What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2025-12-12 compared with 2024-12-17 · 1281 added, 1437 removed, 633 unchanged (81% of the section changed)

19 unchanged sentences

The substantial majority of this component of our portfolio bore interest based on a SOFR reference rate.

Certain such investments used

a LIBOR reference rate at September 30, 2024.

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 the applicable reference rates are not offset by a corresponding

increase in the spread over the 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 reference

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 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

The composition of our floating rate debt investments by cash interest rate floor as of September 30, 2024 was as follows (dollars

in thousands):

September 30, 2024

SOFR and LIBOR Floor

% of Floating Rate Portfolio

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 the applicable

reference rates are not offset by a corresponding increase in the spread over the 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 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

In addition, 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.

composition of our floating rate debt investments by cash interest rate floor as of September 30, 2025 was as follows (dollars in thousands):

1% to under 2%

5 unchanged sentences

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

Change in Interest Rates

Interest Income (1)

Interest Expense

Net Increase/ (Decrease)

Interest Rates

Up 300 basis points

7 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

of Independent Registered Public Accounting Firms

of Independent Registered Public Accounting Firm

Statements of Assets and Liabilities as of September 30, 2025 and 2024

4 unchanged sentences

to Consolidated Financial Statements

of Independent Registered Public Accounting Firms

To the Shareholders and Board of Directors

PhenixFIN Corporation:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of assets

and liabilities of PhenixFIN Corporation and subsidiaries (the Company), including the consolidated schedules of investments, as of September 30,

2024 and 2023, the related consolidated statements of operations, changes in net assets, and cash flows for each of the years in the two-year

period ended September 30, 2024, and the related notes (collectively, the consolidated financial statements).

In our opinion, the

consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30,

2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended September 30,

2024, in conformity with U.S.

of Independent Registered Public Accounting Firm

the Shareholders and Board of Directors

on the Consolidated Financial Statements

have audited the accompanying consolidated statements of assets and liabilities of PhenixFIN Corporation and subsidiaries (the Company),

including the consolidated schedules of investments, as of September 30, 2025 and 2024, the related consolidated statements of operations,

changes in net assets, and cash flows for each of the years in the three-year period ended September 30, 2025 and the related notes (collectively,

the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects,

the financial position of the Company as of September 30, 2025 and 2024, and the results of its operations and its cash flows for each

of the years in the three-year period ended September 30, 2025, in conformity with U.S.

generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the

Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

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.

federal securities laws and the applicable rules and regulations

of the Securities and Exchange Commission and the PCAOB.

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

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements

are free of material misstatement, whether due to error or fraud.

The Company 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.

Our audits included performing procedures to assess the risks of material

misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial

Such procedures also included confirmation of securities owned as of September 30, 2024 and 2023, by correspondence with custodians,

portfolio companies, agents or by other appropriate auditing procedures.

Our audits also included evaluating the accounting principles

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

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

Critical Audit Matter

The critical audit matter communicated

below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to

be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter

does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the

critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Fair value of investments

As discussed in Notes 2, 3 and 4 of the consolidated financial statements,

the Company measures its investments at fair value.

The Company determines the fair value of investments that are not publicly traded

and whose market quotations are not readily available using one or more methodologies including the market approach and income approach,

which requires the Company to make subjective judgments and estimates using unobservable inputs.

As of September 30, 2024, the fair value

of level 3 investments was $140.3 million.

We identified the

assessment of the fair value of level 3 investments for which unobservable inputs were used as a critical audit matter.

The key assumptions

used to estimate the fair value of these investments related to the market yield associated with the portfolio company used in an income

approach and the selection of financial performance multiples of comparative companies used in a market approach.

Evaluating these assumptions

involved a high degree of subjective auditor judgment and involvement of professionals with specialized skills and knowledge.

in these assumptions could have a significant impact on the estimated fair value of investments.

The following are the primary procedures we performed to

address this critical audit matter.

We evaluated the design of certain internal controls over the Company’s process to estimate

the fair value of level 3 investments, including controls related to the determination of market yield and financial performance multiples

We evaluated the Company’s ability to estimate fair value by comparing prior period fair values for a selection of

investments to transaction prices occurring subsequent to the prior period valuation date.

We involved valuation professionals with specialized

skills and knowledge who, for a selection of the Company’s investments, assisted in evaluating the Company’s estimate of fair

value by developing an independent estimate of fair value using independent market yields and financial performance multiples that were

developed using relevant market and portfolio company financial information and comparing such estimates to the fair values recorded by

the Company for the selected investments.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on these consolidated financial statements based on our audits.

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.

Those standards require that we plan and perform the audit to obtain

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

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

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.

we express no such opinion.

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

due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the consolidated financial statements.

Such procedures also included confirmation of securities

owned as of September 30, 2025 and 2024, by correspondence with the custodian, portfolio companies, agents, or by other appropriate auditing

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

as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis

for our opinion.

critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that

was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material

to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication

of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are

not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or

disclosures to which it relates.

value of investments

discussed in Notes 2, 3 and 4 of the consolidated financial statements, the Company measures its investments at fair value.

determines the fair value of investments that are not publicly traded and whose market quotations are not readily available using one

or more methodologies including the market approach and/or income approach, which requires the Company to make subjective judgments and

estimates using unobservable inputs.

As of September 30, 2025, the fair value of level 3 investments was $224.2 million.

identified the assessment of the fair value of level 3 investments for which unobservable inputs were used as a critical audit matter.

The key assumptions used to estimate the fair value of these investments related to the market yield associated with the portfolio company

used in an income approach and the selection of financial performance multiples of comparative companies used in a market approach.

these assumptions involved a high degree of subjective auditor judgment and involvement of professionals with specialized skills and

Changes in these assumptions could have a significant impact on the estimated fair value of investments.

following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and implementation of

certain internal controls over the Company’s process to estimate the fair value of level 3 investments, including controls related

to the determination of market yield and financial performance multiples assumptions.

We evaluated the Company’s ability to estimate

fair value by comparing prior period fair values for a selection of investments to transaction prices occurring subsequent to the prior

period valuation date.

We involved valuation professionals with specialized skills and knowledge who, for a selection of the Company’s

investments, assisted in evaluating the Company’s estimate of fair value by developing an independent estimate of fair value using

independent market yields and financial performance multiples that were developed using relevant market and portfolio company financial

information and comparing such estimates to the fair values recorded by the Company for the selected investments.

We have served

1 unchanged sentence

December 12, 2025

To the Shareholders and the Board of Directors of PhenixFIN Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of operations,

changes in net assets, and cash flows of PhenixFIN Corporation (the Company), for the year ended September 30, 2022, and the related notes

(collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements

present fairly, in all material respects, the results of its operations, changes in its net assets, and its cash flows for the year ended

September 30, 2022 in conformity with U.S.

generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company’s

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

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.

federal securities laws and the applicable rules and regulations

of the Securities and Exchange Commission and the PCAOB.

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

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free

of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit

of the Company’s 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.

Our audits included performing procedures to assess the risks of material

misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures

included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our procedures included

confirmation of investments owned as of September 30, 2022, 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.

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.

We believe that our audits provide a reasonable

basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Company’s auditor from 2010 to 2022.

New York, New York

December 16, 2022

Statements of Assets and Liabilities

6 unchanged sentences

Affiliated investments (amortized cost of $ 35,390,223 and $ 20,564,242 , respectively)

Controlled investments (amortized cost of $ 97,016,429 and $ 82,437,692 ,

respectively)

Total Investments at fair value

Cash and cash equivalents

Other receivable

Interest receivable

Dividends receivable

Receivable for investments sold

Deferred tax asset

Deferred financing costs

investments (amortized cost of $149,656,451 and $97,016,429, respectively)

Investments at fair value

and cash equivalents

tax asset, net

financing costs

Prepaid share repurchase

Due from Affiliate

for investments sold

$ 316,909,795

2 unchanged sentences

$ 148,011,724

Accounts payable and accrued expenses

Interest and fees payable

Other liabilities

Due to Affiliate

Payable for investments purchased

Deferred revenue

Total Liabilities

Commitments and Contingencies (see Note 8)

$ 135,723,636

payable and accrued expenses

and fees payable

and Contingencies (see Note 8)

Common Shares, $ 0.001 par value;

2 unchanged sentences

2,003,769 and 2,019,778 common shares outstanding, respectively

Capital in excess of par value

Total distributable earnings (loss)

Capital in excess of par

distributable earnings (loss)

( 543,868,352 )

( 544,603,835 )

Total Net Assets

Total Liabilities and Net Assets

Liabilities and Net Assets

$ 316,909,795

$ 302,751,813

Net Asset Value Per Common Share

Asset Value Per Common Share

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

Statements of Operations

For the Years Ended September 30,

the Year Ended September 30,

Interest Income:

Interest from investments

Non-controlled, non-affiliated investments:

Non-controlled, non-affiliated

Payment in-kind

2 unchanged sentences

Controlled investments:

Payment in-kind

Total interest income

Dividend income

Non-controlled, non-affiliated investments

Non-controlled, non-affiliated

Affiliated investments

Controlled investments

Total dividend income

5 unchanged sentences

Professional fees, net

General and administrative expenses

General and administrative

Directors fees

Insurance expenses

Administrator expenses (see Note 6)

Administrator expenses (see

Total expenses

Net Investment Income

Realized and unrealized gains (losses) on investments

Realized and unrealized

gains (losses) on investments

Net realized gains (losses):

Non-controlled, non-affiliated investments

Non-controlled, non-affiliated

( 1,618,869 )

Affiliated investments

( 10,538,228 )

Affiliated investments

( 10,316,867 )

Controlled investments

Total net realized gains (losses)

( 1,991,456 )

Net change in unrealized gains (losses):

Non-controlled, non-affiliated investments

( 1,018,267 )

Affiliated investments

Controlled investments

Total net realized gains

( 11,922,506 )

Total net change in unrealized gains (losses)

( 11,533,039 )

Loss on extinguishment of debt (see Note 5)

Deferred tax benefit (expense)

Total realized and unrealized gains (losses)

Net change in unrealized gains (losses):

Non-controlled, non-affiliated

Affiliated investments

( 1,960,755 )

Net Increase (Decrease) in Net Assets Resulting from Operations

( 7,287,134 )

Total net change in unrealized

gains (losses)

Deferred tax benefit

realized and unrealized gains (losses)

Increase (Decrease) in Net Assets Resulting from Operations

Weighted average basic and diluted earnings per common share

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

Weighted average common shares outstanding

- basic and diluted (see Note 11)

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

6 unchanged sentences

$ 120,845,408

Net investment income (loss)

Net realized gains (losses) on investments

Net change in unrealized appreciation (depreciation) on investments

Net investment income

realized gains (losses) on investments

( 11,533,039 )

Net loss on extinguishment of debt

change in unrealized appreciation (depreciation) on investments

CAPITAL SHARE TRANSACTIONS

Distributions declared

Repurchase of common shares

1 unchanged sentence

( 1,058,213 )

Tax reclassification of shareholders’ equity in accordance with generally accepted accounting principles

( 3,276,372 )

Total Increase (Decrease) in Net Assets

( 13,464,840 )

( 9,383,318 )

reclassification of shareholders’ equity in accordance with generally accepted accounting principles

( 20,468,622 )

Increase (Decrease) in Net Assets

Balance at September 30, 2023

( 548,108,778 )

Net investment income (loss)

Net realized gains (losses) on investments

Net investment income

realized gains (losses) on investments

change in unrealized appreciation (depreciation) on investments

Deferred tax benefit

CAPITAL SHARE TRANSACTIONS

Distributions declared

( 2,645,925 )

Net change in unrealized appreciation (depreciation) on investments

CAPITAL SHARE TRANSACTIONS

Repurchase of common shares

1 unchanged sentence

( 2,370,959 )

Tax reclassification of shareholders’ equity in accordance with generally accepted accounting principles

reclassification of shareholders’ equity in accordance with generally accepted accounting principles

( 12,468,254 )

Total Increase (Decrease) in Net Assets

Increase (Decrease) in Net Assets

Balance at September 30, 2024

( 544,603,835 )

Net investment income (loss)

Net realized gains (losses) on investments

Net change in unrealized appreciation (depreciation) on investments

Deferred tax benefit (expense)

Net investment income

realized gains (losses) on investments

( 11,922,506 )

change in unrealized appreciation (depreciation) on investments

Deferred tax benefit

CAPITAL SHARE TRANSACTIONS

3 unchanged sentences

Repurchase of common shares

( 2,370,905 )

( 2,370,959 )

Tax reclassification of shareholders’ equity in accordance with generally accepted accounting principles

( 12,468,254 )

