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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2022-12-16 compared with 2021-12-20 · 1968 added, 2009 removed, 505 unchanged (89% of the section changed)

Quantitative and Qualitative Disclosures About Market Risk

are subject to financial market risks, including changes in interest rates.

Changes in interest rates may affect both our cost of funding

and our interest income from portfolio investments and cash and cash equivalents.

Our investment income will be affected by changes in

various interest rates, including LIBOR, to the extent our debt investments include floating interest rates.

In the future, we expect

other loans in our portfolio will have floating interest rates.

Quantitative and Qualitative Disclosures About Market

We are subject to financial market risks,

including changes in interest rates.

Changes in interest rates may affect both our cost of funding and our interest income from

portfolio investments and cash and cash equivalents.

Our investment income will be affected by changes in various interest rates,

including LIBOR and SOFR, to the extent our debt investments include floating interest rates.

In the future, we expect other loans

in our portfolio will have floating interest rates.

In addition, U.S.

and global capital markets and credit markets have

experienced a higher level of stress due to the global COVID-19 pandemic, which has resulted in an increase in the level of volatility

across such markets.

and global capital markets and credit markets have experienced

a higher level of stress due to the global COVID-19 pandemic, which has resulted in an increase in the level of volatility across

such markets.

We may hedge against interest rate fluctuations by using standard hedging instruments such as futures, options and

forward contracts subject to the requirements of the 1940 Act.

For the year ended September 30, 2021, we did not engage in hedging activities.

of September 30, 2021, 58.1% of our income-bearing investment portfolio bore interest based on floating rates based upon fair value.

In connection with the COVID-19 pandemic, the U.S.

Federal Reserve and other central banks have reduced certain interest rates and LIBOR

has decreased.

A prolonged reduction in interest rates will reduce our gross investment income and could result in a decrease in our

net investment income if such decreases in LIBOR are not offset by a corresponding increase in the spread over LIBOR that we earn on

any portfolio investments, a decrease in our operating expenses, including with respect to any income incentive fee, or a decrease in

the interest rate of our floating interest rate liabilities tied to LIBOR.

In contrast, a rise in the general level of interest rates

can be expected to lead to higher interest rates applicable to any variable rate investments we hold and to declines in the value of

any fixed rate investments we hold.

In addition, a rise in interest rates may increase the likelihood that a portfolio company defaults

However, many of our variable rate investments provide for an interest rate floor, which may prevent our interest income from

increasing until benchmark interest rates increase beyond a threshold amount.

The composition of our floating rate debt investments by

cash interest rate LIBOR floor as of September 30, 2021 was as follows (dollars in thousands):

of Floating Rate Portfolio

For the year ended September 30, 2022, we did not engage in hedging

As of September 30, 2022, 60.2% of our

income-bearing investment portfolio bore interest based on floating rates based upon fair value.

A prolonged reduction in interest

rates will reduce our gross investment income and could result in a decrease in our net investment income if such decreases in

LIBOR, SOFR or similar reference rates are not offset by a corresponding increase in the spread over LIBOR, SOFR or similar

reference rates that we earn on any portfolio investments, a decrease in our operating expenses, including with respect to any

income incentive fee, or a decrease in the interest rate of our floating interest rate liabilities tied to LIBOR, SOFR or similar

reference rates.

In contrast, a rise in the general level of interest rates can be expected to lead to higher interest rates

applicable to any variable rate investments we hold and to declines in the value of any fixed rate investments we hold.

a rise in interest rates may increase the likelihood that a portfolio company defaults on a loan.

However, many of our variable rate

investments provide for an interest rate floor, which may prevent our interest income from increasing until benchmark interest rates

increase beyond a threshold amount.

The composition of our floating rate debt investments by cash interest rate LIBOR and SOFR floor

as of September 30, 2022 was as follows (dollars in thousands):

September 30, 2022

LIBOR and SOFR Floor

% of Floating

Rate Portfolio

1% to under 2%

2% to under 3%

on our Consolidated Statements of Assets and Liabilities as of September 30, 2021, the following table (dollars in thousands) shows the

approximate increase/(decrease) in components of net assets resulting from operations of hypothetical LIBOR base rate changes in interest

rates, assuming no changes in our investment and capital structure.

Interest Rates

Based on our Consolidated Statements of

Assets and Liabilities as of September 30, 2022, the following table (dollars in thousands) shows the approximate

increase/(decrease) in components of net assets resulting from operations of hypothetical LIBOR and SOFR base rate changes in

interest rates, assuming no changes in our investment and capital structure.

Change in Interest Rates

Interest Income (1)

Interest Expense

Net Increase/ (Decrease)

Up 300 basis points

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Down 300 basis points

no defaults or prepayments by portfolio companies over the next twelve months.

(1) Assumes no defaults or prepayments

by portfolio companies over the next twelve months.

Consolidated Financial Statements and Supplementary Data

CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent

Registered Public Accounting Firm

Consolidated Statements

of Assets and Liabilities as of September 30, 2021 and 2020

Consolidated Statements

of Operations for the years ended September 30, 2021, 2020 and 2019

Consolidated Statements

of Changes in Net Assets for the years ended September 30, 2021, 2020 and 2019

Consolidated Statements

of Cash Flows for the years ended September 30, 2021, 2020 and 2019

Consolidated Schedules

of Investments as of September 30, 2021 and 2020

Notes to Consolidated

Financial Statements

of Independent Registered Public Accounting Firm

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Consolidated Statements of Assets and Liabilities as of September 30, 2022 and 2021

Consolidated Statements of Operations for the years ended September 30, 2022, 2021 and 2020

Consolidated Statements of Changes in Net Assets for the years ended September 30, 2022, 2021 and 2020

Consolidated Statements of Cash Flows for the years ended September 30, 2022, 2021 and 2020

Consolidated Schedules of Investments as of September 30, 2022 and 2021

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting

the Shareholders and the Board of Directors of PhenixFIN Corporation

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financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent

with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities

and Exchange Commission and the PCAOB.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

1 unchanged sentence

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

is not required to have, nor were we engaged to perform, an audit of the Company’s internal control over financial reporting.

part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of

expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express

no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

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Our procedures included confirmation of investments owned as of September 30,

2021 and 2020, by correspondence with the custodians, directly with designees of the portfolio companies, debt agents and brokers, as

applicable, or by other appropriate auditing procedures where replies were not received.

