0001213900-23-009500.txt : 20230209 0001213900-23-009500.hdr.sgml : 20230209 20230209060428 ACCESSION NUMBER: 0001213900-23-009500 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 80 CONFORMED PERIOD OF REPORT: 20221231 FILED AS OF DATE: 20230209 DATE AS OF CHANGE: 20230209 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PhenixFIN Corp CENTRAL INDEX KEY: 0001490349 IRS NUMBER: 274576073 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 814-00818 FILM NUMBER: 23600960 BUSINESS ADDRESS: STREET 1: 445 PARK AVENUE STREET 2: 9TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 212-759-0777 MAIL ADDRESS: STREET 1: 445 PARK AVENUE STREET 2: 9TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: Medley Capital Corp DATE OF NAME CHANGE: 20110118 FORMER COMPANY: FORMER CONFORMED NAME: Medley Capital BDC LLC DATE OF NAME CHANGE: 20100426 10-Q 1 f10q1222_phenixfincorp.htm QUARTERLY REPORT

 

 

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 December 31, 2022

 

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 2,096,772 shares of common stock, $0.001 par value, outstanding as of February 7, 2023.

 

 

 

 

 

 

PHENIXFIN CORPORATION

 

TABLE OF CONTENTS

 

    Page  
PART I. Financial Information    
     
Item 1. Financial Statements    
     
Consolidated Statements of Assets and Liabilities as of December 31, 2022 (unaudited) and September 30, 2022   1
     
Consolidated Statements of Operations for the three months ended December 31, 2022 and 2021 (unaudited)   2
     
Consolidated Statements of Changes in Net Assets for the three months ended December 31, 2022 and 2021 (unaudited)   3
     
Consolidated Statements of Cash Flows for the three months ended December 31, 2022 and 2021 (unaudited)   4
     
Consolidated Schedules of Investments as of December 31, 2022 (unaudited) and September 30, 2022   5
     
Notes to Consolidated Financial Statements (unaudited)   26
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations   52
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk   72
     
Item 4. Controls and Procedures   72
     
Part II. Other Information   73
     
Item 1. Legal Proceedings   73
     
Item 1A. Risk Factors   73
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   77
     
Item 3. Defaults Upon Senior Securities   77
     
Item 4. Mine Safety Disclosures   77
     
Item 5. Other Information   77
     
Item 6. Exhibits   78
     
SIGNATURES   80

 

i

 

 

PHENIXFIN CORPORATION

Consolidated Statements of Assets and Liabilities

 

    December 31,
2022
(Unaudited)		     September 30,
2022		  
Assets:            
Investments at fair value            
Non-controlled, non-affiliated investments (amortized cost of $146,467,213 and $147,378,917, respectively)   $ 123,227,670     $ 122,616,275  
Affiliated investments (amortized cost of $29,987,947 and $30,585,884, respectively)     12,431,792       12,314,192  
Controlled investments (amortized cost of $75,017,459 and $85,483,093, respectively)     47,611,717       58,026,182  
Total Investments at fair value     183,271,179       192,956,649  
Cash and cash equivalents     17,654,080       22,768,066  
Receivables:                
Interest receivable     1,712,890       727,576  
Paydown receivable     400,308       112,500  
Dividends receivable     269,330       269,330  
Other receivable     -       36,992  
Prepaid share repurchase     384,637       489,156  
Deferred financing costs     332,092       50,000  
Due from Affiliate     301,020       271,962  
Other assets     1,054,413       1,192,677  
Total Assets   $ 205,379,949     $ 218,874,908  
                 
Liabilities:                
Notes payable (net of debt issuance costs of $1,955,972 and $2,059,164, respectively)   $ 78,065,828     $ 77,962,636  
Accounts payable and accrued expenses     1,042,136       2,040,277  
Other liabilities     535,267       572,949  
Interest and fees payable     503,125       503,125  
Deferred revenue     472,521       325,602  
Administrator expenses payable (see Note 6)     68,267       74,911  
Due to broker     -       16,550,000  
Total Liabilities     80,687,144       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; 2,099,824 and 2,102,129 common shares outstanding, respectively     2,100       2,102  
Capital in excess of par value     675,297,285       675,401,802  
Total distributable earnings (loss)     (550,606,580)       (554,558,496 )
Total Net Assets     124,692,805       120,845,408  
Total Liabilities and Net Assets   $ 205,379,949     $ 218,874,908  
                 