Total Increase (Decrease) in Net Assets

reclassification of shareholders’ equity in accordance with generally accepted accounting principles

Increase (Decrease) in Net Assets

Balance at September

4 unchanged sentences

Statements of Cash Flows

For the Years Ended September 30,

Cash Flows from Operating Activities:

Net increase (decrease) in net assets resulting from operations

the Year Ended September 30,

Cash Flows from Operating

increase (decrease) in net assets resulting from operations

to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:

from sale and settlements of investments

originations and participations

( 173,921,300 )

Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:

Proceeds from sale and settlements of investments

Purchases, originations and participations

( 99,173,887 )

( 76,652,712 )

increases due to payment-in-kind interest

( 1,355,918 )

Investment increases due to payment-in-kind interest

( 1,207,710 )

( 1,525,392 )

Net amortization of premium (discount) on investments

amortization of premium (discount) on investments

( 1,560,684 )

Amortization of debt issuance cost

Amortization of deferred financing cost

Net realized (gains) losses from investments

of debt issuance cost

of deferred financing cost

realized (gains) losses from investments

( 7,292,299 )

unrealized (gains) losses on investments

( 10,727,490 )

Net unrealized (gains) losses on investments

( 5,705,864 )

( 31,941,213 )

Loss on extinguishment of debt

(Increase) decrease in operating assets:

Fees receivable

Interest receivable

Due from affiliate

Receivable for investments sold

decrease in operating assets:

from affiliate

( 1,680,452 )

Dividends receivable

Paydown receivable

Other receivable

Prepaid share repurchase

Deferred tax benefit (expense)

Increase (decrease) in operating liabilities:

Payable for investments purchased

for investments sold

( 3,940,175 )

for deferred taxes on unrealized appreciation/(depreciation) on investments

(decrease) in operating liabilities:

payable and accrued expenses

( 1,343,261 )

Accounts payable and accrued expenses

Due to Affiliate

Administrator expenses payable

Interest and fees payable

Deferred revenue

Other liabilities

Net cash provided by (used in) operating activities

and fees payable

for investments purchased

( 4,123,059 )

( 12,426,941 )

Cash Flows from Financing Activities:

Debt issuance

Paydowns on debt

Administrator

expenses payable

cash provided by (used in) operating activities

( 67,328,360 )

( 20,706,050 )

Flows from Financing Activities:

( 43,500,000 )

Debt issuance costs paid

( 25,178,988 )

Deferred financing costs

Distributions paid to shareholders

( 30,521,800 )

Repurchase of common shares

issuance costs paid

financing costs

( 1,183,506 )

Distributions

paid to shareholders

( 2,888,283 )

( 2,645,925 )

Net cash provided by (used in) financing activities

of common shares

( 2,370,959 )

Net increase (decrease) in cash and cash equivalents

( 1,058,213 )

cash provided by (used in) financing activities

increase (decrease) in cash and cash equivalents

( 60,282,188 )

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Supplemental information:

Interest paid during the period

Non-cash purchase of investments

Non-cash sale of investments

( 16,779,843 )

and cash equivalents, beginning of period

and cash equivalents, end of period

paid during the period

purchase of investments

sale of investments

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

6 unchanged sentences

Non-Controlled/Non-Affiliated Investments:

All Around Roustabout, LLC Energy:

Oil & Gas Senior Secured First Lien Term Loan C 8/31/2026 $ 350,000 $ 196,411 $ 350,000 0.22 %

Adamas Trust, Inc.(11) Real Estate Equity - 221,469 Class E Preferred Units(13)(24) $ 221,469 $ 5,510,240 $ 5,565,516 3.45 %

Equity - 17,243 Class F Preferred Units(13)(18) 17,243 375,635 392,278 0.24 %

238,712 5,885,875 5,957,794 3.69 %

Altisource S.A.R.L.(11) Services:

Business Senior Secured First Lien Term Loan B (SOFR + CSA + 5.00 %, 3.75 % PIK)(20)(24) 4/30/2025 $ 14,004,684 $ 11,029,605 $ 9,565,199 5.97 %

Business Senior Secured First Lien Term Loan B (SOFR + CSA + 6.50 %)(14)(20)(24)(27) 4/30/2030 8,040,718 8,460,009 8,322,143 5.18 %

Equity - 547,180 Units(13)(21) 547,180 3,327,909 6,380,119 3.97 %

Warrants(13)(21) 4/2/2029 111,343 647,105 77,940 0.05 %

14,102,583 11,029,605 9,647,924 6.02 %

Arcline FM Holdings, LLC Aerospace & Defense First Lien Term Loans (SOFR + 4.50 %, 0.75 % Floor)(14)(25) 6/23/2028 2,658,987 2,571,184 2,660,649 1.66 %

2,658,987 2,571,184 2,660,649 1.66 %

Blufox Mobile Services Services:

Consumer Senior Secured First Lien Term Loan (SOFR + 9.50 % + 4.00 % PIK Toggle, 4.00 % Floor)(23) 4/12/2028 7,111,139 7,047,816 7,111,139 4.44 %

Warrants(13)(21) 4/30/2032 111,343 622,110 64,579 0.04 %

8,810,584 13,057,133 14,844,781 9.24 %

5 unchanged sentences

Chimera Investment Corp.(11) Real Estate Equity - 151,710 Class C Preferred Units(13)(15) 151,710 3,635,972 3,504,501 2.18 %

Equity - 105,480 Class D Preferred Units(13)(24) 105,480 2,305,206 2,561,054 1.60 %

242,790 5,648,289 5,671,126 3.54 %

Copper Property CTL Pass Through Trust Real Estate Equity Certificates(13) 637,795 7,678,355 7,664,893 4.78 %

637,795 7,678,355 7,664,893 4.78 %

DirecTV Financing, LLC Media:

Broadcasting & Subscription Senior Secured First Lien Term Loan (SOFR + CSA + 5.00 %, 0.75 % Floor)(14)(20)(23) 8/2/2027 3,639,523 3,641,793 3,639,523 2.27 %

Senior Secured First Lien Term Loan (SOFR + CSA + 5.25 %, 0.75 % Floor)(14)(20)(23) 8/2/2029 932,500 921,969 916,764 0.57 %

Equity - 26,133 Class B Preferred Units(13)(24) 26,133 635,531 629,544 0.39 %

177,843 4,271,503 4,134,045 2.57 %

Epic Y-Grade Services, LP Energy:

Oil & Gas First Lien Term Loan (SOFR + 5.75 %, 0.00 % Floor)(14)(23) 6/30/2029 4,000,000 3,906,938 3,982,500 2.48 %

Compass Diversified Holdings(11) Real Estate Equity - 22,049 Series C Preferred Units(13)(28) 22,049 381,008 405,702 0.25 %

22,049 381,008 405,702 0.25 %

First Brands Group, LLC Automotive Senior Secured First Lien Term Loan (SOFR + CSA + 5.00 %, 1.00 % Floor)(14)(20)(24) 3/30/2027 3,879,397 3,879,397 3,830,905 2.39 %

Copper Property CTL Pass Through Trust Real Estate Equity Certificates(13) 637,795 7,200,434 7,915,036 4.92 %

637,795 7,200,434 7,915,036 4.92 %

1 unchanged sentence

50,000 498,155 543,000 0.34 %

Global Accessories Group, LLC Consumer goods:

Non-durable Equity - 3.8 % Membership Interest(21) 380 151,337 - 0.00 %

380 151,337 - 0.00 %

Innovate Corp.(11) Construction & Building 10.50 % Senior Secured Notes(14) 2/1/2027 4,558,125 4,022,788 4,033,941 2.51 %

4,558,125 4,022,788 4,033,941 2.51 %

Invesco Mortgage Capital, Inc.(11) Real Estate Equity - 192,300 Class C Preferred Units(13)(16) 192,300 4,725,994 4,624,815 2.88 %

Invesco Mortgage Capital, Inc.(11) Real Estate Equity - 180,000 Common Units(13) 180,000 1,411,789 1,360,800 0.85 %

180,000 1,411,789 1,360,800 0.85 %

NGS-WCS Group Holdings Construction & Building Senior Secured First Lien Term Loan B (SOFR + 4.75 %, 0.50 % Floor)(23) 5/31/2030 987,500 983,422 997,375 0.62 %

JFL-NGS-WCS Partners, LLC Construction & Building Equity - 10,000,000 Units(21) 10,000,000 10,000,000 12,700,000 7.92 %

10,997,500 10,992,748 13,702,488 8.55 %

Kemmerer Operations, LLC Metals & Mining Senior Secured First Lien Term Loan (SOFR + 5.00 %, 0.00 % Floor)(24) 12/31/2028 12,161,321 12,161,321 12,161,321 7.59 %

JFL-NGS-WCS Partners, LLC Equity - 10,000,000 Units(21) 10,000,000 10,000,000 13,100,000 8.15 %

10,987,500 10,983,422 14,097,375 8.77 %

Lighting Science Group Corporation Containers, Packaging & Glass Warrants - 0.62 % of Outstanding Equity(21) 5,000,000 955,680 - 0.00 %

Kemmerer Operations, LLC Metals & Mining Senior Secured First Lien Term Loan (SOFR + 5.00 %)(24) 12/31/2028 8,762,782 8,762,782 8,762,782 5.45 %

8,762,782 8,762,782 8,762,782 5.45 %

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

PHENIXFIN CORPORATION

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

Schedule of Investments (continued)

4 unchanged sentences

Value (4) % of Net

Lucky Bucks, LLC Consumer Discretionary Priority Second Out Term Loan(SOFR + CSA + 7.50 %, 1.00 % Floor)(20)(23) 10/2/2029 $ 1,351,031 $ 1,324,010 $ 1,351,031 0.84 %

Lucky Bucks, LLC (dba Arc Gaming & Technologies, LLC) Consumer Discretionary Priority Second Out Term Loan (SOFR + CSA + 7.50 %, 5.00% PIK, 1.00 % Floor)(20)(25) 10/2/2029 $ 2,143,683 $ 1,998,121 $ 1,993,625 1.24 %

Priority First Out Exit Term Loan (SOFR + CSA + 7.50 %, 1.00 % Floor)(20)(25) 10/2/2028 1,514,302 1,410,541 1,514,302 0.94 %

1 unchanged sentence

3,888,724 3,858,055 4,502,412 2.80 %

McKissock Investment Holdings, LLC (dba Colibri) Services:

Consumer Senior Secured First Lien Term Loan (SOFR + CSA + 5.00 %, 0.75 % Floor)(14)(20)(24) 3/10/2029 4,874,543 4,840,100 4,868,450 3.04 %

4,874,543 4,840,100 4,868,450 3.04 %

MFA Financial, Inc.(11) Real Estate Equity - 114,695 Class C Preferred Units(13)(24) 114,695 2,800,579 2,737,770 1.70 %

Equity - 70,000 Common Units(13) 70,000 714,994 643,300 0.40 %

184,695 3,515,573 3,381,070 2.10 %

2 unchanged sentences

Broadcasting & Subscription First Lien Term Loan (SOFR + CSA + 5.00 %, 0.50 % Floor)(14)(20)(24) 4/11/2029 2,967,133 2,786,574 2,822,486 1.76 %

9.29 % Senior Secured Note(14) 4/15/2029 4,000,000 3,676,250 3,910,000 2.43 %

6,967,133 6,462,824 6,732,486 4.19 %

New York Mortgage Trust, Inc.(11) Real Estate Equity - 165,000 Class E Preferred Units(13)(18) 165,000 4,102,076 4,039,200 2.52 %

Onity Group Inc.(11) Real Estate Equity - 200,000 Preferred Units(28) 200,000 3,925,000 3,948,000 2.46 %

200,000 3,925,000 3,948,000 2.46 %

2 unchanged sentences

2,500,000 2,343,050 2,515,625 1.56 %

Point.360 Services:

Business Senior Secured First Lien Term Loan (LIBOR + 6.00 % PIK)(10)(21) 7/8/2020 2,777,366 2,103,712 - 0.00 %

2,777,366 2,103,712 - 0.00 %

Power Stop LLC Automotive Senior Secured First Lien Term Loan (SOFR + CSA + 4.75 %, 0.50 % Floor)(14)(20)(24) 1/26/2029 9,704,216 8,504,727 7,860,415 4.89 %

9,704,216 8,504,727 7,860,415 4.89 %

Secure Acquisition Inc.

