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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K
 
CURRENT REPORT
 Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported):  May 12, 2021
 
PHENIXFIN CORPORATION
(Exact name of registrant as specified in its charter)

Delaware
814-00818
27-4576073
(State or other jurisdiction of
incorporation or organization)
(Commission file number)
(I.R.S. employer
identification no.)

445 Park Avenue, 9th Floor,
New York, NY
(Address of principal executive offices)
  
10022
(Zip code)

Registrant’s telephone number, including area code:  (212) 859-0390
 
Not Applicable
(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:


☐ 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)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement 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 exchange on which registered
Common Stock, par value $0.001 per share
PFX
The NASDAQ Global Market
6.125% Notes due 2023
PFXNL
The NASDAQ Global Market

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 provided pursuant to Section 13(a) of the Exchange Act.           ☐
 
 


Item 2.02
Results of Operations and Financial Condition.

On May 12, 2021, PhenixFIN Corporation issued a press release announcing its financial results for the quarter ended March 31, 2021.  The press release is included as Exhibit 99.1 to this Form 8-K.


Item 9.01
Financial Statements and Exhibits.
 
(d)
Exhibits
 

 
ExhibitNo.
Description
 
99.1
Press Release dated May 12, 2021
 



 
SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, PhenixFIN Corporation has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 

DATE:  May 12, 2021
PHENIXFIN CORPORATION
  
     
     
 
/s/ David Lorber
  
 
Name:
David Lorber
  
 
Title:
Chief Executive Officer
  
       








Exhibit 99.1

PhenixFIN Corporation Announces Second Quarter 2021 Financial Results
 
New York, NY, May 12, 2021 -- PhenixFIN Corporation (NASDAQ: PFX) (the “Company”), a publicly traded business development company, today announced its financial results for the fiscal second quarter of 2021.
 
Second Quarter 2021 Highlights


 •
Total investment income of $6.5 million; net investment income of $3.7 million

•
$59.1 million in cash on March 31, 2021

•
Net asset value of $151.2 million, or $55.91 per share as of March 31, 2021 vs. $55.30 per share as of September 30, 2020

The quarter ended March 31, 2021 represented the first quarter of operations under the Company’s new internalized management structure.
 
David Lorber, Chief Executive Officer of the Company, stated: “We are pleased with the smooth transition to an internally-managed company and with our performance during the quarter.  We are generally encouraged by potential opportunities to enhance value within the legacy portfolio and deploy capital, as we look to achieve our investment objective of generating current income and capital appreciation.  In addition, we continue to realize efficiencies in operating under our internalized management structure.”

On January 11, 2021, the Company announced that the Board of Directors approved a share repurchase program authorizing up to $15 million in share repurchases.  Under the share repurchase program, the Company is authorized to repurchase from time to time its common stock in open market or other transactions, subject to applicable regulatory requirements.  Under this program, 19,773 shares were repurchased through March 31, 2021.  In aggregate through May 11, 2021 43,988 shares have been repurchased at an average price of $32.52/share.

Second Quarter 2021 Financial Results

For the quarter ended March 31, 2021, investment income totaled $6.4 million, of which $6.1 million was attributable to portfolio interest and dividend income, $0.2 million was attributable to fee income, and $0.1 million was attributable to other income.
 
For the quarter ended March 31, 2020, investment income totaled $5.3 million, of which $5.2 million was attributable to portfolio interest and dividend income, and $0.1 million to fee income.

For the quarter ended March 31, 2021, total net expenses were $2.8 million and for the quarter ended March 31, 2020, total net expenses were $9.5 million.
 
For the quarter ended March 31, 2021, the Company recorded a net realized gain of $0.2 million and net unrealized appreciation of $3.9 million.  For the quarter ended March 31, 2020, the Company recorded a net realized loss of $(0.1) million and net unrealized depreciation of $(73.6) million.

Portfolio and Investment Activities
 
As of March 31, 2021, the fair value of the Company’s investment portfolio totaled $168.2 million and consisted of 38 portfolio companies.
 

As of March 31, 2021, the Company had 10 portfolio company investments on non-accrual status with a fair market value of $16.7 million.
 
Liquidity and Capital Resources
 
At March 31, 2021, the Company had $59.1 million in cash and $77.3 million outstanding in aggregate principal amount of 6.125% unsecured notes due 2023.

 
ABOUT PHENIXFIN CORPORATION

 PhenixFIN Corporation is a non-diversified, internally managed closed-end management investment company incorporated in Delaware that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended.  We completed our initial public offering and commenced operations on January 20, 2011.  The Company has elected, and intends to qualify annually, to be treated, for U.S. federal income tax purposes, as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Effective January 1, 2021, the Company operates under an internalized management structure.

