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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

Form 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly Period Ended March 31, 2023

 

or

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from            to            

 

Commission file number: 1-35040

 

PHENIXFIN CORPORATION

(Exact Name of Registrant as Specified in its Charter)

 

Delaware   27-4576073
(State or Other Jurisdiction of   (I.R.S. Employer
Incorporation or Organization)   Identification No.)

 

445 Park Avenue, 10th Floor, New York, NY   10022
(Address of Principal Executive Offices)   (Zip Code)

 

(212) 859-0390

(Registrant’s Telephone Number, Including Area Code)

 

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, par value $0.001 per share   PFX   The NASDAQ Global Market
5.25% Notes due 2028   PFXNZ   The NASDAQ Global Market

 

Securities registered pursuant to Section 12(g) of the Act: None

 

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 for 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 ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐  Accelerated filer ☐   Non-accelerated filer ☒  Smaller reporting company ☐  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 provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes ☐ No ☒

 

The Registrant had 2,090,889 shares of common stock, $0.001 par value, outstanding as of May 11, 2023.

 

 

 

 

 

 

PHENIXFIN CORPORATION

 

TABLE OF CONTENTS

 

  Page
PART I. Financial Information  
   
Item 1. Financial Statements  
   
Consolidated Statements of Assets and Liabilities as of March 31, 2023 (unaudited) and September 30, 2022 1
   
Consolidated Statements of Operations for the three and six months ended March 31, 2023 and 2022 (unaudited) 2
   
Consolidated Statements of Changes in Net Assets for the three and six months ended March 31, 2023 and 2022 (unaudited) 3
   
Consolidated Statements of Cash Flows for the six months ended March 31, 2023 and 2022 (unaudited) 4
   
Consolidated Schedules of Investments as of March 31, 2023 (unaudited) and September 30, 2022 5
   
Notes to Consolidated Financial Statements (unaudited) 19
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 38
   
Item 3. Quantitative and Qualitative Disclosures About Market Risk 51
   
Item 4. Controls and Procedures 52
   
Part II. Other Information 53
   
Item 1. Legal Proceedings 53
   
Item 1A. Risk Factors 53
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 56
   
Item 3. Defaults Upon Senior Securities 56
   
Item 4. Mine Safety Disclosures 56
   
Item 5. Other Information 56
   
Item 6. Exhibits 57
   
SIGNATURES 59

 

i

 

 

PHENIXFIN CORPORATION

Consolidated Statements of Assets and Liabilities

 

   March 31,
2023 (Unaudited)		   September 30,
2022		 
Assets:        
Investments at fair value        
Non-controlled, non-affiliated investments (amortized cost of $150,946,951 and $147,378,917, respectively)  $128,510,921   $122,616,275 
Affiliated investments (amortized cost of $27,328,814 and $30,585,884, respectively)   10,046,722    12,314,192 
Controlled investments (amortized cost of $84,266,490 and $85,483,093, respectively)   61,531,676    58,026,182 
Total Investments at fair value   200,089,319    192,956,649 
Cash and cash equivalents   10,763,751    22,768,066 
Receivables:          
Interest receivable   725,649    727,576 
Paydown receivable   
-
    112,500 
Dividends receivable   269,330    269,330 
Other receivable   
-
    36,992 
Prepaid share repurchase   124,328    489,156 
Deferred financing costs   848,312    50,000 
Due from Affiliate   393,589    271,962 
Other assets   718,489    1,192,677 
Total Assets  $213,932,767   $218,874,908 
           
Liabilities:          
Credit facility and note payable (net of debt issuance costs of $1,864,836 and $2,059,164, respectively)  $78,877,105   $77,962,636 
Investments purchased payable   1,026,818    
-
 
Accounts payable and accrued expenses   1,366,493    2,040,277 
Interest and fees payable   673,294    503,125 
Other liabilities   500,761    572,949 
Deferred revenue   335,507    325,602 
Administrator expenses payable (see Note 6)   1,900    74,911 
Due to broker   
-
    16,550,000 
Total Liabilities   82,781,878    98,029,500 
           
Commitments and Contingencies (see Note 8)   
 
    
 
 
           
Net Assets:          
Common Shares, $0.001 par value; 5,000,000 shares authorized; 2,723,709 shares issued; 2,091,638 and 2,102,129 common shares outstanding, respectively   2,092    2,102 
Capital in excess of par value   675,047,159    675,401,802 
Total distributable earnings (loss)   (543,898,362)   (554,558,496)
Total Net Assets   131,150,889    120,845,408 
Total Liabilities and Net Assets  $213,932,767   $218,874,908 
           
Net Asset Value Per Common Share  $62.70   $57.49 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

1

 

 

PHENIXFIN CORPORATION

Consolidated Statements of Operations

(Unaudited)

 

   For the Three Months Ended
March 31,		   For the Six Months Ended
March 31,		 
   2023   2022   2023   2022 
                 
Interest Income:                
Interest from investments                
Non-controlled, non-affiliated investments:                
Cash  $2,116,741   $1,264,327   $4,032,782   $2,280,019 
Payment in-kind   119,593    100,062    225,780    238,573 
Affiliated investments:                    
Cash   261,028    387,918    459,481    510,065 
Payment in-kind   
-
    92,733    
-
    189,761 
Controlled investments:                    
Cash   57,188    807,022    251,815    1,360,660 
Payment in-kind   155,994    
-
    245,737    
-
 
Total interest income   2,710,544    2,652,062    5,215,595    4,579,078 
Dividend income   1,503,375    913,949    3,535,733    1,616,879 
Interest from cash and cash equivalents   125,471    6,031    217,697    8,770 
Fee income (see Note 9)   171,055    85,143    244,654    355,265 
Other income   401,986    
-
    401,986    230,434 
Total Investment Income   4,912,431    3,657,185    9,615,665    6,790,426 
                     
