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 June 30, 2021

 

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, 9th 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
6.125% Notes due 2023   PFXNL   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 2,658,921 shares of common stock, $0.001 par value, outstanding as of August 11, 2021.

 

 

 

 

 

 

PHENIXFIN CORPORATION

 

TABLE OF CONTENTS

 

Part I. Financial Information  
   
Item 1. Financial Statements  
   
Consolidated Statements of Assets and Liabilities as of June 30, 2021 (unaudited) and September 30, 2020 1
   
Consolidated Statements of Operations for the three and nine months ended June 30, 2021 and 2020 (unaudited) 2
   
Consolidated Statements of Changes in Net Assets for the three and nine months ended June 30, 2021 and 2020 (unaudited) 3
   
Consolidated Statements of Cash Flows for the nine months ended June 30, 2021 and 2020 (unaudited) 4
   
Consolidated Schedules of Investments as of June 30, 2021 (unaudited) and September 30, 2020 5
   
Notes to Consolidated Financial Statements (unaudited) 22
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 60
   
Item 3. Quantitative and Qualitative Disclosures About Market Risk 77
   
Item 4. Controls and Procedures 77
   
Part II. Other Information 78
   
Item 1. Legal Proceedings 78
   
Item 1A. Risk Factors 80
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 83
   
Item 3. Defaults Upon Senior Securities 83
   
Item 4. Mine Safety Disclosures 83
   
Item 5. Other Information 83
   
Item 6. Exhibits 84
   
SIGNATURES 88

 

i

 

 

PHENIXFIN CORPORATION

Consolidated Statements of Assets and Liabilities

 

   June 30,
2021 (Unaudited)
   September 30,
2020
 
Assets:        
Investments at fair value        
Non-controlled, non-affiliated investments (amortized cost of $109,219,571 and $117,360,954, respectively)  $105,407,064   $114,321,948 
Affiliated investments (amortized cost of $78,821,547 and $92,898,755, respectively)   68,722,983    84,873,023 
Controlled investments (amortized cost of $37,489,171 and $117,874,821, respectively)   7,488,473    47,548,578 
Total Investments at fair value   181,618,520    246,743,549 
Cash and cash equivalents   52,864,911    56,522,148 
Receivables:          
Interest receivable   289,832    624,524 
Fees receivable   106,528    119,028 
Dividends receivable   66,445    - 
Other assets   1,003,437    2,093,559 
Total Assets  $235,949,673   $306,102,808 
           
Liabilities:          
Notes payable (net of debt issuance costs of $482,346 and $905,624, respectively)  $77,364,454   $150,960,662 
Interest and fees payable   -    801,805 
Due to affiliate   -    53,083 
Due to broker   284,067    - 
Management and incentive fees payable (see Note 6)   -    1,392,022 
Administrator expenses payable (see Note 6)   60,685    156,965 
Accounts payable and accrued expenses   1,547,888    2,108,225 
Deferred revenue   14,003    10,529 
Total Liabilities   79,271,097    155,483,291 
           
Commitments and Contingencies (see Note 8)          
           
Net Assets:          
Common Shares, $0.001 par value; 5,000,000 shares authorized; 2,723,709 shares issued; 2,678,921 and 2,723,709 common shares outstanding, respectively   2,679    2,724 
Capital in excess of par value   670,122,430    672,381,617 
Total distributable earnings (loss)   (513,446,533)   (521,764,824)
Total Net Assets  $156,678,576   $150,619,517 
Total Liabilities and Net Assets  $235,949,673   $306,102,808 
           
Net Asset Value Per Common Share  $58.49   $55.30 

 

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
June 30
   For the Nine Months Ended
June 30
 