Net Asset Value Per Common Share   $ 59.38     $ 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
December 31,		  
    2022     2021  
             
Interest Income:            
Interest from investments            
Non-controlled, non-affiliated investments:            
Cash   $ 1,916,041     $ 1,015,692  
Payment in-kind     106,187       138,511  
Affiliated investments:                
Cash     198,453       122,147  
Payment in-kind     89,743       97,028  
Controlled investments:                
Cash     194,627       553,638  
Total interest income     2,505,051       1,927,016  
Dividend income     2,032,358       702,930  
Interest from cash and cash equivalents     92,226       2,739  
Fee income (see Note 9)     73,599       270,122  
Other income     -       230,434  
Total Investment Income     4,703,234       3,133,241  
                 
Expenses:                
Interest and financing expenses     1,233,176       1,487,675  
Salaries and benefits     857,533       505,875  
Professional fees, net (see Note 8)     347,917       306,751  
General and administrative expenses     219,977       196,559  
Directors fees     194,000       208,500  
Insurance expenses     124,084       158,904  
Administrator expenses (see Note 6)     77,884       68,866  
Total expenses     3,054,571       2,933,130  
Net Investment Income     1,648,663       200,111  
                 
Realized and unrealized gains (losses) on investments                
Net realized gains (losses):                
Non-controlled, non-affiliated investments     13,448       484,513  
Affiliated investments     -       14,737,897  
Controlled investments     -       925  
Total net realized gains (losses)     13,448       15,223,335  
Net change in unrealized gains (losses):                
Non-controlled, non-affiliated investments     1,523,099       131,963  
Affiliated investments     715,537       (10,473,843 )
Controlled investments     51,169       17,641  
Total net change in unrealized gains (losses)     2,289,805       (10,324,239 )
Loss on extinguishment of debt (see Note 5)     -       (296,197 )
Total realized and unrealized gains (losses)     2,303,253       4,602,899  
                 
Net Increase (Decrease) in Net Assets Resulting from Operations   $ 3,951,916     $ 4,803,010  
                 
Weighted average basic and diluted earnings per common share   $ 1.88     $ 1.91  
Weighted average basic and diluted net investment income (loss) per common share   $ 0.78     $ 0.08  
Weighted average common shares outstanding - basic and diluted (see Note 11)     2,100,876       2,517,221  

 

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 September 30, 2022   2,102,129   $2,102   $675,401,802   $(554,558,496)  $120,845,408 
                          
OPERATIONS                         
Net investment income (loss)   -    
-
    
-
    1,648,663    1,648,663 
Net realized gains (losses) on investments   -    
-
    
-
    13,448    13,448 
Net change in unrealized appreciation (depreciation) on investments   -    
-
    
-
    2,289,805    2,289,805 
CAPITAL SHARE TRANSACTIONS                         
Repurchase of common shares   (2,305)   (2)   (104,517)   
-
    (104,519)
Total Increase (Decrease) in Net Assets   (2,305)   (2)   (104,517)   3,951,916    3,847,397 
                          
Balance at December 31, 2022   2,099,824   $2,100   $675,297,285   $(550,606,580)  $124,692,805 
                          
Balance at September 30, 2021   2,517,221   $2,517   $688,866,642   $(545,175,178)  $143,693,981 
OPERATIONS                         
Net investment income (loss)   -    -    
-
    200,111    200,111 
Net realized gains (losses) on investments   -    
-
    
-
    15,223,335    15,223,335 
Net change in unrealized appreciation (depreciation) on investments   -    
-
    
-
    (10,324,239)   (10,324,239)
Net loss on extinguishment of debt   -    
-
    
-
    (296,197)   (296,197)
Total Increase (Decrease) in Net Assets   -    -    
-
    4,803,010    4,803,010 
                          
Balance at December 31, 2021   2,517,221   $2,517   $688,866,642   $(540,372,168)  $148,496,991 