Expenses:                    
Interest and financing expenses   1,381,596    1,221,063    2,614,772    2,708,738 
Salaries and benefits   802,090    430,293    1,659,623    936,168 
Professional fees, net   377,229    160,594    725,146    467,345 
General and administrative expenses   201,181    290,136    421,158    486,695 
Directors fees   176,500    167,000    370,500    375,500 
Insurance expenses   121,387    155,450    245,471    314,354 
Administrator expenses (see Note 6)   77,937    82,415    155,821    151,281 
Total expenses   3,137,920    2,506,951    6,192,491    5,440,081 
Net Investment Income   1,774,511    1,150,234    3,423,174    1,350,345 
                     
Realized and unrealized gains (losses) on investments                    
Net realized gains (losses):                    
Non-controlled, non-affiliated investments   (838,070)   453,916    (824,622)   938,429 
Affiliated investments   
-
    
-
    
-
    14,737,897 
Controlled investments   23,273    
-
    23,273    925 
Total net realized gains (losses)   (814,797)   453,916    (801,349)   15,677,251 
Net change in unrealized gains (losses):                    
Non-controlled, non-affiliated investments   803,513    (2,139,279)   2,326,612    (2,007,316)
Affiliated investments   274,063    1,538,979    989,600    (8,934,864)
Controlled investments   4,670,928    1,968,804    4,722,097    1,986,445 
Total net change in unrealized gains (losses)   5,748,504    1,368,504    8,038,309    (8,955,735)
Loss on extinguishment of debt (see Note 5)   
-
    
-
    
-
    (296,197)
Total realized and unrealized gains (losses)   4,933,707    1,822,420    7,236,960    6,425,319 
                     
Net Increase (Decrease) in Net Assets Resulting from Operations  $6,708,218   $2,972,654   $10,660,134   $7,775,664 
                     
Weighted average basic and diluted earnings per common share
  $3.20   $1.24   $5.08   $3.16 
Weighted average basic and diluted net investment income (loss) per common share
  $0.85   $0.48   $1.63   $0.55 
Weighted average common shares outstanding - basic and diluted (see Note 11)
   2,095,193    2,397,911    2,098,041    2,458,222 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

2

 

 

PHENIXFIN CORPORATION

Consolidated Statements of Changes in Net Assets

(Unaudited)

 

   Common Stock         
   Shares   Par Amount   Capital in
Excess of
Par Value		   Total
Distributable
Earnings/(Loss)		   Total Net
Assets		 
Balance at December 31, 2021   2,517,221   $2,517   $688,866,642   $(540,372,168)  $148,496,991 
                          
OPERATIONS                         
Net investment income (loss)   -    
-
    
-
    1,150,234    1,150,234 
Net realized gains (losses) on investments   -    
-
    
-
    453,916    453,916 
Net change in unrealized appreciation (depreciation) on investments   -    
-
    
-
    1,368,504    1,368,504 
CAPITAL SHARE TRANSACTIONS                         
Repurchase of common shares   (309,427)   (309)   (12,509,196)   
-
    (12,509,505)
Total Increase (Decrease) in Net Assets   (309,427)   (309)   (12,509,196)   2,972,654    (9,536,851)
                          
Balance at March 31, 2022   2,207,794   $2,208   $676,357,446   $(537,399,514)  $138,960,140 
                          
Balance at December 31, 2022   2,099,824   $2,100   $675,297,285   $(550,606,580)  $124,692,805 
OPERATIONS                         
Net investment income (loss)   -    
-
    
-
    1,774,511    1,774,511 
Net realized gains (losses) on investments   -    
-
    
-
    (814,797)   (814,797)
Net change in unrealized appreciation (depreciation) on investments   -    
-
    
-
    5,748,504    5,748,504 
Net loss on extinguishment of debt   -    
-
    
-
    
-
    
-
 
CAPITAL SHARE TRANSACTIONS                         
Repurchase of common shares   (8,186)   (8)   (250,126)   
-
    (250,134)
Total Increase (Decrease) in Net Assets   (8,186)   (8)   (250,126)   6,708,218    6,458,084 
                          
Balance at March 31, 2023   2,091,638   $2,092   $675,047,159   $(543,898,362)  $131,150,889 
                          
Balance at September 30, 2021   2,517,221   $2,517   $688,866,642   $(545,175,178)  $143,693,981 
OPERATIONS                         
Net investment income (loss)   -    
-
    
-
    1,350,345    1,350,345 
Net realized gains (losses) on investments   -    
-
    
-
    15,677,251    15,677,251 
Net change in unrealized appreciation (depreciation) on investments   -    
-
    
-
    (8,955,735)   (8,955,735)
Net loss on extinguishment of debt   -    
-
    
-
    (296,197)   (296,197)
CAPITAL SHARE TRANSACTIONS                         
Repurchase of common shares   (309,427)   (309)   (12,509,196)   
-
    (12,509,505)
Total Increase (Decrease) in Net Assets   (309,427)   (309)   (12,509,196)   7,775,664    (4,733,841)
                          
Balance at March 31, 2022   2,207,794   $2,208   $676,357,446   $(537,399,514)  $138,960,140 
                          
Balance at September 30, 2022   2,102,129   $2,102   $675,401,802   $(554,558,496)  $120,845,408 
                          
OPERATIONS                         
Net investment income (loss)   -    
-
    
-
    3,423,174    3,423,174 
Net realized gains (losses) on investments   -    
-
    