   2021   2020   2021   2020 
Interest Income:                
Interest from investments                
Non-controlled, non-affiliated investments:                
Cash  $1,578,657    1,961,009   $4,785,374    7,499,171 
Payment in-kind   186,733    138,018    356,762    465,339 
Affiliated investments:                    
Cash   249,157    291,569    797,776    691,010 
Payment in-kind   286,444    487,065    286,444    2,141,327 
Controlled investments:                    
Cash   -    -    -    84,505 
Payment in-kind   -    -    -    500,767 
Total interest income   2,300,991    2,877,661    6,226,356    11,382,119 
Dividend income   6,307,408    1,225,000    20,979,143    4,725,000 
Interest from cash and cash equivalents   3,862    4,319    5,308    376,747 
Fee income (see Note 9)   71,443    202,122    650,323    617,654 
Other income   -    -    78,204    - 
Total Investment Income   8,683,704    4,309,102    27,939,334    17,101,520 
Expenses:                    
Base management fees (see Note 6)   -    1,317,223    1,146,403    4,966,728 
Interest and financing expenses   1,260,825    2,736,136    4,538,520    12,312,183 
General and administrative expenses   294,022    540,066    856,396    3,140,305 
Salaries and Benefits   679,229    -    1,011,546    - 
Administrator expenses (see Note 6)   106,578    614,535    546,372    1,742,419 
Insurance expenses   444,832    333,816    1,404,312    988,394 
Directors fees   179,000    347,500    875,217    960,000 
Professional fees, net (see Note 8)   289,200    (511,519)   113,797    (4,796,964)
Expenses before expense support reimbursement and management and incentive fee waivers   3,253,686    5,377,757    10,492,563    19,313,065 
Expense support reimbursement (see Note 6)   -    (349,427)   -    (349,427)
Total expenses net of expense support reimbursement and management and incentive fee waivers   3,253,686    5,028,330    10,492,563    18,963,638 
Net Investment Income   5,430,018    (719,228)   17,446,771    (1,862,118)
Realized and unrealized gains (losses) on investments                    
Net realized gains (losses):                    
Non-controlled, non-affiliated investments   38,852    (532,253)   4,093,500    (690,167)
Affiliated investments   19,811    -    (10,433,117)   - 
Controlled investments   1,850    (37,389,588)   (40,145,720)   (39,076,425)
Total net realized gains (losses)   60,513    (37,921,841)   (46,485,337)   (39,766,592)
Net change in unrealized gains (losses):                    
Non-controlled, non-affiliated investments   (1,794,173)   7,379,695    (773,501)   (8,422,875)
Affiliated investments   1,513,353    8,137,213    (2,072,831)   2,558,480 
Controlled investments   1,759,025    31,389,160    40,325,544    (17,062,311)
Total net change in unrealized gains (losses)   1,478,205    46,906,068    37,479,212    (22,926,706)
Change in provision for deferred taxes on unrealized (appreciation) depreciation on investments   -    35,970    -    (49,694)
Loss on extinguishment of debt (see Note 5)   -    (697,191)   (122,355)   (2,481,374)
Total realized and unrealized gains (losses)   1,538,718    8,323,006    (9,128,480)   (65,224,366)
Net Increase (Decrease) in Net Assets Resulting from Operations  $6,968,736   $7,603,778   $8,318,291   $(67,086,484)
Weighted Average Basic and diluted earnings per common share  $2.60   $2.79   $3.07   $(24.63)
Weighted Average Basic and diluted net investment income (loss) per common share  $2.02   $(0.26)  $6.44   $(0.68)
Weighted Average Common Shares Outstanding - Basic and Diluted (see Note 11)   2,683,093    2,723,711   2,707,794    2,723,711

 

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

 

2

 

 

PHENIXFIN CORPORATION

Consolidated Statements of Changes in Net Assets

(Unaudited)

 

   Shares   Par Amount   Capital in
Excess of
Par Value
   Total
Distributable
Earnings/(Loss)
   Total
Net Assets
 
Balance at March 31, 2020   2,723,711   $2,724   $673,584,468   $(531,844,924)  $141,742,268 
OPERATIONS                         
Net investment income (loss)   -    -    -    (719,228)   (719,228)
Net realized gains (losses) on investments   -    -    -    (37,921,841)   (37,921,841)
Net change in unrealized appreciation (depreciation) on investments   -    -    -    46,906,068    46,906,068 
Change in provision for deferred taxes on unrealized (appreciation) depreciation on investments   -    -    -    35,970    35,970 
Net loss on extinguishment of debt   -    -    -    (697,191)   (697,191)
Total Increase (Decrease) in Net Assets   -    -    -    7,603,778    7,603,778 
Balance at June 30, 2020   2,723,711   $2,724   $673,584,468   $(524,241,146)  $149,346,046 
Balance at March 31, 2021   2,703,936   $2,704   $671,589,690   $(520,415,269)  $151,177,125 
OPERATIONS                         
Net investment income (loss)   -    -    -    5,430,018    5,430,018 
Net realized gains (losses) on investments   -    -    -    60,513    60,513 
Net change in unrealized appreciation (depreciation) on investments   -    -    -    1,478,205    1,478,205 
    -    -    -    6,968,736    6,968,736 
CAPITAL SHARE TRANSACTIONS                         
Repurchase of common shares   (25,015)   (25)   (1,467,260)   -    (1,467,285)
    (25,015)   (25)   (1,467,260)   -    (1,467,285)
Total Increase (Decrease) in Net Assets   (25,015)   (25)   (1,467,260)   6,968,736    5,501,451 
Balance at June 30, 2021   2,678,921   $2,679   $670,122,430   $(513,446,533)  $156,678,576 
Balance at September 30, 2019   2,723,711   $2,724   $673,584,468   $(457,154,662)  $216,432,530 
OPERATIONS                         
Net investment income (loss)   -    -    -    (1,862,118)   (1,862,118)
Net realized gains (losses) on investments   -    -    -    (39,766,592)   (39,766,592)
Net change in unrealized appreciation (depreciation) on investments   -    -    -    (22,926,706)   (22,926,706)
Change in provision for deferred taxes on unrealized (appreciation) depreciation on investments   -    -    -    (49,694)   (49,694)
Net loss on extinguishment of debt   -    -    -    (2,481,374)   (2,481,374)
Total Increase (Decrease) in Net Assets   -    -    -    (67,086,484)   (67,086,484)
Balance at June 30, 2020   2,723,711   $2,724   $673,584,468   $(524,241,146)  $149,346,046 
Balance at September 30, 2020   2,723,709   $2,724   $672,381,617   $(521,764,824)  $150,619,517 
OPERATIONS                         
Net investment income (loss)   -    -    -    17,446,771    17,446,771 
Net realized gains (losses) on investments   -    -    -    (46,485,337)   (46,485,337)
Net change in unrealized appreciation (depreciation) on investments   -    -    -    37,479,212    37,479,212 
Net loss on extinguishment of debt   -    -    -    (122,355)   (122,355)
    -    -    -    8,318,291    8,318,291 
CAPITAL SHARE TRANSACTIONS                         
Repurchase of common shares   (44,788)   (45)   (2,259,187)   -    (2,259,232)
    (44,788)   (45)   (2,259,187)   -    (2,259,232)
Total Increase (Decrease) in Net Assets   (44,788)   (45)   (2,259,187)   8,318,291    6,059,059 
Balance at June 30, 2021   2,678,921   $2,679   $670,122,430   $(513,446,533)  $156,678,576 