 

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

 

3

 

 

PHENIXFIN CORPORATION

Consolidated Statements of Cash Flows

(Unaudited)

 

   For the Three Months Ended December 31, 
   2022   2021 
Cash Flows from Operating Activities:        
Net increase (decrease) in net assets resulting from operations  $3,951,916   $4,803,010 
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   (195,930)   (235,539)
Net amortization of premium (discount) on investments   (72,247)   2,072 
Amortization of debt issuance cost   103,192    41,698 
Amortization of deferred financing cost   30,431    
-
 
Net realized (gains) losses from investments   (13,448)   (15,223,335)
Net unrealized (gains) losses on investments   (2,289,805)   10,324,239 
Proceeds from sale and settlements of investments   19,188,416    77,579,123 
Purchases, originations and participations   (6,931,516)   (96,205,833)
Loss on extinguishment of debt   
-
    296,197 
(Increase) decrease in operating assets:          
Fees receivable   
-
    1,872,700 
Interest receivable   (985,314)   (161,771)
Due from affiliate   (29,058)   
-
 
Dividends receivable   
-
    (139,248)
Paydown receivable   (287,808)   (3,593,630)
Other receivable   36,992    (1,293)
Other assets   138,264    158,901 
Increase (decrease) in operating liabilities:          
Due to broker   (16,550,000)   10,503,033 
Accounts payable and accrued expenses   (998,141)   (494,108)
Due to affiliates   
-
    (280,460)
Administrator expenses payable   (6,644)   60,045 
Interest and fees payable   
-
    385,729 
Deferred revenue   146,919    386,156 
Other liabilities   (37,682)   
-
 
Net cash provided by (used in) operating activities   (4,801,463)   (9,922,314)
Cash Flows from Financing Activities:          
Debt issuance   
-
    57,500,000 
Paydowns on debt   
-
    (55,325,000)
Debt issuance costs paid   
-
    (2,305,942)
Deferred financing costs   (312,523)   
-
 
Net cash provided by (used in) financing activities   (312,523)   (130,942)
Net increase (decrease) in cash and cash equivalents   (5,113,986)   (10,053,256)
Cash and cash equivalents, beginning of period   22,768,066    69,433,256 
Cash and cash equivalents, end of period  $17,654,080   $59,380,000 
           
Supplemental information:          
Interest paid during the period  $1,099,553   $1,873,404 
           
Supplemental non-cash information:          
Repurchase of common shares  $(104,519)  $
-
 

 

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

 

4

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of December 31, 2022

(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 + 4.00%, 1.00% LIBOR Floor)   4/3/2024     $ 6,486,419     $ 5,870,077     $ 5,335,079       4.28 %
                    6,486,419       5,870,077       5,335,079       4.28 %
                                               
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       2,011,866       1.61 %
                    117,310       2,884,724       2,011,866       1.61 %
                                               
Copper Property CTL Pass Through Trust   Banking, Finance, Insurance & Real Estate   Equity Certificates(14)           437,795       5,874,043       5,669,444       4.55 %
                                               
DataOnline Corp.   High Tech Industries   Senior Secured First Lien Term Loan (LIBOR + 6.25%, 1.00% LIBOR Floor)   11/13/2025       4,850,000       4,850,000       4,656,000       3.73 %
        Revolving Credit Facility (LIBOR + 6.25%, 1.00% LIBOR Floor)   11/13/2025       714,286       714,286       685,714       0.55 %
                    5,564,286       5,564,286       5,341,714       4.28 %
                                               
DirecTV Financing, LLC   Media: Broadcasting & Subscription   Senior Secured First Lien Term Loan (LIBOR + 5.00%, 0.75% LIBOR Floor)(14)   8/2/2027       4,437,500       4,437,500       4,307,038       3.45 %
                    4,437,500       4,437,500       4,307,038       3.45 %
                                               
Dream Finders Homes, LLC   Construction & Building   Preferred Equity (8.00% PIK)           5,415,528       5,415,528       5,036,441       4.04 %
                    5,415,528       5,415,528       5,036,441       4.04 %

 

 

5

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of December 31, 2022

(Unaudited)

 