-
    (801,349)   (801,349)
Net change in unrealized appreciation (depreciation) on investments   -    
-
    
-
    8,038,309    8,038,309 
CAPITAL SHARE TRANSACTIONS                         
Repurchase of common shares   (10,491)   (10)   (354,643)   
-
    (354,653)
Total Increase (Decrease) in Net Assets   (10,491)   (10)   (354,643)   10,660,134    10,305,481 
                          
Balance at March 31, 2023   2,091,638   $2,092   $675,047,159   $(543,898,362)  $131,150,889 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

3

 

 

PHENIXFIN CORPORATION

Consolidated Statements of Cash Flows

(Unaudited)

 

   For the Six Months Ended
March 31,		 
   2023   2022 
Cash Flows from Operating Activities:        
Net increase (decrease) in net assets resulting from operations  $10,660,134   $7,775,664 
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:          
Investment increases due to payment-in-kind interest   (471,517)   (428,334)
Net amortization of premium (discount) on investments   (368,824)   (71,905)
Amortization of debt issuance cost   204,079    163,208 
Amortization of deferred financing cost   113,963    
-
 
Net realized (gains) losses from investments   801,349    (15,677,251)
Net unrealized (gains) losses on investments   (8,038,309)   8,955,735 
Proceeds from sale and settlements of investments   26,919,844    89,812,369 
Purchases, originations and participations   (25,975,213)   (119,755,681)
Loss on extinguishment of debt   
-
    296,197 
(Increase) decrease in operating assets:          
Fees receivable   
-
    1,872,700 
Interest receivable   1,927    (345,928)
Due from affiliate   (121,627)   (128,850)
Dividends receivable   
-
    (188,119)
Paydown receivable   112,500    292,015 
Other receivable   36,992    
-
 
Prepaid share repurchase   364,828    
-
 
Other assets   474,188    388,105 
Increase (decrease) in operating liabilities:          
Due to broker   (16,550,000)   8,789,632 
Accounts payable and accrued expenses   (673,784)   (967,889)
Due to affiliates   
-
    (280,323)
Administrator expenses payable   (73,011)   4,898 
Interest and fees payable   170,169    503,125 
Deferred revenue   9,905    377,852 
Investments purchased payable   1,026,818    
-
 
Other liabilities   (72,188)   (18,671)
Net cash provided by (used in) operating activities   (11,447,777)   (18,631,451)
Cash Flows from Financing Activities:          
Debt issuance   23,241,941    57,500,000 
Paydowns on debt   (22,521,800)   (55,325,000)
Debt issuance costs paid   (9,751)   (2,311,036)
Deferred financing costs   (912,275)   
-
 
Repurchase of common shares   (354,653)   (12,989,759)
Net cash provided by (used in) financing activities   (556,538)   (13,125,795)
Net increase (decrease) in cash and cash equivalents   (12,004,315)   (31,757,246)
Cash and cash equivalents, beginning of period   22,768,066    69,433,256 
Cash and cash equivalents, end of period  $10,763,751   $37,676,010 
           
Supplemental information:          
Interest paid during the period  $1,854,240   $2,042,405 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

4

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of March 31, 2023

(Unaudited)

 

Company(1)  Industry  Type of Investment  Maturity    Par Amount/
Shares/Units(2)		   Cost(3)   Fair Value(4)   % of Net
Assets(5)		 
                            
Non-Controlled/Non-Affiliated Investments:                     
                            
Altisource S.A.R.L.(11)  Services: Business  Senior Secured First Lien Term Loan B (LIBOR + 5.00%, 4.50% PIK, 1.00% LIBOR Floor)(23)  4/30/2025    $5,972,008   $5,439,910   $4,749,537    3.62%
      Warrants  5/22/2027     67,791    -    210,153    0.16%
               6,039,799    5,439,910    4,959,690    3.78%
                                
Arcline FM Holdings, LLC  Aerospace & Defense  First Lien Term Loans (SOFR + 4.75%, 1.00% SOFR Floor)(21)(23)  6/23/2028     2,693,165    2,595,537    2,595,537    1.98%
               2,693,165    2,595,537    2,595,537    1.98%
                                
Be Green Packaging, LLC  Containers, Packaging & Glass  Equity - 417 Common Units(21)        417    416,250    -    0.00%
               417    416,250    -    0.00%
                                
Boostability Seotowncenter, Inc.  Services: Business  Equity - 833,152 Common Units(21)        833,152    66,475    -    0.00%
               833,152    66,475    -    0.00%
                                
Chimera Investment Corp.(11)  Banking, Finance, Insurance & Real Estate  Equity - 117,310 Class C Preferred Units(13)(15)        117,310    2,884,724    2,255,870    1.72%
               117,310    2,884,724    2,255,870    1.72%
                                
Copper Property CTL Pass Through Trust  Banking, Finance, Insurance & Real Estate  Equity Certificates(14)        537,795    7,029,161    5,835,075    4.45%
                                
DataOnline Corp.  High Tech Industries  Senior Secured First Lien Term Loan (LIBOR + 6.25%, 1.00% LIBOR Floor)(22)  11/13/2025     4,837,500    4,837,500    4,692,375    3.58%
      Revolving Credit Facility (LIBOR + 6.25%, 1.00% LIBOR Floor)(22)  11/13/2025     714,286    714,286    692,857    0.53%
               5,551,786    5,551,786    5,385,232    4.11%
                                
DirecTV Financing, LLC  Media: Broadcasting & Subscription  Senior Secured First Lien Term Loan (LIBOR + 5.00%, 0.75% LIBOR Floor)(14)(22)  8/2/2027     4,325,000    4,325,000    4,171,030    3.18%
               4,325,000    4,325,000    4,171,030    3.18%
                                