 

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

 

3

 

 

PHENIXFIN CORPORATION

Consolidated Statements of Cash Flows

(Unaudited)

 

   For the Nine Months Ended
June 30
 
   2021   2020 
Cash Flows from Operating Activities:        
Net increase (decrease) in net assets resulting from operations  $8,318,291   $(67,086,484)
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   (643,206)   (3,539,584)
Net amortization of premium (discount) on investments   (13,366)   (91,980)
Amortization of debt issuance cost   294,261    2,642,386 
Net realized (gain) loss from investments   46,485,337    39,766,592 
Net deferred income taxes   -    49,694 
Net unrealized (gains) losses on investments   (37,479,212)   22,926,706 
Proceeds from sale and settlements of investments   87,789,083    103,367,413 
Purchases, originations and participations   (31,013,606)   (16,159,203)
Loss on extinguishment of debt   122,355    2,481,374 
(Increase) decrease in operating assets:          
Other assets   1,090,122    931,926 
Interest receivable   334,692    929,546 
Receivable for dispositions and investments sold   -    (882,979)
Fees receivable   12,500    (10,723)
Dividends receivable   (66,445)   - 
Increase (decrease) in operating liabilities:          
Accounts payable and accrued expenses   (560,337)   (7,580,816)
Interest and fees payable   (801,805)   (2,102,943)
Management and incentive fees payable, net   (1,392,022)   (913,952)
Administrator expenses payable   (96,280)   (596,677)
Deferred revenue   3,474    (74,577)
Due to affiliate   (53,083)   (13,398)
Due to broker   284,067    - 
Net cash provided by (used in) operating activities   72,614,820    74,042,321 
Cash Flows from Financing Activities:          
Paydowns on debt   (74,012,825)   (106,122,923)
Repurchase of common shares   (2,259,232)   - 
Net cash provided by (used in) financing activities   (76,272,057)   (106,122,923)
Net increase (decrease) in cash and cash equivalents   (3,657,237)   (32,080,602)
Cash and cash equivalents, beginning of period   56,522,148    84,283,903 
Cash and cash equivalents, end of period  $52,864,911   $52,203,301 
           
Supplemental information:          
Interest paid during the period  $5,340,325   $11,772,739 

 

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

  

4

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of June 30, 2021

(Unaudited)

 

Company(1)  Industry  Type of Investment  Maturity   Par
Amount(2)
   Cost(3)   Fair
Value(4)
   % of
Net Assets(5)
 
                           

Non-Controlled/Non-Affiliated Investments:

                         
                                
Alpine SG, LLC (8)  High Tech Industries  Senior Secured First Lien Term Loan (LIBOR + 5.75% Cash, 1.00% LIBOR Floor)(14)   11/16/2022   $4,715,809   $4,715,809   $4,715,806    3.01%
      Senior Secured Incremental First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(14)   11/16/2022    472,087    472,087    472,087    0.30%
      Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 5.75% Cash, 1.00% LIBOR Floor)(14)   11/16/2022    2,277,293    2,277,293    2,277,293    1.45%
      Senior Secured Incremental First Lien Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(14)   11/16/2022    4,174,037    4,094,287    4,174,037    2.66%
               11,639,226    11,559,476    11,639,223    7.42%
                                
Autosplice, Inc.  Automotive  Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash & 2.00% PIK, 1.00% LIBOR Floor)(14)   4/30/2022    11,854,234    11,854,234    11,854,234    7.57%
               11,854,234    11,854,234    11,854,234    7.57%
                                
Be Green Packaging, LLC  Containers, Packaging & Glass  Equity - 417 Common Units        1    416,250    -    0.00%
               1    416,250    -    0.00%
                                
Chimera Investment Corp.(11)  Banking, Finance, Insurance & Real Estate  Equity - 112,310 Class C Preferred Units(18)(21)       112,310    2,755,253    2,904,337    1.85%
               112,310    2,755,253    2,904,337    1.85%
                                
Cleaver-Brooks, Inc.  Manufacturing  7.875% Senior Secured Notes(19)   3/1/2023    3,764,000    3,756,540    3,726,360    2.38%
               3,764,000    3,756,540    3,726,360    2.38%
                                
CM Finance SPV, LLC  Energy: Oil & Gas  Unsecured Debt(10)        101,463    101,463    -    0.00%
               101,463    101,463    -    0.00%

 

5

 

 

Company(1)  Industry  Type of Investment  Maturity   Par
Amount(2)
   Cost(3)   Fair
Value(4)
   % of
Net Assets(5)
 
                           
CPI International, Inc.  Aerospace & Defense  Senior Secured Second Lien Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor)(13)   7/28/2025    2,607,062    2,599,755    2,483,227    1.58%
               2,607,062    2,599,755    2,483,227    1.58%
                                

Crow Precision Components, LLC

  Aerospace & Defense  Equity - 350 Common Units        350    700,000    127,474    0.08%
               350    700,000    127,474    0.08%
                                
