UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K10-K/A

Amendment No. 1

☒ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: JUNE 30 2021, 2022

or

☐TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________________________to _____________________________________

PHI GROUP, INC.INC.

(n/k/a PHILUX GLOBAL GROUP INC)

(Exact name of

registrant as specified in its charter)

Registrant’s telephone number, including area code: 702-475-5430702-475-5430

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ☐No ☐No☒

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.

Yes ☐ No☒ No ☐

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 ☒ No ☐ No ☒

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (ss229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, indefinitive proxy or information statement incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Yes ☐ No ☒

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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No☒

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed fiscal quarter:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of October 11, 2021,January 17, 2023, there were 27,705,108,673 33,645,885,430shares of the registrant’s $0.001 par value Common Stock and 180,000600,000 shares of Class B Series I Preferred Stock issued and outstanding.

EXPLANATORY NOTE

The purpose of this Form 10-K/A is to combine the EDGAR-formatted version of the 10-K filed on January 13, 2023 with the required iXBRL tagging, to provide additional information about Class B Series I Preferred Stock (Item 12), to correct some typographical errors in Note 3 (Other Current Assets) and Note 4 (Other Assets) of the filed 10-K, to include additional information with regard to Note 13 (Preferred Stock), Note 16 (Related Party Transactions), Note 18 (Contracts and Commitments) and Note 20 (Subsequent Events) and to add references to the Exhibit Index.

There was no change to the financial statements reported in the original Form 10-K.

TABLE OF CONTENTS

The statements contained in this annual report that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our financial condition, results of operations and business, which can be identified by the use of forward-looking terminology, such as “estimates,” “projects,” “plans,” “believes,” “expects,” “anticipates,” “intends,” or the negative thereof or other variations thereon, or by discussions of strategy that involve risks and uncertainties. All forward-looking statements are based largely on current expectations and beliefs concerning future events that are subject to substantial risks and uncertainties. Actual results may differ materially from the results suggested herein. Factors that may cause or contribute to such differences include, but are not limited to, the company’s ability to develop and successfully market the products and services described in this report (and the costs associated therewith); their acceptance in the marketplace; technical difficulties or errors in the products and/or services; the company’s customer and active prospect base containing a substantially lower number of interested customers than the company anticipates; the failure to consummate the pending acquisitions, joint ventures and/or strategic alliances at all (or on a timely basis) due to various reasons; difficulty integrating or managing multiple companies from technology, operational and marketing aspects; the success (and cost) of new marketing strategies as a result of mergers and acquisitions; unfavorable critical reviews; increased competition (including product and price competition); entrance of new competitors into the market; timing and significance of additional new product and service introductions by the company and its competitors; general economic and market factors, including changes in securities and financial markets; technology obsolescence, the adequacy of working capital, cash flows and available financing to fund the company’s business model and the proposed acquisitions or investments ; and other risks and uncertainties indicated throughout this report and from time to time in the company’s releases and filings including without limitation filings with the Securities and Exchange Commission. As used in this report, the terms “we,” “us,” “our,” the “company” and “PHI” mean PHI Group, Inc. and the term “common stock” means PHI Group, Inc.’s common stock, $.001 par value per share (unless context indicates a different meaning).

PART I

ITEM 1. BUSINESS OVERVIEW

INTRODUCTION

PHI Group, Inc. (n/k/a Philux Global Group Inc) (the “Company” or “PHI”) (www.phiglobal.comwww.philuxglobal.com) is primarily engaged in mergers and acquisitions, runningadvancing PHILUX Global Funds, SCA, SICAV-RAIF, a “Reserved Alternative Investment Fund” (“RAIF”) under the laws of Luxembourg, and establishing the Asia Diamond Exchange in Vietnam. Besides, the Company provides corporate finance services, including merger and acquisition advisory and consulting services for client companies through our wholly owned subsidiary PHILUX Capital Advisors, Inc. (formerly PHI Capital Holdings, Inc.) (www.philuxcap.com(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 a number ofPhilux Global Select Growth Fund and potentially other sub-funds for investment in real estate, renewable energy, infrastructure, agriculture and healthcare and on developing and establishing the Asia Diamond Exchange in Vietnam. In addition, PHILUX Capital Advisors, Inc. (formerly Capital Holdings, Inc.), a wholly owned subsidiary of the Company, continues to provide corporate and project finance services, including merger and acquisition (M&A) advisory and consulting services for U.S. and international companies. Recently, theThe Company has signed a Memorandum of Agreementagreements to acquire seventy percent ownershipmajority 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 Company,Co., Ltd., a Chinese baiju distiller, to collaborate in Jilin Province, China.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.

BUSINESS STRATEGY

PHI’s strategy is to:

1. Identify, build, acquire, commit and deploy valuable resources with distinctive competitive advantages;

2. Identify, evaluate, acquire, participate and compete in attractive businesses that have large, growing market potential;

3. Build an attractive investment that includes points of exit for investors through capital appreciation or spin-offs of business units.

SUBSIDIARIES:

As of October 12, 2021,January 10, 2023, the Company owned the following subsidiaries: (1) Asia Diamond Exchange, Inc., a Wyoming corporation (100%), (2) Empire Spirits, Inc., a Nevada corporation (85% - formerly Provimex, Inc.) (3) (4) PHILUX Global Funds SCA, SICAV-RAIF, a Luxembourg Reserved Alternative Investment Fund (100%), (4) PHILUX Capital Advisors, Inc., a Wyoming corporation (100%), (5) CO2-1-0 (CARBON) CORP., a Wyoming corporation (51%), (6) PHI Luxembourg Development S.A., a Luxembourg corporation (100%), (7)(6) PHILUX Global General Partners SA, a Luxembourg corporation (100%), (8)(7) PHI Luxembourg Holding SA, a Luxembourg corporation (100%), (9) PHI(8) Philux Global Vietnam Investment and Development Company Ltd., a Vietnamese limited liability company (100%), (10)(9) Phivitae Healthcare, Inc. (100%), , (11) American Pacific Plastics, Inc., a Wyoming corporation (100%), and (12)(10) American Pacific Resources, Inc., a Wyoming corporation (100%), (11) Philux Fidelity Global Group, a Wyoming corporation, (12) Philux Global Trade Inc., a Wyoming corporation.