Dream Finders Homes, LLC  Construction & Building  Preferred Equity (8.00% PIK)        5,523,839    5,523,839    5,150,979    3.93%
               5,523,839    5,523,839    5,150,979    3.93%
                                
First Brands Group, LLC  Automotive  Senior Secured First Lien Term Loan (SOFR + 5.00%, 1.00% SOFR Floor)(26)  3/30/2027     3,939,699    3,939,699    3,711,112    2.83%
      Senior Secured First Lien Term Loan (SOFR + 5.00%, 1.00% SOFR Floor)(26)  3/30/2027     1,995,000    1,915,200    1,879,290    1.43%
               5,934,699    5,854,899    5,590,402    4.26%

 

5

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of March 31, 2023

(Unaudited)

 

Company(1)  Industry  Type of Investment  Maturity    Par Amount/
Shares/Units(2)		   Cost(3)   Fair Value(4)   % of Net 
Assets(5)		 
Franklin BSP Realty Trust, Inc.(11)  Banking, Finance, Insurance & Real Estate  Equity - 529,914 Common Units(13)        529,914    8,754,386    6,321,874    4.82%
               529,914    8,754,386    6,321,874    4.82%
                                
Global Accessories Group, LLC  Consumer goods: Non-durable  Equity - 3.8% Membership Interest(21)        380    151,337    -    0.00%
               380    151,337    -    0.00%
                                
Great AJAX Corp.(11)  Banking, Finance, Insurance & Real Estate  Equity - 254,922 Common Units(13)        254,922    3,333,786    1,677,387    1.28%
               254,922    3,333,786    1,677,387    1.28%
                                
Innovate Corp.(11)  Construction & Building  8.50% Senior Secured Notes(14)  2/1/2026     2,750,000    2,615,913    2,127,950    1.62%
               2,750,000    2,615,913    2,127,950    1.62%
                                
Invesco Mortgage Capital, Inc.(11)  Banking, Finance, Insurance & Real Estate  Equity - 205,000 Class C Preferred Units(13)(16)        205,000    5,035,506    3,712,550    2.83%
               205,000    5,035,506    3,712,550    2.83%
                                
JFL-NGS-WCS Partners, LLC  Construction & Building  Senior Secured First Lien Term Loan B (SOFR + 5.50%, 1.00% SOFR Floor)  11/12/2026     873,328    876,643    868,961    0.66%
      Equity - 10,000,000 Units(24)        10,000,000    10,000,000    10,290,567    7.85%
               10,873,328    10,876,643    11,159,528    8.51%
                                
Lighting Science Group Corporation  Containers, Packaging & Glass  Warrants - 0.62% of Outstanding Equity(21)        5,000,000    955,680    -    0.00%
               5,000,000    955,680    -    0.00%
                                
Lucky Bucks, LLC  Consumer Discretionary  Senior Secured First Lien Term Loan(LIBOR + 7.50%, 0.75% LIBOR Floor)(10)(21)(23)  7/30/2027     10,125,000    8,273,087    3,655,125    2.79%
               10,125,000    8,273,087    3,655,125    2.79%
                                
Maritime Wireless Holdings LLC  Hotel, Gaming & Leisure  Senior Secured First Lien Term Loan A (SOFR + CSA + 9.00%, 1.00% SOFR + CSA Floor)(20)(24)  2/15/2024     4,600,000    4,507,353    4,565,500    3.48%
      Senior Secured First Lien Term Loan B (SOFR + CSA + 9.00%, 1.00% SOFR + CSA Floor)(20)(24)  5/31/2027     7,500,000    7,348,945    7,443,750    5.68%
      Convertible Promissory Note(21)        5,000,000    5,000,000    6,000,000    4.57%
               17,100,000    16,856,298    18,009,250    13.73%
                                
McKissock Investment Holdings, LLC (dba Colibri)  Services: Consumer  Senior Secured First Lien Term Loan (SOFR + CSA + 5.00%, 0.75% SOFR + CSA Floor)(20)(25)  3/10/2029     4,949,996    4,905,892    4,751,997    3.62%
               4,949,996    4,905,892    4,751,997    3.62%

 

6

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of March 31, 2023

(Unaudited)

 

Company(1)  Industry  Type of Investment  Maturity    Par Amount/
Shares/Units(2)		   Cost(3)   Fair Value(4)   % of Net 
Assets(5)		 
MFA Financial, Inc.(11)  Banking, Finance, Insurance & Real Estate  Equity - 97,426 Class C Preferred Units(13)(19)        97,426    2,318,487    1,660,139    1.27%
               97,426    2,318,487    1,660,139    1.27%
                                
New York Mortgage Trust, Inc.(11)  Banking, Finance, Insurance & Real Estate  Equity - 165,000 Class E Preferred Units(13)(18)        165,000    4,102,076    3,372,600    2.57%
               165,000    4,102,076    3,372,600    2.57%
                                
PennyMac Financial Services, Inc.(11)  Banking, Finance, Insurance & Real Estate  Equity - 66,500 Common Units(13)        66,500    4,362,213    3,964,065    3.02%
               66,500    4,362,213    3,964,065    3.02%
                                
Point.360  Services: Business  Senior Secured First Lien Term Loan (LIBOR + 6.00% PIK)(10)(21)  7/8/2020     2,777,366    2,103,712    -    0.00%
               2,777,366    2,103,712    -    0.00%
                                
Power Stop LLC  Automotive  Senior Secured First Lien Term Loan (LIBOR + 4.75, 0.50% LIBOR Floor)(22)  1/26/2029     4,950,000    4,906,624    3,811,500    2.91%
               4,950,000    4,906,624    3,811,500    2.91%
                                