DataOnline Corp.(8)  High Tech Industries  Senior Secured First Lien Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor)(14)   11/13/2025    4,925,000    4,925,000    4,826,500    3.08%
      Revolving Credit Facility (LIBOR + 6.25% Cash, 1.00% LIBOR Floor)(14)(16)   11/13/2025    607,143    607,143    592,857    0.38%
               5,532,143    5,532,143    5,419,357    3.46%
                                
Dividend and Income Fund(11)  Banking, Finance, Insurance & Real Estate  Equity - 45,653 Common Units(18)        45,653    665,852    676,121    0.43%
               45,653    665,852    676,121    0.43%
                                

Dream Finders Homes, LLC(11)

  Construction & Building  Preferred Equity (8.00% PIK)        4,808,834    4,808,834    4,616,481    2.95%
               4,808,834    4,808,834    4,616,481    2.95%
                                
Footprint Acquisition, LLC  Services: Business  Preferred Equity (8.75% PIK)(10)        4,049,398    4,049,398    2,348,651    1.50%
      Equity - 150 Common Units        150    -    -    0.00%
               4,049,548    4,049,398    2,348,651    1.50%
                                
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 - 37,254 Common Units(18)        37,254    469,512    483,557    0.31%
               37,254    469,512    483,557    0.31%

 

6

 

 

Company(1)  Industry  Type of Investment  Maturity   Par
Amount(2)
   Cost(3)   Fair
Value(4)
   % of
Net Assets(5)
 
                           

Non-Controlled/ Non-Affiliated Investments:

                         
                          
Impact Group, LLC  Services: Business  Senior Secured First Lien Term Loan (LIBOR + 7.37% Cash, 1.00% LIBOR Floor)(14)   6/27/2023    3,159,309    3,159,309    3,159,309    2.02%
      Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 7.37% Cash, 1.00% LIBOR Floor)(14)   6/27/2023    9,155,136    9,155,136    9,155,136    5.84%
               12,314,445    12,314,445    12,314,445    7.86%
                                
InterFlex Acquisition Company, LLC  Containers, Packaging & Glass  Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(13)   8/18/2022    11,535,906    11,535,906    11,535,906    7.36%
               11,535,906    11,535,906    11,535,906    7.36%
                                
Invesco Mortgage Capital, Inc.(11)  Banking, Finance, Insurance & Real Estate  Equity - 205,000 Class C Preferred Units(18)(22)       205,000    5,035,506    5,139,350    3.28%
               205,000    5,035,506    5,139,350    3.28%
                                
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%
                                
New Residential Investment Corp.(11)  Banking, Finance, Insurance & Real Estate  Equity - 159,583 Class B Preferred Units(18)(23)       159,583    3,948,103    4,096,496    2.61%
               159,583    3,948,103    4,096,496    2.61%
                                
New York Mortgage Trust, Inc.(11)   Banking, Finance, Insurance & Real Estate  Equity - 135,000 Class E Preferred Units(18)(24)       135,000    3,335,657    3,488,400    2.23%
               135,000    3,335,657    3,488,400    2.23%
                                
Point.360  Services: Business  Senior Secured First Lien Term Loan (LIBOR + 6.00% PIK)(10)(15)   7/8/2020    2,777,366    2,103,712    -    0.00%
               2,777,366    2,103,712    -    0.00%

 

7

 

 

Company(1)  Industry  Type of Investment  Maturity   Par
Amount(2)
   Cost(3)   Fair
Value(4)
   % of
Net Assets(5)
 
                                
RateGain Technologies, Inc.  Hotel, Gaming & Leisure  Unsecured Debt(10)(12)   10/2/2023    589,821    589,821    -    0.00%
      Unsecured Debt(10)(12)   4/1/2024    761,905    761,905    -    0.00%
               1,351,726    1,351,726    -    0.00%
                                
Redwood Services Group, LLC(8)  Services: Business  Revolving Credit Facility (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(13)(16)   6/6/2023    175,000    175,000    157,500    0.10%
               175,000    175,000    157,500    0.10%
                                
Sendero Drilling Company, LLC  Energy: Oil & Gas  Unsecured Debt (9.00% Cash)(10)   8/1/2022    297,500    283,238    -    0.00%
               297,500    283,238    -    0.00%
                                
Seotowncenter, Inc.  Services: Business  Equity - 3,434,169.6 Common Units        3,434,170    566,475    -    0.00%
               3,434,170    566,475    -    0.00%
                                
SFP Holding, Inc.  Services: Business  Senior Secured First Lien Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor)(14)   9/1/2022    4,744,636    4,744,636    4,697,190    3.00%
      Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor)(14)   9/1/2022    1,839,544    1,839,544    1,821,149    1.16%
      Equity - 101,165.93 Common Units in CI (Summit) Investment Holdings LLC        101,166    1,067,547    863,957    0.55%
               6,685,346    7,651,727    7,382,296    4.71%
                                
SMART Financial Operations, LLC  Retail  Equity - 700,000 Class A Preferred Units        700,000    700,000    -    0.00%
               700,000    700,000    -    0.00%

 

8

 

 

Company(1)  Industry  Type of Investment  Maturity   Par
Amount(2)
   Cost(3)   Fair
Value(4)
   % of
Net Assets(5)
 
                                
Stancor, Inc.  Services: Business  Equity - 263,814.43 Class A Units        263,814    263,814    204,946    0.13%
               263,814    263,814    204,946    0.13%
                                
