UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): September 16, 2021
(Exact
name of registrant as specified in its charter)
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Wyoming
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001-38255-NY
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90-0114535
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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2323
Main Street, Irvine, CA
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92614
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: 714-793-9227
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
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☐
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Precommencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Precommencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).
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Securities
registered pursuant to Section 12(b) of the Act:
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Title
of each class
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Trading
Symbol(s)
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Name
of each exchange on which registered
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Common
Stock
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PHIL
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OTC
Markets
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Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provide pursuant to Section 13(a) of the Exchange Act. ☐
Section
1 – Registrant’s Business and Operations
Item
1.01 Entry into a Material Definitive Agreement
On
September 16, 2021, PHI Group, Inc. entered into a Memorandum of Understanding with Five Grain Treasure Spirits Co., Ltd. (“FGTS”),
a company organized and existing by virtue of the laws of People’s Republic of China, with principal business address at Jigu Road
Economic Zone, Shulan City, Jilin Province, China, to acquire seventy percent (70%) of ownership in FGTS and provide the additional required
capital for FGTS to implement its business plan. The total budget for the purchase price and the additional required capital is one hundred
million U.S. dollars (USD 100,000,000), whose terms and conditions for payment will be stipulated in a Definitive Agreement to be signed
by both parties after satisfactory due diligence of FGTS by the Registrant.
FGTS
specializes in the production and sales of spirits, together with the development
of proprietary spirit production processes and the possession of patented technology for growing raw materials for beverage manufacturing.
Completion
of this transaction will be conditioned, among other matters, upon:
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(a)
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Upon
signing of this MOU, FGTS will cooperate with and accommodate PHIL and/or its representative(s) for further due diligence review
of FGTS’s business, including but not limited to its assets, liabilities, property, plant and equipment, technologies, operations,
books and records, and business plan.
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(b)
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The
signing of the Definitive Agreement by the parties within forty-five days following the signing of this MOU and the closing of this
transaction by December 31, 2021, unless extended by the consent of both parties in writing.
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(c)
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The
establishment of a special purpose vehicle (SPV) as the holding company for the seventy percent (70%) ownership in FGTS.
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SECTION
9 – FINANCIAL STATEMENTS AND EXHBITS
Item
9.01 Financial Statements and Exhibits
The
following is a complete list of exhibit(s) filed as part of this Report.
Exhibit
number(s) correspond to the number(s) in the exhibit table of Item 601 of Regulation S-K.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Dated:
September 17, 2021
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PHI
GROUP, INC.
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(Registrant)
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By:
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/s/
Henry D. Fahman
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Henry
D. Fahman
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Chairman
and CEO
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EXHIBIT
10.1
MEMORANDUM
OF UNDERSTANDING
This
Memorandum of Understanding, made on this 16th day of September 2021, shall set forth the guidelines and plan (the “MOU”)
by and between PHI Group, Inc., a U.S. public company duly organized and existing by virtue of the laws of the State Wyoming, U.S.A.
(Trading symbol: PHIL) with principal address at 2323 Main Street, Irvine, CA 92614, U.S.A., hereinafter referred to as “PHIL”
and Five Grain Treasure Spirits Co., Ltd., a company organized and existing by virtue of the laws of People’s Republic of China,
with principal business address at Jigu Road Economic Zone, Shulan City, Jilin Province, China, hereinafter referred to as “FGTS”.
WHEREAS,
FGTS specializes in the production and sales of spirits, together with the development of proprietary
spirit production processes and the possession of patented technology for growing raw materials for beverage manufacturing.
WHEREAS,
PHIL is a U.S. diversified publicly traded company which owns a Luxembourg bank fund (PHILUX Global Funds SCA, SICAV-RAIF) and is engaged
in mergers and acquisitions and investing in various industries, including but not limited to real estate, agriculture, energy and natural
resources, healthcare and consumer goods.
The
parties hereby agree to the following terms of this MOU:
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1.
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PHIL
and FGTS are parties to this MOU dated the 16th day of September 2021.
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2.
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The
MOU sets forth guidelines for further discussions and negotiations between PHIL and FGTS towards the execution of a Definitive Agreement
between the parties containing representations, warranties, covenants, and indemnities customary for a transaction of this type.
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3.
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PHIL
is desirous of acquiring seventy percent (70%) of ownership in FGTS, pursuant to the price, terms and conditions herein, which will
be fully delineated in a Definitive Agreement by both parties for the consummation of this transaction.
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4.
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Subject
to further satisfactory due diligence review by PHIL and discussions between the parties herein, PHIL agrees to acquire seventy percent
(70%) of ownership in FGTS and provide the additional required capital for FGTS to implement its business plan. The total budget
for the purchase price and the additional required capital is one hundred million U.S. dollars (USD 100,000,000), whose terms and
conditions for payment will be stipulated in the Definitive Agreement.
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5.