Our audits also included evaluating the accounting

principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

2022 and 2021, by correspondence with the custodians, directly with designees of the portfolio companies and debt agents, as applicable,

when replies were not received from designees of the portfolio companies and debt agents, we performed other auditing procedures.

audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the

overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

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of the Matter

September 30, 2021, the fair value of the Company’s investments categorized as Level 3 within the fair value hierarchy (Level

3 investments) totaled $115.8 million.

September 30, 2022, the fair value of the Company’s investments categorized as Level

3 within the fair value hierarchy (Level 3 investments) totaled $141.2 million.

further described in Notes 2 and 4 to the Company’s consolidated financial statements, management determines the fair value

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We Addressed the Matter in Our Audit

audit procedures performed to test the fair value of the Company’s Level 3 investments included, among others and on a sample

basis, evaluating the Company’s valuation methodologies and significant unobservable inputs and assumptions used in the valuations,

as well as testing the mathematical accuracy of the Company’s valuation models utilized to calculate the fair value.

audit procedures performed to test the fair value of the Company’s Level 3 investments

included, among others and on a sample basis, evaluating the Company’s valuation methodologies

and significant unobservable inputs and assumptions used in the valuations, as well as testing

the mathematical accuracy of the Company’s valuation models utilized to calculate the

a sample of Level 3 investments, we obtained and reviewed management’s valuation models and compared the significant portfolio

10 unchanged sentences

and market yields, and/or portfolio company financial information, as applicable.

searched for and evaluated information that corroborated or contradicted the Company's significant unobservable inputs and assumptions.

We also evaluated subsequent events and transactions and considered whether they corroborated or contradicted the Company's year-end

searched for and evaluated information that corroborated or contradicted the Company’s significant unobservable inputs and assumptions.

We also evaluated subsequent events and transactions and considered whether they corroborated or contradicted the Company’s year-end

Ernst & Young LLP

1 unchanged sentence

York, New York

Statements of Assets and Liabilities

PHENIXFIN CORPORATION

Consolidated Statements

of Assets and Liabilities

September 30,

1 unchanged sentence

Investments at fair value

Non-controlled,

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

$ 114,321,948

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

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

Investments at fair value

and cash equivalents

Non-controlled, non-affiliated investments (amortized cost of $147,378,917 and $92,214,167, respectively)

$ 122,616,275

Affiliated investments (amortized cost of $30,585,884 and $75,963,427, respectively)

Controlled investments (amortized cost of $85,483,093 and $39,490,097, respectively)

Total Investments at fair value

Cash and cash equivalents

Fees receivable

Interest receivable

Prepaid share repurchase

Due from affiliates

Dividends receivable

Paydown receivable

Other receivable

$ 218,874,908

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

$ 225,092,287

payable and accrued expenses

Administrator

expenses payable (see Note 6)

and incentive fees payable (see Note 6)

and fees payable

and Contingencies (see Note 8)

Common Shares, $0.001 par

Notes payable (net of debt issuance costs of $2,059,164 and $412,795, respectively)

Due to broker

Accounts payable and accrued expenses

Due to affiliate

Administrator expenses payable (see Note 6)

Interest and fees payable

Deferred revenue

Other liabilities

Total Liabilities

Commitments and Contingencies (see Note 8)

Common Shares, $0.001 par value;

5,000,000 shares authorized;

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2,102,129 and 2,517,221 common shares outstanding, respectively

Capital in excess of par

distributable earnings (loss)

Capital in excess of par value

Total distributable earnings (loss)

(554,558,496 )

(545,175,178 )

Liabilities and Net Assets

Total Net Assets

Total Liabilities and Net Assets

$ 218,874,908

$ 225,092,287

Asset Value Per Common Share

accompanying notes to consolidated financial statements.

Statements of Operations

the Years Ended September 30

Net Asset Value Per Common Share

See accompanying notes to consolidated financial

PHENIXFIN CORPORATION

Consolidated Statements

of Operations

Years Ended September 30

Interest Income:

13 unchanged sentences

Interest and financing expenses

General and administrative expenses

Salaries and benefits

Administrator expenses (see Note 6)

Insurance expenses

General and administrative expenses

Directors fees

Insurance expenses

Administrator expenses (see Note 6)

Professional fees, net (see Note 8)

Expenses before expense

support reimbursement and management and incentive fee waivers

Expenses before expense support reimbursement

Expense support reimbursement (see Note 6)

Total expenses net of

expense support reimbursement and management and incentive fee waivers

Net Investment Income

(20,867,427 )

Realized and unrealized

gains (losses) on investments

Total expenses net of expense support reimbursement

Net Investment Income (Loss)

Realized and unrealized gains (losses) on investments

Net realized gains (losses):

Non-controlled, non-affiliated investments

(24,762,224 )

Affiliated investments

3 unchanged sentences

(39,076,425 )

(79,739,742 )

Total net realized gains

(42,485,528 )

Total net realized gains (losses)

(42,485,528 )

2 unchanged sentences

Non-controlled, non-affiliated investments

(16,701,153 )

Affiliated investments

2 unchanged sentences

(23,178,993 )

Total net change in unrealized

gains (losses)

Total net change in unrealized gains (losses)

(14,463,337 )

Loss on extinguishment

of debt (see Note 5)

realized and unrealized gains (losses)

(10,632,403 )

Loss on extinguishment of debt (see Note 5)

Total realized and unrealized gains (losses)

(17,244,811 )

(63,092,608 )

Increase (Decrease) in Net Assets Resulting from Operations

Net Increase (Decrease) in Net Assets Resulting from Operations

$ (6,106,946 )

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Weighted average basic and diluted earnings per common share

Weighted Average Basic and diluted net investment

income (loss) per common share

Weighted Average Common Shares Outstanding

- Basic and Diluted (see Note 11)

Weighted average basic and diluted net investment income (loss) per common share

Weighted average common shares outstanding - basic and diluted (see Note 11)

Dividends declared per common share

accompanying notes to consolidated financial statements.