Thryv Holdings, Inc.(11)  Services: Business  Senior Secured First Lien Term Loan B (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(13)(19)   3/1/2026    6,120,000    5,944,492    6,120,000    3.91%
               6,120,000    5,944,492    6,120,000    3.91%
                                
Velocity Pooling Vehicle, LLC  Automotive  Senior Secured First Lien Term Loan (LIBOR + 11.00%, 1.00% LIBOR Floor)(14)   4/28/2023    1,014,440    951,629    1,014,440    0.65%
      Equity - 5,441 Class A Units        5,441    302,464    62,299    0.04%
      Warrants - 0.65% of Outstanding Equity   3/30/2028    6,506    361,667    74,429    0.05%
               1,026,387    1,615,760    1,151,168    0.74%
                                
Walker Edison Furniture Company LLC  Consumer goods: Durable  Equity - 10,244 Common Units        10,244    1,500,000    7,537,535    4.81%
               10,244    1,500,000    7,537,535    4.81%
                                
Watermill-QMC Midco, Inc.  Automotive  Equity - 1.3% Partnership Interest(9)        518,283    518,283    -    -0.02%
               518,283    518,283    -    -0.02%
                                
Subtotal Non-Controlled/
Non-Affiliated Investments
             $97,262,228   $109,219,571   $105,407,064    67.28%

 

9

 

 

Company(1)  Industry  Type of Investment  Maturity   Par
Amount(2)
   Cost(3)   Fair
Value(4)
   % of
Net Assets(5)
 
                           

Non-Controlled/Non-Affiliated Investments:

                         
                          
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)(14)   9/30/2021    9,946,740    9,473,066    -    0.00%
      Senior Secured First Lien Term Loan B (LIBOR + 8.00% PIK, 1.00% LIBOR Floor)(10)(14)   9/30/2021    25,937,520    19,468,870    -    0.00%
      Senior Secured First Lien Term Loan C (LIBOR + 5.00%, 1.00% LIBOR Floor)(10)(14)   9/30/2021    1,231,932    1,191,257    197,109    0.13%
      Revolving Credit Facility (LIBOR +5.00%, 1.00% LIBOR Floor)(14)(16)(25)   9/30/2021    3,554,069    3,554,069    3,554,069    2.27%
      Equity - 17,493.63 Class A Units        21,562    -    -    0.00%
               40,691,823    33,687,262    3,751,178    2.40%
                                
Black Angus Steakhouses, LLC(8)  Hotel, Gaming & Leisure  Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(13)   6/30/2022    758,929    758,929    758,929    0.48%
      Senior Secured First Lien Term Loan (LIBOR + 9.00% PIK, 1.00% LIBOR Floor)(10)(13)   6/30/2022    8,412,596    7,767,533    2,136,799    1.36%
      Senior Secured First Lien Super Priority DDTL (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(13)(16)   6/30/2022    1,500,000    1,500,000    1,500,000    0.96%
               10,671,525    10,026,462    4,395,728    2.80%
                                
Caddo Investors Holdings 1 LLC(11)  Forest Products & Paper  Equity - 6.15% Membership Interest(20)        2,528,826    2,528,826    3,766,822    2.40%
               2,528,826    2,528,826    3,766,822    2.40%

 

10

 

 

Company(1)  Industry  Type of Investment  Maturity   Par
Amount(2)
   Cost(3)   Fair
Value(4)
   % of
Net Assets(5)
 
                                
Dynamic Energy Services International LLC  Energy: Oil & Gas  Senior Secured First Lien Term Loan (LIBOR + 13.50% PIK)(10)(15)   12/31/2021    12,930,235    7,824,975    -    0.00%
      Equity - 12,350,000 Class A Units        12,350,000    -    -    0.00%
               25,280,235    7,824,975    -    0.00%
                                
JFL-NGS Partners, LLC  Construction & Building  Equity - 57,300 Class B Units        57,300    57,300    33,383,212    21.31%
               57,300    57,300    33,383,212    21.31%
                                
JFL-WCS Partners, LLC  Environmental Industries  Equity - 129,588 Class B Units        129,588    129,588    10,070,454    6.43%
               129,588    129,588    10,070,454    6.43%
                                
Kemmerer Operations, LLC(8)  Metals & Mining  Senior Secured First Lien Term Loan (15.00% PIK)   6/21/2023    2,294,047    2,294,047    2,294,047    1.45%
      Senior Secured First Lien Delayed Draw Term Loan (15.00% PIK)(16)   6/21/2023    288,614    288,614    288,614    0.18%
      Equity - 6.7797 Common Units        7    962,717    276,078    0.18%
               2,582,668    3,545,378    2,858,739    1.81%
                                
Path Medical, LLC  Healthcare & Pharmaceuticals  Senior Secured First Lien Term Loan A (LIBOR + 9.50% Cash, 1.00% LIBOR Floor)(10)(13)   10/11/2021    5,905,080    5,905,080    2,911,204    1.85%
      Senior Secured First Lien Term Loan B (LIBOR + 13.00% PIK, 1.00% LIBOR Floor)(10)(13)   10/11/2021    7,783,840    6,599,918    -    0.00%
      Warrants - 7.68% of Outstanding Equity        123,867    499,751    -    0.00%
               13,812,787    13,004,749    2,911,204    1.85%
                                