Rithm Capital Corp.(11)  Banking, Finance, Insurance & Real Estate  Equity - 206,684 Class B Preferred Units(13)(17)        206,684    5,129,170    4,451,973    3.39%
               206,684    5,129,170    4,451,973    3.39%
                                
Secure Acquisition Inc. (dba Paragon Films)(8)  Packaging  Senior Secured First Lien Term Loan (LIBOR + 5.00%, 0.50% LIBOR Floor)(23)  12/16/2028     3,447,931    3,435,718    3,344,493    2.55%
      Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 5.00%, 0.50% LIBOR Floor)(12)(23)  12/16/2028     -    (970)   -    0.00%
               3,447,931    3,434,748    3,344,493    2.55%

 

7

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of March 31, 2023

(Unaudited)

 

Company(1)  Industry  Type of Investment  Maturity    Par Amount/
Shares/Units(2)		   Cost(3)   Fair Value(4)   % of Net 
Assets(5)		 
Sendero Drilling Company, LLC  Energy: Oil & Gas  Unsecured Debt(9.00%)(10)(21)  8/1/2023     191,250    182,081    -    0.00%
               191,250    182,081    -    0.00%
                                
SS Acquisition, LLC (dba Soccer Shots Franchising)  Services: Consumer  Senior Secured First Lien Term Loan (SOFR + CSA + 6.50%, 1.00% SOFR Floor)(24)  12/30/2026     6,666,667    6,586,133    6,666,667    5.08%
      Senior Secured First Lien Delayed Draw Term Loan (SOFR + 6.50%, 1.00% SOFR Floor)(24)  12/30/2026     3,200,000    3,200,000    3,200,000    2.44%
               9,866,667    9,786,133    9,866,667    7.52%
                                
SMART Financial Operations, LLC  Retail  Equity - 700,000 Class A Preferred Units(21)        700,000    700,000    187,000    0.14%
               700,000    700,000    187,000    0.14%
                                
Stancor (dba Industrial Flow Solutions Holdings, LLC)  Services: Business  Equity - 338,736.11 Class A Units(21)        338,736    308,652    193,000    0.15%
               338,736    308,652    193,000    0.15%
                                
Staples, Inc.  Services: Consumer  First Lien Term Loan (LIBOR + 4.50%, 0.0% LIBOR Floor)(14)(23)  9/12/2024     3,711,440    3,657,294    3,681,748    2.82%
               3,711,440    3,657,294    3,681,748    2.82%
                                
Tamarix Capital Partners II, L.P.(8)(11)  Banking, Finance, Insurance & Real Estate  Fund Investment(21)        1,026,818    1,026,818    1,026,818    0.79%
               1,026,818    1,026,818    1,026,818    0.79%
                                
Thryv Holdings, Inc.(11)  Media: Broadcasting & Subscription  Senior Secured First Lien Term Loan (LIBOR + 8.50%, 1.00% LIBOR Floor)(14)(22)  3/1/2026     5,683,515    5,600,420    5,591,442    4.27%
               5,683,515    5,600,420    5,591,442    4.27%
                                
Velocity Pooling Vehicle, LLC  Automotive  Equity - 5,441 Class A Units(21)        5,441    302,464    -    0.00%
      Warrants - 0.65% of Outstanding Equity(21)  3/30/2028     6,506    361,667    -    0.00%
               11,947    664,131    -    0.00%
                                
Watermill-QMC Midco, Inc.  Automotive  Equity - 1.30% Partnership Interest(9)(21)        518,283    518,283    -    0.00%
               518,283    518,283    -    0.00%
                                
Wingman Holdings, Inc.  Aerospace & Defense  Equity - 350 Common Shares(21)        350    700,000    -    0.00%
               350    700,000    -    0.00%
                                
Subtotal Non-Controlled/Non-Affiliated Investments    $117,105,415   $150,946,951   $128,510,921    98.01%

 

8

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of March 31, 2023

(Unaudited)

 

Company(1)  Industry  Type of Investment  Maturity    Par Amount/
Shares/Units(2)		   Cost(3)   Fair Value(4)   % of Net 
Assets(5)		 
Affiliated Investments:(6)                            
1888 Industrial Services, LLC  Energy: Oil & Gas  Senior Secured First Lien Term Loan A (LIBOR + 5.00% PIK, 1.00% LIBOR Floor)(10)(21)  5/1/2023    $9,946,741   $9,473,068   $-    0.00%
      Senior Secured First Lien Term Loan C (LIBOR + 5.00%, 1.00% LIBOR Floor)(23)  5/1/2023     1,231,932    1,191,257    566,689    0.43%
      Revolving Credit Facility (LIBOR + 5.00%, 1.00% LIBOR Floor)(12)(23)  5/1/2023     4,632,177    4,632,177    4,632,177    3.53%
      Equity - 21,562 Class A Units(21)        21,562    -    -    - 
               15,832,412    15,296,502    5,198,866    3.96%
                                
Black Angus Steakhouses, LLC(8)  Hotel, Gaming & Leisure  Senior Secured First Lien Delayed Draw Term Loan (SOFR + 9.00%, 1.00% SOFR Floor)(21)  1/31/2024     758,929    758,929    758,929    0.58%
      Senior Secured First Lien Term Loan (SOFR + 9.00% PIK, 1.00% SOFR Floor)(10)(21)  1/31/2024     8,412,596    7,767,533    1,665,694    1.27%
      Senior Secured First Lien Super Priority Delayed Draw Term Loan (SOFR + 9.00%, 1.00% SOFR Floor)(24)  1/31/2024     1,500,000    1,500,000    1,500,000    1.14%
      Equity - 17.92% Membership Interest        -    -    -    0.00%
               10,671,525    10,026,462    3,924,623    2.99%
                                