(dba Paragon Films) Packaging Senior Secured First Lien Term Loan (SOFR + 4.25 %, 0.50 % Floor)(14)(24) 12/16/2028 3,509,670 3,499,674 3,505,283 2.19 %

PREIT Associates Real Estate Senior Secured First Lien Term Loan (SOFR + 7.00 %)(14)(23) 4/1/2029 56,201 55,077 57,606 0.04 %

Senior Secured Revolving Note (SOFR + 5.50 %)(8)(23) 12/31/2028 73,083 72,230 71,251 0.04 %

129,284 127,307 128,857 0.08 %

PSB Group, LLC Services:

Consumer Senior Secured First Lien Term Loan (SOFR + 6.50 %, 1.00 % Floor)(23) 4/17/2030 5,706,618 5,679,996 5,706,618 3.55 %

Senior Secured First Lien Revolver (SOFR + 6.50 %, 1.00 % Floor)(8)(12)(23) 4/17/2030 293,137 293,137 293,137 0.18 %

5,999,755 5,973,133 5,999,755 3.73 %

Redwood Trust Inc.(11) Real Estate Equity - 165,000 Common Units(13) 165,000 1,012,942 955,350 0.59 %

165,000 1,012,942 955,350 0.59 %

SS Acquisition, LLC (dba Soccer Shots Franchising) Services:

Consumer Senior Secured First Lien Term Loan (SOFR + CSA + 6.50 %, 1.00 % Floor)(20)(23) 12/30/2026 6,666,667 6,612,831 6,666,667 4.16 %

Senior Secured First Lien Delayed Draw Term Loan (SOFR + CSA + 6.50 %, 1.00 % Floor)(20)(23) 12/30/2026 3,200,000 3,171,118 3,200,000 2.00 %

Consumer Senior Secured First Lien Term Loan (SOFR + 5.75 %, 1.00 % Floor)(23) 12/20/2029 13,469,643 13,404,028 13,469,643 8.38 %

Senior Secured First Lien Revolver (SOFR + 5.75 %, 1.00 % Floor)(8)(12)(23) 12/20/2029 400,000 400,000 400,000 0.25 %

13,869,643 13,804,028 13,869,643 8.63 %

2 unchanged sentences

358,867 345,491 314,132 0.20 %

High Tech Industries Equity - Series D-1 Preferred Stock(21) 414,293 5,999,998 5,999,998 3.73 %

414,293 5,999,998 5,999,998 3.73 %

Staples, Inc.

6 unchanged sentences

2,025,000 2,009,375 2,027,531 1.26 %

Velocity Pooling Vehicle, LLC Automotive Equity - 5,441 Class A Units(21) 5,441 302,464 - 0.00 %

Warrants - 0.65 % of Outstanding Equity(21) 3/30/2028 6,506 361,667 - 0.00 %

11,947 664,131 - 0.00 %

WHI Global, LLC Aerospace & Defense Senior Secured Revolving Note(SOFR + CSA + 8.75%, 3.00% Floor)(8)(12)(20)(23) 4/17/2029 884,053 863,075 876,097 0.54 %

Senior Secured First Lien Term Loan(SOFR + CSA + 8.75 %, 3.00 % Floor)(20)(23) 4/17/2029 12,369,840 12,256,814 12,258,511 7.62 %

Wingman Holdings, Inc.

Aerospace & Defense Equity - 350 Common Shares(21) 350 700,000 166,795 0.10 %

Equity - 350 Common Shares(21) 350 700,000 483,284 0.30 %

13,254,243 13,819,889 13,617,892 8.46 %

1 unchanged sentence

Consumer First Out Term Loan (SOFR + 3.50 %, 2.00 % Floor)(24) 10/16/2028 618,546 623,442 618,546 0.38 %

10/16/2028 646,390 650,342 641,542 0.40 %

First Out Delayed Draw Term Loan (SOFR + 3.50 %, 2.00 % Floor)(24) 10/16/2028 30,950 31,933 31,128 0.02 %

10/16/2028 32,366 33,259 32,123 0.02 %

Last Out Term Loan (SOFR + 11.75 %, 2.00 % Floor)(24)

10/16/2028 1,863,568 1,853,360 1,830,956 1.14 %

Last Out Delayed Draw Term Loan (SOFR + 11.75 %, 2.00 % Floor)(8)(24)

10/16/2028 140,082 142,014 137,630 0.09 %

Last Out Term Loan (SOFR + 6.25 % + 2.75 % First Out Skim, 2.00 % Floor)(24) 10/16/2028 1,863,568 1,859,920 1,858,909 1.16 %

Last Out Delayed Draw Term Loan (SOFR + 6.25 % + 2.75 % First Out Skim, 2.00 % Floor)(24) 10/16/2028 140,082 140,082 139,955 0.09 %

2,653,146 2,655,377 2,648,538 1.65 %

Subtotal Non-Controlled/Non-Affiliated Investments 104,412,066 $ 139,342,491 $ 145,280,169 90.35 %

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

PHENIXFIN CORPORATION

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

Schedule of Investments (continued)

3 unchanged sentences

Affiliated Investments:

Black Angus Steakhouses, LLC Hotel, Gaming & Leisure Senior Secured First Lien Delayed Draw Term Loan (SOFR + CSA + 9.00 % PIK, 1.00 % Floor)(10)(20)(23) 1/31/2025 1,013,584 875,749 751,207 0.47 %

Senior Secured First Lien Term Loan (SOFR + CSA + 9.00 % PIK, 1.00 % Floor)(10)(20)(23) 1/31/2025 15,090,314 7,767,533 - 0.00 %

Senior Secured First Lien Super Priority Delayed Draw Term Loan (SOFR + CSA + 9.00 % PIK, 1.00 % Floor)(10)(20)(23) 1/31/2025 2,223,303 1,920,960 1,647,776 1.03 %

Equity - 17.92 % Membership Interest(21) - - - 0.00 %

Advocates for Disabled Vets, LLC (dba Reps for Vets) Services:

Consumer 12 % Senior Secured First Lien Term Loan 3/7/2030 8,932,500 8,770,471 8,798,513 5.47 %

Equity - 3,375,000 Units(21) 3,375,000 3,375,000 3,359,511 2.09 %

12,307,500 12,145,471 12,158,024 7.56 %

1 unchanged sentence

625,548 10,008,289 10,960,741 6.82 %

MB Precision Investment Holdings LLC Aerospace & Defense Senior Secured First Lien Term Loan(SOFR + CSA + 8.00 %, 4.00 % Floor)(20)(24)(27) 9/30/2028 6,843,380 6,696,228 6,398,561 3.98 %

Senior Secured Delayed Draw Term Loan(SOFR + CSA + 10.00%, 4.00 % Floor)(8)(20)(24)(27) 10/1/2028 505,470 468,621 490,306 0.30 %

Senior Secured First Lien Revolver(SOFR + CSA + 8.00 %, 4.00 % Floor)(8)(12)(20)(24)(27) 9/30/2028 2,112,671 2,077,048 1,975,347 1.23 %

Equity - Class E Preferred Units(21)(27) 4,106,076 3,167,157 2,725,408 1.70 %

Warrants - 2.28 % of Outstanding Equity(21) 3,380,282 827,409 673,018 0.42 %

16,947,879 13,236,463 12,262,640 7.63 %

Subtotal Affiliated Investments 29,880,927 $ 35,390,223 $ 35,381,405 22.01 %

11 unchanged sentences

NVTN LLC Hotel, Gaming & Leisure Senior Secured Revolving Note (SOFR + 7.00 %, 2.00 % Floor)(23) 12/31/2026 8,900,000 9,029,539 8,900,000 5.54 %

Senior Secured First Lien Term Loan B (AFR, 2.00 % Floor)(26) 12/31/2026 17,552,420 13,916,082 16,353,590 10.20 %

Senior Secured First Lien Term Loan B (AFR)(26) 12/31/2026 17,552,420 13,916,082 13,427,601 8.35 %

Senior Secured First Lien Term Loan C (SOFR + 12.00 % PIK, 2.00 % Floor)(10) 12/31/2026 11,506,159 7,570,055 - 0.00 %

1 unchanged sentence

37,959,579 51,966,600 22,327,601 13.89 %

Subtotal Control Investments 162,764,636 $ 97,016,429 $ 70,931,647 44.24 %

Subtotal Controlled Investments 166,237,352 $ 149,656,451 $ 121,610,914 75.65 %

Total Investments, September 30, 2025 300,530,345 $ 324,389,165 $ 302,272,488 188.01 %

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

PHENIXFIN CORPORATION

Schedule of Investments (continued)

of September 30, 2024

(1) Substantially

all of our investments are domiciled in the United States.

(1) Substantially all of our investments are domiciled in the United States.

Certain investments also have international operations.

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

(2) 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.

1 unchanged sentence

federal income tax purposes totaled $(22,116,677).

$(31,349,330).

The tax cost basis of investments is $323,885,351 as of September 30, 2025.

The amortized cost represents

the original cost adjusted for the amortization or accretion of premium or discount, as applicable, on debt investments using the effective

interest method.

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 $160,307,773 as of September 30, 2024.

(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.

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.

investment has an unfunded commitment as of September 30, 2024 (see Note 8), and fair value includes the value of any unfunded commitments.

The negative cost, if applicable, is the result of the capitalized discount being greater than the principal amount outstanding on the

The amortized cost represents the original cost adjusted for the amortization or accretion of premium or discount, as applicable, on debt investments using the effective interest method.

(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 $160,774,300 as of September 30, 2025.

(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 September 30, 2025 (see Note 8), and fair value includes the value of any unfunded commitments.

The negative cost, if applicable, is the result of the capitalized discount being greater than the principal amount outstanding on the loan.

The negative fair value, if applicable, is the result of the capitalized discount on the loan.

investment was on non-accrual status as of September 30, 2024.

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, 2024, non-qualifying

assets represented 13.1% of total assets.

investment earns 0.50% commitment fee on all unused commitment as of September 30, 2024, 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, 2024 (see Note 4).

investment represents a Level 2 security in the ASC 820 table as of September 30, 2024 (see Note 4).

interest rate on this preferred equity is fixed-to-floating and will shift to 3 month SOFR plus a CSA of 0.262% plus a 4.743% spread

on 9/30/2025.

interest rate on this preferred equity is fixed-to-floating and will shift to 3 month SOFR plus a CSA of 0.262% plus a 5.29% spread on

(9) NSG Captive, Inc.

owns 80% of National Security Group Holdings Inc.

(10) The investment was on non-accrual status as of September 30, 2025.

(11) 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, 2025, non-qualifying assets represented 14.70% of total assets.

(12) This investment earns 0.50% commitment fee on all unused commitment as of September 30, 2025, and is recorded as a component of interest income on the Consolidated Statements of Operations.

(13) This investment represents a Level 1 security in the ASC 820 table as of September 30, 2025 (see Note 4).

(14) This investment represents a Level 2 security in the ASC 820 table as of September 30, 2025 (see Note 4).

(15) The interest rate on this preferred equity is fixed-to-floating and shifted to 3 month SOFR plus a CSA of 0.262% plus a 4.743% spread on 9/30/2025.

(16) The interest rate on this preferred equity is fixed-to-floating and will shift to 3 month SOFR plus a CSA of 0.262% plus a 5.29% spread on 9/27/2027.

(17) The investment is held through PhenixFIN Investment Holdings FST, LLC.

interest rate on this preferred equity is fixed-to-floating and will shift to 3 month SOFR plus a CSA of 0.262% plus a 6.429% spread

on 1/15/2025.

(19) The interest rate on this preferred equity is fixed-to-floating and

will shift to 3 month SOFR plus a 5.345% spread on 3/31/2025.

Spread Adjustment (“CSA”)

(21) Non-income

producing security.

interest rate on these loans is subject to 1 month SOFR, which as of September 30, 2024 was 4.85%

interest rate on these loans is subject to 3 month SOFR, which as of September 30, 2024 was 4.59%.

interest rate on these loans is subject to 6 month SOFR, which as of September 30, 2024 was 4.25%.

interest rate on these loans is subject to the monthly Applicable Federal Rate, which as of September 30, 2024 was 4.48%.

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

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of September 30, 2023

(18) The interest rate on this preferred equity is fixed-to-floating and will shift to 3 month SOFR plus a CSA of 0.262% plus a 6.130% spread on 10/15/2026.

(19) The interest rate on this preferred equity is fixed-to-floating and will shift to a rate equal to the five-year US Treasury Rate plus a 6.278% spread on 4/15/2028

(20) Credit Spread Adjustment (“CSA”)

(21) Non-income producing security.

(22) The investment is valued using NAV as a practical expedient.

(23) The interest rate on these securities is subject to 1 month SOFR, which as of September 30, 2025 was 4.13%

(24) The interest rate on these securities is subject to 3 month SOFR, which as of September 30, 2025 was 3.98%.

(25) The interest rate on these securities is subject to 6 month SOFR, which as of September 30, 2025 was 3.85%.

(26) The interest rate on these securities is subject to the monthly Applicable Federal Rate, which as of September 30, 2025 was 3.93%.

