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PhenixFIN Corporation Announces Fiscal Third Quarter 2022 Financial Results

| Source: PhenixFIN Corporation

NEW YORK, Aug. 09, 2022 (GLOBE NEWSWIRE) — PhenixFIN Corporation (NASDAQ: PFX) (the “Company”), a publicly traded business development company, today announced its financial results for the fiscal third quarter of 2022.

Highlights

  • During the third quarter total investment income of $3.7 million; net investment income of $0.2 million
  • Net asset value (NAV) of $129.1 million, or $58.74 per share as of June 30, 2022, vs. $57.08 per share as of September 30, 2021
  • Weighted average yield to maturity of 9.09% on debt investments
  • FlexFIN continues to grow with over $40 million allocated to the business

David Lorber, Chief Executive Officer of the Company, stated:

“During the third quarter the portfolio performed relatively well given the market environment as we continued generating positive Net Investment Income. While during the quarter the portfolio was impacted by increasing broader market volatility, global instability, inflation and rising interest rates, we remain confident in the underlying investments. With a strong balance sheet and low leverage, we believe we continue to position the Company to grow NII through successful capital deployment while remaining prudent and judicious in terms of these new investments. FlexFIN continued to grow with over $40 million allocated to the unique business at quarter end generating a meaningful cash flow stream for the Company.”

Since our internalization on January 1, 2021, we generated proceeds from the monetization of positions totaling $142.0 million and deployed $175.9 million across new and add on investments. In addition, we continue to execute on our share repurchase program.

Selected Third Quarter 2022 Financial Results

For the quarter ended June 30, 2022, total investment income totaled $3.7 million, of which $3.5 million was attributable to portfolio interest and dividend income and $0.2 million was attributable to fee and other income.

For the quarter ended June 30, 2022, total net expenses were $3.5 million and total net investment income was $0.2 million.

For the quarter ended June 30, 2022, the Company recorded a net realized loss of $0.2 million and net unrealized depreciation of $9.2 million largely due to market volatility in various investments.

Portfolio and Investment Activities

As of June 30, 2022, the fair value of the Company’s investment portfolio totaled $182.8 million and consisted of 45 portfolio companies.

As of June 30, 2022, the Company had 6 portfolio company investments on non-accrual status with a fair market value of $12.4 million.

Liquidity and Capital Resources

At June 30, 2022, the Company had $24.4 million in cash and $57.5 million and $22.5 million outstanding in aggregate principal amount of its 5.25% unsecured notes due 2028 and 6.125% unsecured notes due 2023, respectively.

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, increase net investment income, reduce operating expenses for a sustainable period of time, implement its investment objective, capitalize on investment opportunities, grow its net asset value and perform well and operate effectively under an internalized management structure, FlexFIN’s ability to perform effectively and generate attractive returns 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.

Past performance is not a guarantee of future results. 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

    June 30,

2022

(Unaudited)
    September 30,

2021
 
Assets:            
Investments at fair value            
Non-controlled, non-affiliated investments (amortized cost of $135,629,418 and $92,214,167, respectively)   $ 115,937,311     $ 84,152,678  
Affiliated investments (amortized cost of $44,288,170 and $75,963,427, respectively)     17,390,505       57,595,245  
Controlled investments (amortized cost of $77,098,614 and $39,490,097, respectively)     49,455,289       9,891,860  
Total Investments at fair value     182,783,105       151,639,783  
Cash and cash equivalents     24,382,766       69,433,256  
Receivables:                
Fees receivable           1,872,700  
Interest receivable     1,262,193       371,576  
Paydown receivable     168,866       292,015  
Due from Affiliate     132,763        
Dividends receivable     269,330       81,211  
Prepaid share repurchases     96,096        
Other assets     866,821       1,401,746  
Total Assets   $ 209,961,940     $ 225,092,287  
                 
Liabilities:                
Notes payable (net of debt issuance costs of $2,162,356 and $412,795, respectively)   $ 77,859,444     $ 77,434,005  
Interest and fees payable     503,125        
Due to affiliates           280,323  
Due to broker           1,586,000  
Administrator expenses payable     67,028       67,920  
Distributions payable     265,798        
Accounts payable and accrued expenses     1,299,858       1,416,524  
Deferred revenue     279,032        
Other liabilities     606,675       613,534  
Total Liabilities     80,880,960       81,398,306  
                 