ASIA DIAMOND EXCHANGE INC. AND THE DEVELOPMENT OF ASIA DIAMOND EXCHANGEMULTI-COMMODITIES AND LOGISTICS CENTER IN VIETNAM

Along with the establishment of PHILUX Global Funds, since March 2018 the Company has worked closely with the Authority of Chu Lai Open Economic Zone and the Provincial Government of Quang Nam, Vietnam to develop the Asia Diamond Exchange. Quang Nam Provincial Government has agreed in principle to allocate more thanabout 200 hectares in the sanctioned Free-Trade Zone near Chu Lai Airport, Nui Thanh District, Quang Nam Province in Central Vietnam for us to set up a multi-commodities center which would include the Asia Diamond Exchange. Recently,

On June 04, 2021 the Company 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.

In addition, another opportunity has arisen with the start of construction of the new international airport in Long Thanh District, Dong Nai Province near Ho Chi Minh City in Southern Vietnam. In December 2020, the Vietnamese central government designated 1,200approximately 2,600 hectares of land in Bau Can village,and Tan Hiep Villages, Long Thanh District, Dong Nai Province as a new industrial zone. We are in the process of applyingThe Company has submitted a request for 600 hectaresadditional land close to the new Long Thanh International Airport to develop the Long Thanh Multi-Commodities Logistics Center (LMLC) together with a plan to house the proposed International Financial Center, an Urban AreaIndustrial Zone and other hi-tech industrial operations. On June 04, 2021,is currently working with the Company incorporated Asia Diamond Exchange, Inc., a Wyoming corporation, ID number 2021-001010234, asDong Nai Provincial People’s Committee and the holding company forrelevant ministries of the Asia Diamond ExchangeVietnamese central government on this project.

EMPIRE SPIRITS, INC. (FORMERLY PROVIMEX, INC.)

Provimex, Inc. was originally incorporated as a Nevada corporation on September 23, 2004, Entity Number C25551-4, as a subsidiary of the Company to engage in international trade. On 9/26/2021, the companyProvimex, Inc. changed its name to Empire Spirits, Inc. as the holding company for the acquisition of seventy percent (70%)a majority ownership in Five-Grain Treasure Spirits Company, Ltd., a baiju distiller in Jilin Province, China. PHI Group, Inc.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. will provide additional required capital for Five-Grain to fully execute its business plan. The budget for this transaction will be one hundred million U.S. dollars (USD 100,000,000), to be paid in three tranches. The Company will complete the due diligence of Five-Grain before signing a Definitive Agreement for the consummation of this transaction, which is scheduled to close by the end of 2021.

Baijiu is a white spirit distilled from sorghum. It is similar to vodka but with a fragrant aroma and taste. It is currently the most consumed spirit in the world. Mainly consumed in China, it is gaining popularity in the rest of the world.

Five-Grain specializes in the production and sales of spirits and the development of proprietary spirit production processes. It also possesses a patented technology to grow red sorghum for baiju manufacturing. The patented grain produces superior yield and quality. Five-Grain is a reputable bulk alcohol supplier to some of the largest spirits companies in the world.

PHILUX GLOBAL FUNDS SCA, SICAV-RAIF

On June 11, 2020, the Company received the approval from the Luxembourg Commission de Surveillance du Secteur Financier (CSSF) and successfully established and activated PHILUX GLOBAL FUNDS SCA, SICAV-RAIF (the “Fund”), Registration No. B244952, a Luxembourg bank fund organized as a Reserved Alternative Investment Fund in accordance with the Luxembourg Law of July 23, 2016 relative to reserved alternative investment funds, Law of August 23, 2016 relative to commercial companies, and Modified Law of July 12, 2013 relative to alternative investment fund managers.

The following entities havehad 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 containingintended to contain one or more sub-fund compartments intended to investfor investing in select opportunities in the areas of real estate, infrastructure, renewable energy, agriculture, healthcare and especially the Multi-Commodities Center (MCC) in Vietnam which will include the Asia Diamond Exchange and potentially the proposed International Financial Center.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 severala number of privately held and publicly traded companies and continues to focus on serving the Pacific Rim markets in the foreseeable future. This subsidiary currently serves as the investment advisor to PHILUX Global Funds SCA, SICAV-RAIF and also arranges debt financing for its international clients. Website: www.philuxcapital.com.

CO2-1-0 (CARBON) CORP

In August 2021, PHI Group signed a Letter of Intent with Indonesia-based CYFS Group, headed by Mr. Choky Fernando Simanjuntak, to sponsor and co-found CO2-1-0 (CARBON) CORP to implement a new disruptive carbon mitigation initiative through environmentally sustainable projects starting in Indonesia, Vietnam, other ASEAN countries, and worldwide. On September 21, 2021 CO2-1-0 (CARBON) CORP was incorporated as a Wyoming corporation to manage this program. During the fiscal year ended June 30, 2022, PHI Group, will contributeInc. has contributed a major portion of the development budget for CO2-1-0 (CARBON) CORP) and will hold 50.1% shares of CO2-1-0 (CARBON). The Company is in the process of relocating CO2-1-0 (CARBON) CORP to the United Arab Emirates.