Statements of Changes in Net Assets

in Excess of Par Value

Distributable

Earnings/(Loss)

at September 30, 2018

See accompanying notes to

consolidated financial statements.

PHENIXFIN CORPORATION

Consolidated Statements

of Changes in Net Assets

Capital in Excess of Par Value

Total Distributable Earnings/(Loss)

Total Net Assets

Balance at September 30, 2019

$ 673,584,467

1 unchanged sentence

$ 216,432,530

investment income (loss)

Net investment income (loss)

Net realized gains (losses) on investments

(49,978,831 )

realized gains (losses) on investments

Net change in unrealized appreciation (depreciation) on investments

(10,632,403 )

change in unrealized appreciation (depreciation) on investments

loss on extinguishment of debt

DISTRIBUTIONS

Return of Capital

reclassification of shareholders’

Net loss on extinguishment of debt

SHAREHOLDER DISTRIBUTIONS

Tax reclassification of shareholders’

equity in accordance with generally accepted accounting principles

(16,882,923 )

Increase (Decrease) in Net Assets

(25,054,053 )

(79,692,144 )

(104,746,197 )

at September 30, 2019

Total Increase (Decrease) in Net Assets

(64,610,163 )

investment income (loss)

realized gains (losses) on investments

(65,813,013 )

Balance at September 30, 2020

(521,764,824 )

change in unrealized appreciation (depreciation) on investments

Net investment income (loss)

Net realized gains (losses) on investments

(42,485,528 )

loss on extinguishment of debt

DISTRIBUTIONS

reclassification of shareholders’

Net change in unrealized appreciation (depreciation) on investments

Net loss on extinguishment of debt

CAPITAL SHARE TRANSACTIONS

Repurchase of common shares

SHAREHOLDER DISTRIBUTIONS

Tax reclassification of shareholders’

equity in accordance with generally accepted accounting principles

Increase (Decrease) in Net Assets

(24,688,262 )

Total Increase (Decrease) in Net Assets

(23,410,354 )

at September 30, 2020

Balance at September 30, 2021

(545,175,178 )

investment income (loss)

realized gains (losses) on investments

Net investment income (loss)

Net realized gains (losses) on investments

Net change in unrealized appreciation (depreciation) on investments

(14,463,337 )

change in unrealized appreciation (depreciation) on investments

loss on extinguishment of debt

Net loss on extinguishment of debt

CAPITAL SHARE TRANSACTIONS

Distributions to shareholders

Repurchase of common shares

reclassification of shareholders’

(16,475,414 )

(16,475,829 )

SHAREHOLDER DISTRIBUTIONS

Tax reclassification of shareholders’

equity in accordance with generally accepted accounting principles

Total Increase (Decrease) in Net Assets

(13,464,840 )

Increase (Decrease) in Net Assets

(22,848,573 )

at September 30, 2021

Balance at September 30, 2022

$ 675,401,802

1 unchanged sentence

$ 120,845,408

accompanying notes to consolidated financial statements.

Statements of Cash Flows

For the Years Ended

See accompanying notes to consolidated financial

PHENIXFIN CORPORATION

Consolidated Statements

of Cash Flows

Years Ended September 30

Cash Flows from Operating Activities:

6 unchanged sentences

Amortization of debt issuance cost

Net realized (gain) loss from investments

Net unrealized (appreciation) depreciation on investments

(25,363,072 )

Net realized (gains) losses from investments

Net unrealized (gains) losses on investments

(25,363,072 )

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(Increase) decrease in operating assets:

Other assets (1)

Interest receivable

Receivable for dispositions and investments sold

Receivable for paydowns

Fees receivable

Interest receivable

Due from affiliates

Dividends receivable

Receivable for paydowns

Other receivable

Receivable for dispositions and investments sold

Increase (decrease) in operating liabilities:

Due to broker

Accounts payable and accrued expenses

Interest and fees payable

Management and incentive fees payable, net

Due to affiliates

Administrator expenses payable

Interest and fees payable

Deferred revenue

Due to affiliate

Due to broker

Management and incentive fees payable, net

Other liabilities

Net cash provided by (used in) operating activities

(29,298,371 )

Cash Flows from Financing Activities:

Debt issuance costs paid

Paydowns on debt

2 unchanged sentences

(106,122,925 )

Distributions paid to shareholders

Debt issuance costs paid

Payments of cash dividends

Offering costs paid

Repurchase of common shares

(16,964,985 )

Net cash provided by (used in) financing activities

4 unchanged sentences

(46,665,190 )

(27,761,755 )

Cash and cash equivalents, beginning of period

5 unchanged sentences

Non-cash sale of investments

Restricted Cash

Total cash and restricted cash shown in the statement of cash flows

(1) Excludes non-cash recognition of a right of

use asset of $613,534.

accompanying notes to consolidated financial statements.

Schedule of Investments

See accompanying notes to consolidated

financial statements.

