. On
October 20, 2022, the Company, VNF and Ms. Do Thi Nghieu signed an agreement to terminate said Business Cooperation Agreement and Stock
Swap Agreement. The termination of the referenced Business Cooperation Agreement, retroactively effective August 06, 2018, was due to
the resultant impact of the Covid-19 pandemic and particular microeconomic conditions which made it infeasible for the Parties herein
to continue the originally-planned Business Cooperation Agreement.
CONSULTING
SERVICE AGREEMENT WITH GLINK APPS JSC
On
December 23, 2019, PHI Capital Holdings, Inc. a subsidiary of the Company, (name changed to PHILUX Capital Advisors, Inc. effective June
03, 2020) signed a Consulting Service Agreement to provide consulting service to Glink Apps JSC, a Wyoming corporation, and assist the
latter to become a publicly traded company in the U.S. According to the agreement, Glink Apps JSC will pay PHI Capital Holdings, Inc.
$88,500 in cash and five million (5,000,000) shares of its common stock of the newly combined public entity after a 1-for-500 reverse
split for the consulting service to be rendered.
BUSINESS
COOPERATION AGREEMENT WITH NATURAL WELL TECHNICAL LTD.
On
April 27, 2020, the Company signed a Business Cooperation Agreement with Natural Well Technical Ltd. (“NWTL”), a company
organized and existing under the laws of Republic of China and engaged in research and development of innovative biotechnologies that
may have significant applications for healthcare, beauty supply, agriculture and industry.
NWTL
and the Company agree to jointly cooperate in the research and development activities of pertinent technologies that have been initiated
and continue to be carried out by NWTL and applying them to produce commercial products and services in the fields of healthcare, beauty
supply, agriculture and industry, as the case may be, as well as any other business activities deemed mutually beneficial.
In
particular, NWTL and the Company will initially focus on the following activities:
a.
Developing and implementing a comprehensive plan to increase the production, marketing and sale of the “Super Green” High
Energy Drop Drink and “Mistyrious” Fine Mist Spray products on a large scale worldwide;
b.
Developing and implementing a plan to increase the production, marketing and sale of “Super Cassava” and “Uni-Wash”
Engine Booster products as well as other products related to the fields of agriculture and energy that have been studied and developed
by NWTL;
c.
Continuing to conduct research and accumulate clinical data for NWTL’s biotechnologies in order to obtain U.S. FDA’s approval
of cancer treatments and other healthcare products. In addition, both parties also develop, produce and market beauty supply products.
d.
Designing a financial plan and providing the required funding for NWTL to execute its business plan.
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, 2022, Tecco Group has paid a total of $156,366.25 towards the total agreed amount.
INVESTMENT
AGREEMENTS AND MEMORANDUM OF UNDERSTANDING
From
August 24, 2020 to November 03, 22, the Company and its subsidiaries have entered into loan financing agreements, investment management
agreements, joint venture agreement, and memorandum of understanding with six international investor groups for a total six billion three
hundred million U.S. dollars, as reported in various 8-K filings with the Securities and Exchange Commission. The Company expects to
begin receiving capital through these sources in the near future to support its merges and acquisitions and investment programs.
NOTE
19 – GOING CONCERN UNCERTAINTY
As
shown in the accompanying consolidated financial statements, the Company has accumulated deficit of $71,717,973
and total stockholders’ deficit of $6,543,502
as of June 30, 2022. These factors as well as
the uncertain conditions that the Company faces in its day-to-day operations with respect to cash flows create an uncertainty as to the
Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary
should the Company be unable to continue as a going concern. Management has taken action to strengthen the Company’s working capital
position and generate sufficient cash to meet its operating needs through June 30, 2022 and beyond.
NOTE
20 – SUBSEQUENT EVENTS
These
financial statements were approved by management and available for issuance on January 12, 2023. Subsequent events have been evaluated
through this date.
1.
Joint Venture/Partnership Agreement (Fund Management MOU) between an investor in the Gulf Cooperation Council region and PHILUX Global
Group, Inc. (a/k/a PHI Group, Inc.)
On
July 08, 2022, the registrant signed a Joint Venture/Partnership Agreement (Fund Management MOU) with an investor in the Gulf Cooperation
Council region to manage an initial amount of Three Billion United States Dollars (USD 3,000,000,000) for investment in different transactions
chosen and advised by the registrant for a period of ten years. According to the Agreement, after the first twenty four months of investment
implementation, the registrant will be allocated 40% of the net profit from these investments.
2.