According to the United Nation Framework Convention on Climate Change (UNFCCC), together with the Paris agreement and Kyoto protocol in 2016, where Indonesia has actively participated and agreed to maintain the earth temperature not to exceed by 1,5 degrees Celsius by 2030. The greenhouse gases (GHG), mainly CO2, CH4, N2O, SF6, HFCs, PFCs, are the root cause of global climate change, each of which can be calculated as CER (CO2 Emission Reduction) equivalent. The target for Indonesia is 834 million tonnes of CER by 2030.

Currently, CER is being tediously registered, validated, and certified centrally under UNFCCC methodology by a few independent institutions, mostly in the US and Europe, where the CER later can be traded (as carbon credits) voluntarily. For the past 5 years, the market for carbon credits is nearly zero, and due to complexity of the processes, many companies/ projects have less appetite to be engaged into the carbon credit opportunity. Many environmentally sustainable projects (renewable energy/ waste/ agriculture/forestry/ etc.) have failed to get financial support especially at the initial/ development stage, due to the above reasons, causing less economic value of the project or delays.

Though the carbon market is still on hibernate stage, CER value is estimated to rise to US$ 100/ ton CER by 2030, while crypto currency is just starting and has attracted many millennials and gen-Z who are more aware to green environment and sustainability (recent survey result, Indonesian college students, 12-13 July 2021). It is believed that from year 2022 onward the world will witness the boom of renewable energy projects/ sustainability initiatives that are related to Carbon Credits, with an enormous market size of 23 Giga tones of CO2 emission to be reduced in 2030. The Taskforce on Scaling Voluntary Carbon Markets (TSVCM), sponsored by the Institute of International Finance (IIF) with knowledge support from McKinsey, estimates that demand for carbon credits could increase by a factor of 15 or more by 2030 and by a factor of up to 100 by 2050. Overall, the market for carbon credits could be worth upward of $50 billion in 2030.

CO2-1-0 (CARBON) aims to provide a solution in disruptive decentralized new carbon market system using blockchain technology which will be empowering environmentally sustainable projects (renewable energy/ waste/ agriculture/ forestry/ etc.) starting in Indonesia, Vietnam, other ASEAN countries and worldwide. It has a clear and systematic product development roadmap, and the ultimate milestones of the products estimated to be launched in the near future. The solution, methodology, and improved TACCC (transparent, accurate, consistent, complete, and comparable) business process originally introduced by CO2-1-0 (CARBON) will bring full impact to better environment and life of millions.

AMERICAN PACIFIC RESOURCES, INC.

American Pacific Resources, Inc. (“APR”) is a Wyoming corporation established in April 2016 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 a convertible demand promissory note and cash totaling $25,000,000 to Rush Gold Royalty, Inc.Inc.. As of June 30, 2020, the Company has recorded $462,000 paid for this transaction as expenses for research and development in connection with the Granite Mining Claims project. The value of these mining claims is expected to be adjusted later after a new valuation of these mining assets is conducted by an independent third-party valuator.

On April 23, 2018,The Company has passed several resolutions with respect to the Company’s Boarddeclaration of Directors passed a resolution to declare a twenty percent (20%) special stock dividend from its holdings of Common Stock in American Pacific Resources, Inc., a subsidiary of the Company, to shareholders of Common Stock of the Company as follows: (a) Declaration date: April 23, 2018; (b) Record date: May 31, 2018; (c) Payment date: October 31, 2018; (d) Dividend ratio: All eligible shareholders of Common StockCompany. Due to the continued adverse effects of the coronavirus pandemic and other factors that have delayed the development of APR, it deems necessary for the Company asto suspend the distribution of the Record date shall be entitled to receive two (2) shares of Common Stock of American Pacific Resources, Inc. for every ten (10) shares of Common Stock of PHI Group, Inc. held by such shareholders as of the referenced Record date. The payment date was rescheduled for March 29, 2019.

Most recently, on June 25, 2021, the Board of Directors of PHI Group, Inc., adopted a resolution to further extend the Record Date to December 31, 2021 and amend the provisions for the afore-mentioned stock dividend as follows: (a) Eligible shareholders: In order to be eligible for the above-mentionedAPR special stock dividend until later on in order to allow APR additional time to reach certain milestones that would make the minimum amountspin-off of Common Stock of PHI Group, Inc. each shareholder must hold as of December 31, 2021 (the New Record Date) is two thousand (2,000) shares; (b) Dividend ratio: All eligible shareholders of Common Stock ofAPR and this special stock dividend distribution economically beneficial for the Company’s shareholders. The Company as ofwill provide an update regarding the new Record Date will be entitled to receive one (1) share of Common Stock of American Pacific Resources, Inc. for every two thousand (2,000) shares of Common Stock of PHI Group, Inc. held by such shareholders as of the new Record date; and (c) Payment Date: the Payment Date for the distribution of thethis special stock dividend to be ten (10) business days after a registration statement for said special stock dividend shares is declared effective by the Securities and Exchange Commission.when certain conditions are met.

PHIVITAE HEALTHCARE, INC.

PHIVITAE HEALTHCARE, INC., a Wyoming corporation, is a wholly-owned subsidiary of PHI Group established on July 07, 2017 under the name of “PHIVATAE Corporation, Inc.” with the intention to acquire a pharmaceutical and medical equipment distribution company in Romania and to manage distribution of medical equipment and pharmaceutical products to emerging markets. This subsidiary changed its name to PHIVITAE HEALTHCARE, INC. on March 17, 2020. On April 27, 2020, PHI Group, Inc. signed a business cooperation agreement with Natural Well Technical Ltd. (“NWTL”), a Taiwanese company, to jointly cooperate in the research and development activities of pertinent technologies that have been initiated and continue to be carried out by NWTL and applying them to produce commercial products and services in the fields of healthcare, beauty supply, agriculture and industry as well as any other business activities deemed mutually beneficial. PHIVITAE is also in the process of entering into a strategic alliance with a Vietnam-based medical supply company.