URT Acquisition Holdings Corporation  Services: Business  Unsecured Debt (10.00% Cash)(17)   12/4/2024    2,109,589    2,109,589    2,109,589    1.35%
      Warrants        28,912    -    1,070,000    0.68%
               2,138,501    2,109,589    3,179,589    2.03%
                                
US Multifamily, LLC(11)  Banking, Finance, Insurance & Real Estate  Senior Secured First Lien Term Loan (10.00% Cash)   12/31/2022    2,577,418    2,577,418    2,577,418    1.65%
      Equity - 33,300 Preferred Units        33,300    3,330,000    1,828,639    1.17%
               2,610,718    5,907,418    4,406,057    2.82%
                                
Subtotal Affiliated Investments             $100,503,971   $78,821,547   $68,722,983    43.86%

 

11

 

 

Company(1)  Industry  Type of Investment  Maturity   Par
Amount(2)
   Cost(3)   Fair
Value(4)
   % of
Net Assets(5)
 
                                
Controlled Investments:(7)                           
                                
NVTN LLC(8)  Hotel, Gaming & Leisure  Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 4.00% Cash, 1.00% LIBOR Floor)(10)(13)(16)   11/9/2021    6,565,875    6,565,875    6,027,473    3.85%
      Senior Secured First Lien Super Priority DDTL (LIBOR + 4.00% Cash, 1.00% LIBOR Floor)(13)(16)   12/31/2024    1,500,000    1,497,224    1,461,000    0.93%
      Senior Secured First Lien Term Loan B (LIBOR + 9.25% PIK, 1.00% LIBOR Floor)(10)(13)   11/9/2021    14,963,195    12,305,096    -    0.00%
      Senior Secured First Lien Term Loan C (LIBOR + 12.00% PIK, 1.00% LIBOR Floor)(10)(13)   11/9/2021    10,014,223    7,570,054    -    0.00%
      Equity - 787.4 Class A Units        9,550,922    9,550,922    -    0.00%
               42,594,215    37,489,171    7,488,473    4.78%
                                
Subtotal Control Investments             $42,594,215   $37,489,171   $7,488,473    4.78%
                                
Total Investments, June 30, 2021             $240,360,414   $225,530,289   $181,618,520    115.92%

 

12

 

 

(1) All of our investments are domiciled in the United States. Certain investments also have international operations.
   
(2) Par amount includes accumulated payment-in-kind (“PIK”) interest, as applicable, and is net of repayments.
   
(3) Net unrealized depreciation for U.S. federal income tax purposes totaled $44,153,134.
   
  The tax cost basis of investments is $225,771,654 as of June 30, 2021.
   
(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 $156,678,576 as of June 30, 2021.
   
(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 June 30, 2021 (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 June 30, 2021.
   
(11) The investment is not a qualifying asset as defined under Section 55(a) of 1940 Act, in whole, or in part. As of June 30, 2021, 14.51% of the Company's portfolio investments were non-qualifying assets.
   
(12) Security is non-income producing.
   
(13) The interest rate on these loans is subject to the greater of a London Interbank Offering Rate (“LIBOR”) floor, or 1 month LIBOR plus a base rate. The 1 month LIBOR as of June 30, 2021 was 0.10%.
   
(14) The interest rate on these loans is subject to the greater of a LIBOR floor, or 3 month LIBOR plus a base rate. The 3 month LIBOR as of June 30, 2021 was 0.15%.
   
(15) The interest rate on these loans is subject to 3 month LIBOR plus a base rate. The 3 month LIBOR as of June 30, 2021 was 0.15%.
   
(16) This investment earns 0.50% commitment fee on all unused commitment as of June 30, 2021, and is recorded as a component of interest income on the Consolidated Statements of Operations.
   
(17) In lieu of paying 10.00% Cash, URT Acquisition Holdings Corporation may elect to pay 12.00% PIK. This security has been paying 10.00% Cash since 12/31/2020.
   
(18) This investment represents a Level 1 security in the ASC 820 table as of June 30, 2021 (see Note 4).
   
(19) This investment represents a Level 2 security in the ASC 820 table as of June 30, 2021 (see Note 4).
   
(20) As a practical expedient, the Company uses net asset value (“NAV”) to determine the fair value of this investment.
   
(21) The interest rate on this loan is fixed-to-floating and will shift to 3 month LIBOR plus a 4.743% spread on 9/30/2025.
   
(22) The interest rate on this loan is fixed-to-floating and will shift to 3 month LIBOR plus a 5.29% spread on 9/27/2027.
   
(23) The interest rate on this loan is fixed-to-floating and will shift to 3 month LIBOR plus a 5.64% spread on 8/15/2024.
   
(24) The interest rate on this loan is fixed-to-floating and will shift to 3 month LIBOR plus a 6.429% spread on 1/15/2025.
   
(25) In lieu of paying 5.00% Cash, 1888 Industrial Services, LLC may elect to pay 5.00% PIK. This security has been paying 5.00% Cash.