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       3,949,749       3,949,749       3,693,015       2.96 %
                    3,949,749       3,949,749       3,693,015       2.96 %
                                               
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       6,835,891       5.48 %
                    529,914       8,754,386       6,835,891       5.48 %
                                               
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       1,848,185       1.48 %
                    254,922       3,333,786       1,848,185       1.48 %
                                               
Innovate Corp.   Construction & Building   8.50% Senior Secured Notes   2/1/2026       2,250,000       2,252,156       1,617,300       1.30 %
                    2,250,000       2,252,156       1,617,300       1.30 %
                                               
Invesco Mortgage Capital, Inc.(11)   Banking, Finance, Insurance & Real Estate   Equity - 205,000 Class C Preferred Units(13)(16)           205,000       5,035,506       4,206,600       3.37 %
                    205,000       5,035,506       4,206,600       3.37 %
                                               
JFL-NGS-WCS Partners, LLC   Construction & Building   Senior Secured First Lien Term Loan B (LIBOR + 5.50%, 1.00% LIBOR Floor)   11/12/2026       879,189       882,715       863,803       0.69 %
        Equity - 10,000,000 Units           10,000,000       10,000,000       9,886,157       7.93 %
                    10,879,189       10,882,715       10,749,960       8.62 %

 

6

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of December 31, 2022

(Unaudited)

 

Company(1)   Industry   Type of Investment   Maturity     Par Amount/
Shares/Units(2)		     Cost(3)     Fair
Value(4)		     % of Net
Assets(5)		  
                                               
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       7,125,000       7,008,030       4,916,250       3.94 %
                    7,125,000       7,008,030       4,916,250       3.94 %
                                               
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       4,925,000       4,825,807       4,838,813       3.88 %
        Senior Secured First Lien Term Loan B (SOFR + CSA + 9.00%, 1.00% SOFR + CSA Floor)(20)   5/31/2027       7,500,000       7,348,945       7,368,750       5.91 %
        Convertible Promissory Note           5,000,000       5,000,000       5,000,000       4.01 %
                    17,425,000       17,174,752       17,207,563       13.80 %
                                               
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       4,962,498       4,916,886       4,714,373       3.78 %
                    4,962,498       4,916,886       4,714,373       3.78 %

 

7

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of December 31, 2022

(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       1,714,698       1.38 %
                    97,426       2,318,487       1,714,698       1.38 %
                                               
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       3,021,150       2.42 %
                    165,000       4,102,076       3,021,150       2.42 %
                                               
PennyMac Financial Services, Inc.(11)   Banking, Finance, Insurance & Real Estate   Equity - 81,500 Common Units(13)           81,500       5,364,478       4,617,790       3.70 %
                    81,500       5,364,478       4,617,790       3.70 %
                                               
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       4,962,500       4,917,684       3,821,125       3.06 %
                    4,962,500       4,917,684       3,821,125       3.06 %
                                               
Rithm Capital Corp.(11)   Banking, Finance, Insurance & Real Estate   Equity - 206,684 Class B Preferred Units(13)(17)           206,684       5,129,170       3,974,533       3.19 %
                    206,684       5,129,170       3,974,533       3.19 %

 

8

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of December 31, 2022

(Unaudited)

 

Company(1)   Industry   Type of Investment   Maturity     Par Amount/
Shares/Units(2)		     Cost(3)     Fair
Value(4)		     % of Net
Assets(5)		  
                                               
Secure Acquisition Inc. (dba Paragon Films)(8)   Packaging   Senior Secured First Lien Term Loan(LIBOR + 5.00%, 0.50% LIBOR Floor)   12/16/2028       3,456,638       3,443,979       3,352,939       2.69 %
        Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 5.00%, 0.50% LIBOR Floor)(12)   12/16/2028       -       (970 )     -       0.00 %
                    3,456,638       3,443,009       3,352,939       2.69 %
                                               
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 (SOFR + CSA + 6.50%, 1.00% SOFR Floor)   12/30/2026       6,666,667       6,580,984       6,592,000       5.29 %
        Senior Secured First Lien Delayed Draw Term Loan (SOFR + 6.50%, 1.00% SOFR Floor)(12)   12/30/2026       2,626,667       2,626,667       2,636,800       2.11 %
                    9,293,334       9,207,651       9,228,800       7.40 %
                                               
