SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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)
|(State or other jurisdiction||(Commission||(IRS Employer|
|of incorporation)||File Number)||Identification No.)|
|2323 Main Street, Irvine, CA||92614|
|(Address of principal executive offices)||(Zip Code)|
Registrant’s telephone number, including area code: 714-793-9227
(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):
|☐||Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)|
|☐||Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)|
|☐||Precommencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))|
|☐||Precommencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).|
Securities registered pursuant to Section 12(b) of the Act:
|Title of each class||Trading Symbol(s)||Name of each exchange on which registered|
|Common Stock||PHIL||OTC Markets|
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:
|(a)||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.|
|(b)||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.|
|(c)||The establishment of a special purpose vehicle (SPV) as the holding company for the seventy percent (70%) ownership in FGTS.|
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.
|Memorandum of Understanding dated September 16, 2021 between the Registrant and Five Grain Treasure Spirits, Co., Ltd.|
|99.1||Press release dated September 17, 2021|
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
|PHI GROUP, INC.|
|By:||/s/ Henry D. Fahman|
|Henry D. Fahman|
|Chairman and CEO|
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:
|1.||PHIL and FGTS are parties to this MOU dated the 16th day of September 2021.|
|2.||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.|
|3.||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.|
|4.||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.|
|5.||Completion of the transaction will be conditioned, among other matters, upon:|
|(d)||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.|
|(e)||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.|
|(f)||The establishment of a special purpose vehicle (SPV) as the holding company for the seventy percent (70%) ownership in FGTS.|
|6.||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.|
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
|PHI Group, Inc.||Five Grain Treasure Spirits Co., Ltd.|
|By:||/s/ Henry D. Fahman||By:||/s/ Jimmy Wang|
|Henry D. Fahman||Jimmy Wang|
|Chairman & CEO||Vice President, Authorized Representative|
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.
PHI Group, Inc.