Commitments and Contingencies                
                 
Net Assets:                
Common Shares, $0.001 par value; 5,000,000 shares authorized; 2,723,709 shares issued; 2,197,418 and 2,517,221 common shares outstanding, respectively     2,198       2,517  
Capital in excess of par value     675,707,499       688,866,642  
Total distributable earnings (loss)     (546,628,717 )     (545,175,178 )
Total Net Assets   $ 129,080,980     $ 143,693,981  
Total Liabilities and Net Assets   $ 209,961,940     $ 225,092,287  
                 
Net Asset Value Per Common Share   $ 58.74     $ 57.08  

PHENIXFIN CORPORATION

Consolidated Statements of Operations

(Unaudited)

    For the Three Months

Ended June 30
    For the Nine Months

Ended June 30
 
    2022     2021     2022     2021  
Interest Income:                                
Interest from investments                                
Non-controlled, non-affiliated investments:                                
Cash   $ 1,468,171     $ 1,578,657     $ 3,748,190     $ 4,785,374  
Payment in-kind     102,063       186,733       340,636       356,762  
Affiliated investments:                                
Cash     (23,496 )     249,157       486,569       797,776  
Payment in-kind     93,275       286,444       283,036       286,444  
Controlled investments:                                
Cash     4,375             1,365,035        
Total interest income     1,644,388       2,300,991       6,223,466       6,226,356  
Dividend income     1,846,507       6,307,408       3,463,386       20,979,143  
Interest from cash and cash equivalents     9,255       3,862       18,025       5,308  
Fee income     65,014       71,443       420,279       650,323  
Other income     93,394             323,828       78,204  
Total Investment Income     3,658,558       8,683,704       10,448,984       27,939,334  
                                 
Expenses:                                
Base management fees                       1,146,403  
Interest and financing expenses     1,201,623       1,260,825       3,910,361       4,538,520  
General and administrative expenses     362,989       294,022       849,684       856,396  
Salaries and benefits     1,037,602       679,229       1,973,770       1,011,546  
Administrator expenses     58,881       106,578       210,162       546,372  
Insurance expenses     155,449       444,832       469,803       1,404,312  
Directors fees     164,500       179,000       540,000       875,217  
Professional fees, net     469,550       289,200       936,895       113,797  
Total expenses     3,450,594       3,253,686       8,890,675       10,492,563  
Net Investment Income     207,964       5,430,018       1,558,309       17,446,771  
                                 
Realized and unrealized gains (losses) on investments                                
Net realized gains (losses):                                
Non-controlled, non-affiliated investments     (188,638 )     38,852       749,791       4,093,500  
Affiliated investments           19,811       14,737,897       (10,433,117 )
Controlled investments     925       1,850       1,850       (40,145,720 )
Total net realized gains (losses)     (187,713 )     60,513       15,489,538       (46,485,337 )
Net change in unrealized gains (losses):                                
Non-controlled, non-affiliated investments     (9,623,302 )     (1,794,173 )     (11,630,618 )     (773,501 )
Affiliated investments     405,381       1,513,353       (8,529,483 )     (2,072,831 )
Controlled investments     (31,533 )     1,759,025       1,954,912       40,325,544  
Total net change in unrealized gains (losses)     (9,249,454 )     1,478,205       (18,205,189 )     37,479,212  
Loss on extinguishment of debt                 (296,197 )     (122,355 )
Total realized and unrealized gains (losses)     (9,437,167 )     1,538,718       (3,011,848 )     (9,128,480 )
                                 
Net Increase (Decrease) in Net Assets Resulting from Operations   $ (9,229,203 )   $ 6,968,736     $ (1,453,539 )   $ 8,318,291  
                                 
Weighted Average Basic and Diluted Earnings Per Common Share   $ (4.19 )   $ 2.60     $ (0.61 )   $ 3.07  
Weighted Average Basic and Diluted Net Investment Income (Loss) Per Common Share   $ 0.09     $ 2.02     $ 0.66     $ 6.44  
Weighted Average Common Shares Outstanding – Basic and Diluted     2,202,115       2,683,093       2,372,849       2,707,794  

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