(27) The investment includes an exit fee that is receivable upon repayment of the loan.

See Note 2 “Significant Accounting Policies.”

(28) The interest rate on this preferred equity is 7.875%

(29) On November 1, 2025, the maturity date of this investment was extended to 11/1/2026.

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

Schedule of Investments

of September 30, 2024

Company (1) Industry Type of Investment Maturity Par Amount/

Shares/Units (2) Amortized Cost (3) Fair

Shares/Units (2) Amortized

Cost (3) Fair

Value (4) % of Net

Non-Controlled/Non-Affiliated Investments:

All Around Roustabout, LLC Energy:

Oil & Gas Senior Secured First Lien Term Loan C 8/31/2026 $ 350,000 $ 196,411 $ 350,000 0.22 %

350,000 196,411 350,000 0.22 %

Altisource S.A.R.L.(11) Services:

Business Senior Secured First Lien Term Loan B

(SOFR + CSA + 5.00 %, 3.75 % PIK)(20)(24) 4/30/2025 $ 9,565,710 $ 8,507,963 $ 7,805,619 5.31 %

Business Senior Secured First Lien Term Loan B (SOFR + CSA + 5.00 %, 3.75 % PIK)(20)(24) 4/30/2025 14,004,684 11,029,605 9,565,199 5.97 %

Warrants(21) 5/22/2027 97,899 - 82,725 0.05 %

14,102,583 11,029,605 9,647,924 6.02 %

Arcline FM Holdings, LLC Aerospace & Defense First Lien Term Loans

(SOFR + CSA + 4.75 %, 0.75 % Floor)(20)(24) 6/23/2028 2,679,494 2,591,013 2,644,660 1.80 %

Arcline FM Holdings, LLC Aerospace & Defense First Lien Term Loans (SOFR + 4.50 %, 0.75 % Floor)(14)(25) 6/23/2028 2,658,987 2,571,184 2,660,649 1.66 %

2,658,987 2,571,184 2,660,649 1.66 %

Be Green Packaging, LLC Containers, Packaging & Glass Equity - 417 Common Units(21) 417 416,250 - 0.00 %

Blufox Mobile Services Services:

Consumer Senior Secured First Lien Term Loan (SOFR + 9.50 % + 4.00 % PIK Toggle, 4.00 % Floor)(23) 4/12/2028 7,111,139 7,047,816 7,111,139 4.44 %

7,111,139 7,047,816 7,111,139 4.44 %

2 unchanged sentences

833,152 66,475 - 0.00 %

CB&L Associates Holdco I, LLC (11) Banking, Finance, Insurance & Real Estate First Lien Term Loan

(SOFR + CSA+ 2.75 %, 1.00 % Floor)(14)(20)(23) 11/1/2025 5,916,102 4,990,179 5,191,380 3.53 %

CB&L Associates Holdco I, LLC(11) Real Estate First Lien Term Loan (SOFR + CSA+ 2.75 %, 1.00 % Floor)(14)(20)(23) 11/1/2025 5,384,063 4,541,408 5,034,099 3.14 %

5,384,063 4,541,408 5,034,099 3.14 %

Chimera Investment Corp.

(11) Banking, Finance, Insurance & Real Estate Equity - 117,310 Class C Preferred Units(13)(15) 117,310 2,884,724 2,116,271 1.44 %

Chimera Investment Corp.(11) Real Estate Equity - 137,310 Class C Preferred Units(13)(15) 137,310 3,343,083 3,110,072 1.94 %

Equity - 105,480 Class D Preferred Units(13)(24) 105,480 2,305,206 2,561,054 1.60 %

242,790 5,648,289 5,671,126 3.54 %

Copper Property CTL Pass Through Trust Banking, Finance, Insurance & Real Estate Equity Certificates(14) 597,795 7,547,670 6,217,067 4.23 %

DataOnline Corp.

High Tech Industries Senior Secured First Lien Term Loan (SOFR + CSA + 5.50 %, 1.00 % Floor)(20)(24) 11/13/2025 4,812,500 4,812,500 4,764,375 3.24 %

Revolving Credit Facility (SOFR + CSA + 5.50 %, 1.00 % Floor)(20)(24) 11/13/2025 714,286 714,286 707,143 0.48 %

5,526,786 5,526,786 5,471,518 3.72 %

Deer Management Systems LLC Consumer Discretionary First Lien Term Loan (SOFR + CSA + 8.25 %, 3.00 % Floor)(8)(20)(24) 5/1/2028 3,357,500 3,294,306 3,323,925 2.26 %

Copper Property CTL Pass Through Trust Real Estate Equity Certificates(13) 637,795 7,678,355 7,664,893 4.78 %

637,795 7,678,355 7,664,893 4.78 %

1 unchanged sentence

Broadcasting & Subscription Senior Secured First Lien Term Loan (SOFR + CSA + 5.00 %, 0.75 % Floor)(14)(20)(23) 8/2/2027 3,639,523 3,641,793 3,639,523 2.27 %

Senior Secured First Lien Term Loan (SOFR + CSA + 5.25 %, 0.75 % Floor)(14)(20)(23) 8/2/2029 932,500 921,969 916,764 0.57 %

4,572,023 4,563,762 4,556,287 2.84 %

Epic Y-Grade Services, LP Energy:

Oil & Gas First Lien Term Loan (SOFR + 5.75 %, 0.00 % Floor)(14)(23) 6/30/2029 4,000,000 3,906,938 3,982,500 2.48 %

4,000,000 3,906,938 3,982,500 2.48 %

First Brands Group, LLC Automotive Senior Secured First Lien Term Loan (SOFR + CSA + 5.00 %, 1.00 % Floor)(14)(20)(24) 3/30/2027 3,879,397 3,879,397 3,830,905 2.39 %

3,879,397 3,879,397 3,830,905 2.39 %

Franklin BSP Realty Trust, Inc.(11) Banking, Finance, Insurance & Real Estate Equity - 226,107 Common Units(13) 226,107 3,572,788 2,993,657 2.04 %

Franklin BSP Realty Trust, Inc.(11) Real Estate Equity - 66,107 Common Units(13) 66,107 907,782 863,357 0.54 %

66,107 907,782 863,357 0.54 %

4 unchanged sentences

4,250,000 3,714,663 3,392,031 2.12 %

Invesco Mortgage Capital, Inc.(11) Banking, Finance, Insurance & Real Estate Equity - 205,000 Class C Preferred Units(13)(16) 205,000 5,035,506 3,989,300 2.71 %

Invesco Mortgage Capital, Inc.(11) Real Estate Equity - 192,300 Class C Preferred Units(13)(16) 192,300 4,725,994 4,624,815 2.88 %

192,300 4,725,994 4,624,815 2.88 %

JFL-NGS-WCS Partners, LLC Construction & Building Senior Secured First Lien Term Loan B (SOFR + CSA+ 5.50 %, 1.00 % Floor)(20)(23) 11/12/2026 861,605 864,482 865,913 0.59 %

Equity - 10,000,000 Units(21) 10,000,000 10,000,000 11,733,525 7.98 %

NGS-WCS Group Holdings Construction & Building Senior Secured First Lien Term Loan B (SOFR + 4.75 %, 0.50 % Floor)(23) 5/31/2030 997,500 992,748 1,002,488 0.63 %

JFL-NGS-WCS Partners, LLC Construction & Building Equity - 10,000,000 Units(21) 10,000,000 10,000,000 12,700,000 7.92 %

10,997,500 10,992,748 13,702,488 8.55 %

Kemmerer Operations, LLC Metals & Mining Senior Secured First Lien Term Loan (SOFR + 5.00 %, 0.00 % Floor)(24) 12/31/2028 12,161,321 12,161,321 12,161,321 7.59 %

12,161,321 12,161,321 12,161,321 7.59 %

Lighting Science Group Corporation Containers, Packaging & Glass Warrants - 0.62 % of Outstanding Equity(21) 5,000,000 955,680 - 0.00 %

5,000,000 955,680 - 0.00 %

The accompanying notes are an integral part

of these consolidated financial statements.

PHENIXFIN CORPORATION

Consolidated Schedule of Investments (continued)

As of September 30, 2023

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

Schedule of Investments (continued)

of September 30, 2024

Company (1) Industry Type of Investment Maturity Par Amount/

Shares/Units (2) Amortized Cost (3) Fair Value (4) % of Net

Lucky Bucks, LLC Consumer Discretionary Equity - 180,739 Membership Units (21) 180,739 174,393 1,545,318 1.05 %

Second Out Exit Term Loan (SOFR + CSA + 7.50 %, 1.00 % Floor)(20)(23) 10/2/2029 1,361,240 1,334,015 1,361,240 0.93 %

First Out Exit Term Loan (SOFR + CSA + 7.50 %, 1.00 % Floor)(20)(23) 10/2/2028 689,541 626,519 689,541 0.47 %

Shares/Units (2) Amortized

Cost (3) Fair

Value (4) % of Net

Lucky Bucks, LLC Consumer Discretionary Priority Second Out Term Loan(SOFR + CSA + 7.50 %, 1.00 % Floor)(20)(23) 10/2/2029 $ 1,351,031 $ 1,324,010 $ 1,351,031 0.84 %

Priority First Out Exit Term Loan(SOFR + CSA + 7.50 %, 1.00 % Floor)(20)(23) 10/2/2028 684,370 621,820 684,370 0.43 %

LB NewHoldCo, LLC Equity - 180,739 Membership Units(21) 180,739 174,393 1,420,305 0.89 %

2,216,140 2,120,223 3,455,706 2.16 %

McKissock Investment Holdings, LLC (dba Colibri) Services:

Consumer Senior Secured First Lien Term Loan

(SOFR + CSA + 5.00 %, 0.75 % Floor)(20)(24) 3/12/2029 4,924,535 4,883,570 4,776,799 3.25 %

Consumer Senior Secured First Lien Term Loan (SOFR + CSA + 5.00 %, 0.75 % Floor)(14)(20)(24) 3/10/2029 4,874,543 4,840,100 4,868,450 3.04 %

4,874,543 4,840,100 4,868,450 3.04 %

MFA Financial, Inc.(11) Banking, Finance, Insurance & Real Estate Equity - 97,426 Class C Preferred Units(13)(19) 97,426 2,318,487 1,856,940 1.26 %

MFA Financial, Inc.(11) Real Estate Equity - 97,426 Class C Preferred Units(13)(19) 97,426 2,318,487 2,308,996 1.44 %

97,426 2,318,487 2,308,996 1.44 %

New York Mortgage Trust, Inc.(11) Banking, Finance, Insurance & Real Estate Equity - 165,000 Class E Preferred Units(13)(18) 165,000 4,102,076 3,677,850 2.50 %

Neptune Bidco US, Inc.

(dba Nielsen) Media:

Broadcasting & Subscription First Lien Term Loan (SOFR + CSA + 5.00 %, 0.50 % Floor)(14)(20)(24) 4/11/2029 1,994,949 1,885,227 1,865,278 1.16 %

1,994,949 1,885,227 1,865,278 1.16 %

PennyMac Financial Services, Inc.(11) Banking, Finance, Insurance & Real Estate Equity - 29,500 Common Units(13) 29,500 1,921,275 1,964,700 1.34 %

New York Mortgage Trust, Inc.(11) Real Estate Equity - 165,000 Class E Preferred Units(13)(18) 165,000 4,102,076 4,039,200 2.52 %

165,000 4,102,076 4,039,200 2.52 %

PHH Mortgage Corp.

Banking, Finance, Insurance & Real Estate 7.875 % Senior Secured Note(14) 3/15/2026 7,686,000 6,895,720 6,845,344 4.66 %

Real Estate 7.875 % Senior Secured Note(14) 3/15/2026 7,686,000 6,990,720 7,661,981 4.78 %

7,686,000 6,990,720 7,661,981 4.78 %

Point.360 Services:

Business Senior Secured First Lien Term Loan

(LIBOR + 6.00 % PIK)(10)(21) 7/8/2020 2,777,366 2,103,712 - 0.00 %

2,777,366 2,103,712 - 0.00 %

Power Stop LLC Automotive Senior Secured First Lien Term Loan

(SOFR + CSA + 4.75 %, 0.50 % Floor)(20)(23) 1/26/2029 6,919,937 6,515,010 5,639,748 3.84 %

Business Senior Secured First Lien Term Loan (LIBOR + 6.00 % PIK)(10)(21) 7/8/2020 2,777,366 2,103,712 - 0.00 %

2,777,366 2,103,712 - 0.00 %

Rithm Capital Corp.(11) Banking, Finance, Insurance & Real Estate Equity - 206,684 Class B Preferred Units(13)(17) 206,684 5,129,170 4,695,860 3.20 %

Power Stop LLC Automotive Senior Secured First Lien Term Loan (SOFR + CSA + 4.75 %, 0.50 % Floor)(14)(20)(24) 1/26/2029 8,838,431 8,289,487 8,484,894 5.29 %

8,838,431 8,289,487 8,484,894 5.29 %

Secure Acquisition Inc.