 SAFE HARBOR STATEMENT AND OTHER DISCLOSURES

This press release contains “forward-looking” statements.  Such forward-looking statements reflect current views with respect to future events and financial performance, and the Company may make related oral forward-looking statements on or following the date hereof.  These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions.  Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements, including among other things, PhenixFIN’s ability to deliver value to shareholders, implement its investment objective, capitalize on investment opportunities and continue to realize efficiencies, and other factors that are enumerated in the Company’s periodic filings with the Securities and Exchange Commission. PhenixFIN Corporation disclaims and does not undertake any obligation to update or revise any forward-looking statement in this press release.

The press release contains unaudited financial results.  For ease of review, we have excluded the word “approximately” when rounding the results.  This press release is for informational purposes only and is not an offer to purchase or a solicitation of an offer to sell shares of PhenixFIN Corporation’s common stock. There can be no assurance that PhenixFIN Corporation will achieve its investment objective. 


For PhenixFIN investor relations, please call 212-859-0390. For media inquiries, please contact info@phenixfc.com.
 









PHENIXFIN CORPORATION
Consolidated Statements of Assets and Liabilities

 
 
March 31,
2021
(Unaudited)
 
 
September 30,
2020
 
Assets:
 
 
 
 
 
 
Investments at fair value
 
 
 
 
 
 
Non-controlled, non-affiliated investments (amortized cost of $95,301,443 and $117,360,954, respectively)
 
$
93,283,110
 
 
$
114,321,948
 
Affiliated investments (amortized cost of $79,845,752 and $92,898,755, respectively)
 
 
68,233,836
 
 
 
84,873,023
 
Controlled investments (amortized cost of $38,487,321 and $117,874,821, respectively)
 
 
6,727,597
 
 
 
47,548,578
 
Total Investments at fair value
 
 
168,244,543
 
 
 
246,743,549
 
Cash and cash equivalents
 
 
59,092,731
 
 
 
56,522,148
 
Receivables:
 
 
 
 
 
 
 
 
Interest receivable
 
 
299,655
 
 
 
624,524
 
Fees receivable
 
 
106,528
 
 
 
119,028
 
Other receivable
 
 
398,551
 
 
 
-
 
Prepaid share repurchases
 
 
164,258
 
 
 
-
 
Other assets
 
 
1,210,724
 
 
 
2,093,559
 
Total Assets
 
$
229,516,990
 
 
$
306,102,808
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
Notes payable (net of debt issuance costs of $551,142 and $905,624, respectively)
 
$
77,295,658
 
 
$
150,960,662
 
Interest and fees payable
 
 
-
 
 
 
801,805
 
Due to affiliates
 
 
-
 
 
 
53,083
 
Management and incentive fees payable
 
 
-
 
 
 
1,392,022
 
Administrator expenses payable
 
 
94,958
 
 
 
156,965
 
Accounts payable and accrued expenses
 
 
918,279
 
 
 
2,108,225
 
Deferred revenue
 
 
30,970
 
 
 
10,529
 
Total Liabilities
 
 
78,339,865
 
 
 
155,483,291
 
 
 
 
 
 
 
 
 
 
Commitments and Contingencies
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Assets:
 
 
 
 
 
 
 
 
Common Shares, $0.001 par value; 5,000,000 shares authorized; 2,703,936 and 2,723,709 common shares issued and outstanding, respectively
 
 
2,704
 
 
 
2,724
 
Capital in excess of par value
 
 
671,589,690
 
 
 
672,381,617
 
Total distributable earnings/(loss)
 
 
(520,415,269
)
 
 
(521,764,824
)
Total Net Assets
 
$
151,177,125
 
 
$
150,619,517
 
Total Liabilities and Net Assets
 
$
229,516,990
 
 
$
306,102,808
 
 
 
 
 
 
 
 
 
 
Net Asset Value Per Common Share
 
$
55.91
 
 
$
55.30
 






PHENIXFIN CORPORATION
Consolidated Statements of Operations
(Unaudited)

 
 
For the Three Months Ended
March 31
 
 
For the Six Months Ended
March 31
 
 
 
2021
 
 
2020
 
 
2021
 
 
2020
 
Interest Income:
 
 
 
 
 
 
 
 
 
 
 
 
Interest from investments
 
 
 
 
 
 
 
 
 
 
 
 
Non-controlled, non-affiliated investments:
 
 
 
 
 
 
 
 
 
 
 
 
Cash
 
$
1,534,904
 
 
 
2,320,453
 
 
$
3,206,717
 
 
 
5,538,162
 
Payment in-kind
 
 
-
 
 
 
128,309
 
 
 
170,029
 
 
 
327,321
 
Affiliated investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash
 
 
196,328
 
 
 
190,193
 
 
 
548,619
 
 
 
399,441
 
Payment in-kind
 
 
-
 
 
 
706,789
 
 
 
-
 
 
 
1,654,262
 
Controlled investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash
 
 
(1,190
)
 
 
1,297
 
 
 