STOCK OWNERSHIPS:PHILUX GLOBAL ENERGY, INC.

MYSON GROUP,On January 3, 2022, the Company filed “Profit Corporation Articles of Incorporation” with the Wyoming Secretary of State to incorporate “PHILUX GLOBAL ENERGY, INC.

As of June 30, 2020, PHI Group, Inc. and PHI Capital Holdings, Inc.,” – Original ID: 2020-001066221, as a wholly ownedwholly-owned subsidiary of the Company together owned 33,805,106 sharesto serve as the holding company for the contemplated acquisition of Common Stockfifty-point one percent (50.10%) ownership in both Kota Energy Group LLC and Kota Construction LLC, both of Myson Group, Inc.,which are California limited liability companies.

PHILUX FIDELITY GLOBAL GROUP

PHILUX FIDELITY GLOBAL GROUP is a NevadaWyoming corporation currently tradedincorporated on the OTC markets under the symbol “MYSN.” The Company wrote off 32,900,106 shares of MYSN stock held in certificate form as worthless as of June 30, 2019,2022 to serve as Mysonthe holding company for business cooperation between Tin Thanh Group was not in good standing with(www.tinthanhgroup.vn) and the State of Nevada at that time. Subsequently, Myson Group filed a Certificate of Reinstatement with the Secretary of State of Nevada on June 04, 2021.Company.

DISPOSAL OF STOCK OWNERSHIP IN SPORTS POUCH BEVERAGE COMPANY, INC.

AsOn May 3, 2022, Philux Capital Advisors, Inc., a subsidiary of June 30, 2020, the Company, through PHILUX Capital Advisors, Inc. ownedtransferred 292,050,000 shares of Sports Pouch Beverage Company, Inc., a Nevada corporation traded on the OTC Markets under the symbol “SPBV”. On to Chinh T. Truong for twenty-five thousand U.S. dollars as part of the agreements in connection with the Business Combination Agreement entered into on March 19, 2021 this company signedbetween Sports Pouch Beverage Company, Inc. and Glink Apps International, Inc., a Wyoming corporation. Sports Pouch Beverage Company, Inc. has agreed to issue five million shares of its Common Stock to Philux Capital Advisors, Inc. after the consummation of said Business Combination Agreement with Glink Apps International,and a 1-for-500 reverse split of the combined Sports Pouch Beverage Company, Inc. and expects to change its name and trading symbol to reflect to core business of Glink Apps International, Inc.

ITEM 1A. RISK FACTORS

RISK FACTORS

Investment in our securities is subject to various risks, including risks and uncertainties inherent in our business. The following sets forth factors related to our business, operations, financial position or future financial performance or cash flows which could cause an investment in our securities to decline and result in a loss.

General Risks Related to Our Business

Our success depends on our management team and other key personnel, the loss of any of whom could disrupt our business operations.

Our future success will depend in substantial part on the continued service of our senior management and certain external experts. The loss of the services of one or more of our key personnel and/or outside experts could impede implementation and execution of our business strategy and result in the failure to reach our goals. We do not carry key person life insurance for any of our officers or employees. Our future success will also depend on the continued ability to attract, retain and motivate highly qualified personnel in the diverse areas required for continuing our operations. We cannot assure that we will be able to retain our key personnel or that we will be able to attract, train or retain qualified personnel in the future.

Risks Related to Mergers and Acquisitions

Our strategy in mergers and acquisitions involves a number of risks and we have a limited history of successful acquisitions. Even when an acquisition is completed, we may have to continue our service for integration that may not produce results as positive as management may have projected.

The Company continues evaluating various opportunities and negotiating to acquire other companies, assets and technologies. Acquisitions entail numerous risks, including difficulties in the assimilation of acquired operations and products, diversion of management’s attention from other business concerns, amortization of acquired intangible assets and potential loss of key employees of acquired companies. We have limited experience in assimilating acquired organizations into our operations. Although potential synergy may be achieved by acquisitions of related technologies and businesses, no assurance can be given as to the Company’s ability to integrate successfully any operations, personnel, services or products that have been acquired or might be acquired in the future. Failure to successfully assimilate acquired organizations could have a material adverse effect on the Company’s business, financial condition and operating results.

Acquisitions involve a number of special risks, including:

These risks could have a material adverse effect on our business, results of operations and financial condition since the values of the securities received for the consulting service at the execution of the acquisition depend on the success of the company involved in acquisition. In addition, our ability to further expand our operations through acquisitions may be dependent on our ability to obtain sufficient working capital, either through cash flows generated through operations or financing activities or both. There can be no assurance that we will be able to obtain any additional financing on terms that are acceptable to us, or at all.

Risks associated with private equity (PE) funds

There are, broadly, five key risks to private equity investing:

1. Operational risk: The risk of loss resulting from inadequate processes and systems supporting the organization. It is a key consideration for investors regardless of the asset classes that funds invest into.

2. Funding risk: This is the risk that investors are not able to provide their capital commitments and is effectively the ‘investor default risk’. PE funds typically do not call upon all the committed investor capital and only draw capital once they have identified investments. Funding risk is closely related to liquidity risk, as when investors are faced with a funding shortfall they may be forced to sell illiquid assets to meet their commitments.

3. Liquidity risk: This refers to an investor’s inability to redeem their investment at any given time. PE investors are ‘locked-in’ for between five and ten years, or more, and are unable to redeem their committed capital on request during that period. Additionally, given the lack of an active market for the underlying investments, it is difficult to estimate when the investment can be realized and at what valuation.

