PHI Group Inc (PHIL)

[gemmerling]

PHI Group CC Transcript 5/23/2022

Transcribed by bahamasbex

May 23, 2022

Ladies and gentleman thank you very much for taking your time to join our shareholder zoom conference today. I know it is short notice for some of you but thank you for taking your time. I know some of you are far away. I know one of our shareholders is on the way to Ukraine in a few hours, other people are in Europe and Asia and of course most of us are here in the US. And thank you for taking your time to join us today. It's been quite a while since we had our last conference call. And I was traveling quite a bit to Asia and also to the Middle East before that but it's time for us to get together and update our shareholders because there have been a lot of activities behind the scenes and it's hard for you to imagine and sometime just trying to speculate what is going on sometimes can not be very close to the reality.

So I know it's very rushed, but we want to take this time and have this opportunity to update you and give you an overview of what's going on. Our usual caveat is the Safe Harbour, but I am not going to belabour on it in this conference. We have information that contains forward looking statements pursuant to the Safe Harbour provisions of the Private Securities Litigation Reform Act of 1995. And forward looking statement usually describes future plans and strategy, expectation and so forth, and those may defer terribly from those that have checked it because of the nature of things. There's a multitude of risk and uncertainties that could cause future circumstances and in result to be much different than we expect and want to see happen.

With that in mind we will go ahead and cover a number of topics today. We will talk a little bit about earnings and the loans we have and the transaction with Kota, with 5 Grain, progress with ADE (Asia Diamond Exchange project), and our recent relationship with VIENC (Vietnam International Entrepreneur Networking Club) and also our agreement with Tin Thanh Group. And I will also touch on our Philux Global funds and the progress.

The early report just came out right after closing of market today so maybe some of you haven't had a chance to review the details yet. But I just want to give you a quick summary. You know we didn't generate much revenue at all during the past quarter. Only a little bit of money from our consulting service and we devoted a lot of time in the past two years, in particular to work on the Diamond Exchange project and also our Philux Global funds. And of course our major initiatives are the Asia Diamond Exchange and also the Global fund program that we have been working on.

And so things can change very quickly after the closing of some of our pending acquisitions and the ability to consolidate numbers. But at the same time we will also ramp up and continue to capitalize on our ability to generate revenue through our Philux Capital advisor as the consulting arm that provides M & A (mergers and acquisitions) services and also to help other companies, especially the emerging market to become public in the US and also in Europe for that matter.

And last quarter our total operating expenses were about $295,000 and the income actually lost from operation was about $290,000 and other income and expenses. I would say expenses, not income, the other income part was small. The net other expenses were about $1.7 million. That came to about $2 million in net loss and of course most of the lost is a paper loss, not cash that we actually spent. But as far as GAAP accounting is concerned, you know, we have to be very conservative to have book every item according to GAAP requirement. So it's not all that money was cash that was spent so keep that in mind. But the result of the last quarter is not indicative of the result of the whole fiscal year because things may change very quickly if we, and when we, close some of the pending acquisitions.

Lots of you have been asking about the loans, and if you read the 8K which was filed, we just terminated two loan agreements with Geza and also with Neok Financial Group. We had some difficulties in our due diligence process. We were not very satisfied with the process and the results so we decided to unilaterally terminate those agreements and just focus on those uh that we've been working more and more closely and with greater level of interaction of feedback and progress. Right now we still have a number of programs on our books still under way, especially the HAJ Financial program.

You know we mentioned in our previous conference call and maybe in some of our tweets and so forth. Yeah we have gone a long way with that project. We have already established the SPV in Dubai. If you read the filing you will see it. We have set up Philux Dubai Global LLC and we got the license and formation number and information, we also reported that. We also set up the bank account for the holding company in Dubai and also we have gone through the Hawala certification process as of today we got the report back from our partner in Dubai that part is already done.

So very soon the whole process of due diligence and administration requirement will be completed and we look forward to being able to close this transaction, maybe part of it as a tranche first and then the rest will come later. The other loan with Arab League is still under way and we also set up the bank account and still need to complete some more requirements in terms of security bond coverage and all that. Which we will be working on after our filing so I be able to travel again and will follow up on that. And then the one with Al Aqel that one is still under way.

We've made some progress there but still some more work to do.
Among the MOU's and commitments back since 2000, we still have a very potential commitment from a group of about $350 million. We are working on that very closely at this juncture and so we are pushing forward with those 4 remaining long term loan programs. Most recently we have also had an agreement with a group for a crypto loan program for a total of $75 million, and the initial transfer would be $17 million.

We are expecting to satisfy all the requirements and we look forward to closing that tranche very soon here too. So we will keep you posted on that. So those are the major loan programs we have been working on. We dropped two but we still have five others that are under way. Yeah, the loans are important for us at this stage because with the proceeds from this program we can do a number of things. We can close the Kota transaction.