-
 
 
 
84,505
 
Payment in-kind
 
 
-
 
 
 
5,385
 
 
 
-
 
 
 
500,767
 
Total interest income
 
 
1,730,042
 
 
 
3,352,426
 
 
 
3,925,365
 
 
 
8,504,458
 
Dividend income
 
 
4,408,234
 
 
 
1,662,500
 
 
 
14,671,735
 
 
 
3,500,000
 
Interest from cash and cash equivalents
 
 
506
 
 
 
154,290
 
 
 
1,446
 
 
 
372,428
 
Fee income
 
 
237,416
 
 
 
131,992
 
 
 
578,880
 
 
 
415,532
 
Other income
 
 
78,204
 
 
 
-
 
 
 
78,204
 
 
 
-
 
Total Investment Income
 
 
6,454,402
 
 
 
5,301,208
 
 
 
19,255,630
 
 
 
12,792,418
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Base management fees
 
 
-
 
 
 
1,641,271
 
 
 
1,146,403
 
 
 
3,649,505
 
Interest and financing expenses
 
 
1,260,054
 
 
 
4,432,118
 
 
 
3,277,695
 
 
 
9,576,047
 
General and administrative expenses
 
 
104,440
 
 
 
2,083,397
 
 
 
466,049
 
 
 
2,600,239
 
Salaries and Benefits
 
 
332,317
 
 
 
-
 
 
 
332,317
 
 
 
-
 
Administrator expenses
 
 
(44,618
)
 
 
576,362
 
 
 
439,794
 
 
 
1,127,884
 
Insurance expenses
 
 
474,468
 
 
 
356,580
 
 
 
959,480
 
 
 
654,578
 
Directors fees
 
 
220,500
 
 
 
296,500
 
 
 
696,217
 
 
 
612,500
 
Professional fees, net
 
 
420,220
 
 
 
130,630
 
 
 
(79,077
)
 
 
(4,285,445
)
Total expenses net of expense support reimbursement and management and incentive fee waivers
 
 
2,767,381
 
 
 
9,516,858
 
 
 
7,238,878
 
 
 
13,935,308
 
Net Investment Income
 
 
3,687,021
 
 
 
(4,215,650
)
 
 
12,016,752
 
 
 
(1,142,890
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized and unrealized gains (losses) on investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net realized gains (losses):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-controlled, non-affiliated investments
 
 
160,926
 
 
 
(100,115
)
 
 
4,054,648
 
 
 
(157,914
)
Affiliated investments
 
 
-
 
 
 
-
 
 
 
(10,452,928
)
 
 
-
 
Controlled investments
 
 
-
 
 
 
-
 
 
 
(40,147,570
)
 
 
(1,686,837
)
Total net realized gains (losses)
 
 
160,926
 
 
 
(100,115
)
 
 
(46,545,850
)
 
 
(1,844,751
)
Net change in unrealized gains (losses):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-controlled, non-affiliated investments
 
 
5,077,737
 
 
 
(19,549,944
)
 
 
1,020,673
 
 
 
(15,802,570
)
Affiliated investments
 
 
(1,467,862
)
 
 
(15,019,332
)
 
 
(3,586,184
)
 
 
(5,578,733
)
Controlled investments
 
 
329,584
 
 
 
(38,994,357
)
 
 
38,566,519
 
 
 
(48,451,471
)
Total net change in unrealized gains (losses)
 
 
3,939,459
 
 
 
(73,563,633
)
 
 
36,001,008
 
 
 
(69,832,774
)
Change in provision for deferred taxes on unrealized (appreciation)/ depreciation on investments
 
 
-
 
 
 
(85,664
)
 
 
-
 
 
 
(85,664
)
Loss on extinguishment of debt
 
 
-
 
 
 
(895,033
)
 
 
(122,355
)
 
 
(1,784,183
)
Total realized and unrealized gains (losses)
 
 
4,100,385
 
 
 
(74,644,445
)
 
 
(10,667,197
)
 
 
(73,547,372
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Increase (Decrease) in Net Assets Resulting from Operations
 
$
7,787,406
 
 
$
(78,860,095
)
 
$
1,349,555
 
 
$
(74,690,262
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Basic and diluted earnings per common share
 
$
2.87
 
 
$
(28.95
)
 
$
0.50
 
 
$
(27.42
)
Weighted Average Basic and diluted net investment income (loss) per common share
 
$
1.36
 
 
$
(1.55
)
 
$
4.42
 
 
$
(0.42
)
Weighted Average Common Shares Outstanding - Basic and Diluted
 
 
2,716,627
 
 
 
2,723,711
(1)
 
 
2,720,226
 
 
 
2,723,711
(1)
   
(1)
Basic and diluted shares has been adjusted for 2020 to reflect the one-for-twenty reverse stock split effected on July 24, 2020 on a retroactive basis.