4. Market risk: There are many forms of market risk affecting PE investments, such as broad equity market exposure, geographical/sector exposure, foreign exchange, commodity prices, and interest rates. Unlike in public markets where prices fluctuate constantly and are marked-to-market, PE investments are subject to infrequent valuations and are typically valued quarterly and with some element of subjectivity inherent in the assessment. However, the market prices of publicly listed equities at the time of sale of a portfolio company will ultimately impact realization value.

5. Capital risk: The capital at risk is equal to the net asset value of the unrealized portfolio plus the future undrawn commitments. In theory, there is a risk that all portfolio companies could experience a decline in their current value, and in the worst-case drop to a valuation of zero. Capital risk is closely related to market risk. Whilst market risk is the uncertainty associated with unrealized gains or losses, capital risk is the possibility of having a realized loss of the original capital at the end of a fund’s life.

There are two main ways that capital risk brings itself to bear - through the failure of underlying companies within the PE portfolio and suppressed equity prices which make exits less attractive. The former is impacted by the quality of the fund manager, i.e. their ability to select portfolio companies with good growth prospects and to create value, hence why fund manager selection is key for investors. The condition, method, and timing of the exit are all factors that can affect how value can be created for investors.

Risks Associated with Building and Operating a Diamond Exchange

Fundamentally, the key requirements for a successful diamond exchange include the following:

1. Supply: One of the most important things for a successful trading hub is the ability to secure ample, stable, and sustainable supply of commodities. In the case of a diamond exchange, adequate supply of rough diamond must be secured to make it successful.

2. Capital: Besides the infrastructure, facilities, systems, and amenities to operate the diamond exchange, the organizers must be able to arrange very large amounts of capital to facilitate the trade and other business activities related to the exchange.

3. Participants: The organizers must be able to attract a large number of international diamonteers to participate in the exchange. There is no guarantee that people will come when the exchange is built.

4. Venue: The venue must be able to provide competitive advantages compared with existing diamond exchanges in the world in terms of (a) modern facilities, latest technologies and state-of-the-art provisions, (b) tax relief, (c) financial facilitating network from big investors, (d) retail banking, lending institutions and foreign exchange facilities, (e) licenses and registrations, (f) global multi-commodities trading flatform, and (g) other amenities.

Risks Associated with International Markets

As some of our business activities are currently involved with international markets, any adverse change to the economy or business environment in these countries could significantly affect our operations, which would lead to lower revenues and reduced profitability.

Some of our business activities are currently involved with non-US countries. Because of this presence in specific geographic locations, we are susceptible to fluctuations in our business caused by adverse economic or other conditions in this region, including stock market fluctuation. A stagnant or depressed economy in these countries generally, or in any of the other markets that we serve, could adversely affect our business, results of operations and financial condition.

Risks Related to Our Securities

Insiders have substantial control over the company, and they could delay or prevent a change in our corporate control, even if our other stockholders wanted such a change to occur.

Though our executive officers and directors as of the date of this report, in the aggregate, only hold a small portion of our outstanding common stock, we have the majority voting rights associated with the Company’s Class B Series I Preferred Stock, which decision may allow the Board of Directors to exercise significant control over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This could delay or prevent an outside party from acquiring or merging with us even if our other stockholders wanted it to occur.

The price at which investors purchase our common stock may not be indicative of the prevailing market price.

The stock market often experiences significant price fluctuations that are unrelated to the operating performance of the specific companies whose stock is traded. These market fluctuations could adversely affect the trading price of our shares. Investors may be unable to sell their shares of common stock at or above their purchase price, which may result in substantial losses.

Since we do not currently meet the requirements for our stock to be quoted on NASDAQ, NYSE MKT LLC or any other senior exchange, the tradability in our securities will be limited under the penny stock regulations.

Under the rules of the Securities and Exchange Commission, as the price of our securities on the OTCQB or OTC Markets is below $5.00 per share, our securities are within the definition of a “penny stock.” As a result, it is possible that our securities may be subject to the “penny stock” rules and regulations. Broker-dealers who sell penny stocks to certain types of investors are required to comply with the Commission’s regulations concerning the transfer of penny stock. These regulations require broker-dealers to:

*Make a suitability determination prior to selling penny stock to the purchaser;

*Receive the purchaser’s written consent to the transaction; and

*Provide certain written disclosures to the purchaser.

These requirements may restrict the ability of broker/dealers to sell our securities, and may affect the ability to resell our securities.

Our compliance with the Sarbanes-Oxley Act and SEC rules concerning internal controls may be time consuming, difficult and costly for us.

It may be time consuming, difficult and costly for us to develop and implement the internal controls and reporting procedures required by the Sarbanes-Oxley Act. We may need to hire additional financial reporting, internal controls and other finance staff in order to develop and implement appropriate internal controls and reporting procedures. If we are unable to comply with the internal controls requirements of the Sarbanes-Oxley Act, we may not be able to obtain the independent accountant certifications that the Sarbanes-Oxley Act requires publicly traded companies to obtain.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

ITEM 2. DESCRIPTION OF PROPERTIES

As of June 30, 2021,2022, the Company did not own any realty or equipment.

ITEM 3. LEGAL PROCEEDINGS

The Company is currently not a party to any material pending legal proceedings and, to the best of its knowledge, no such action by or against Company has been threatened.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company’s Common Stock is currently trading on the OTC Markets under the symbol “PHIL”. The following sets forth the high and low prices of the Company’s Common Stock in the US for the most recent month, two most recent quarters and each quarter during the preceding two fiscal years.