 

13

 

 

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

September 30, 2020

 

Company(1)   Industry   Type of Investment   Maturity   Par
Amount(2)
    Cost(3)     Fair
Value(6)
    % of
Net Assets(4)
 
                                     
Non-Controlled/Non-Affiliated Investments:                            
                                     
Alpine SG, LLC   High Tech Industries   Senior Secured First Lien Term Loan (LIBOR + 5.75% Cash, 1.00% LIBOR Floor)(13)   11/16/2022     4,715,809       4,715,809       4,466,815       3.0 %
        Senior Secured Incremental First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(13)   11/16/2022     472,087       472,087       472,087       0.3 %
        Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 5.75% Cash, 1.00% LIBOR Floor)(13)   11/16/2022     2,277,293       2,277,293       2,157,052       1.4 %
        Revolving Credit Facility (LIBOR + 5.75% Cash, 1.00% LIBOR Floor)(13)(15)   11/16/2022     1,000,000       1,000,000       947,200       0.6 %
                  8,465,189       8,465,189       8,043,154          
                                             
American Dental Partners, Inc.   Healthcare & Pharmaceuticals   Senior Secured Second Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(13)   9/25/2023     4,387,500       4,387,500       3,948,750       2.6 %
                  4,387,500       4,387,500       3,948,750          
                                             
Autosplice, Inc.   High Tech Industries   Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash, 1.00% LIBOR Floor)(13)   12/17/2021     12,780,349       12,780,349       11,898,505       7.9 %
                  12,780,349       12,780,349       11,898,505          
                                             
Avantor, Inc.(10)   Wholesale   Equity - 13,695  Common Units(16)               9,553,793       12,277,988       8.2 %
                        9,553,793       12,277,988          
                                             
Be Green Packaging, LLC   Containers, Packaging & Glass   Equity - 417 Common Units               416,250             0.0 %
                        416,250                
                                             
CM Finance SPV, LLC   Banking, Finance, Insurance & Real Estate   Unsecured Debt   6/24/2021     101,463       101,463       101,463       0.1 %
                  101,463       101,463       101,463          
                                             
CPI International, Inc.   Aerospace & Defense   Senior Secured Second Lien Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor)(12)   7/28/2025     2,607,062       2,598,252       2,219,392       1.5 %
                  2,607,062       2,598,252       2,219,392          

 

14

 

 

Company(1)   Industry   Type of Investment   Maturity   Par
Amount(2)
    Cost(3)     Fair
Value(6)
    % of
Net Assets(4)
 
                                     
Crow Precision Components, LLC   Aerospace & Defense   Equity - 350 Common Units               700,000       723,131       0.5 %
                        700,000       723,131          
                                             
CT Technologies Intermediate Holdings, Inc.(11)   Healthcare & Pharmaceuticals   Senior Secured Second Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(13)   12/1/2022     7,500,000       7,500,000       6,832,500       4.5 %
                  7,500,000       7,500,000       6,832,500          
                                             
DataOnline Corp.(7)   High Tech Industries   Senior Secured First Lien Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor)(13)   11/13/2025     4,962,500       4,962,500       4,786,331       3.2 %
        Revolving Credit Facility (LIBOR + 6.25% Cash, 1.00% LIBOR Floor)(13)(15)   11/13/2025     535,714       535,714       510,357       0.3 %
                  5,498,214       5,498,214       5,296,688          
                                             
Dream Finders Homes, LLC   Construction & Building   Preferred Equity (8.00% PIK)         4,531,472       4,531,472       3,928,786       2.6 %
                  4,531,472       4,531,472       3,928,786          
                                     
Footprint Acquisition, LLC   Services: Business   Preferred Equity (8.75% PIK)         3,969,998       3,969,998       3,969,998       2.6 %
        Equity - 150 Common Units                     1,960,830       1.3 %
                  3,969,998       3,969,998       5,930,828          
                                             
Global Accessories Group, LLC(11)   Consumer goods: Non-durable   Equity - 3.8% Membership Interest               151,337             0.0 %
                        151,337                
                                             
Impact Group, LLC   Services: Business   Senior Secured First Lien Term Loan (LIBOR + 7.37% Cash, 1.00% LIBOR Floor)(13)   6/27/2023     3,219,964       3,219,964       2,994,565       2.0 %
        Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 7.37% Cash, 1.00% LIBOR Floor)(13)   6/27/2023     9,330,056       9,330,056       8,676,952       5.8 %
                  12,550,020       12,550,020       11,671,517        
                                             
InterFlex Acquisition Company, LLC   Containers, Packaging & Glass   Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(12)   8/18/2022     12,098,406       12,098,406       11,987,100       8.0 %
                  12,098,406       12,098,406       11,987,100          

 

15

 

 

Company(1)   Industry   Type of Investment   Maturity   Par
Amount(2)
    Cost(3)     Fair
Value(6)
    % of
Net Assets(4)
 
                                     
Lighting Science Group Corporation   Containers, Packaging & Glass   Warrants - 0.62% of Outstanding Equity(17)   2/19/2024           955,680             0.0 %
                        955,680                
                                             
Manna Pro Products, LLC   Consumer goods: Non-durable   Senior Secured First Lien Term Loan (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(12)   12/8/2023     5,343,674       5,343,674       5,123,515       3.4 %
        Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(12)   12/8/2023     1,085,219       1,085,219       1,040,508       0.7 %
                  6,428,893       6,428,893       6,164,023          
                                             
Point.360   Services: Business   Senior Secured First Lien Term Loan (LIBOR + 6.00% PIK)(9) (14)(21)   7/8/2020     2,777,366       2,103,712       186,083       0.1 %
                  2,777,366       2,103,712       186,083          
                                             