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Completion
of the transaction will be conditioned, among other matters, upon:
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(d)
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Upon
signing of this MOU, FGTS will cooperate with and accommodate PHIL and/or its representative(s) for further due diligence review
of FGTS’s business, including but not limited to its assets, liabilities, property, plant and equipment, technologies, operations,
books and records, and business plan.
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(e)
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The
signing of the Definitive Agreement by the parties within forty-five days following the signing of this MOU and the closing of this
transaction by December 31, 2021, unless extended by the consent of both parties in writing.
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(f)
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The
establishment of a special purpose vehicle (SPV) as the holding company for the seventy percent (70%) ownership in FGTS.
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6.
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This
letter constitutes the entire Memorandum of Understanding of the parties relating to the contemplated acquisition of seventy percent
(70%) ownership in FGTS and supersedes all prior contracts or agreements with respect to those matters, whether oral or written. Each
party’s rights under this MOU are assignable only with the prior written consent of the other party. This MOU and
the rights and duties of the parties arising out of it shall be governed by and construed and enforced in accordance with the laws
of Hong Kong.
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IN
WITNESS WHEREOF, the parties have caused this Memorandum of Understanding to be executed and have agreed to and accepted the terms
herein on the date written above.
This
16th day of September 2021
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PHI
Group, Inc.
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Five
Grain Treasure Spirits Co., Ltd.
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By:
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/s/
Henry D. Fahman
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By:
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/s/ Jimmy Wang
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Henry
D. Fahman
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Jimmy
Wang
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Chairman
& CEO
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Vice
President, Authorized Representative
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Exhibit
99.1
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PHI
Group Signs MOU to Acquire Majority Ownership in a Baijiu (“bye-joe”) Distiller
New
York, September 17, 2021 (GLOBE NEWSWIRE) — PHI Group, Inc. (www.phiglobal.com, PHIL), a diversified holding
company currently engaged in PHILUX Global Funds (a group of Luxembourg bank funds), the Asia Diamond Exchange project (“ADE”)
in Vietnam, mergers and acquisitions and investing in special situations, is pleased to announce that it has signed a Memorandum of Understanding
(MOU) to acquire seventy percent (70%) ownership in Five Grain Treasure Spirits Co., Ltd., (“Five-Grain”) a company with
over one hundred years of tradition in Jilin Province, China. This is a unique, special situation transaction that is expected to create
substantial value for the Company, its shareholders and all stakeholders.
According
to the MOU, PHI Group will acquire seventy percent (70%) ownership in Five-Grain and provide the 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. PHI Group will also set up a subsidiary under the name of “Empire
Spirits, Inc.” as the special purpose vehicle for this undertaking.
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.
According
to the Five-Grain development plan, once the acquisition is completed, the company will follow a three-prong growth strategy to reach
200,000,000 liters of bulk spirits per year to supply to other beverage companies and develop its own brand using proprietary manufacturing
methods and preferred distribution channels. By reaching these goals, Five-Grain expects to annually generate over US$ 600 million in
revenues on the success of the Company’s growth plan.
Kweichow
Moutai, the largest alcohol company in the world has recently crossed the $500 billion dollar valuation mark. With a single Baijiu product,
they enjoy a 50X expected revenues. Five-Grain will supply bulk spirits to them as well as other major spirits companies.
With
this type of a multiple, PHI Group is confident this will bring tremendous value to all its shareholders.
Mr.
Jimmy Wang, Vice President of Five-Grain, stated: “By partnering with PHI Group and having access to international capital sources,
we are confident we will be able to accelerate our execution to meet our growth targets and become a major player in this sector.”
Henry
Fahman, Chairman and CEO of PHI Group, concurred: “We are delighted to work with Five-Grain in this very rare opportunity to create
special value for our shareholders and all other stakeholders. While continuing to fulfill major initiatives regarding our Luxembourg
bank funds, the Asia Diamond Exchange, crypto technology and blockchain projects, we also are currently expanding our mergers and acquisitions
activities to increase consolidated revenues and operating results for our company.”
About
PHI Group, Inc.
PHI
Group (www.phiglobal.com, PHIL)
primarily focuses on advancing PHILUX Global Funds, a group of Luxembourg bank funds organized
as “Reserved Alternative Investment Fund” (“RAIF”) (www.philux.eu), and building the Asia Diamond Exchange
(“ADE”) in Vietnam. The Company also engages in mergers
and acquisitions and invests in select industries and special situations that may substantially enhance shareholder value.
Safe
Harbor Act and Forward-looking Statements
This
news release contains “forward-looking statements” pursuant to the “safe-harbor” provisions of the Private Securities
Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and
are generally preceded by words such as “may,” “future,” “plan” or “planned,” “will”
or “should,” “expected,” “anticipates,” “draft,” “eventually” or “projected,”
which are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially
from those projected in the forward-looking statements as a result of various factors.
Contact:
PHI
Group, Inc.
+1-714-793-9227
info@phiglobal.com