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

September 30, 2022

of Investment

Non-Controlled/Non-Affiliated

Investments :

Tech Industries

Secured First Lien Term Loan (LIBOR + 5.75% Cash, 1.00% LIBOR Floor) (14)

Secured Incremental First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor) (14)

Secured First Lien Delayed Draw Term Loan (LIBOR + 5.75% Cash, 1.00% LIBOR Floor) (14)

Secured Incremental First Lien Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor) (14)

Secured First Lien Term Loan (LIBOR + 8.00% Cash & 2.00% PIK, 1.00% LIBOR Floor) (14)

Green Packaging, LLC

Shares/Units (2)

Non-Controlled/Non-Affiliated Investments:

Secured First Lien Term Loan B (LIBOR + 4.00%, 1.00% LIBOR Floor)(14)

Packaging, LLC

Packaging & Glass

- 417 Common Units

Seotowncenter, Inc.

- 3,434,169.6 Common Units

Investment Corp.(11)

1 unchanged sentence

- 117,310 Class C Preferred Units(13)(15)

Cleaver-Brooks,

Manufacturing

Senior Secured Notes (18)

Finance SPV, LLC

International, Inc.

Secured Second Lien Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor) (13)

Tech Industries

Secured First Lien Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor) (14)

Credit Facility (LIBOR + 6.25% Cash, 1.00% LIBOR Floor) (14)(16)

and Income Fund (11)

Property CTL Pass Through Trust

Finance, Insurance & Real Estate

- 87,483 Common Units (17)

Certificates(14)

International, Inc.

Secured Second Lien Term Loan (LIBOR + 7.25%, 1.00% LIBOR Floor)

DataOnline Corp.

High Tech Industries

Senior Secured First Lien Term

Loan (LIBOR + 6.25%, 1.00% LIBOR Floor)

Credit Facility (LIBOR + 6.25%, 1.00% LIBOR Floor)

Financing, LLC

Broadcasting & Subscription

Secured First Lien Term Loan (LIBOR + 5.00%, 0.75% LIBOR Floor)(14)

Finders Homes, LLC

Equity (8.00% PIK)

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

September 30, 2022

of Investment

Acquisition, LLC

Equity (8.75% PIK) (10)

Shares/Units (2)

Brands Group, LLC

Secured First Lien Term Loan (SOFR + 5.00%, 1.00% SOFR Floor)

Holding Company Inc.

- 150 Common Units

BSP Realty Trust, Inc.(11)

Finance, Insurance & Real Estate

- 529,914 Common Units(13)

Accessories Group, LLC

- 3.8% Membership Interest

AJAX Corp.(11)

Finance, Insurance & Real Estate

- 254,922 Common Units(13)

Senior Secured Notes(14)

Mortgage Capital, Inc.(11)

1 unchanged sentence

- 205,000 Class C Preferred Units(13)(16)

JFL-NGS-WCS Partners, LLC

Construction & Building

Senior Secured First Lien Term

Loan B (LIBOR + 5.50%, 1.00% LIBOR Floor)

- 10,000,000 Units

Science Group Corporation

1 unchanged sentence

- 0.62% of Outstanding Equity

Discretionary

Secured First Lien Term Loan(LIBOR + 5.50%, 0.75% LIBOR Floor)

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

September 30, 2022

of Investment

Shares/Units (2)

Maritime Wireless Holdings

Hotel, Gaming & Leisure

Senior Secured First Lien Term

Loan A (SOFR + CSA + 9.00%, 1.00% SOFR + CSA Floor)(20)

Senior Secured First Lien Term

Loan B (SOFR + CSA + 9.00%, 1.00% SOFR + CSA Floor)(20)

Promissory Note

Investment Holdings, LLC (dba Colibri)

Secured First Lien Term Loan (SOFR + CSA + 5.00%, 0.75% SOFR + CSA Floor)(20)

Financial, Inc.(11)

1 unchanged sentence

- 97,426 Class C Preferred Units(13)(19)

Residential Investment Corp.

Finance, Insurance & Real Estate

- 206,684 Class B Preferred Units (17)(22)

York Mortgage Trust, Inc.(11)

1 unchanged sentence

- 165,000 Class E Preferred Units(13)(18)

Secured First Lien Term Loan (LIBOR + 6.00% PIK) (10)(15)

Technologies, Inc.

Gaming & Leisure

Debt (4.50% Cash) (12)

Services Group, LLC (8)

Credit Facility (LIBOR + 6.00% Cash, 1.00% LIBOR Floor) (13)(16)

Drilling Company, LLC

Debt (9.00% Cash) (10)

Seotowncenter,

Financial Services, Inc.(11)

Finance, Insurance & Real Estate

- 81,500 Common Units(13)

Secured First Lien Term Loan (LIBOR + 6.00% PIK)(10)

Secured First Lien Term Loan(LIBOR + 4.75, 0.50% LIBOR Floor)

Rithm Capital Corp.(11)

Finance, Insurance & Real Estate

- 206,684 Class B Preferred Units(13)(17)

Secure Acquisition Inc.

Paragon Films)(8)

Senior Secured First Lien Term

Loan(LIBOR + 5.00%, 0.50% LIBOR Floor)

Secured First Lien Delayed Draw Term Loan (LIBOR + 5.00%, 0.50% LIBOR Floor)(12)

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

September 30, 2022

of Investment

Shares/Units (2)

Drilling Company, LLC

Debt (9.00%)(10)

SS Acquisition,

LLC (dba Soccer Shots Franchising)(8)

Secured First Lien Term Loan (LIBOR + 6.50%, 1.00% LIBOR Floor)

Financial Operations, LLC

- 700,000 Class A Preferred Units

(dba Industrial Flow Solutions Holdings, LLC)

- 338,736.11 Class A Units

Lien Term Loan (LIBOR + 4.50%, 0.0% LIBOR Floor)(14)

Holdings, Inc.(11)

Secured First Lien Term Loan B (LIBOR + 8.50% Cash, 1.00% LIBOR Floor) (13)

Pooling Vehicle, LLC

- 5,441 Class A Units

Secured First Lien Term Loan B (LIBOR + 8.50%, 1.00% LIBOR Floor)

Velocity Pooling Vehicle, LLC

Equity - 5,441 Class A Units

- 0.65% of Outstanding Equity

4 unchanged sentences

Holdings, Inc.

