Dear Valued Shareholders,
Over the last year, we have made a number of announcements regarding acquisitions, joint ventures and business cooperation and have also created subsidiary companies to manage specific projects. I understand that our shareholders are anxious to see all of these transactions come to fruition in the form of revenue reflected in our quarterly and annual filings with the SEC.
In this update, I will provide a timeline on revenue generation from a few of our projects that will translate to our bottom line.
American Pacific Resources, Inc. (“APR”)
We have begun selling the gold bearing material abroad from the Oregon gold claims at this time. We should be able to see these revenues reflected in the quarter ending December of this year, which will come out in our 10-Q report with the SEC in mid February 2018.
We expect revenue generation from PHI EZ Water to begin during the first two quarters of 2018. We are in the process of setting up production facility in Romania to take advantage of 3 billion Euros of non-recourse grant funding from the European Union for irrigation. In my conservative estimate of the September 14 update, we were expecting PHI EZ Water Tech to generate $12.5 million in revenues and $3.4 in net profits in 2018. However, with the recent new developments in Eastern Europe, Vietnam, Japan, Laos and the US with respect to interest in PHI EZ Water products, I think the picture will be much brighter than originally anticipated. Revenues from EZ Water Tech operations are expected to be reflected in Q-2 of 2018.
Abundant Farms, Inc.
Abundant Farms is primarily engaged in organic farming activity. We continue to acquire farmland, form joint ventures with governments and other farmers, and lease arable land to grow select crops and medicinal plants that potentially command superior return on investment. We will also produce proprietary organic fertilizer using proprietary formulations developed by Mr. Lam Duong, M.S., Abundant Farms’ new Chief Technology and Operating Officer, and provide special water treatment systems by PHI EZ Water Tech, Inc.
Abundant Farms plans to use a combination of proprietary enhanced bioavailable nutrient and natural symbiotic immune systems without chemical pesticides and synthetic fertilizers, together innovative water conditioning mechanism provided by PHI EZ Water Tech to initially grow select plants that can be used for medicinal purposes like bitter melon (momordica charantia), turmeric (curcuma longa) and saffron (crocus sativus). All these plants have great medicinal attributes and command much higher prices than regular crops. For bitter melon alone, we expect to generate $18 million in revenues and $4.3 million in net profit in 2018, $36 million revenues and $9.8 million net profit in 2019, and $53 million revenues and $14.5 million net profit in 2020. For turmeric, the estimated revenues and net profits will be $1.2 million and $817,000 for 2018, $24.4 million and $16.8 for 2019, and $48.9 and $33.7 in 2020, respectively. For fertilizer business, it is still too early to fix a number but we are confident that our organic fertilizer products will be able to capture a decent portion of this multi-billion dollar market.
Acquisition of Agriculture and Pharmaceutical Supply Companies
We have entered into Letters of Intent and Agreement to acquire a conventional farming company, an organic farming and agricultural logistics company, and a pharmaceutical and medical supply company, all in Easter Europe. The addition of these operating companies will allow us to immediately report significant consolidated revenues for PHI Group. We expect to close these transactions during the first two quarters of 2018.
M&A Advisory and Consulting Business
We are currently advising four companies with respect to M&A, restructuring and public listing. The completion of these transactions is expected to add approximately $10 million in value to PHI Group in the next two to three quarters.
The timing and magnitude of revenue streams through our relationships with AQuarius Power, Inc., Tho Xuan Duong JSC, TNB Vietnam JSC, VIDIFI JSC, and others will vary due to distinctive characteristics of each of these transactions, i.e. short-term vs. long-term, small vs. large, level of governmental engagement, stakeholders, nature of funding, etc. I will provide update on these projects at the appropriate times in the near future.
Thank you for your time and I appreciate your patience while we build our Company. I will keep you informed further…
With kindest regards,
PHI GROUP, INC.
This update contains forward-looking statements that are subject to certain risks and uncertainties that may cause actual results to differ materially from those projected on the basis of such forward-looking statements pursuant to the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995.