And I want to take this opportunity to thank the partners and management team of Kota for their patience and understanding. Actually according to the agreement they could have decided to not continue the transaction with us because we were not able to consummate the transaction according to the agreement, but they are willing to work with us. And actually we also assisted Kota with some short term financing to bridge the gap so that they were able to ramp up production and sales, so that was a good thing, but that's just a temporary thing.

We need to close the transaction, bring in substantial amount of money in order to be able to accomplish the goal and plans that both Kota and we have set out. So we are getting very close on that and hopefully we will have some good news to report soon.

With the 5 Grains transaction we have made some changes. Initially we decided to acquire 70% ownership in 5 Grain but there is also some complication in terms of relationship between the two countries and the fact that a number of Chinese listed companies in the US have shown lack of transparency and also the level of audit that was done sometimes is not the best. Those do not effect us because we be doing what is right and in full compliance, but we believe we don't really need to go that far.

We have decided to amend the agreement with 5 Grain just to have a smaller ownership in the company as a strategic partner and we will manufacture the organic baiju here in the US instead. It is under our own subsidiary, Empire Spirits. We do hope to be able to share that information in full detail hopefully this week or later next week so you see the whole plan and everything. I believe it will be very very exciting because we can ramp up and produce and introduce the first ever American made baiju here in California. So that will be very exciting.

As far as the ADE project is concerned, we spend a lot of time and our people on the ground. Staff and our consultants have been working tirelessly to move this project forward and of course the opportunity is huge like the 2,600 hectacres of land that has been set aside as a new investor zone in Long Thanh district, Quang Nam province near the new international airport. That's a huge project. It will be one of the best industrial zone ever in Vietnam because it's only like less than two miles from the airport and less than fifteen miles to the the sea port.

So there's no other industrial zone that's better than that. Initially we applied for 600 hectacres to set aside 300 hectacres to do our Asia Diamond Exchange project and the rest for (???) operation for other companies as well. The government suggested that if we can undertake the whole project it would be mutually convenient, so we have decided and also submitted the application to request for the whole entire zone. But you know that zone will take some time to develop. It's not going to happen over night. The airport will take some time to get built out. Ultimately it will be the biggest airport in Vietnam, we will be able to handle 100 million passengers per year. So this will be a great hub for a lot of things, not only the industrial zone but also other manufacturing like high tech facility etc.

That being said we have not abandoned our original plan to operate in Chu Lai, it's not the month of July, it's the location they call Chu Lai. Those of you who follow us, you know. Our relationship with the Quang Nam provincial government is excellent and we want to continue doing some work there so after consulting with our international diamond tier participants and partners, we decided to set up the lab grown artificial synthetic diamond exchange in Chu Lai first. And then we will do the other ADE buildings in Long Thanh.

So we can start very quickly, we don't have to wait for Long Thanh to be completed to launch our ADE program. I'm very excited about that because right now there is no other lab grown diamond exchange whatsoever. We are the first one that are doing that and we are not alone, we are with major major groups. The biggest ones in this sector are coming and working with us. We have the design and layout, and everything and we've been working closely with the Quang Nam province to get it off the ground very quickly.

Very very exciting. There have been delays, but a project of this nature takes time. We want to see things happen over night but we have to be very very realistic. And as I've mentioned to our investors and our shareholders, time isn't over. We are a different company. If you are looking at something making money in one or two quarters, it may not be the right place for you. So be mindful of that when you get in our stock. If you are looking for something that can make a quick buck and get out, this may not be the stock for you.

So please don't be disappointed. You have to have patience. If you do not have patience, it's not the right place for you. But we will be doing some big stuff. You know, we will make a big difference.

I want to share with you a little bit about our relationship with VIENC. They have about 200-300 member companies, and many of them well qualified to go public on senior exchanges in the US or even in Europe, or in Hong Kong, Singapore, etc. It is a privilege for us to work closely with this very special group. A network of people with great minds, with great ambitions and talents and we believe we can do a lot of things that will benefit both sides.

Not only helping their members, but by helping their members we are helping ourself because when we help take one company public, for example, not only do we earn fees from the transaction but we also earn equity in those companies. And looking at Chinese companies right now, even though a lot of those have dropped out due to different reasons and so forth, I think about 260 or more companies that are still listed on senior exchanges here in the US, not counting the (???) on OTC markets. The total market cap of Chinese companies listed in the US is about over $1.4 trillion, and I believe Vietnam deserves some of that opportunity and accessibility for them as well.