SMART Financial Operations, LLC   Retail   Equity - 700,000 Class A Preferred Units           700,000       700,000       121,000       0.10 %
                    700,000       700,000       121,000       0.10 %

 

9

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of December 31, 2022

(Unaudited)

 

Company(1)   Industry   Type of Investment   Maturity     Par Amount/
Shares/Units(2)		     Cost(3)     Fair
Value(4)		     % of Net
Assets(5)		  
                                               
Stancor (dba Industrial Flow Solutions Holdings, LLC)   Services: Business   Equity - 338,736.11 Class A Units           338,736       308,652       161,654       0.13 %
                    338,736       308,652       161,654       0.13 %
                                               
Staples, Inc.   Services: Consumer   First Lien Term Loan (LIBOR + 4.50%, 0.0% LIBOR Floor)(14)   9/12/2024       3,721,080       3,658,517       3,674,566       2.96 %
                    3,721,080       3,658,517       3,674,566       2.96 %
                                               
Thryv Holdings, Inc.(11)   Media: Broadcasting & Subscription   Senior Secured First Lien Term Loan (LIBOR + 8.50%, 1.00% LIBOR Floor)(14)   3/1/2026       6,187,924       6,090,770       6,048,696       4.95 %
                    6,187,924       6,090,770       6,048,696       4.95 %
                                               
Velocity Pooling Vehicle, LLC   Automotive   Equity - 5,441 Class A Units           5,441       302,464       -       0.00 %
        Warrants - 0.65% of Outstanding Equity   3/30/2028       6,506       361,667       -       0.00 %
                    11,947       664,131       -       0.00 %

 

10

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of December 31, 2022

(Unaudited)

 

Company(1)   Industry   Type of Investment   Maturity     Par Amount/
Shares/Units(2)		     Cost(3)     Fair
Value(4)		     % of Net
Assets(5)		  
                                               
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       -       0.00 %
                                               
Watermill-QMC Midco, Inc.   Automotive   Equity - 1.30% Partnership Interest(9)           518,283       518,283       -       0.00 %
                    518,283       518,283       -       0.00 %
                                               
Wingman Holdings, Inc.   Aerospace & Defense   Equity - 350 Common Shares           350       700,000       -       0.00 %
                    350       700,000       -       0.00 %
                                               
Subtotal Non-Controlled/Non-Affiliated Investments                 $ 108,596,855     $ 146,467,213     $ 123,227,670       98.92 %

 

11

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of December 31, 2022

(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(8)   Energy: Oil & Gas   Senior Secured First Lien Term Loan A (LIBOR + 5.00% PIK, 1.00% LIBOR Floor)(10)   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)   5/1/2023       1,231,932       1,191,257       123,193       0.10 %
        Revolving Credit Facility (LIBOR + 5.00%, 1.00% LIBOR Floor)(12)   5/1/2023       4,632,177       4,632,177       4,632,177       3.71 %
        Equity - 21,562 Class A Units           21,562       -       -       -  
                    15,832,412       15,296,502       4,755,370       3.81 %
                                               
Black Angus Steakhouses, LLC(8)   Hotel, Gaming & Leisure   Senior Secured First Lien Delayed Draw Term Loan (SOFR + 9.00%, 1.00% SOFR Floor)   1/31/2024       758,929       758,929       758,929       0.61 %
        Senior Secured First Lien Term Loan( SOFR + 9.00% PIK, 1.00% SOFR Floor)(10)   1/31/2024       8,412,596       7,767,533       1,665,694       1.34 %
        Senior Secured First Lien Super Priority Delayed Draw Term Loan(SOFR + 9.00%, 1.00% SOFR Floor)   1/31/2024       1,500,000       1,500,000       1,500,000       1.20 %
    Equity - 17.92% Membership Interest           -       -       -       0.00 % 
                    10,671,525       10,026,462       3,924,623       3.15 %

 

12

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of December 31, 2022

(Unaudited)

 