(f/k/a Crow Precision Components, LLC)

- 350 Common Units

Non-Controlled/Non-Affiliated Investments

Investments :

Industrial Services, LLC (8)

Secured First Lien Term Loan A (LIBOR + 5.00% PIK, 1.00% LIBOR Floor) (10)(14)

9/30/2021 (25)

Secured First Lien Term Loan B (LIBOR + 8.00% PIK, 1.00% LIBOR Floor) (10)(14)

Equity - 350 Common Shares

Subtotal Non-Controlled/Non-Affiliated Investments

$ 109,151,781

Secured First Lien Term Loan C (LIBOR + 5.00%, 1.00% LIBOR Floor) (14)

$ 147,378,917

Credit Facility (LIBOR +5.00% PIK, 1.00% LIBOR Floor) (14)(16)

$ 122,616,275

- 17,493.63 Class A Units

Angus Steakhouses, LLC (8)

Gaming & Leisure

Secured First Lien Delayed Draw Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor) (13)

Secured First Lien Term Loan (LIBOR + 9.00% PIK, 1.00% LIBOR Floor) (10)(13)

Secured First Lien Super Priority DDTL (LIBOR + 9.00% Cash, 1.00% LIBOR Floor) (13)(16)

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

September 30, 2022

of Investment

Investors Holdings 1 LLC (11)

Products & Paper

- 6.15% Membership Interest (19)

Energy Services International LLC

Secured First Lien Term Loan (LIBOR + 13.50% PIK) (10)(15)

Shares/Units (2)

Affiliated Investments:

1888 Industrial Services, LLC(8)

Senior Secured First Lien Term

Loan A (LIBOR + 5.00% PIK, 1.00% LIBOR Floor)(10)

Senior Secured First Lien Term

Loan C(LIBOR + 5.00%, 1.00% LIBOR Floor)

Revolving Credit Facility (LIBOR

+ 5.00%, 1.00% LIBOR Floor)(12)

- 21,562 Class A Units

Partners, LLC

- 57,300 Class B Units

Partners, LLC

Environmental

- 129,588 Class B Units

Operations, LLC (8)

Secured First Lien Term Loan (15.00% PIK)

Secured First Lien Delayed Draw Term Loan (15.00% PIK) (16)

- 6.7797 Common Units

& Pharmaceuticals

Secured First Lien Term Loan A (LIBOR + 9.50% Cash, 1.00% LIBOR Floor) (10)(13)

Secured First Lien Term Loan B (LIBOR + 13.00% PIK, 1.00% LIBOR Floor) (10)(13)

- 7.68% of Outstanding Equity

Acquisition Holdings Corporation

Multifamily, LLC (11)

Black Angus Steakhouses, LLC(8)

Hotel, Gaming & Leisure

Secured First Lien Delayed Draw Term Loan (SOFR + CSA + 9.00%, 1.00% SOFR Floor)

Secured First Lien Term Loan (SOFR + CSA + 9.00% PIK, 1.00% SOFR Floor)(10)

Secured First Lien Super Priority Delayed Draw Term Loan (SOFR + CSA + 9.00%, 1.00% SOFR Floor)

Equity - 17.92% Membership Interest

Kemmerer Operations, LLC(8)

Metals & Mining

Senior Secured First Lien Term

Loan(15.00% PIK)

Equity - 6.78 Common Units

US Multifamily,

Finance, Insurance & Real Estate

Secured First Lien Term Loan (10.00% Cash)

- 33,300 Preferred Units

Affiliated Investments

Investments :

Gaming & Leisure

Secured First Lien Delayed Draw Term Loan (LIBOR + 4.00% Cash, 1.00% LIBOR Floor) (10)(13)(16)

Secured First Lien Super Priority DDTL (LIBOR + 4.00% Cash, 1.00% LIBOR Floor) (13)(16)

Secured First Lien Term Loan B (LIBOR + 9.25% PIK, 1.00% LIBOR Floor) (10)(13)

Subtotal Affiliated Investments

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

September 30, 2022

of Investment

Secured First Lien Term Loan C (LIBOR + 12.00% PIK, 1.00% LIBOR Floor) (10)(13)

Shares/Units (2)

Controlled Investments:

Hotel, Gaming & Leisure

Senior Secured First Lien Delayed

Draw Term Loan (LIBOR + 4.00% Cash, 1.00% LIBOR Floor)

Senior Secured First Lien Term

Loan B (LIBOR + 9.25% PIK, 1.00% LIBOR Floor)(10)

Senior Secured First Lien Term

Loan C(LIBOR + 12.00% PIK, 1.00% LIBOR Floor)(10)

- 1,000 Class A Units

Control Investments

Investments, September 30, 2021

Subtotal Control Investments

Total Investments, September 30, 2022

$ 234,610,363

1 unchanged sentence

$ 192,956,649

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

investments are domiciled in the United States.

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

September 30, 2022

All of our investments are domiciled in the United States.

Certain investments also have international operations.

Par amount includes accumulated payment-in-kind (“PIK”) interest, as applicable, and is net of repayments.

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.

Net unrealized depreciation for U.S.

10 unchanged sentences

As of September 30, 2022, 17.24% of the Company’s portfolio investments were non-qualifying assets.

Security is non-income producing.

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 September 30, 2021 was 0.08%.

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 September 30, 2021 was 0.13 %.

The interest rate on these loans is subject to 3 month LIBOR plus a base rate.

The 3 month LIBOR as of September 30, 2021 was 0.13 %.

This investment earns 0.50% commitment fee on all unused commitment as of September 30, 2021, and is recorded as a component of interest income on the Consolidated Statements of Operations.

