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PhenixFIN Corporation Announces September 30, 2021 Financial Results

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NEW YORK, Dec. 20, 2021 (GLOBE NEWSWIRE) -- PhenixFIN Corporation (NASDAQ: PFX) (the “Company”), a publicly traded business development company, today announced its financial results for the fiscal fourth quarter and fiscal year ended September 30, 2021.

Fourth Quarter Highlights

  • Total investment income of $4.4 million; net investment income of $1.1 million

  • $69.4 million in cash and cash equivalents on September 30, 2021

  • Net asset value of $143.7 million, or $57.08 per share as of September 30, 2021 vs. $55.30 per share as of September 30, 2020

  • 141,700 shares repurchased for an aggregate purchase price of $5.9 million during the fourth quarter

  • Launched FlexFIN, LLC, an asset-based lending business engaged in the gem and jewelry industry.

Subsequent Event

  • On November 15, 2021, PhenixFIN issued $57.5 million in aggregate principal amount of 5.25% unsecured notes due 2028 (NASDAQ: PFXNZ)

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

“In our first three quarters as being an internally managed BDC we have made appreciable progress on repositioning the portfolio as we continue to be focused on optimizing the long-term value of PhenixFIN.”

Since January 1, 2021 we have monetized 13 positions and deployed capital into 16 new investments.

During the fourth quarter, we launched FlexFIN, LLC, a partnership with Kwiat & Fred Leighton to provide alternative financing to the gem and jewelry industry. The partnership is intended to leverage Kwiat’s rich 115-year history and network within the gem and jewelry industry. We believe this new business affords us the opportunity to generate higher-yielding, risk adjusted returns within the multi-billion-dollar jewelry industry.

In addition, as of September 30, 2021, the Company had a net capital loss carryforward of $490 million. “We are focused on implementing strategies seeking to increase our NAV and optimize the value of our tax attributes,” added Mr. Lorber.

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, 206,488 shares were repurchased through September 30, 2021 at a weighted average share price of $39.73/share.

Selected Fourth Quarter 2021 Financial Results

For the quarter ended September 30, 2021, investment income totaled $4.4 million, of which $2.4 million was attributable to portfolio interest and dividend income and $1.9 million was attributable to fee income.

For the quarter ended September 30, 2021, total net expenses were $3.3 million and total net investment income was $1.1 million.

For the quarter ended September 30, 2021, the Company recorded a net realized gain of $4.0 million and net change in unrealized depreciation of $12.1 million.

Portfolio and Investment Activities

As of September 30, 2021, the fair value of the Company’s investment portfolio totaled $151.6 million and consisted of 42 portfolio companies.

As of September 30, 2021, the Company had 9 portfolio company investments on non-accrual status with a fair market value of $13.9 million.

Liquidity and Capital Resources

At September 30, 2021, the Company had $69.4 million in cash and $77.8 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, optimize its tax attributes, develop FlexFIN into a successful business and perform well and operate effectively under an internalized management structure, 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

September 30,
2021

September 30,
2020

Assets:

Investments at fair value

Non-controlled, non-affiliated investments (amortized cost of $92,214,167 and $117,360,954, respectively)

$

84,152,678

$

114,321,948

Affiliated investments (amortized cost of $75,963,427 and $92,898,755, respectively)

57,595,245

84,873,023

Controlled investments (amortized cost of $39,490,097 and $117,874,821, respectively)

9,891,860

47,548,578

Total Investments at fair value

151,639,783

246,743,549

Cash and cash equivalents

69,433,256

56,522,148

Receivables:

Fees receivable

1,872,700

119,028

Interest receivable

371,576

624,524

Paydown receivable

292,015

-

Dividends receivable

81,211

-

Other assets

1,401,746

2,093,559

Total Assets

$

225,092,287

$

306,102,808

Liabilities:

Notes payable (net of debt issuance costs of $412,795 and $905,624, respectively)