US Multifamily, LLC  Banking, Finance, Insurance & Real Estate  Equity - 33,300 Preferred Units(21)        33,300    2,005,850    923,233    0.70%
               33,300    2,005,850    923,233    0.70%
                                
Subtotal Affiliated Investments          $26,537,237   $27,328,814   $10,046,722    7.65%

 

9

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of March 31, 2023

(Unaudited)

 

Company(1)  Industry  Type of Investment  Maturity    Par Amount/
Shares/Units(2)		   Cost(3)   Fair Value(4)   % of Net 
Assets(5)		 
Controlled Investments:(7)                            
FlexFIN, LLC  Services: Business  Equity Interest       $38,050,830   $38,050,830   $38,050,830    29.01%
               38,050,830    38,050,830    38,050,830    29.01%
                                
Kemmerer Holdings, LLC  Metals & Mining  Senior Secured First Lien Term Loan (15.00% PIK)  6/21/2025     6,033,413    6,032,555    6,032,738    4.60%
      Equity - 31 Common Units(21)        31    1,836,157    6,073,976    4.63%
               6,033,444    7,868,712    12,106,714    9.23%
                                
NVTN LLC(8)  Hotel, Gaming & Leisure  Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 4.00% Cash, 1.00% LIBOR Floor)(22)  12/31/2024     7,309,985    7,309,885    7,207,547    5.50%
      Senior Secured First Lien Term Loan B (LIBOR + 9.25% PIK, 1.00% LIBOR Floor)(10)(21)  12/31/2024     19,561,424    13,916,083    4,166,585    3.18%
      Senior Secured First Lien Term Loan C (LIBOR + 12.00% PIK, 1.00% LIBOR Floor)(10)(21)  12/31/2024     13,199,860    7,570,056    -    0.00%
      Equity - 1,000 Class A Units(21)        1,000    9,550,924    -    0.00%
               40,072,269    38,346,948    11,374,132    8.68%
                                
Subtotal Control Investments          $84,156,543   $84,266,490   $61,531,676    46.92%
                                
   Total Investments, March 31, 2023    $227,799,195   $262,542,255   $200,089,319    152.58%

 

10

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of March 31, 2023

(Unaudited)

 

(1) All of our investments are domiciled in the United States. Certain investments also have international operations.
(2) Par amount is presented for debt investments and the amount includes accumulated payment-in-kind (“PIK”) interest, as applicable, and is net of repayments, while the number of shares or units owned is presented for equity investments. Par amount is denominated in U.S. Dollars (“$”) unless otherwise noted.
(3) The amortized cost represents the original cost adjusted for the amortization or accretion of premium or discount, as applicable, on debt investments using the effective interest method. Net unrealized depreciation for U.S. federal income tax purposes totaled $(62,452,936).
The tax cost basis of investments is $262,542,255 as of March 31, 2023.
(4) Unless otherwise indicated, all securities are valued using significant unobservable inputs, which are categorized as Level 3 assets under the definition of ASC 820 fair value hierarchy (see Note 4).
(5) Percentage is based on net assets of $131,150,889 as of March 31, 2023.
(6) Affiliated Investments are defined by the 1940 Act as investments in companies in which the Company owns between 5% and 25% outstanding voting securities or is under common control with such portfolio company.
(7) Control Investments are defined by the Investment Company Act of 1940, as amended (the “1940 Act”), as investments in companies in which the Company owns more than 25% of the voting securities or maintains greater than 50% of the board representation.
(8) The investment has an unfunded commitment as of March 31, 2023 (see Note 8), and fair value includes the value of any unfunded commitments.
(9) Represents 1.3% partnership interest in Watermill-QMC Partners, LP and Watermill-EMI Partners, LP.
(10) The investment was on non-accrual status as of March 31, 2023.
(11) The investment is not a qualifying asset as defined under Section 55(a) of 1940 Act, in a whole, or in part. As of March 31, 2023, non-qualifying assets represented 20.55% of total assets.
(12) This investment earns 0.50% commitment fee on all unused commitment as of March 31, 2023, and is recorded as a component of interest income on the Consolidated Statements of Operations.
(13) This investment represents a Level 1 security in the ASC 820 table as of March 31, 2023 (see Note 4).
(14) This investment represents a Level 2 security in the ASC 820 table as of March 31, 2023 (see Note 4).
(15) The interest rate on this investment is fixed-to-floating and will shift to 3 month LIBOR plus a 4.743% spread on 9/30/2025.
(16) The interest rate on this investment is fixed-to-floating and will shift to 3 month LIBOR plus a 5.29% spread on 9/27/2027.
(17) The interest rate on this investment is fixed-to-floating and will shift to 3 month LIBOR plus a 5.64% spread on 8/15/2024.
(18) The interest rate on this investment is fixed-to-floating and will shift to 3 month LIBOR plus a 6.429% spread on 1/15/2025.
(19) The interest rate on this preferred equity is fixed-to-floating and will shift to 3 month LIBOR plus a 5.345% spread on 3/31/2025.
(20) Credit Spread Adjustment (“CSA”)
(21) Non-income producing security.
(22) The interest rate on these loans is subject to 1 month LIBOR, which as of March 31, 2023 was 4.86%.
(23) The interest rate on these loans is subject to 3 month LIBOR, which as of March 31, 2023 was 5.19%.
(24) The interest rate on these loans is subject to 1 month SOFR, which as of March 31, 2023 was 4.63%.
(25) The interest rate on these loans is subject to 3 month SOFR, which as of March 31, 2023 was 4.51%.
(26) The interest rate on these loans is subject to 6 month SOFR, which as of March 31, 2023 was 4.09%.