Company(1)   Industry   Type of Investment   Maturity     Par Amount/
Shares/Units(2)		     Cost(3)     Fair
Value(4)		     % of Net
Assets(5)		  
                                       
Kemmerer Operations, LLC   Metals & Mining   Senior Secured First Lien Term Loan
(15.00% PIK)		   6/21/2023       1,564,951       1,564,951       1,564,951       1.26 %
        Equity - 6.78 Common Units           7       962,717       1,075,444       0.86 %
                    1,564,958       2,527,668       2,640,395       2.12 %
                                               
US Multifamily, LLC   Banking, Finance, Insurance & Real Estate   Equity - 33,300 Preferred Units           33,300       2,137,315       1,111,404       0.89 %
                    33,300       2,137,315       1,111,404       0.89 %
                                               
Subtotal Affiliated Investments                 $ 28,102,195     $ 29,987,947     $ 12,431,792       9.97 %

 

13

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of December 31, 2022

(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         $ 36,670,512     $ 36,670,512     $ 36,670,512       29.41 %
                    36,670,512       36,670,512       36,670,512       29.41 %
                                               
NVTN LLC(8)   Hotel, Gaming & Leisure   Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 4.00% Cash, 1.00% LIBOR Floor)   12/31/2024       7,309,885       7,309,885       7,244,096       5.81 %
        Senior Secured First Lien Term Loan B (LIBOR + 9.25% PIK, 1.00% LIBOR Floor)(10)   12/31/2024       19,561,424       13,916,082       3,697,109       2.96 %
        Senior Secured First Lien Term Loan C(LIBOR + 12.00% PIK, 1.00% LIBOR Floor)(10)   12/31/2024       13,199,860       7,570,056       -       0.00 %
        Equity - 1,000 Class A Units           9,551,135       9,550,924       -       0.00 %
                    49,622,304       38,346,947       10,941,205       8.77 %
                                               
Subtotal Control Investments                 $ 86,292,816     $ 75,017,459     $ 47,611,717       38.18 %
                                               
Total Investments, December 31, 2022         $ 222,991,866     $ 251,472,619     $ 183,271,179       147.07 %

 

(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.

14

 

 

PHENIXFIN CORPORATION
Consolidated Schedule of Investments
As of December 31, 2022
(Unaudited)

 

(3) Net unrealized depreciation for U.S. federal income tax purposes totaled $(68,128,841).
  The tax cost basis of investments is $251,399,020 as of December 31, 2022.
(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 $124,692,805 as of December 31, 2022.

(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 December 31, 2022 (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 December 31, 2022.
(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 December 31, 2022, 19.96% of the Company’s portfolio investments were non-qualifying assets.
(12) This investment earns 0.50% commitment fee on all unused commitment as of December 31, 2022, 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 December 31, 2022 (see Note 4).
(14) This investment represents a Level 2 security in the ASC 820 table as of December 31, 2022 (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”)

 

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

 

15

 

 

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    5.23%
              6,486,419    5,825,616    5,448,591    5.23%
                               
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    1.84%
              117,310    2,884,724    1,915,672    1.84%
                               
Copper Property CTL Pass Through Trust  Banking, Finance, Insurance & Real Estate  Equity Certificates(14)       437,795    6,314,757    5,877,398    5.65%
                               
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    2.50%
              2,607,062    2,602,547    2,607,062    2.50%
                               
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    4.58%
      Revolving Credit Facility (LIBOR + 6.25%, 1.00% LIBOR Floor)  11/13/2025    714,286    714,286    700,000    0.67%
              5,576,786    5,576,786    5,465,250    5.25%

 

16

 

 

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)		 
                               
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    4.05%
              4,550,000    4,550,000    4,220,000    4.05%
                               
Dream Finders Homes, LLC  Construction & Building  Preferred Equity (8.00% PIK)       5,309,341    5,309,341    4,950,961    4.76%
              5,309,341    5,309,341    4,950,961    4.76%
                               
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    3.78%
              3,959,799    3,959,799    3,930,101    3.78%
                               
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    5.48%
              529,914    8,754,386    5,707,174    5.48%
                               
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    1.84%
              254,922    3,333,786    1,914,464    1.84%

 

17

 

 

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)