The prices for the Company’s common stock quoted by brokers are not necessarily a reliable indication of the value of the Company’s common stock.

Per Share Common Stock Prices by Quarter

For the Fiscal Year Ended June 30, 2022

Per Share Common Stock Prices by Quarter

For the Fiscal Year Ended June 30, 2021

Per Share Common Stock Prices by Quarter

For the Fiscal Year Ended June 30, 2020

Holders of Common Equity:

As of October 10, 2021,January 12, 2023 there are approximately 1,5861,592 shareholders of record of the Company’s common stock, of which 1,2871,286 are active.

Dividends:

Cash dividend: The Company has not declared or paid a cash dividend to common stock shareholders since the Company’s inception. The Board of Directors presently intends to retain any earnings to finance company operations and does not expect to authorize cash dividends to common shareholders in the foreseeable future. Any payment of cash dividends in the future will depend upon Company’s earnings, capital requirements and other factors.

Share dividend: On March 12, 2012 the Board of Directors of the Company declared a special stock dividend to shareholders of Common Stock of the Company with the following stipulations: (a) Declaration date: March 16, 2012; (b) Record date: June 15, 2012; (c) Payment date: September 17, 2012; (d) Dividend ratio: All eligible shareholders of Common Stock of the Company as of the Record date shall receive three new shares of Common Stock of the Company for each share held by such shareholders as of the referenced record date. The purpose of this special stock dividend was to partially mitigate the impact of the dilution in connection with the 1-for-1,500 reverse split of the Common Stock on the Company’s long-term shareholders and reward them for staying with the Company. On June 6, 2012, the Company’s Board of Directors passed a resolution to change the record date for the special stock dividend to July 31, 2012 and the distribution date to November 30, 2012. The Company has reserved a total of 5,673,327 shares of Common Stock for this special dividend distribution and will reset a new distribution date when the market price of the Company’s Common Stock makes the special stock dividend economically meaningful for such shareholders and a registration statement for the dividend shares is declared effective by the Securities and Exchange Commission.

ITEM 6. SELECTED FINANCIAL DATA

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Except for the audited historical information contained herein, this report specifies forward-looking statements of management of the Company within the meaning of Section 27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act of 1934 (“forward-looking statements”) including, without limitation, forward-looking statements regarding the Company’s expectations, beliefs, intentions and future strategies. Forward-looking statements are statements that estimate the happening of future events and are not based on historical facts. Forward- looking statements may be identified by the use of forward-looking terminology, such as “could”, “may”, “will”, “expect”, “shall”, “estimate”, “anticipate”, “probable”, “possible”, “should”, “continue”, “intend” or similar terms, variations of those terms or the negative of those terms. The forward-looking statements specified in this report have been compiled by management of the Company on the basis of assumptions made by management and considered by management to be reasonable. Future operating results of the Company, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking statements. The assumptions used for purposes of the forward-looking statements specified in this report represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. In addition, those forward-looking statements have been compiled as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this report. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in this report are accurate and the Company assumes no obligation to update any such forward-looking statements.

RESULTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 20212022 AND JUNE 30, 20202021

Revenues:

The Company received $30,000 from consulting services for the fiscal year ended June 30, 2022 as compared to $61,000 from consulting services for the fiscal year ended June 30, 2021 as compared to $12,531 from consulting services2021.

Operating Expenses:

The Company incurred total operating expenses of $16,929,928 for the fiscal year ended June 30, 2020.

Operating Expenses:

The Company incurred total operating expenses of $949,184 for the fiscal year ended June 30, 20212022 as compared to $1,873,738$913,616 for the year ended June 30, 2020.2021. The decreaseincrease of $924,554operating expenses between the two fiscal periods $16,047,312 includes a decreasean increase of $91,308$45,538 in general and administrative expenses, a decreasean increase of $780,746 in professional services, and a decrease of $52,5000$112,500 in salaries and wages, fees betweenan increase of $1,018,651 for the two fiscal periods. The decreasedevelopment costs of the Asia Diamond Exchange and an increase of $14,839,623 in professional services was due to a decrease in the expensesmainly associated with setting up the Luxembourg bank funds duringissuances of the fiscal year ended June 30, 2021.Company’s stock for the development and launching of an Asia Diamond Exchange (ADE) blockchain token.

Income (loss) from operations:

The Company had a loss from operations of $888,184$ 16,899,928 for the fiscal year ended June 30, 20212022 as compared to a loss from operations of $1,861,207$852,616 for the fiscal year ended June 30, 2020.2021. This represents a decreasean increase of $973,023$16,047,312 in loss from operations during the current fiscal year as compared to that of the precious year. This was mainly due to a decreasean increase of $91,308$45,538 in general and administrative expenses, a decreasean increase of $780,746 in professional services, a decrease of $52,5000$112,500 in salaries and wages, fees between the two fiscal periods as mentioned above, plus an increase of $48,469$1,018,651 for the development costs of the Asia Diamond Exchange and an increase of $14,839,623 in revenues inprofessional services mainly associated with the current period.issuances of the Company’s stock for the development and launching of an Asia Diamond Exchange (ADE) blockchain token as mentioned above.