 

The accompanying notes are an integral part of these consolidated financial statements.

 

11

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of September 30, 2022

 

Company(1)  Industry  Type of Investment  Maturity    Par Amount/
Shares/Units(2)		   Cost(3)   Fair
Value(4)		   % of Net 
Assets(5)		 
Non-Controlled/Non-Affiliated Investments:                     
                            
Altisource S.A.R.L.(11)  Services: Business  Senior Secured First Lien Term Loan B (LIBOR + 4.00%, 1.00% LIBOR Floor)(14)  4/3/2024    $6,486,419   $5,825,616   $5,448,591    4.51%
               6,486,419    5,825,616    5,448,591    4.51%
                                
Be Green Packaging, LLC  Containers, Packaging & Glass  Equity - 417 Common Units        1    416,250    -    0.00%
               1    416,250    -    0.00%
                                
Boostability Seotowncenter, Inc.  Services: Business  Equity - 3,434,169.6 Common Units        833,152    66,475    -    0.00%
               833,152    66,475    -    0.00%
                                
Chimera Investment Corp.(11)  Banking, Finance, Insurance & Real Estate  Equity - 117,310 Class C Preferred Units(13)(15)        117,310    2,884,724    1,915,672    1.59%
               117,310    2,884,724    1,915,672    1.59%
                                
Copper Property CTL Pass Through Trust  Banking, Finance, Insurance & Real Estate  Equity Certificates(14)        437,795    6,314,757    5,877,398    4.86%
                                
CPI International, Inc.  Aerospace & Defense  Senior Secured Second Lien Term Loan (LIBOR + 7.25%, 1.00% LIBOR Floor)  7/28/2025     2,607,062    2,602,547    2,607,062    2.16%
               2,607,062    2,602,547    2,607,062    2.16%
                                
DataOnline Corp.  High Tech Industries  Senior Secured First Lien Term Loan (LIBOR + 6.25%, 1.00% LIBOR Floor)  11/13/2025     4,862,500    4,862,500    4,765,250    3.94%
      Revolving Credit Facility (LIBOR + 6.25%, 1.00% LIBOR Floor)  11/13/2025     714,286    714,286    700,000    0.58%
               5,576,786    5,576,786    5,465,250    4.52%
                                
DirecTV Financing, LLC  Media: Broadcasting & Subscription  Senior Secured First Lien Term Loan (LIBOR + 5.00%, 0.75% LIBOR Floor)(14)  8/2/2027     4,550,000    4,550,000    4,220,000    3.49%
               4,550,000    4,550,000    4,220,000    3.49%
                                
Dream Finders Homes, LLC  Construction & Building  Preferred Equity (8.00% PIK)        5,309,341    5,309,341    4,950,961    4.10%
               5,309,341    5,309,341    4,950,961    4.10%

 

12

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

September 30, 2022

 

Company(1)  Industry  Type of Investment  Maturity    Par Amount/
Shares/Units(2)		   Cost(3)   Fair Value(4)   % of Net 
Assets(5)		 
First Brands Group, LLC  Automotive  Senior Secured First Lien Term Loan (SOFR + 5.00%, 1.00% SOFR Floor)  3/30/2027     3,959,799    3,959,799    3,930,101    3.25%
               3,959,799    3,959,799    3,930,101    3.25%
                                
Footprint Holding Company Inc.  Services: Business  Equity - 150 Common Units        150    -    -    0.00%
               150    -    -    0.00%
                                
Franklin BSP Realty Trust, Inc.(11)  Banking, Finance, Insurance & Real Estate  Equity - 529,914 Common Units(13)        529,914    8,754,386    5,707,174    4.72%
               529,914    8,754,386    5,707,174    4.72%
                                
Global Accessories Group, LLC  Consumer goods: Non-durable  Equity - 3.8% Membership Interest        380    151,337    -    0.00%
               380    151,337    -    0.00%
                                
Great AJAX Corp.(11)  Banking, Finance, Insurance & Real Estate  Equity - 254,922 Common Units(13)        254,922    3,333,786    1,914,464    1.58%
               254,922    3,333,786    1,914,464    1.58%
                                
Innovate Corp.  Construction & Building  8.50% Senior Secured Notes(14)  2/1/2026     2,250,000    2,252,156    1,659,375    1.37%
               2,250,000    2,252,156    1,659,375    1.37%
                                
Invesco Mortgage Capital, Inc.(11)  Banking, Finance, Insurance & Real Estate  Equity - 205,000 Class C Preferred Units(13)(16)        205,000    5,035,506    3,138,550    2.60%
               205,000    5,035,506    3,138,550    2.60%
                                
JFL-NGS-WCS Partners, LLC  Construction & Building  Senior Secured First Lien Term Loan B (LIBOR + 5.50%, 1.00% LIBOR Floor)  11/12/2026     885,050    888,790    865,137    0.72%
      Equity - 10,000,000 Units        10,000,000    10,000,000    10,248,798    8.48%
               10,885,050    10,888,790    11,113,935    9.20%
                                
Lighting Science Group Corporation  Containers, Packaging & Glass  Warrants - 0.62% of Outstanding Equity        5,000,000    955,680    -    0.00%
               5,000,000    955,680    -    0.00%
                                
Lucky Bucks, LLC  Consumer Discretionary  Senior Secured First Lien Term Loan(LIBOR + 5.50%, 0.75% LIBOR Floor)  7/30/2027     7,218,750    7,095,116    6,208,125    5.14%
               7,218,750    7,095,116    6,208,125    5.14%