(dba Paragon Films) Packaging Senior Secured First Lien Term Loan

(SOFR + CSA + 5.00 %, 0.50 % Floor)(20)(24) 12/16/2028 3,430,517 3,418,570 3,396,212 2.31 %

Senior Secured First Lien Delayed Draw Term Loan

(SOFR + CSA + 5.00 %, 0.50 % Floor)(8)(12)(20)(24) 12/16/2028 - ( 970 ) - 0.00 %

(dba Paragon Films) Packaging Senior Secured First Lien Term Loan (SOFR + 4.25 %, 0.50 % Floor)(14)(24) 12/16/2028 3,509,670 3,499,674 3,505,283 2.19 %

3,509,670 3,499,674 3,505,283 2.19 %

SS Acquisition, LLC (dba Soccer Shots Franchising) Services:

Consumer Senior Secured First Lien Term Loan

(SOFR + CSA + 6.50 %, 1.00 % Floor)(20)(23) 12/30/2026 6,666,667 6,592,976 6,666,667 4.54 %

Senior Secured First Lien Delayed Draw Term Loan

(SOFR + CSA + 6.50 %, 1.00 % Floor)(20)(23) 12/30/2026 3,200,000 3,160,542 3,200,000 2.18 %

9,866,667 9,753,518 9,866,667 6.72 %

SMART Financial Operations, LLC Retail Equity - 700,000 Class A Preferred Units(21) 700,000 700,000 978,140 0.67 %

Consumer Senior Secured First Lien Term Loan (SOFR + CSA + 6.50 %, 1.00 % Floor)(20)(23) 12/30/2026 6,666,667 6,612,831 6,666,667 4.16 %

Senior Secured First Lien Delayed Draw Term Loan (SOFR + CSA + 6.50 %, 1.00 % Floor)(20)(23) 12/30/2026 3,200,000 3,171,118 3,200,000 2.00 %

9,866,667 9,783,949 9,866,667 6.16 %

3 unchanged sentences

Staples, Inc.

Consumer First Lien Term Loan

(LIBOR + 4.50 %)(14) 9/12/2024 3,692,159 3,655,672 3,648,315 2.48 %

Consumer First Lien Term Loan (SOFR + 5.75 %, 0.50 % Floor)(14)(24) 9/1/2029 4,000,000 3,845,748 3,632,500 2.27 %

4,000,000 3,845,748 3,632,500 2.27 %

Tamarix Capital Partners II, L.P.(11) Banking, Finance, Insurance & Real Estate Fund Investment(8)(21) N/A 1,026,818 792,346 0.54 %

Tamarix Capital Partners II, L.P.(11) Banking Fund Investment(8)(21) N/A 1,746,049 1,524,911 0.96 %

- 1,746,049 1,524,911 0.96 %

Thryv Holdings, Inc.(11) Media:

Broadcasting & Subscription Senior Secured First Lien Term Loan

(SOFR + CSA + 8.50 %, 1.00 % Floor)(14)(20)(23) 3/1/2026 7,656,442 7,604,838 7,661,227 5.21 %

Broadcasting & Subscription Senior Secured First Lien Term Loan (SOFR + 6.75 %, 1.00 % Floor)(14)(23) 5/1/2029 2,550,000 2,526,140 2,581,875 1.61 %

2,550,000 2,526,140 2,581,875 1.61 %

5 unchanged sentences

350 700,000 166,795 0.10 %

XYZ Roofco, LLC (dba SMC Roofing Solutions LLC) Services:

Consumer First Out Term Loan (SOFR + CSA + 3.50 %, 2.00 % Floor)(24) 10/16/2028 646,390 650,342 641,542 0.40 %

First Out Delayed Draw Term Loan (SOFR + CSA + 3.50 %, 2.00 % Floor)(8)(24) 10/16/2028 32,366 33,259 32,123 0.02 %

Last Out Term Loan (SOFR + CSA + 11.75 %, 2.00 % Floor)(24) 10/16/2028 1,863,568 1,853,360 1,830,956 1.14 %

Last Out Delayed Draw Term Loan (SOFR + CSA + 11.75 %, 2.00 % Floor)(8)(24) 10/16/2028 140,082 142,014 137,630 0.09 %

2,682,406 2,678,975 2,642,251 1.65 %

Subtotal Non-Controlled/Non-Affiliated Investments 128,069,299 $ 143,179,354 $ 142,233,426 88.75 %

The accompanying notes are an integral part of

these consolidated financial statements.

PHENIXFIN CORPORATION

Consolidated Schedule of Investments (continued)

As of September 30, 2023

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

Schedule of Investments (continued)

of September 30, 2024

Company (1) Industry Type of Investment Maturity Par Amount/

1 unchanged sentence

Affiliated Investments:

1888 Industrial Services, LLC Energy:

Oil & Gas Senior Secured First Lien Term Loan A

(SOFR + 5.00 % PIK, 1.00 % Floor)(10)(21)(24) 8/31/2024 $ 9,946,741 $ 9,473,068 $ - 0.00 %

Senior Secured First Lien Term Loan C

(SOFR + 5.00 %, 1.00 % Floor)(24) 8/31/2024 1,231,932 1,191,257 751,479 0.51 %

Revolving Credit Facility

(SOFR + 5.00 %, 1.00 % Floor)(12)(24) 8/31/2024 4,632,177 4,632,177 4,632,177 3.15 %

Equity - 21,562 Class A Units(21) 21,562 - - -

15,832,412 15,296,502 5,383,656 3.66 %

Black Angus Steakhouses, LLC Hotel, Gaming & Leisure Senior Secured First Lien Delayed Draw Term Loan (SOFR + CSA + 9.00 % PIK, 1.00 % Floor)(10)(20)(23) 1/31/2025 1,013,584 875,749 751,207 0.47 %

5 unchanged sentences

625,548 10,000,000 12,351,802 7.71 %

Maritime Wireless Holdings LLC Hotel, Gaming & Leisure Senior Secured First Lien Term Loan B (SOFR + CSA + 9.00 %, 1.00 % Floor)(20)(23) 5/31/2027 7,500,000 7,373,166 7,500,000 5.10 %

Equity - 500,000 Class A Units(21) 5,000,000 5,000,000 10,150,000 6.91 %

12,500,000 12,373,166 17,650,000 12.01 %

Subtotal Affiliated Investments 18,952,749 $ 20,564,242 $ 14,750,785 9.21 %

The accompanying notes are an integral part

of these consolidated financial statements.

PHENIXFIN CORPORATION

Consolidated Schedule of Investments (continued)

As of September 30, 2023

Company (1) Industry Type of Investment Maturity Par Amount/

Shares/Units (2) Amortized Cost (3) Fair Value (4) % of Net

Controlled Investments:

ECC Capital Corp.

Real Estate Equity - 84,000,000 Units(13)(21) 84,000,000 4,257,002 4,872,000 3.04 %

Senior Secured Promissory Note (SOFR + 5.00 %, 0.00 % Floor)(24) 12/31/2031 7,422,012 7,422,012 7,422,012 4.65 %

91,422,012 11,679,014 12,294,012 7.67 %

FlexFIN, LLC Services:

1 unchanged sentence

36,683,045 36,683,045 36,683,045 22.88 %

Kemmerer Holdings, LLC Metals & Mining Senior Secured First Lien Term Loan ( 15.00 % PIK) 6/21/2025 3,383,877 3,383,877 3,383,877 2.30 %

Equity - 31 Common Units(21) 31 1,836,157 9,133,052 6.22 %

NSG Captive, Inc.

Insurance Equity - 100,000 Units(21) 100,000 101,000 101,000 0.06 %

100,000 101,000 101,000 0.06 %

NVTN LLC Hotel, Gaming & Leisure Senior Secured First Lien Delayed Draw Term Loan

(LIBOR + 4.00 % Cash, 1.00 % LIBOR Floor)(8)(22) 12/31/2024 7,309,552 7,309,885 7,214,856 4.91 %

Senior Secured First Lien Term Loan B

(LIBOR + 9.25 % PIK, 1.00 % LIBOR Floor)(10)(21) 12/31/2024 17,552,420 13,916,083 5,037,547 3.43 %

Senior Secured First Lien Term Loan C

(LIBOR + 12.00 % PIK, 1.00 % LIBOR Floor)(10)(21) 12/31/2024 11,506,159 7,570,055 - 0.00 %

NVTN LLC Hotel, Gaming & Leisure Senior Secured Revolving Note (SOFR + 7.00 %, 2.00 % Floor)(23) 12/31/2026 5,500,000 5,616,309 5,500,000 3.43 %

Senior Secured First Lien Term Loan B (AFR, 2.00 % Floor)(26) 12/31/2026 17,552,420 13,916,082 16,353,590 10.20 %

Senior Secured First Lien Term Loan C (SOFR + 12.00 % PIK, 2.00 % Floor)(10) 12/31/2026 11,506,159 7,570,055 - 0.00 %

Equity - 1,000 Class A Units 1,000 21,450,924 - 0.00 %

2 unchanged sentences

Total Investments, September 30, 2024 309,786,684 $ 260,760,025 $ 227,915,858 142.20 %

The accompanying notes are an integral part of

these consolidated financial statements.

PHENIXFIN CORPORATION

Consolidated Schedule of Investments (continued)

As of September 30, 2023

(1) All of our investments are domiciled in the United States.

(1) Substantially all of our investments are domiciled in the United States.

Certain investments also have international operations.

5 unchanged sentences

The tax cost basis of investments is $259,682,623 as of September 30, 2024.

The amortized cost represents the original cost adjusted for the amortization or accretion of premium or discount, as applicable, on debt investments using the effective interest method.

(5) Percentage is based on net assets of $160,307,773 as of September 30, 2024.

(6) Affiliated Investments are defined by Investment Company Act of 1940 Act, as amended (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.

1 unchanged sentence

The negative cost, if applicable, is the result of the capitalized discount being greater than the principal amount outstanding on the loan.

The negative fair value, if applicable, is the result of the capitalized discount on the loan commitment.

(9) The interest rate on this investment is fixed-to-floating and will shift to 3 month SOFR plus a CSA of 0.262% plus a 5.379% spread on 3/30/2024.

The negative fair value, if applicable, is the result of the capitalized discount on the loan.

(9) Not in use.

(10) The investment was on non-accrual status as of September 30, 2024.

6 unchanged sentences

(16) The interest rate on this preferred equity is fixed-to-floating and will shift to 3 month SOFR plus a CSA of 0.262% plus a 5.29% spread on 9/27/2027.

(17) 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.

(17) The investment is held through PhenixFIN Investment Holdings FST, LLC.

(18) The interest rate on this preferred equity is fixed-to-floating and will shift to 3 month SOFR plus a CSA of 0.262% plus a 6.429% spread on 1/15/2025.

2 unchanged sentences

(21) Non-income producing security.

(22) The interest rate on these loans is subject to 1 month LIBOR, which as of September 30, 2023 was 5.43%.

(22) Not in use.

(23) The interest rate on these loans is subject to 1 month SOFR, which as of September 30, 2024 was 4.85%

1 unchanged sentence

(25) The interest rate on these loans is subject to 6 month SOFR, which as of September 30, 2024 was 4.25%.

The accompanying notes are an integral part of

these consolidated financial statements.

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

September 30, 2024

PhenixFIN Corporation (“PhenixFIN.”

the “Company,” “we” and “us”) is an internally-managed non-diversified closed-end management investment

company incorporated in Delaware that has elected to be regulated as a business development company (“BDC”) under the Investment

Company Act of 1940, as amended (the “1940 Act”).

We completed our initial public offering (“IPO”) 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 (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

(26) The interest rate on these loans is subject to the monthly Applicable Federal Rate, which as of September 30, 2024 was 4.48%.

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

to Consolidated Financial Statements

Corporation (“PhenixFIN,” the “Company,” “we” and “us”) is an internally-managed non-diversified

closed-end management investment company incorporated in Delaware that has elected to be regulated as a business development company

(“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”).

We completed our initial public

offering (“IPO”) 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 (“RIC”) under Subchapter M of the

Internal Revenue Code of 1986, as amended (the “Code”).

Through December 31, 2020, we were an externally managed company.

Since January 1, 2021, we have operated under our present internalized

management structure.

The Company has formed and expects to continue

to form certain taxable subsidiaries (the “Taxable Subsidiaries”), which are taxed as corporations for federal income tax

These Taxable Subsidiaries allow us to, among other things, hold equity securities of portfolio companies organized as pass-through

entities while continuing to satisfy the requirements of a RIC under the Code.