Other income (expense):

The Company had net other expenses of $6,112,184$ 4,254,515 for the fiscal year ended June 30, 20212022 as compared to net other incomeexpenses of $539,402$5,700,562 for the fiscal year ended June 30, 2020.2021. The net variance of $6,651,586$1,446,047 between the two fiscal periods was primarily due to an increase of $56,557$711,419 in other income, an increase in interest expenses in the amount of $1,223,277 and a decrease of $750,751 in other income, and an increase in other expenses in the amount of $5,844,278.$1,957,905. The Company recognized $104,356$1,118,195 as other income in connection with a gain in settlement of debt in the amount of $87,228, a refund$1,017,969 and the sale of $10,650 and total adjustments of $6,458 from the accounts of the Luxembourg bank funds during the fiscal year ended June 30, 2021 as compared to a total of 855,107 as other income from derivative gains during the same period in 2020.400,000 CO2-1-0(CARBON) Corp. tokens for $100,000. As for other expenses, the Company incurred $5,860,341$3,780,153 under this category during the fiscal year ended June 30, 2021,2022, primarily due to a loss in the amount of $877,484 in connection with cashless warrant exercises, a loss on note discounts of $221,307, penalties of $215,663, commissions of $10,000, a loss on derivatives of $427,704, a loss on issuance of stock in the amount of $2,431,914, loss on conversion$237,879, prepayment premium of notes in the amount of $2,558,325, loss on note discounts of $215,216, penalties of $174,987$23,809, and total financing origination costs of $28,070$336,392, as compared to $16,063$5,700,562 in other expenses during the previous fiscal year. Interest expenses for the current fiscal year is $1,592,557 as compared to interest expenses of $369,280 for the previous fiscal year.

Net income (loss):

The Company had a net loss of $7,000,368$21,154,443 for the fiscal ended June 30, 2021,2022, as compared to a net loss of $1,321,805$6,553,178 for the fiscal year ended June 30, 2020,2021, representing a variance of $5,678,563$14,601,265 in net loss between the two fiscal years. The net loss per share based on the basic and diluted weighted average number of common shares outstanding for the fiscal years ended June 30, 20212022 and June 30, 20202021 was both $(0.00).

CASH FLOWS

We had in cash and cash equivalents of $95,344$67,896 as of June 30, 20212022 as compared to $225,381$95,344 in cash and cash equivalents as of June 30, 2020,2021, respectively.

Net cash provided byused in our operating activities was $158,720$ 1,545,570 for the fiscal year ended June 30, 20212022 as compared to cash used in operating activities of $(720,125)$ 79,446 for the fiscal year ended June 30, 2020.2021.

The underlying reasons for the variance in net cash provided by and used in operating activities between the two fiscal year periods were mainly due to an increase in net loss from operations of $5,678,563,$14,601,265, a net change in non-cash issuances of stock of $20,404,740, an increase in deferred financing costs of $6,885,045 due to conversion of notes,$355,860, a net decrease in assets and prepaid expenses of $770,632$179,420 and a net increase in accounts payable and accrued expenses of $521,324$224,410 between the two fiscal years.

There was $406,427 in$410,438 cash used inprovided by investing activities during the fiscal year ended June 30, 2021,2022, compared to no$441,995 cash provided by or used in investing activities during the same period ended June 30, 2020.2021.

Net cash provided by financing activities was $117,670$ 1,107,288 for the fiscal year ended June 30, 20212022 as compared with $873,827net cash provided by financing activities of $391,404 for the fiscal year ended June 30, 2020.2021. The net cash provided by financing activities for the current fiscal year primarily came from loans from officers and directorsnotes payable in the amount of $24,049$1,087,288 and $112,530$20,000 from issuanceissuances of common stock for cash.

HISTORICAL FINANCING ARRANGEMENTS

SHORT TERM NOTES PAYABLE AND ISSUANCE OF COMMON STOCK

In the course of its business, the Company has obtained short-term loans from individuals and institutional investors and from time to time raised money by issuing restricted common stock of the Company under the auspices of Rule 144. These notes bear interest rates ranging from 0% to 36% per annum. (Notes 8 & 13).

CONVERTIBLE PROMISSORY NOTES

The Company has also from time to time issued convertible promissory notes to various private investment funds for short-term working capital and special projects. Typically, these notes bear interest rates from 5% to 12% per annum, mature within one year, are convertible to common stock of the Company at a discount ranging from 42% to 50%, and may be repaid within 180 days at a prepayment premium ranging from 130% to 150%. (Note 8)

COMPANY’S PLAN OF OPERATION FOR THE FOLLOWING 12 MONTHS

In the next twelve months the Company’s goals are to createadvance a number of sub-funds under PHILUX Global Funds SCA, SICAV-RAIF for investment in real estate, renewable energy, agriculture, infrastructure, and healthcare, as well as develop the Asia Diamond Exchange in Vietnam. In addition, theThe Company will also continue to carry out its merger and acquisition program by acquiring target companies for roll-up strategy and also invest in special situations. In particular, the Company willplans to complete the acquisitionpending acquisitions of Five-Grain Treasure Spirits Co., Ltd. under Empire Spirits, Inc.KOTA Energy Group LLC, KOTA Construction LLC, and develop a private baiju brandTin Thanh Group and intends to increase revenues.execute the new business plan in conjunction with Tin Thanh Group regarding the smart-tire leasing program and the production of hydrogen in collaboration with Air Products and Chemicals. Moreover, the Company will continue to provide advisory and consulting services to international clients through its wholly owned subsidiary PHILUX Capital Advisors, Inc. (formerly known as PHI Capital Holdings, Inc.)

In addition, 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 of 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.

FINANCIAL PLANS

MATERIAL CASH REQUIREMENTS: We must raise substantial amounts of capital to fulfill our plans for PHILUX Global Funds and for acquisitions. We intend to use equity, debt and project financing to meet our capital needs for acquisitions and investments.

Management has taken action and formulated plans to meet the Company’s operating needs through June 30, 20222023 and beyond. The working capital cash requirements for the next 12 months are expected to be generated from operations, sale of marketable securities and additional financing. The Company plans to generate revenues from its consulting services, merger and acquisition advisory services, and acquisitions of target companies with cash flows.