RateGain Technologies, Inc.   Hotel, Gaming & Leisure   Unsecured Debt(18)   7/31/2020     704,106       704,106             0.0 %
        Unsecured Debt(18)   7/31/2021     761,905       761,905             0.0 %
                  1,466,011       1,466,011                
                                             
Redwood Services Group, LLC(7)   Services: Business   Revolving Credit Facility (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(12 )(15)   6/6/2023     700,000       700,000       647,500       0.4 %
                  700,000       700,000       647,500          
                                             
Sendero Drilling Company, LLC   Energy: Oil & Gas   Unsecured Debt (8.00% Cash)(9)   8/31/2021     488,750       465,319             0.0 %
                  488,750       465,319                
                                             
Seotowncenter, Inc.   Services: Business   Equity - 3,434,169.6 Common Units               566,475       686,834       0.5 %
                        566,475       686,834          
                                             
SFP Holding, Inc.   Construction & Building   Senior Secured First Lien Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor)(13)   9/1/2022     4,776,955       4,776,955       4,733,962       3.1 %
        Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor)(13)   9/1/2022     1,852,522       1,852,522       1,835,850       1.2 %
        Equity - 101,165.93 Common Units in CI (Summit) Investment Holdings LLC               1,067,546       657,578       0.4 %
                  6,629,477       7,697,023       7,227,390          

 

16

 

 

Company(1)   Industry   Type of Investment   Maturity   Par
Amount(2)
    Cost(3)     Fair
Value(6)
    % of
Net Assets(4)
 
                                     
SMART Financial Operations, LLC   Retail   Equity - 700,000 Class A Preferred Units               700,000       343,000       0.2 %
                        700,000       343,000          
                                             
Stancor, Inc.   Services: Business   Equity - 263,814.43 Class A Units               263,814       150,374       0.1 %
                        263,814       150,374          
                                             
Starfish Holdco, LLC   High Tech Industries   Senior Secured Second Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(12)   8/18/2025     1,000,000       989,935       926,500       0.6 %
                  1,000,000       989,935       926,500        
                                             
URT Acquisition Holdings Corporation   Services: Business   Unsecured Debt (10.00% PIK)   6/23/2021     2,567,929       2,567,929       2,567,929       1.7 %
                  2,567,929       2,567,929       2,567,929          
                                             
Velocity Pooling Vehicle, LLC   Automotive   Senior Secured First Lien Term Loan (LIBOR + 11.00% PIK, 1.00% LIBOR Floor)(13)   4/28/2023     1,014,440       951,628       1,014,440       0.7 %
        Equity - 5,441 Class A Units               302,464       12,841       0.0 %
        Warrants - 0.65% of Outstanding Equity   3/30/2028           361,667       15,354       0.0 %
                  1,014,440       1,615,759       1,042,635          
                                             
Walker Edison Furniture Company LLC   Consumer goods: Durable   Senior Secured First Lien Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor)(13)   9/26/2024     3,519,878       3,519,878       3,519,878       2.3 %
        Equity - 1,500 Common Units               1,500,000       6,000,000       4.0 %
                  3,519,878       5,019,878       9,519,878          
                                             
Watermill-QMC Midco, Inc.   Automotive   Equity - 1.3% Partnership Interest(8)               518,283             0.0 %
                        518,283                
                                             
Subtotal Non-Controlled/Non-Affiliated Investments   $ 101,082,417     $ 117,360,954     $ 114,321,948          

 

17

 

 

Company(1)   Industry   Type of Investment   Maturity   Par
Amount(2)
    Cost(3)     Fair
Value(6)
    % of
Net Assets(4)
 
                                             
Affiliated Investments:(20)                                    
                                             
1888 Industrial Services, LLC(7)   Energy: Oil & Gas   Senior Secured First Lien Term Loan A (LIBOR + 5.00% PIK, 1.00% LIBOR Floor)(9)(13)   9/30/2021     9,946,741       9,473,067             0.0 %
        Senior Secured First Lien Term Loan B (LIBOR + 8.00% PIK, 1.00% LIBOR Floor)(9)(13)   9/30/2021     25,937,520       19,468,870             0.0 %
        Senior Secured First Lien Term Loan C (LIBOR + 5.00%, 1.00% LIBOR Floor)(9)(13)   9/30/2021     1,231,932       1,191,257       1,166,763       0.8 %
        Revolving Credit Facility (LIBOR + 5.00% PIK, 1.00% LIBOR Floor)(13)(15)   9/30/2021     3,554,069       3,554,069       3,554,069       2.4 %
        Equity - 17,493.63 Class A Units                           0.0 %
                  40,670,262       33,687,263       4,720,832          
                                             
Access Media Holdings, LLC   Media: Broadcasting & Subscription   Senior Secured First Lien Term Loan (10.00% PIK)(9)(21)   7/22/2020     11,105,630       8,446,385       1,110,563       0.7 %
        Preferred Equity Series A         1,600,000       1,600,000             0.0 %
        Preferred Equity Series AA         800,000       800,000             0.0 %
        Preferred Equity Series AAA         971,200       971,200             0.0 %
        Equity - 16 Common Units                           0.0 %
                  14,476,830       11,817,585       1,110,563          
                                             
Black Angus Steakhouses, LLC   Hotel, Gaming & Leisure   Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(12)   12/31/2020     758,929       758,929       758,929       0.5 %
        Senior Secured First Lien Term Loan (LIBOR + 9.00% PIK, 1.00% LIBOR Floor)(9)(12)