The Company’s investment objective is to

generate current income and capital appreciation.

The management team seeks to achieve this objective primarily through making loans,

private equity or other investments in privately-held companies.

The Company may also make debt, equity or other investments in publicly-traded

(These investments may also include investments in other BDCs, closed-end funds or REITs.) We may also pursue other strategic

opportunities and invest in other assets or operate other businesses to achieve our investment objective, such as operating and managing

an asset-based lending business.

The portfolio generally consists of senior secured first lien term loans, senior secured second lien

term loans, senior secured bonds, preferred equity and common equity.

Occasionally, we will receive warrants or other equity participation

features which we believe will have the potential to increase total investment returns.

Our loan and other debt investments are primarily

rated below investment grade or are unrated.

Investments in below investment grade securities are considered predominantly speculative

with respect to the issuer’s capacity to pay interest and repay principal when due.

Since January 4, 2021, the common stock trades

on the NASDAQ Global Market under the trading symbol “PFX.”

Since January 1, 2021, we have operated under our present internalized management structure.

Company has formed and expects to continue to form certain taxable subsidiaries (the “Taxable Subsidiaries”), which are taxed

as corporations for federal income tax purposes.

These Taxable Subsidiaries allow us to, among other things, hold equity securities of

portfolio companies organized as pass-through entities while continuing to satisfy the requirements of a RIC under the Code.

Company’s investment objective is to generate current income and capital appreciation.

The management team seeks to achieve this

objective primarily through making loans, private equity or other investments in privately-held companies.

The Company may also make

debt, equity or other investments in publicly-traded companies.

(These investments may also include investments in other BDCs, closed-end

funds or REITs.) We may also pursue other strategic opportunities and invest in other assets or operate other businesses to achieve our

investment objective, such as operating and managing an asset-based (gems) lending business and overseeing an insurance business.

portfolio generally consists of senior secured first lien term loans, senior secured second lien term loans, senior secured bonds, preferred

equity and common equity.

Occasionally, we will receive warrants or other equity participation features which we believe will have the

potential to increase total investment returns.

Our loan and other debt investments are primarily rated below investment grade or are

Investments in below investment grade securities are considered predominantly speculative with respect to the issuer’s

capacity to pay interest and repay principal when due.

January 4, 2021, the common stock trades on the NASDAQ Global Market under the trading symbol “PFX.”

Significant Accounting Policies

Basis of Presentation

The Company is an investment company following the accounting and reporting

guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 946 (“ASC 946”), Financial

Services – Investment Companies.

The accompanying consolidated financial statements have been prepared on the accrual basis of accounting

in conformity with U.S.

generally accepted accounting principles (“GAAP”) and include the consolidated accounts of the Company

and its wholly owned subsidiaries PhenixFIN Small Business Fund, LP, PhenixFIN SLF Funding I LLC, PhenixFIN Investment Holdings, LLC,

PhenixFIN Investment Holdings Omnivere, LLC, PhenixFIN Investment Holdings AAR, LLC, and PhenixFIN Investment Holdings Amvestar, LLC.

All references made to the “Company,” “we,” and “us” herein include PhenixFIN Corporation and its

consolidated subsidiaries, except as stated otherwise.

Additionally, the accompanying consolidated financial statements of the Company

and related financial information have been prepared pursuant to the requirements for reporting on Form 10-K and Article 10 of Regulation

S-X of the Securities Act of 1933.

Certain prior period information has been reclassified to conform to current period presentation.

reclassifications have no effect on the Company’s financial positions or its results of operations as previously recorded.

of Presentation

Company is an investment company following the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”)

Accounting Standards Codification 946 (“ASC 946”), Financial Services – Investment Companies.

The accompanying consolidated

financial statements have been prepared on the accrual basis of accounting in conformity with U.S.

generally accepted accounting principles

(“GAAP”) and include the consolidated accounts of the Company and its wholly owned subsidiaries PhenixFIN Small Business

Fund, LP, PhenixFIN SLF Funding I LLC, PhenixFIN Investment Holdings, LLC, PhenixFIN Investment Holdings Omnivere, LLC, PhenixFIN Investment

Holdings AAR, LLC, and PhenixFIN Investment Holdings Amvestar, LLC.

All references made to the “Company,” “we,”

and “us” herein include PhenixFIN Corporation and its consolidated subsidiaries, except as stated otherwise.

Additionally,

the accompanying consolidated financial statements of the Company and related financial information have been prepared pursuant to the

requirements for reporting on Form 10-K and Article 10 of Regulation S-X of the Securities Act of 1933.

Significant Accounting Policies (continued)

Use of Estimates in the Preparation of Financial

The preparation of financial statements in conformity

with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure

of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses

during the reporting period.

of Estimates in the Preparation of Financial Statements

preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported

amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements

and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

Cash, Restricted Cash and Cash Equivalents

The Company considers cash equivalents to be highly

liquid investments with original maturities of three months or less.

Cash and cash equivalents include deposits in a money market account.

The Company deposits its cash in financial institutions and, at times, such balances may be in excess of the Federal Deposit Insurance

Corporation insurance limits.

As of September 30, 2024 and 2023, we had $ 67.6 million and $ 6.0 million in cash and cash equivalents,

respectively, none of which is restricted.

Debt Issuance Costs and Deferred Financing

Debt issuance costs, incurred in connection with

unsecured notes (see Note 5) are deferred and amortized over the life of the respective instrument.

Deferred financing costs related to

the issuance of revolving debt obligations (see Note 5) are deferred and amortized over the life of the respective obligation.

Debt issuance

costs related to any unsecured notes are presented net against the outstanding debt balance on the Consolidated Statements of Assets and

Deferred financing costs related to any credit facilities are presented on the Consolidated Statements of Assets and Liabilities.

Restricted Cash and Cash Equivalents

Company considers cash equivalents to be highly liquid investments with original maturities of three months or less.

Cash and cash equivalents

include deposits in a money market account.

The Company deposits its cash in financial institutions and, at times, such balances may

be in excess of the Federal Deposit Insurance Corporation insurance limits.

As of September 30, 2025 and 2024, we had $ 7.3 million

and $ 67.6 million in cash and cash equivalents, respectively, none of which is restricted.

Issuance Costs and Deferred Financing Costs

issuance costs, incurred in connection with unsecured notes (see Note 5), are deferred and amortized over the life of the respective

Deferred financing costs related to the issuance of revolving debt obligations (see Note 5) are deferred and amortized over

the life of the respective obligation.

Debt issuance costs related to any unsecured notes are presented net against the outstanding debt

balance on the Consolidated Statements of Assets and Liabilities.

Deferred financing costs related to any credit facilities are presented

on the Consolidated Statements of Assets and Liabilities.

Indemnification

In the normal course of business, the Company

enters into contractual agreements that provide general indemnifications against losses, costs, claims and liabilities arising from the

performance of individual obligations under such agreements.

The Company has had no material claims or payments pursuant to such agreements.

The Company’s individual maximum exposure under these arrangements is unknown, as this would involve future claims that may be made

against the Company that have not yet occurred.

However, based on management’s experience, the Company expects the risk of loss

to be remote.

Revenue Recognition

Interest income, adjusted for amortization of

premium and accretion of discount, is recorded on an accrual basis.

Discounts and premiums to par value on investments purchased are accreted

and amortized into interest income over the life of the respective investment.

Loan origination fees, original issue discount (“OID”)

and market discounts or premiums are capitalized and amortized into interest income using the effective interest method or straight-line

method, as applicable.

The Company holds debt investments in its portfolio

that contain a payment-in-kind (“PIK”) interest provision.

PIK interest, which represents contractually deferred interest

added to the investment balance that is generally due at maturity, is recorded on the accrual basis to the extent such amounts are expected

to be collected.

PIK interest is not accrued if the Company does not expect the issuer to be able to pay all principal and interest when

For the years ended September 30, 2024, 2023 and 2022, the Company earned approximately $ 1.2 million, $ 1.5 million, $ 0.8 million

in PIK interest, respectively.

the normal course of business, the Company enters into contractual agreements that provide general indemnifications against losses, costs,

claims and liabilities arising from the performance of individual obligations under such agreements.

The Company has had no material

claims or payments pursuant to such agreements.

The Company’s individual maximum exposure under these arrangements is unknown,

as this would involve future claims that may be made against the Company that have not yet occurred.

However, based on management’s

experience, the Company expects the risk of loss to be remote.

income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis.

Discounts and premiums to par

value on investments purchased are accreted and amortized into interest income over the life of the respective investment.

Loan origination

fees, original issue discount (“OID”) and market discounts or premiums are capitalized and amortized into interest income

using the effective interest method or straight-line method, as applicable.

Company holds debt investments in its portfolio that contain a payment-in-kind (“PIK”) interest provision.

PIK interest,

which represents contractually deferred interest added to the investment balance that is generally due at maturity, is recorded on the

accrual basis to the extent such amounts are expected to be collected.

PIK interest is not accrued if the Company does not expect the

issuer to be able to pay all principal and interest when due.

For the years ended September 30, 2025, 2024 and 2023, the Company earned

approximately $ 1.4 million, $ 1.2 million, $ 1.5 million in PIK interest, respectively.

Significant Accounting Policies (continued)

Amendment and transaction break-up fees associated

with investments in portfolio companies are recognized as income when we become entitled to such fees.

Prepayment penalties received by

the Company for debt instruments paid back to the Company prior to the maturity date are recorded as income upon repayment of debt.

Administrative

agent fees received by the Company are capitalized as deferred revenue and recorded as fee income when the services are rendered.

income includes fees for providing managerial assistance to our portfolio companies and is recognized as revenue when earned.

the years ended September 30, 2024, 2023 and 2022, fee income was approximately $ 0.5 million, $ 0.3 million and $ 0.4 million, respectively

(see Note 9).

and transaction break-up fees associated with investments in portfolio companies are recognized as income when we become entitled to

Prepayment penalties received by the Company for debt instruments paid back to the Company prior to the maturity date are

recorded as income upon repayment of debt.

Administrative agent fees received by the Company are capitalized as deferred revenue and

recorded as fee income when the services are rendered.

Other income includes fees for providing managerial assistance to our portfolio

companies and is recognized as revenue when earned.

For the years ended September 30, 2025, 2024 and 2023, fee income was approximately

$ 1.0 million, $ 0.5 million and $ 0.3 million, respectively (see Note 9).

Investment transactions are accounted for on a trade date basis.

gains or losses on investments are measured by the difference between the net proceeds from the disposition and the amortized cost basis

of investment using the specific identification method, without regard to unrealized gains or losses previously recognized.

gains relating to restructuring transactions that occurred during the year ended September 30, 2024 were $ 6.9 million.

No realized losses

relating to restructuring transactions occurred during the year ended September 30, 2024.

Realized gains or losses on investments are measured by the difference

between the net proceeds from the disposition and the amortized cost basis of investment using the specific identification method, without

regard to unrealized gains or losses previously recognized.

Realized gains relating to restructuring transactions that occurred

during the year ended September 30, 2025 and 2024 were $ 0.3 million and $ 6.9 million.

No realized gains or losses relating to restructuring

transactions occurred during the years ended September 30, 2023 and 2022.

The Company reports changes in fair value of investments as

net unrealized appreciation/(depreciation) on investments in the Consolidated Statements of Operations.

Management reviews all loans that become 90 days

or more past due on principal or interest or when there is reasonable doubt that principal or interest will be collected for possible

placement on management’s designation of non-accrual status.

Interest receivable is analyzed regularly and may be reserved against

when deemed not collectible.

Interest payments received on non-accrual loans may be recognized as income or applied to principal depending

upon management’s judgment regarding collectability.

Non-accrual loans are restored to accrual status when past due principal and

interest is paid and, in management’s judgment, are likely to remain current, although we may make exceptions to this general rule

if the loan has sufficient collateral value and is in the process of collection.

At September 30, 2024, certain investments in three portfolio

companies held by the Company were on non-accrual status with a combined fair value of approximately $ 2.4 million, or 1.1 % of the fair

value of our portfolio.

At September 30, 2023, certain investments in four portfolio companies held by the Company were on non-accrual

status with a combined fair value of approximately $ 6.5 million, or 2.9 % of the fair value of our portfolio.

Investment Classification

The Company classifies its investments in accordance

with the requirements of the 1940 Act.

Under the 1940 Act, we would be deemed to “control” a portfolio company if we owned

more than 25 % of its outstanding voting securities and/or had the power to exercise control over the management or policies of such

portfolio company.

We refer to such investments in portfolio companies that we “control” as “Control Investments.”