This investment represents a Level 1 security in the ASC 820 table as of September 30, 2021 (see Note 4).

This investment represents a Level 2 security in the ASC 820 table as of September 30, 2021 (see Note 4).

As a practical expedient, the Company uses net asset value (“NAV”) to determine the fair value of this investment.

The interest rate on this preferred equity is fixed-to-floating and will shift to 3 month LIBOR plus a 4.743% spread on 9/30/2025.

The interest rate on this preferred equity is fixed-to-floating and will shift to 3 month LIBOR plus a 5.29% spread on 9/27/2027.

The interest rate on this preferred equity is fixed-to-floating and will shift to 3 month LIBOR plus a 5.64% spread on 8/15/2024.

The interest rate on this preferred equity is fixed-to-floating and will shift to 3 month LIBOR plus a 6.429% spread on 1/15/2025.

This investment earns 0.50% commitment fee on all unused commitment as of June 30, 2022, and is recorded as a component of interest income on the Consolidated Statements of Operations.

This investment represents a Level 1 security in the ASC 820 table as of June 30, 2022 (see Note 4).

This investment represents a Level 2 security in the ASC 820 table as of June 30, 2022 (see Note 4).

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.

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.

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.

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.

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.

The maturity date was extended to May 1, 2023 subsequent to September 30, 2021.

Schedule of Investments

of Investment

Credit Spread Adjustment (“CSA”)

accompanying notes to consolidated financial statements.

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

September 30, 2021

Type of Investment

Shares/Units (2)

Fair Value (4)

Non-Controlled/Non-Affiliated

Tech Industries

Secured First Lien Term Loan (LIBOR + 5.75% Cash, 1.00% LIBOR Floor) (13)

Secured Incremental First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor) (13)

Secured First Lien Delayed Draw Term Loan (LIBOR + 5.75% Cash, 1.00% LIBOR Floor) (13)

Credit Facility (LIBOR + 5.75% Cash, 1.00% LIBOR Floor) (13)(15)

Dental Partners, Inc.

& Pharmaceuticals

Secured Second Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor) (13)

Tech Industries

Secured First Lien Term Loan (LIBOR + 8.00% Cash, 1.00% LIBOR Floor) (13)

- 545,931 Common Units (16)

Green Packaging, LLC

Packaging & Glass

- 417 Common Units

Finance SPV, LLC

Alpine SG, LLC (8)

High Tech Industries

Senior Secured First Lien Term Loan (LIBOR + 5.75% Cash, 1.00% LIBOR Floor) (14)

Senior Secured Incremental First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor) (14)

Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 5.75% Cash, 1.00% LIBOR Floor) (14)

Senior Secured Incremental First Lien Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor) (14)

Autosplice, Inc.

Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash & 2.00% PIK, 1.00% LIBOR Floor) (14)

Be Green Packaging, LLC

Containers, Packaging & Glass

Equity - 417 Common Units

Boostability Seotowncenter, Inc.

Equity - 3,434,169.6 Common Units

Chimera Investment Corp.

Banking, Finance, Insurance & Real Estate

Equity - 117,310 Class C Preferred Units (17)(20)

Cleaver-Brooks, Inc.

Manufacturing

7.875% Senior Secured Notes (18)

CM Finance SPV, LLC

Unsecured Debt (10)

CPI International, Inc.

Aerospace & Defense

Senior Secured Second Lien Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor) (13)

DataOnline Corp.

High Tech Industries

Senior Secured First Lien Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor) (14)

Revolving Credit Facility (LIBOR + 6.25% Cash, 1.00% LIBOR Floor) (14)(16)

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

September 30, 2021

of Investment

Shares/Units (2)

and Income Fund (11)

Finance, Insurance & Real Estate

International, Inc.

Secured Second Lien Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor) (12)

Precision Components, LLC

- 87,483 Common Units (17)

Technologies Intermediate Holdings, Inc.

& Pharmaceuticals

Secured Second Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor) (13)

Tech Industries

Secured First Lien Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor) (13)

Credit Facility (LIBOR + 6.25% Cash, 1.00% LIBOR Floor) (13)(15)

Finders Homes, LLC (11)

Equity (8.00% PIK)

of Investment

Preferred Equity (8.00%

Acquisition, LLC

Equity (8.75% PIK)

- 150 Common Units

Preferred Equity (8.75%

Accessories Group, LLC

Consumer goods:

Equity - 3.8%

Membership Interest

Secured First Lien Term Loan (LIBOR + 7.37% Cash, 1.00% LIBOR Floor) (13)

Secured First Lien Delayed Draw Term Loan (LIBOR + 7.37% Cash, 1.00% LIBOR Floor) (13)

Acquisition Company, LLC

Packaging & Glass

Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor) (12)

Banking, Finance,

Insurance & Real Estate

Equity - 253,651

Common Units (17)

Mortgage Capital, Inc.

Banking, Finance,

Insurance & Real Estate

Equity - 205,000

Class C Preferred Units (17)(21)

Science Group Corporation

1 unchanged sentence

0.62% of Outstanding Equity (18)

Pro Products, LLC

Secured First Lien Term Loan (LIBOR + 6.00% Cash, 1.00% LIBOR Floor) (12)

Secured First Lien Delayed Draw Term Loan (LIBOR + 6.00% Cash, 1.00% LIBOR Floor) (12)

Secured First Lien Term Loan (LIBOR + 6.00% PIK) (9)(14)(21)

Financial, Inc.

Banking, Finance,

Insurance & Real Estate

Equity - 31,692

Class C Preferred Units (17)(24)

York Mortgage Trust, Inc.

Banking, Finance,

Insurance & Real Estate

Equity - 165,000

Class E Preferred Units (17)(23)

Senior Secured

First Lien Term Loan (LIBOR + 6.00% PIK) (10)(15)

Technologies, Inc.