So we are very glad that we are ramping up our effort because there is still a void there. We started the first Vietnamese company public on NASDAQ. We were instrumental in the process and we also took our very own subsidiary in Vietnam to the Frankfurt stock exchange. We can still do the same. We left a void and we have to fill that void. The timing is now.

We just recently signed an agreement with Tin Thanh Group. On the surface, you may not pay a lot of attention, but Tin Thanh is quite a unique company. A pioneer conglomerate with decades of experience in providing renewable energy and also introducing global emissions. They are involved mainly in the environmental sector, renewable energy and they have a very unique IP (intellectual property).

It is called "closed circular agro-industrial energy" by using the sorghum crops and I will mention a little bit about how that fits very well in to what we are doing. We have launched Carbon CO2-1-0.io as a climate fighting instrument to reduce Carbon emissions, to mitigate the effects of greenhouse gases and we already listed that token on Digifinex in Singapore. It's some what active but the price does not reflect the real value of the company yet.

We have a lot of work to do, but it is getting better and better every day. Tin Thanh will be also very instrumental in bringing to us the Carbon credits that can be used for our program almost immediately. They can contribute significant amounts of Carbon credits towards our Carbon emission mitigation program. And then at the same time their other activities in environmental protection and renewable energy fit very very well in to our strategy, our scope of business. It fits in to our passion, and also our prime concerns, so it's a great fit.

Just through Tin Thanh Group alone we will be able to help them get listed on NASDAQ or NYSE in the very near future. We will be a mutual benefit for both Tin Thanh and ourselves.

As far as Philux Global Funds is concerned, we have some changes with regards to our custodian bank and also the investment manager. We are working on it right now. But it would become a much better situation for us with the new custodian and the new fund manager that will work closely with us. As mentioned from my previous tweets and press releases, I was in Dubai and Abu Dhabi in late March and also in Zurich in April. We met with a lot of major qualified vetted investors, introduced by the US embassy in those countries and also the Department of Commerce.

Quite a few major groups have interest in working with us, and we also are working with three groups in particular in Dubai, in Israel and also in London that will be working with us to fund Philux Global Funds. First will be the real estate compartment and then the energy and then other to follow. So things are working out very very well. I'm very happy with the result, even though on the surface sometime if you look at the immediate things on the surface, you don't see it. Oh, the company didn't make any money the last quarter.

No, we didn't make any money, but we have invested a lot of energy, resources and our commitment and our hard work in to this. It will all come to fruition and we will see the results. I just want to give you the assurance that I will fully devote my energy and attention and effort to make sure that we will accomplish our goals.
I hope to be able to share with you very soon on the status of Kota and 5 Grains in more detail, especially with the loans that are very close to having the first closing. So with those we will be able to show some solid result by being able to consolidate the numbers of our acquisition partners and also with the work we are doing through Philux Capital advisors with regard to taking companies public and also providing M & A services for them we will be able to generate revenues and be able to show on our books more going forward.

As far as Vina Films is concerned, we just talked to our auditor yesterday. He will be in Asia later this month and part of June. So the plan is for him to come back to Vietnam to finish the audit so we can consolidate the numbers for Vina Films for the year ending June 30, 2022. So that's the plan. As you know, when we first set out to acquire or to have the business combination cooperation agreement with Vina Films in Vietnam it was before Covid. But after, when Covid happened, things have changed dramatically. Not only for Vina Films but also for many other companies. So I say wow, we have to be very realistic as far as our expectations, or new expectations are concerned. Business is not the same, it is not as usual as before.

We have to adapt, we have to be able to sort through things and make the best decision that will be most beneficial for the company for our shareholders. A board member of our company often say when you go to battle after you fire the first shot, all your configuration and all your plan will change, is not going to be the same anymore. And in fact it is the same thing in business. One decision or one factor that happens that can change the whole landscape so please keep that in mind. We are in a very dynamic situation, but we are not sitting on our hands. We are doing our best to make sure that we get to the end results.

I want to take this time to thank all of you for taking your time to join us today on a catch up call that has been delayed so long. And a lot of our shareholders and even potential investors say why no news, why no new tweet, why no update. So I think today we've covered a lot of things. Not only about the quarterly earnings, the loan programs, about Kota, about 5 Grains, about Empire Spirits, about the ADE, about the lab grown diamond exchange itself and also the rough diamond and polished diamond exchange itself as well. And then our relationship with VIENC, with TT Group and the future of our Phliux Global funds.

And sorry we will be ending our call at this moment because we have a call with Kota management in a little bit. I want to thank you again for your time and for your patience and for your confidence. I wish the best for all of us and may God bless us. May God bless Phi Group and our shareholders and investors. May God bless America. God be with you. Thank you very much. See you again soon.

Stream of CC: https://www.youtube.com/watch?v=QiZpgb7eJFE

Previous transcripts can be found here: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=168636195