Under the 1940 Act, we would be deemed to be an “Affiliated Person” of a portfolio company if we own between 5 % and 25 %

of the portfolio company’s outstanding voting securities or we are under common control with such portfolio company.

such investments in Affiliated Persons as “Affiliated Investments.”

Valuation of Investments

The Company applies fair value accounting to all

of its financial instruments in accordance with the 1940 Act and ASC Topic 820 - Fair Value Measurements and Disclosures (“ASC 820”).

ASC 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements.

accordance with ASC 820, the Company has categorized its financial instruments carried at fair value, based on the priority of the valuation

technique, into a three-level fair value hierarchy as discussed in Note 4.

Fair value is a market-based measure considered from the perspective

of a market participant rather than an entity specific measure.

Therefore, when market assumptions are not readily available, the Company’s

own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at

the measurement date.

transactions occurred during the year ended September 30, 2023.

The Company reports changes in fair value of investments as net unrealized

appreciation/(depreciation) on investments in the Consolidated Statements of Operations.

reviews all loans that become 90 days or more past due on principal or interest or when there is reasonable doubt that principal or interest

will be collected for possible placement on management’s designation of non-accrual status.

Interest receivable is analyzed regularly

and may be reserved against when deemed not collectible.

Interest payments received on non-accrual loans may be recognized as income

or applied to principal depending upon management’s judgment regarding collectability.

Non-accrual loans are restored to accrual

status when past due principal and interest is paid and, in management’s judgment, are likely to remain current, although we may

make exceptions to this general rule if the loan has sufficient collateral value and is in the process of collection.

At September 30,

2025, a certain investment in one portfolio company held by the Company was on non-accrual status with a combined fair value of approximately

$0.0 million, or 0.0 % of the fair value of our portfolio, and a cost of $ 7.6 million.

At September 30, 2024, certain investments in three

portfolio companies held by the Company were on non-accrual status with a combined fair value of approximately $ 2.4 million, or 1.1 %

of the fair value of our portfolio, and a cost of $20.

Classification

Company classifies its investments in accordance with the requirements of the 1940 Act.

Under the 1940 Act, we would be deemed to “control”

a portfolio company if we owned more than 25 % of its outstanding voting securities and/or had the power to exercise control over

the management or policies of such portfolio company.

We refer to such investments in portfolio companies that we “control”

as “Control Investments.” Under the 1940 Act, we would be deemed to be an “Affiliated Person” of a portfolio

company if we own between 5 % and 25 % of the portfolio company’s outstanding voting securities or we are under common

control with such portfolio company.

We refer to such investments in Affiliated Persons as “Affiliated Investments.”

of Investments

Company applies fair value accounting to all of its financial instruments in accordance with the 1940 Act and ASC Topic 820 - Fair Value

Measurements and Disclosures (“ASC 820”).

ASC 820 defines fair value, establishes a framework used to measure fair value

and requires disclosures for fair value measurements.

In accordance with ASC 820, the Company has categorized its financial instruments

carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy as discussed in Note

Fair value is a market-based measure considered from the perspective of a market participant rather than an entity specific measure.

Therefore, when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that management

believes market participants would use in pricing the financial instrument at the measurement date.

Significant Accounting Policies (continued)

Investments for which market quotations are readily

available are valued at such market quotations, which are generally obtained from an independent pricing service or multiple broker-dealers

or market makers.

We weight the use of third-party broker quotations, if any, in determining fair value based on our understanding of

the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer.

However, debt investments with remaining maturities within 60 days that are not credit impaired are valued at cost plus accreted discount,

or minus amortized premium, which approximates fair value.

Investments for which market quotations are not readily available are valued

at fair value as determined by our Chief Financial Officer, the Company’s Valuation Designee, based upon input from management and

third-party valuation firms.

Because these investments are illiquid and because there may not be any directly comparable companies whose

financial instruments have observable market values, these loans are valued using a fundamental valuation methodology, consistent with

traditional asset pricing standards, that is objective and consistently applied across all loans and through time.

Investments in investment funds are valued at

Fair values are generally determined utilizing the NAV supplied by, or on behalf of, management of each investment fund, which

is net of management and incentive fees or allocations charged by the investment fund and is in accordance with the “practical expedient”,

as defined by FASB Accounting Standards Update (“ASU”) 2009-12, Investments in Certain Entities that Calculate Net

Asset Value per Share .

NAVs received by, or on behalf of, management of each investment fund are based on the fair value of the investment

funds’ underlying investments in accordance with policies established by management of each investment fund, as described in each

of their financial statements and offering memorandum.

If the Company is in the process of the sale of an investment fund, fair value

will be determined by actual or estimated sale proceeds.

The methodologies utilized by the Company in estimating

the fair value of its investments categorized as Level 3 generally fall into the following two categories:

The “Market Approach” uses prices and other relevant information generated by market transactions involving identical or comparable (that is, similar) assets, liabilities, or a group of assets and liabilities, such as a business.

The “Income Approach” converts future amounts (for example, cash flows or income and expenses) to a single current (that is, discounted) amount.

When the Income Approach is used, the fair value measurement reflects current market expectations about those future amounts.

The Company has engaged third-party valuation

firms (the “Valuation Firms”) to assist it and its Valuation Designee (the Chief Financial Officer) in the valuation of its

portfolio investments.

The valuation reports generated by the Valuation Firms consider the evaluation of financing and sale transactions

with third parties, expected cash flows and market-based information, including comparable transactions, performance multiples, and movement

in yields of debt instruments, among other factors.

The Company uses a market yield analysis under the Income Approach or an enterprise

model of valuation under the Market Approach, or a combination thereof.

In applying the market yield analysis, the value of the Company’s

loans are determined based upon inputs such as the coupon rate, current market yield, interest rate spreads of similar securities, the

stated value of the loan, and the length to maturity.

In applying the enterprise model, the Company uses a waterfall analysis, which takes

into account the specific capital structure of the borrower and the related seniority of the instruments within the borrower’s capital

To estimate the enterprise value of the portfolio company, we weigh some or all of the traditional market valuation methods

and factors based on the individual circumstances of the portfolio company in order to estimate the enterprise value.

for which market quotations are readily available are valued at such market quotations, which are generally obtained from an independent

pricing service or multiple broker-dealers or market makers.

We weight the use of third-party broker quotations, if any, in determining

fair value based on our understanding of the level of actual transactions used by the broker to develop the quote and whether the quote

was an indicative price or binding offer.

However, debt investments with remaining maturities within 60 days that are not credit impaired

are valued at cost plus accreted discount, or minus amortized premium, which approximates fair value.

Investments for which market quotations

are not readily available are valued at fair value as determined by our Chief Financial Officer, the Company’s Valuation Designee,

based upon input from management and third-party valuation firms.

Because these investments are illiquid and because there may not be

any directly comparable companies whose financial instruments have observable market values, these loans are valued using a fundamental

valuation methodology, consistent with traditional asset pricing standards, that is objective and consistently applied across all loans

and through time.

in investment funds are valued at fair value.

Fair values are generally determined utilizing the NAV supplied by, or on behalf of, management

of each investment fund, which is net of management and incentive fees or allocations charged by the investment fund and is in accordance

with the “practical expedient”, as defined by FASB Accounting Standards Update (“ASU”) 2009-12, Investments

in Certain Entities that Calculate Net Asset Value per Share .

NAVs received by, or on behalf of, management of each investment fund

are based on the fair value of the investment funds’ underlying investments in accordance with policies established by management

of each investment fund, as described in each of their financial statements and offering memorandum.

If the Company is in the process

of the sale of an investment fund, fair value will be determined by actual or estimated sale proceeds.

methodologies utilized by the Company in estimating the fair value of its investments categorized as Level 3 generally fall into the

following two categories:

The “Market Approach”

uses prices and other relevant information generated by market transactions involving identical or comparable (that is, similar)

assets, liabilities, or a group of assets and liabilities, such as a business.

The “Income Approach”

converts future amounts (for example, cash flows or income and expenses) to a single current (that is, discounted) amount.

Income Approach is used, the fair value measurement reflects current market expectations about those future amounts.

Company has engaged third-party valuation firms (the “Valuation Firms”) to assist it and its Valuation Designee (the Chief

Financial Officer) in the valuation of its portfolio investments.

The valuation reports generated by the Valuation Firms consider the

evaluation of financing and sale transactions with third parties, expected cash flows and market-based information, including comparable

transactions, performance multiples, and movement in yields of debt instruments, among other factors.

The Company uses a market yield

analysis under the Income Approach or an enterprise model of valuation under the Market Approach, or a combination thereof.

the market yield analysis, the value of the Company’s loans are determined based upon inputs such as the coupon rate, current market

yield, interest rate spreads of similar securities, the stated value of the loan, and the length to maturity.

In applying the enterprise

model, the Company uses a waterfall analysis, which takes into account the specific capital structure of the borrower and the related

seniority of the instruments within the borrower’s capital structure.

To estimate the enterprise value of the portfolio company,

we weigh some or all of the traditional market valuation methods and factors based on the individual circumstances of the portfolio company

in order to estimate the enterprise value.

Significant Accounting Policies (continued)

The methodologies and information that the Company

utilizes when applying the Market Approach for performing investments include, among other things:

valuations of comparable public companies (“Guideline Comparable Approach”);

recent sales of private and public comparable companies (“Guideline Comparable Approach”);

recent acquisition prices of the company, debt securities or equity securities (“Recent Arms-Length Transaction”);

external valuations of the portfolio company, offers from third parties to buy the company (“Estimated Sales Proceeds Approach”);

subsequent sales made by the Company of its investments (“Expected Sales Proceeds Approach”);

estimating the value to potential buyers.

The methodologies and information that the Company

utilizes when applying the Income Approach for performing investments include:

discounting the forecasted cash flows of the portfolio company or securities (Discounted Cash Flow (“DCF”) Approach);

Black-Scholes model or simulation models or a combination thereof (Income Approach - Option Model) with respect to the valuation of warrants.

For non-performing investments, we may estimate

the liquidation or collateral value of the portfolio company’s assets and liabilities using an expected recovery model (Market Approach

- Expected Recovery Analysis or Estimated Liquidation Proceeds).

We undertake a multi-step valuation process each

quarter when valuing investments for which market quotations are not readily available, as described below:

our quarterly valuation process generally begins with each portfolio investment being initially valued by a Valuation Firm;

Available third-party market data will be reviewed by Company personnel designated by the Valuation Designee (“Fair Value Personnel”) and the Valuation Firm.

Available portfolio company data and general industry data are then reviewed by the Fair Value Personnel.

Preliminary valuation conclusions are then documented and discussed with the Fair Value Personnel.

The Valuation Designee then determines the fair value of each investment in the Company’s portfolio in good faith based on such discussions, the Company’s Valuation Policy and the Valuation Firms’ final estimated valuations.

The Valuation Designee’s report is then presented to the Board of Directors and the Audit Committee.

methodologies and information that the Company utilizes when applying the Market Approach for performing investments include, among other

valuations of comparable

public companies (“Guideline Comparable Approach”);

recent sales of private

and public comparable companies (“Guideline Comparable Approach”);

recent acquisition prices

of the company, debt securities or equity securities (“Recent Arms-Length Transaction”);

external valuations of

the portfolio company, offers from third parties to buy the company (“Estimated Sales Proceeds Approach”);

subsequent sales made by

the Company of its investments (“Expected Sales Proceeds Approach”);

estimating the value to

potential buyers.

methodologies and information that the Company utilizes when applying the Income Approach for performing investments include:

discounting the forecasted

cash flows of the portfolio company or securities (Discounted Cash Flow (“DCF”) Approach);

Black-Scholes model or

simulation models or a combination thereof (Income Approach - Option Model) with respect to the valuation of warrants.

non-performing investments, we may estimate the liquidation or collateral value of the portfolio company’s assets and liabilities

using an expected recovery model (Market Approach - Expected Recovery Analysis or Estimated Liquidation Proceeds).

undertake a multi-step valuation process each quarter when valuing investments for which market quotations are not readily available,

as described below:

Our quarterly valuation

process generally begins with each portfolio investment being initially valued by a Valuation Firm;

Available third-party market

data will be reviewed by Company personnel designated by the Valuation Designee (“Fair Value Personnel”) and the Valuation

Available portfolio company

data and general industry data are then reviewed by the Fair Value Personnel.

Preliminary valuation conclusions

are then documented and discussed with the Fair Value Personnel.

The Valuation Designee

then determines the fair value of each investment in the Company’s portfolio in good faith based on such discussions, the Company’s

Valuation Policy and the Valuation Firms’ final estimated valuations.

The Valuation Designee’s

report is then presented to the Board of Directors and the Audit Committee.