Gaming & Leisure

Hotel, Gaming & Leisure

Unsecured Debt (4.50% Cash) (12)

Unsecured Debt

(4.50% Cash) (12)

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

September 30, 2021

of Investment

Shares/Units (2)

Services Group, LLC (8)

Credit Facility (LIBOR + 6.00% Cash, 1.00% LIBOR Floor) (12 )(15)

Drilling Company, LLC

Debt (8.00% Cash) (9)

Seotowncenter,

- 3,434,169.6 Common Units

Holding, Inc.

Secured First Lien Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor) (13)

Secured First Lien Delayed Draw Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor) (13)

- 101,165.93 Common Units in CI (Summit) Investment Holdings LLC

Revolving Credit Facility (LIBOR

+ 6.00% Cash, 1.00% LIBOR Floor) (13)(16)

Rithm Capital Corp.

Banking, Finance,

Insurance & Real Estate

Equity - 206,684

Class B Preferred Units (17)(22)

Sendero Drilling

Unsecured Debt (9.00% Cash) (10)

SMART Financial Operations, LLC

Equity - 700,000 Class A Preferred Units

Stancor (dba Industrial Flow Solutions Holdings, LLC)

Equity - 263,814.43 Class A Units

Thryv Holdings, Inc.

Senior Secured First Lien Term Loan B (LIBOR + 8.50% Cash, 1.00% LIBOR Floor) (13)

Velocity Pooling Vehicle, LLC

Equity - 5,441 Class A Units

Warrants - 0.65% of Outstanding Equity

Walker Edison Furniture Company LLC

Consumer goods:

Equity - 10,244 Common Units

Watermill-QMC Midco, Inc.

Equity - 1.3% Partnership Interest (9)

Wingman Holdings, Inc.

(f/k/a Crow Precision Components, LLC)

Aerospace & Defense

Equity - 350 Common Units

Subtotal Non-Controlled/Non-Affiliated Investments

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

September 30, 2021

of Investment

Financial Operations, LLC

- 700,000 Class A Preferred Units

- 263,814.43 Class A Units

Tech Industries

Secured Second Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor) (12)

Acquisition Holdings Corporation

Debt (10.00% PIK)

Pooling Vehicle, LLC

Secured First Lien Term Loan (LIBOR + 11.00% PIK, 1.00% LIBOR Floor) (13)

- 5,441 Class A Units

- 0.65% of Outstanding Equity

Edison Furniture Company LLC

Secured First Lien Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor) (13)

- 1,500 Common Units

Watermill-QMC

- 1.3% Partnership Interest (8)

Non-Controlled/Non-Affiliated Investments

Shares/Units (2)

Affiliated Investments :

1888 Industrial Services, LLC (8)

Senior Secured First Lien Term Loan A (LIBOR + 5.00% PIK, 1.00% LIBOR Floor) (10)(14)

9/30/2021 (25)

Senior Secured First Lien Term Loan B (LIBOR + 8.00% PIK, 1.00% LIBOR Floor) (10)(14)

9/30/2021 (25)

Senior Secured First Lien Term Loan C (LIBOR + 5.00%, 1.00% LIBOR Floor) (14)

9/30/2021 (25)

Investments :

Industrial Services, LLC (7)

Secured First Lien Term Loan A (LIBOR + 5.00% PIK,

LIBOR Floor) (9)(13)

Secured First Lien Term Loan B (LIBOR + 8.00% PIK, 1.00% LIBOR Floor) (9)(13)

Secured First Lien Term Loan C (LIBOR + 5.00%, 1.00% LIBOR Floor) (9)(13)

Credit Facility (LIBOR + 5.00% PIK, 1.00% LIBOR Floor) (13)(15)

- 17,493.63 Class A Units

Media Holdings, LLC

Broadcasting & Subscription

Secured First Lien Term Loan (10.00% PIK) (9)(21)

Equity Series A

Equity Series AA

Equity Series AAA

- 16 Common Units

Angus Steakhouses, LLC

Gaming & Leisure

Secured First Lien Delayed Draw Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor) (12)

Secured First Lien Term Loan (LIBOR + 9.00% PIK, 1.00% LIBOR Floor) (9)(12)

- 17.9% Membership Interest

of Investment

Investors Holdings 1 LLC (10)

Products & Paper

- 6.15% Membership Interest (19)

Energy Services International LLC

Secured First Lien Term Loan (LIBOR + 13.50% PIK) (9)(14)

- 12,350,000 Class A Units

Partners, LLC

Equity - A-2 Preferred (3.00% PIK)

Equity - A-1 Preferred (3.00% PIK)

- 57,300 Class B Units

Partners, LLC

Environmental

Equity - Class A Preferred (6.00% PIK)

- 129,588 Class B Units

Operations, LLC (7)

Secured First Lien Term Loan (15.00% PIK)

Secured First Lien Delayed Draw Term Loan (15.00% PIK)

- 6.7797 Common Units

& Pharmaceuticals

Secured First Lien Term Loan A (LIBOR + 9.50% Cash, 1.00% LIBOR Floor) (12)

Secured First Lien Term Loan B (LIBOR + 13% PIK, 1.00% LIBOR Floor) (9)(12)

- 7.68% of Outstanding Equity

Multifamily, LLC (10)

Finance, Insurance & Real Estate

Secured First Lien Term Loan (10.00% Cash)

- 33,300 Preferred Units

Affiliated Investments

Revolving Credit Facility (LIBOR +5.00% PIK, 1.00% LIBOR Floor) (14)(16)

9/30/2021 (25)

Investments :

Senior Loan Strategy JV I LLC (10)

- 87.5% ownership of MCC Senior Loan Strategy JV I LLC

Equity - 17,493.63 Class A Units

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)

Senior Secured First Lien Term Loan (LIBOR + 9.00% PIK, 1.00% LIBOR Floor) (10)(13)