Entry into Agreement with Tin Thanh Group
Effective
August 13, 2022, PHI Group, Inc. (a/k/a PHILUX GLOBAL GROUP INC.) (“the Registrant”) signed a Stock Transfer Agreement with
Tin Thanh Group Joint Stock Company, a joint stock company organized and existing by virtue of the laws of Socialist Republic of Vietnam,
with principal business address at 71 Pho Quang Street, Ward 2, Tan Binh District, Ho Chi Minh City, Vietnam, hereinafter referred to
as “TTG” and Mr. Tran Dinh Quyen, the holder of at least fifty-one percent (51.00%) of equity ownership in TTG (the “Majority
Shareholder”), hereinafter referred to as “Seller,” to acquire Twenty-Two Million Thirty-Two Thousand (22,032,000)
Shares of Ordinary Stock of TTG, which is equivalent to Fifty-One Percent (51.00%) of all the issued and outstanding Ordinary Stock of
TTG for a total purchase price of Sixty Million U.S. Dollars ($US 60,000,000) in cash. The closing date of this transaction shall be
the date on which the closing actually occurs, which was expected to happen as soon as possible within sixty days following the signing
of the Stock Transfer Agreement, and was extended to January 15, 2023. This transaction may be extended further in writing by all Parties
to said Agreement.
3.
Entry into Agreement with Van Phat Dat Joint Stock Company
Effective
August 16, 2022, PHI Group, Inc. (a/k/a PHILUX GLOBAL GROUP INC.) (“the Registrant”) signed an Agreement of Purchase and
Sale with Van Phat Dat Export Joint Stock Company, a joint stock company organized and existing by virtue of the laws of Socialist Republic
of Vietnam, with principal business address at 316 Le Van Sy Street, Ward 1, Tan Binh District, Ho Chi Minh City, Vietnam, hereinafter
referred to as “VPD,” and the holder of at least fifty-one percent (51.00%) of equity ownership in VPD, hereinafter referred
to as “Seller,” to acquire Five Million One Hundred Thousand (5,100,000) Shares of Ordinary Stock of VPD, which is equivalent
to Fifty-One percent (51.00%) of all the issued and outstanding Ordinary Stock of VPD for a total purchase price of Six Million One Hundred
Twenty-Seven Thousand Eight Hundred Ninety-Five U.S. Dollars ($US 6,127,895) in form of a convertible promissory note to be issued by
Philux Global Trade Inc., a Wyoming corporation and wholly-owned subsidiary of the Registrant. The closing date of this transaction shall
be the date on which the closing actually occurs, which is expected to happen as soon as possible within sixty days following the signing
of the Agreement of Purchase and Sale, unless extended in writing by the Parties to said Agreement.
The
convertible promissory note, which will be guaranteed by Philux Global Group Inc. and carries no interest, will be due and payable 180
days commencing the date of issuance and may be converted into common stock of Philux Global Trade Inc. any time after this subsidiary
becomes a publicly traded company in the United States. The conversion price will be 50% of the average closing price during the ten
trading-day period ending one trading day prior to the date of conversion.
On
September 30, 2022 PHI Group, Inc. entered into a Closing Memorandum for the Agreement of Purchase and Sale dated August 16, 2022 with
and among Van Phat Dat Export Joint Stock Company and Mr. Huynh Ngoc Vu, an individual and the majority shareholder of VPD.
4.
Termination of Business Cooperation Agreement with Vinafilms Joint Stock Company
On
October 20, 2022, Philux Global Group Inc. (f/k/a PHI Group, Inc.), Vinafilms JSC (Công ty Cổ phần Màng Bao
Bì Tân Vinh Nam Phát), a Vietnamese joint stock company, with principal business address at Lot G9, Road No. 9, Tan
Do Industrial Zone, Duc Hoa Ha Village, Duc Hoa District, Long An Province, Vietnam, and Ms. Do Thi Nghieu, the majority shareholder
of Vinafilms JSC, signed an agreement to terminate the Business Cooperation Agreement that was previously entered into by the parties
hereto on August 06, 2018. The termination of the referenced Business Cooperation Agreement, retroactively effective August 06, 2018,
is due to the resultant impact of the Covid-19 pandemic and particular microeconomic conditions which make it infeasible for the Parties
herein to continue the originally-planned Business Cooperation Agreement.
5.
Financial Investment Management Agreement/Contract between an international ultra-high-net-worth investor and Philux Global Group, Inc.
(aka PHI Group, Inc.).
On
November 03, 2022, the registrant (the” Investment Manager”), signed a Financial Management Agreement/Contract (the “Agreement”)
with an international ultra-high-net-worth investor group (the “Investor Party”) to manage an investment amount (the “Investment
Amount”) of One Billion United States Dollars (USD 1,000,000,000) on behalf of the Investor Party for investment in select transactions
and projects to be selected, advised and managed by the Investment Manager for a period of ten years. According to the Agreement, the
Investment Manager shall be entitled to 15% of the Investment Amount for its own investment and benefits. In addition, the sharing of
profits and dividends from the investment results of 80% of the Investment Amount will be determined by the two parties in a subsequent
agreement.