AVAILABLE FUTURE FINANCING ARRANGEMENTS: The Company may use various sources of funds, including short-term loans, long-term debt, equity capital, and project financing as may be necessary. The Company believes it will be able to secure the required capital to implement its business plan.

EQUITY LINE FACILITYOF CREDIT WITH INSTITUTIONAL INVESTOR

On March 6, 2017, PHI Group, Inc., a Nevada corporation (the “Company”) and Azure Capital, a Massachusetts Corporation (the “Investor”)01, 2022, the Company entered into an Investment Agreement (the “Investment Agreement”equity purchase agreement with an institutional investor (“The Investor”) and a Registration Rights Agreement (the “Registration Rights Agreement”), each dated March 6, 2017 between the Company and the Investor.as follows:

Pursuant to the Investment Agreement, theThe Investor committed to purchase, subject to certain restrictions and conditions,will provide an equity line of up to $10,000,000 worthto the Company, pursuant to which the Company has the right, but not the obligation, during the 24 months after an effective registration of the Company’s common stock, overunderlying shares, to issue a period of 36 months from the effectiveness of the registration statement registering the resale of shares purchased by the Investor pursuant to the Investment Agreement. The Company agreed to initially reserve 20,000,000 shares of its Common Stock for issuancenotice to the Investor pursuant to(each a “Drawdown Notice”) which shall specify the Investment Agreement. In the eventamount of registered shares of common stock of the Company cannot register a sufficient number of shares of its Common Stock for issuance pursuant to the Investment Agreement,(the “Put Shares”) that the Company will use its best effortselects to authorize and reserve for issuance the number of shares required for the Company to perform its obligations in connection with the Investment Agreement as soon as reasonably practical.

This Investment Agreement was amended on August 3, 2017 to allow for the reservation of 65,445,000 shares of the Company’s Common Stock for issuancesell to the Investor, pursuantfrom 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 corrected Investment Agreement.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 has filed aintends to file an S-1 Registration Statement with the Securities and Exchange Commission to include 7,936,600 shares of its Common Stock for issuance in connection with the first tranche of thethis Equity Line Facility. The S-1 Registration Statement, as amended, was declared effective by the Securities and Exchange Commission on January 11, 2018.

As of the day of this report, the Company has not accessed the Equity Line Facility for funding. The Company sent an official notice to Azure Capital on September 7, 2021 to terminate this Investment Agreement effective retroactively January 11, 2021. The Company intends to file an Offering Circular pursuant to Tier 2 of Regulation A of the United States Securities and Exchange Commission (the “SEC”) to raise capital for the acquisition of Five-Grain Treasure Spirits, Co., Ltd. in Jilin Province, China and to launch the Asia Diamond Exchange in Vietnam.Credit.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The following discussion about PHI Group Inc.’s market risk involves forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements.

Currency Fluctuations and Foreign Currency Risk

Some of our acquisition targets and partner companies are located outside of the United States and use currencies other than the U.S. dollar as the official currencies of those countries. The fluctuations of exchange rates in these countries may affect the value of our business.

Interest Rate Risk

We do not have significant interest rate risk, as most of our debt obligations are primarily short-term in nature to individuals, with fixed interest rates.

Valuation of Securities Risk

Since some of our income in the past was paid with the marketable securities, the value of our assets may fluctuate significantly depending on the market value of the securities we hold.

ITEM 8. FINANCIAL STATEMENTS

PHI GROUP, INC.

INDEX TO FINANCIAL STATEMENTS

AUDITOR’S REPORT

M.S. Madhava Rao 316, 1st Cross, Gururaja Layout, 7th Block, 4th Phase, BSK 3rd Stage, Bangalore 560085 Tel No: 91-8861838006 email : mankalr@yahoo.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

PHI Group Inc.

2323 Main Street,

Irvine, CA 92614

Opinion on the Financial Statements

We have audited the accompanying Consolidated balance sheet of PHI Group, Inc. (the “Company”) as of June 30, 2022 and 2021, the related statements of operations, changes in shareholders’ deficit and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2022 and 2021, and the results of its operations and its cash flows for the period June 30, 2022 and 2021, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

The Company’s financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of the liabilities in the normal course of business. The Company has an accumulated deficit of $71,717,973 and had a negative cash flow from operations amounting to $1,545,570 for the year ended June 30, 2022. These factors as discussed in Note 19 of the financial statements raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 19. The financial statements do not include any adjustments that might result from the outcome of this uncertainty

Critical Audit Matters

Critical audit matters arising from the current period of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosure that are material to the financial statements and (2) involve especially challenging, subjective, or complex judgements. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit below, providing separate opinions on the critical audit matters or the accounts or disclosures to which they relate.

Related party transactions.

As discussed in Notes 7 and 16 to the financial statement, the Company has borrowed and accrued salaries from related parties in the amounts of $1,077,218 and $360,000 as of the date of June 30, 2022 respectively. The Company is relying on borrowings and contributions by shareholders as well as by selling stock. It is expected to incur losses and negative cash flow in the future.

The procedure performed to address the matter included: obtaining confirmation from related party.

Chartered Accountant
Bangalore, India
January 13, 2023

M.S. Madhava Rao

PHI GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (AUDITED)

The accompanying notes form an integral part of these audited consolidated financial statements

PHI GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS (AUDITED)

FOR THE YEARS ENDED

The accompanying notes form an integral part of these audited consolidated financial statements

PHI GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

AUDITED

The accompanying notes form an integral part of these audited consolidated financial statements

PHI GROUP, INC. AND SUBSIDIARIES

STATEMENT OF STOCKHOLDERS’ DEFICIT (AUDITED)

FOR THE YEARS ENDED JUNE 30, 2022 AND JUNE 30, 2021