Senior Secured First Lien Super Priority DDTL (LIBOR + 9.00% Cash, 1.00% LIBOR Floor) (13)(16)

Caddo Investors Holdings 1 LLC (11)

Forest Products & Paper

Equity - 6.15% Membership Interest (19)

Dynamic Energy Services International LLC

Senior Secured First Lien Term Loan (LIBOR + 13.50% PIK) (10)(15)

Equity - 12,350,000 Class A Units

JFL-NGS Partners, LLC

Construction & Building

Equity - 57,300 Class B Units

JFL-WCS Partners, LLC

Environmental Industries

Equity - 129,588 Class B Units

Kemmerer Operations, LLC (8)

Metals & Mining

Senior Secured First Lien Term Loan (15.00% PIK)

Senior Secured First Lien Delayed Draw Term Loan (15.00% PIK) (16)

Equity - 6.7797 Common Units

Path Medical, LLC

Healthcare & Pharmaceuticals

Senior Secured First Lien Term Loan A (LIBOR + 9.50% Cash, 1.00% LIBOR Floor) (10)(13)

Senior Secured First Lien Term Loan B (LIBOR + 13.00% PIK, 1.00% LIBOR Floor) (10)(13)

Warrants - 7.68% of Outstanding Equity

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

September 30, 2021

of Investment

Gaming & Leisure

Secured First Lien Delayed Draw Term Loan (LIBOR + 4.00% Cash, 1.00% LIBOR Floor) (9)(12)

Secured First Lien Super Priority DDTL (LIBOR + 4.00% Cash, 1.00% LIBOR Floor) (9)(12)

Secured First Lien Term Loan B (LIBOR + 9.25% PIK, 1.00% LIBOR Floor) (9)(12)

Senior Secured

First Lien Term Loan C (LIBOR + 12.00%

PIK, 1.00% LIBOR Floor) (9)(12)

- 787.4 Class A Units

Control Investments

$ 117,874,821

Shares/Units (2)

URT Acquisition Holdings Corporation

US Multifamily, LLC (11)

Banking, Finance, Insurance & Real Estate

Senior Secured First Lien Term Loan (10.00% Cash)

Equity - 33,300 Preferred Units

Subtotal Affiliated Investments

Controlled Investments :

Equity Interest

Hotel, Gaming & Leisure

Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 4.00% Cash, 1.00% LIBOR Floor) (10)(13)(16)

Senior Secured First Lien Super Priority DDTL (LIBOR + 4.00% Cash, 1.00% LIBOR Floor) (13)(16)

Senior Secured First Lien Term Loan B (LIBOR + 9.25% PIK, 1.00% LIBOR Floor) (10)(13)

Senior Secured First Lien Term Loan C (LIBOR + 12.00% PIK, 1.00% LIBOR Floor) (10)(13)

Equity - 787.4 Class A Units

Subtotal Control Investments

Investments, September 30, 2021

2 unchanged sentences

$ 151,639,783

of our investments are domiciled in the United States.

Certain investments also have international

amount includes accumulated payment-in-kind (“PIK”) interest, as applicable,

and is net of repayments.

unrealized appreciation, gross unrealized depreciation, and net unrealized depreciation for

federal income tax purposes totaled $53,757,923, $134,877,746, and $81,119,823, respectively.

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

September 30, 2021

All of our investments are domiciled in the United States.

Certain investments also have international operations.

Par amount is denominated in U.S.

Dollars (“$”) unless otherwise noted.

Net unrealized depreciation for U.S.

federal income tax purposes totaled $55,318,330.

The tax cost basis of investments is $206,958,113 as of September 30, 2021.

(4) Percentage

is based on net assets of $150,619,517 as of September 30, 2020.

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.

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

investment has an unfunded commitment as of September 30, 2020 (see Note 8),and includes

an analysis of the value of any unfunded commitments.

(8) Represents

1.3% partnership interest in Watermill-QMC Partners, LP and Watermill-EMI Partners, LP.

investment was on non-accrual status as of September 30, 2020.

investment is not a qualifying asset as defined under Section 55(a) of 1940 Act, in a whole,

As of September 30, 2020, 25.4% of the Company’s portfolio investments were non-qualifying

portion of this investment was sold via a participation agreement.

The amount stated is the

portion retained by the Company (see Note 3).

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 September

30, 2020 was 0.15%.

interest rate on these loans is subject to the greater of a LIBOR floor, or 3 month LIBOR

plus a base rate.

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).

Percentage is based on net assets of $143,693,981 as of September 30, 2021.

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.

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.

The investment has an unfunded commitment as of September 30, 2021 (see Note 8), and fair value includes the value of any unfunded commitments.

Represents 1.3% partnership interest in Watermill-QMC Partners, LP and Watermill-EMI Partners, LP.

The investment was on non-accrual status as of September 30, 2021.

The investment is not a qualifying asset as defined under Section 55(a) of 1940 Act, in a whole, or in part.

As of September 30, 2021, 20.18% of the Company’s portfolio investments were non-qualifying assets.

Security is non-income producing.

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 September 30, 2021 was 0.08%.

interest rate on these loans is subject to 3 month LIBOR plus a base rate.

The 3 month LIBOR

as of September 30, 2020 was 0.24%.

investment earns 0.50% commitment fee on all unused commitment as of September 30, 2020,

and is recorded as a component of interest income on the Consolidated Statements of Operations.

investment represents a Level 1 security in the ASC 820 table as of September 30, 2020 (see

investment represents a Level 2 security in the ASC 820 table as of September 30, 2020 (see

(18) Security

is non-income producing.

a practical expedient, the Company uses net asset value (“NAV”) to determine

the fair value of this investment.

(20) 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.

investment was past due as of September 30, 2020.

accompanying notes to consolidated financial statements.

to Consolidated Financial Statements

Corporation (“PhenixFIN.”