$

77,434,005

$

150,960,662

Due to broker

1,586,000

-

Accounts payable and accrued expenses

1,416,524

2,108,225

Due to affiliates

280,323

53,083

Administrator expenses payable

67,920

156,965

Management and incentive fees payable

-

1,392,022

Interest and fees payable

-

801,805

Deferred revenue

-

10,529

Other liabilities

613,534

-

Total Liabilities

81,398,306

155,483,291

Commitments and Contingencies

Net Assets:

Common Shares, $0.001 par value; 5,000,000 shares authorized; 2,723,709 shares issued; 2,517,221 and 2,723,709 common shares outstanding, respectively

2,517

2,724

Capital in excess of par value

688,866,642

672,381,617

Total distributable earnings (loss)

(545,175,178

)

(521,764,824

)

Total Net Assets

143,693,981

150,619,517

Total Liabilities and Net Assets

$

225,092,287

$

306,102,808

Net Asset Value Per Common Share

$

57.08

$

55.30

PHENIXFIN CORPORATION
Consolidated Statements of Operations

For the Years Ended September 30

2021

2020

2019

Interest Income:

Interest from investments

Non-controlled, non-affiliated investments:

Cash

$

5,974,807

$

9,137,394

$

25,368,027

Payment in-kind

609,964

863,744

1,755,260

Affiliated investments:

Cash

1,099,809

1,182,294

2,197,555

Payment in-kind

327,804

2,425,557

2,604,279

Controlled investments:

Cash

75,000

84,505

337,956

Payment in-kind

-

500,767

2,800,890

Total interest income

8,087,384

14,194,261

35,063,967

Dividend income

21,564,348

6,256,250

8,218,480

Interest from cash and cash equivalents

10,402

378,077

712,017

Fee income

2,566,519

692,988

2,304,287

Other income

78,204

-

-

Total Investment Income

32,306,857

21,521,576

46,298,751

Expenses:

Base management fees

1,146,403

6,358,750

11,189,646

Interest and financing expenses

5,800,100

14,935,017

24,049,485

General and administrative expenses

1,012,147

3,285,259

7,398,534

Salaries and benefits

1,993,277

-

-

Administrator expenses

612,983

2,226,831

3,323,989

Insurance expenses

1,619,536

1,463,391

623,064

Directors fees

1,039,717

1,451,077

1,258,378

Professional fees, net

559,975

(4,768,050

)

19,323,082

Expenses before expense support reimbursement and management and incentive fee waivers

13,784,138

24,952,275

67,166,178

Expense support reimbursement

-

(710,294

)

-

Total expenses net of expense support reimbursement and management and incentive fee waivers

13,784,138

24,241,981

67,166,178

Net Investment Income

18,522,719

(2,720,405

)

(20,867,427

)

Realized and unrealized gains (losses) on investments

Net realized gains (losses):

Non-controlled, non-affiliated investments

7,747,672

(9,973,416

)

(24,762,224

)

Affiliated investments

(10,088,405

)

(928,990

)

(7,670,970

)

Controlled investments

(40,144,795

)

(39,076,425

)

(79,739,742

)

Total net realized gains (losses)

(42,485,528

)

(49,978,831

)

(112,172,936

)

Net change in unrealized gains (losses):

Non-controlled, non-affiliated investments

(5,022,484

)

9,898,237

20,727,499

Affiliated investments

(10,342,450

)

2,648,353

(6,864,255

)

Controlled investments

40,728,006

(23,178,993

)

24,634,707

Total net change in unrealized gains (losses)

25,363,072

(10,632,403

)

38,497,951

Loss on extinguishment of debt

(122,355

)

(2,481,374

)

(2,032,655

)

Total realized and unrealized gains (losses)

(17,244,811

)

(63,092,608

)

(75,707,640

)

Net Increase (Decrease) in Net Assets Resulting from Operations

$

1,277,908

$

(65,813,013

)

$

(96,575,067

)

Weighted Average Basic and diluted earnings per common share

$

0.48

$

(24.16

)

$

(35.46

)

Weighted Average Basic and diluted net investment income (loss) per common share

$

6.92

$

(1.00

)

$

(7.66

)

Weighted Average Common Shares Outstanding - Basic and Diluted

2,677,891

2,723,709

2,723,709

Dividends Declared per Common Share

$

-

$

-

$

3.00