 

13

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

September 30, 2022

 

Company(1)  Industry  Type of Investment  Maturity    Par Amount/
Shares/Units(2)		   Cost(3)   Fair Value(4)   % of Net 
Assets(5)		 
Maritime Wireless Holdings LLC  Hotel, Gaming & Leisure  Senior Secured First Lien Term Loan A (SOFR + CSA + 9.00%, 1.00% SOFR + CSA Floor)(20)  2/15/2024     5,000,000    4,900,000    4,900,000    4.05%
      Senior Secured First Lien Term Loan B (SOFR + CSA + 9.00%, 1.00% SOFR + CSA Floor)(20)  5/31/2027     7,500,000    7,350,000    7,350,000    6.08%
      Convertible Promissory Note        5,000,000    5,000,000    5,000,000    4.14%
               17,500,000    17,250,000    17,250,000    14.27%
                                
McKissock Investment Holdings, LLC (dba Colibri)  Services: Consumer  Senior Secured First Lien Term Loan (SOFR + CSA + 5.00%, 0.75% SOFR + CSA Floor)(20)  3/10/2029     4,974,999    4,927,870    4,875,500    4.03%
               4,974,999    4,927,870    4,875,500    4.03%
                                
MFA Financial, Inc.(11)  Banking, Finance, Insurance & Real Estate  Equity - 97,426 Class C Preferred Units(13)(19)        97,426    2,318,487    1,722,492    1.43%
               97,426    2,318,487    1,722,492    1.43%
                                
New York Mortgage Trust, Inc.(11)  Banking, Finance, Insurance & Real Estate  Equity - 165,000 Class E Preferred Units(13)(18)        165,000    4,102,076    2,953,500    2.44%
               165,000    4,102,076    2,953,500    2.44%
                                
PennyMac Financial Services, Inc.(11)  Banking, Finance, Insurance & Real Estate  Equity - 81,500 Common Units(13)        81,500    5,364,478    3,496,350    2.89%
               81,500    5,364,478    3,496,350    2.89%
                                
Point.360  Services: Business  Senior Secured First Lien Term Loan (LIBOR + 6.00% PIK)(10)  7/8/2020     2,777,366    2,103,712    -    0.00%
               2,777,366    2,103,712    -    0.00%
                                
Power Stop LLC  Automotive  Senior Secured First Lien Term Loan(LIBOR + 4.75, 0.50% LIBOR Floor)  1/26/2029     4,975,000    4,930,071    4,029,750    3.33%
               4,975,000    4,930,071    4,029,750    3.33%
                                
Rithm Capital Corp.(11)  Banking, Finance, Insurance & Real Estate  Equity - 206,684 Class B Preferred Units(13)(17)        206,684    5,129,170    3,902,194    3.23%
               206,684    5,129,170    3,902,194    3.23%
                                
Secure Acquisition Inc. (dba Paragon Films)(8)  Packaging  Senior Secured First Lien Term Loan(LIBOR + 5.00%, 0.50% LIBOR Floor)  12/16/2028     3,465,345    3,451,574    3,361,385    2.78%
      Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 5.00%, 0.50% LIBOR Floor)(12)  12/16/2028     -    (970)   -    0.00%
               3,465,345    3,450,604    3,361,385    2.78%

 

14

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

September 30, 2022

 

Company(1)  Industry  Type of Investment  Maturity    Par Amount/
Shares/Units(2)		   Cost(3)   Fair Value(4)   % of Net 
Assets(5)		 
Sendero Drilling Company, LLC  Energy: Oil & Gas  Unsecured Debt (9.00%)(10)  8/1/2023     191,250    182,081    -    0.00%
               191,250    182,081    -    0.00%
                                
SS Acquisition, LLC (dba Soccer Shots Franchising)(8)  Services: Consumer  Senior Secured First Lien Term Loan (LIBOR + 6.50%, 1.00% LIBOR Floor)  12/30/2026     6,666,667    6,575,847    6,591,667    5.45%
               6,666,667    6,575,847    6,591,667    5.45%
                                
SMART Financial Operations, LLC  Retail  Equity - 700,000 Class A Preferred Units        700,000    700,000    120,793    0.10%
               700,000    700,000    120,793    0.10%
                                
Stancor (dba Industrial Flow Solutions Holdings, LLC)  Services: Business  Equity - 338,736.11 Class A Units        338,736    308,652    265,269    0.22%
               338,736    308,652    265,269    0.22%
                                
Staples, Inc.  Services: Consumer  First Lien Term Loan (LIBOR + 4.50%, 0.0% LIBOR Floor)(14)  9/12/2024     3,730,720    3,659,706    3,488,223    2.89%
               3,730,720    3,659,706    3,488,223    2.89%
                                
Thryv Holdings, Inc.(11)  Services: Consumer  Senior Secured First Lien Term Loan B (LIBOR + 8.50%, 1.00% LIBOR Floor)  3/1/2026     6,515,633    6,406,051    6,287,583    5.20%
               6,515,633    6,406,051    6,287,583    5.20%
                                
Velocity Pooling Vehicle, LLC  Automotive  Equity - 5,441 Class A Units        5,441    302,464    52,342    0.04%
      Warrants - 0.65% of Outstanding Equity  3/30/2028     6,506    361,667    62,569    0.05%
               11,947    664,131    114,911    0.09%
                                
Walker Edison Furniture Company LLC  Consumer goods: Durable  Equity - 13,044 Common Units        13,044    2,114,646    -    0.00%
               13,044    2,114,646    -