Significant Accounting Policies (continued)

Due to the inherent uncertainty of determining

the fair value of investments that do not have a readily available market value, the fair value of our investments may differ from the

values that would have been used had a readily available market value existed for such investments, and the differences could be material.

In addition, changes in the market environment (including the impact of pandemics, wars or other events on financial markets), portfolio

company performance, and other events may occur over the lives of the investments that may cause the gains or losses ultimately realized

on these investments to be materially different than the valuations currently assigned.

Fair Value of Financial Instruments

The carrying amounts of certain of our financial

instruments, including cash and cash equivalents, accounts payable and accrued expenses, approximate fair value due to their short-term

The carrying amounts and fair values of our long-term obligations are discussed in Note 5.

Recent Accounting Pronouncements

The Company considers the applicability and impact

of all accounting standard updates (“ASU”) FASB.

ASUs not listed were assessed by the Company and either determined to be

not applicable or expected to have minimal impact on its Consolidated Financial Statements.

In November 2023, the FASB issued ASU 2023-07,

“Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 202307”),” which enhances

disclosure requirements about significant segment expenses that are regularly provided to the chief operating decision maker (the “CODM”).

ASU 2023-07, among other things, (i) requires a single segment public entity to provide all of the disclosures as required by Topic 280,

(ii) requires a public entity to disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s)

of segment profit or loss in assessing segment performance and deciding how to allocate resources and (iii) provides the ability for a

public entity to elect more than one performance measure.

ASU 2023-07 is effective for the fiscal years beginning after December 15, 2023,

and interim periods beginning with the first quarter ended March 31, 2025.

Early adoption is permitted and retrospective adoption is required

for all prior periods presented.

The Company is currently assessing the impact of this guidance, however, the Company does not expect

a material impact on its Consolidated Financial Statements.

In December 2023, the FASB issued ASU No.

to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair

value of our investments may differ from the values that would have been used had a readily available market value existed for such investments,

and the differences could be material.

In addition, changes in the market environment (including the impact of pandemics, wars, tariffs,

or other events on financial markets), portfolio company performance, and other events may occur over the lives of the investments that

may cause the gains or losses ultimately realized on these investments to be materially different than the valuations currently assigned.

of Financial Instruments

carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts payable and accrued expenses,

approximate fair value due to their short-term nature.

The carrying amounts and fair values of our long-term obligations are discussed

Accounting Pronouncements

Company considers the applicability and impact of all accounting standard updates (“ASU”) FASB.

ASUs not listed were assessed

by the Company and either determined to be not applicable or expected to have minimal impact on its Consolidated Financial Statements.

November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU

2023-07”),” which enhances disclosure requirements about significant segment expenses that are regularly provided to the

chief operating decision maker (the “CODM”).

ASU 2023-07, among other things, (i) requires a single segment public entity

to provide all of the disclosures as required by Topic 280, (ii) requires a public entity to disclose the title and position of the CODM

and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding

how to allocate resources and (iii) provides the ability for a public entity to elect more than one performance measure.

is effective for the fiscal years beginning after September 30, 2024, and interim periods beginning after September 30, 2025 for the

Early adoption is permitted and retrospective adoption is required for all prior periods presented.

The Company adopted the

guidance during the year ended September 30, 2025 and its adoption did not have a material impact on the Company’s financial statements.

See “Note 15 – Segment Reporting” for more information.

December 2023, the FASB issued ASU No.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”),” which intends to improve the

transparency of income tax disclosures.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and is to be adopted

on a prospective basis with the option to apply retrospectively.

The Company is currently assessing the impact of this guidance, however,

the Company does not expect a material impact to its Consolidated Financial Statements.

Other than the aforementioned guidance, the Company’s

management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a

material effect on the accompanying Consolidated Financial Statements.

Federal Income Taxes

The Company has elected, and intends to qualify

annually, to be treated as a RIC under Subchapter M of the Code.

In order to continue to qualify as a RIC and be eligible for tax treatment

under Subchapter M of the Code, among other things, the Company is required to meet certain source of income and asset diversification

requirements and timely distribute to its stockholders at least 90 % of the sum of investment company taxable income (“ICTI”),

as defined by the Code, including PIK interest, and net tax exempt interest income (which is the excess of gross tax exempt interest income

over certain disallowed deductions) for each taxable year.

Depending on the level of ICTI earned in a tax year, the Company may choose

to carry forward ICTI in excess of current year dividend distributions into the next tax year.

Any such carryover ICTI must be distributed

before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated

Improvements to Income Tax Disclosures (“ASU 2023-09”),”

which intends to improve the transparency of income tax disclosures.

ASU 2023-09 is effective for fiscal years beginning after December

15, 2024 and is to be adopted on a prospective basis with the option to apply retrospectively.

The Company is currently assessing the

impact of this guidance, however, the Company does not expect a material impact to its Consolidated Financial Statements.

November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation

Disclosures (“ASU 2024-03”)”, which requires disaggregated disclosure of certain costs and expenses, including purchases

of inventory, employee compensation, depreciation, amortization and depletion for oil and gas companies, within relevant income statement

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15,

2027, as clarified by ASU 2025-01, which was released by the FASB in January 2025.

Early adoption and retrospective application is permitted.

The Company is currently assessing the impact of this guidance, however, the Company does not expect a material impact on its consolidated

financial statements.

than the aforementioned guidance, the Company’s management does not believe that any recently issued, but not yet effective, accounting

standards, if currently adopted, would have a material effect on the accompanying Consolidated Financial Statements.

Significant Accounting Policies (continued)

Company has elected, and intends to continue to qualify annually, to be treated as a RIC under Subchapter M of the Code.

continue to qualify as a RIC and be eligible for tax treatment under Subchapter M of the Code, among other things, the Company is required

to meet certain source of income and asset diversification requirements and timely distribute to its stockholders at least 90 % of the

sum of investment company taxable income (“ICTI”), as defined by the Code, including PIK interest, and net tax exempt interest

income (which is the excess of gross tax exempt interest income over certain disallowed deductions) for each taxable year.

on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year dividend distributions

into the next tax year.

Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared

prior to filing the final tax return related to the year which generated such ICTI.

Company is subject to a nondeductible U.S.

11 unchanged sentences

The Company filed Form 8927 on December 16, 2024 notifying the IRS.

The Company’s Taxable Subsidiaries accrue

income taxes payable based on the applicable corporate rates on the unrealized gains generated by the investments held by the Taxable

Subsidiaries.

As of September 30, 2024 and 2023, the Company did not record a deferred tax liability on the Consolidated Statements of

Assets and Liabilities.

The change in provision for deferred taxes is included as a component of net realized and unrealized gain/(loss)

on investments in the Consolidated Statements of Operations.

For the years ended September 30, 2024, 2023 and 2022, the Company did not

record a change in provision for deferred taxes on the unrealized (appreciation)/depreciation on investments.

As of September 30, 2024 and 2023, the Company

had a deferred tax asset of $ 20.9 million and $ 23.1 million, respectively, consisting primarily of net operating losses and net unrealized

losses on the investments held within its Taxable Subsidiaries.

As of September 30, 2024 and 2023, the Company has booked a valuation

allowance of $ 20.0 million and $ 23.1 million, respectively, against its deferred tax asset, as for the year ended September 30, 2024 it

anticipated that its Taxable Subsidiaries would be unable to fully utilize their generated net losses.

ICTI generally differs from net investment income

for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses.

The Company may

be required to recognize ICTI in certain circumstances in which it does not receive cash.

For example, if the Company holds debt obligations

that are treated under applicable tax rules as having original issue discount, the Company must include in ICTI each year a portion of

the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received

by the Company in the same taxable year.

The Company may also have to include in ICTI other amounts that it has not yet received in cash,

such as 1) PIK interest income and 2) interest income from investments that have been classified as non-accrual for financial reporting

Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized

Because any original issue discount or other amounts accrued will be included in the Company’s ICTI for the year of accrual,

the Company may be required to make a distribution to its stockholders in order to satisfy the minimum distribution requirements, even

though the Company will not have received and may not ever receive any corresponding cash amount.

ICTI also excludes net unrealized appreciation

or depreciation, as investment gains or losses are not included in taxable income until they are realized.

Permanent differences between ICTI and net investment income for financial

reporting purposes are reclassified among capital accounts in the financial statements to reflect their tax character.

Differences in

classification may also result from the treatment of short-term gains as ordinary income for tax purposes.

During the years ended September

30, 2024, 2023 and 2022, the Company reclassified for book purposes amounts arising from permanent book/tax differences related to the

different tax treatment of investments in wholly-owned subsidiaries and book/tax differences in deductibility of executive compensation

For the Years Ended September 30

Company’s Taxable Subsidiaries accrue income taxes payable based on the applicable corporate rates on the unrealized gains generated

by the investments held by the Taxable Subsidiaries.

As of September 30, 2025 and September 30, 2024, the Company recorded a net deferred

tax asset of $ 1,234,847 and $ 887,099 , respectively, on the Consolidated Statements of Assets and Liabilities.

The change in provision

for deferred taxes is included as a component of net realized and unrealized gain/(loss) on investments in the Consolidated Statements

of Operations.

For the years ended September 30, 2025 and 2024, the Company recorded a change in provision for deferred taxes of $ 210,210

and $ 887,099 , respectively, on the unrealized (appreciation)/depreciation on investments.

For the year ended September 30, 2023, the

Company did not record a change in provision for deferred taxes on the unrealized (appreciation)/depreciation on investments.

of September 30, 2025 and 2024, the Company had a deferred tax asset of $14.4 million and $ 20.9 million, respectively, consisting primarily

of net operating losses and net unrealized losses on the investments held within its Taxable Subsidiaries.

As of September 30, 2025 and

2024, the Company has booked a valuation allowance of $13.2 million and $ 20.0 million, respectively, against its deferred tax asset.

generally differs from net investment income for financial reporting purposes due to temporary and permanent differences in the recognition

of income and expenses.

The Company may be required to recognize ICTI in certain circumstances in which it does not receive cash.

example, if the Company holds debt obligations that are treated under applicable tax rules as having original issue discount, the Company

must include in ICTI each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether

cash representing such income is received by the Company in the same taxable year.

The Company may also have to include in ICTI other

amounts that it has not yet received in cash, such as 1) PIK interest income and 2) interest income from investments that have been classified

as non-accrual for financial reporting purposes.

Interest income on non-accrual investments is not recognized for financial reporting

purposes, but generally is recognized in ICTI.

Because any original issue discount or other amounts accrued will be included in the Company’s

ICTI for the year of accrual, the Company may be required to make a distribution to its stockholders in order to satisfy the minimum

distribution requirements, even though the Company will not have received and may not ever receive any corresponding cash amount.

also excludes net unrealized appreciation or depreciation, as investment gains or losses are not included in taxable income until they

are realized.

Significant Accounting Policies (continued)

differences between ICTI and net investment income for financial reporting purposes are reclassified among capital accounts in the financial

statements to reflect their tax character.

Differences in classification may also result from the treatment of short-term gains as ordinary

income for tax purposes.

During the years ended September 30, 2025, 2024 and 2023, the Company reclassified for book purposes amounts

arising from permanent book/tax differences related to the different tax treatment of net operating losses and investments in wholly-owned

subsidiaries as follows:

the Years Ended September 30

Capital in excess of par value

2 unchanged sentences

( 20,468,622 )

( 3,276,372 )

Total distributable earnings (loss)

Significant Accounting Policies (continued)

For income tax purposes, distributions paid to

stockholders are reported as ordinary income, return of capital, long term capital gains or a combination thereof.

The tax character of

distributions paid for the years ended September 30, 2024, 2023 and 2022 were as follows:

For the Years Ended September 30

Accumulated net realized gain/(loss) from investments

income tax purposes, distributions paid to stockholders are reported as ordinary income, return of capital, long term capital gains or

a combination thereof.

The tax character of distributions paid for the years ended September 30, 2025, 2024 and 2023 were as follows:

the Years Ended September 30

Ordinary income

1 unchanged sentence

Return of capital

Distributions on a tax basis

For federal income tax purposes, the cost of investments owned at September

30, 2024, 2023 and 2022 were approximately $ 259.6 million, $ 264.1 million and $ 262.6 million, respectively.

At September 30, 2024, 2023 and 2022, the components

of distributable earnings/(accumulated deficits) on a tax basis detailed below differ from the amounts reflected in the Company’s

Consolidated Statements of Assets and Liabilities by temporary and other book/tax differences, primarily relating to the tax treatment

of certain fee income and organizational expenses, as follows:

For the Years Ended September 30

Distributions on a tax

federal income tax purposes, the cost of investments owned at September 30, 2025, 2024 and 2023 were approximately $323.9 million, $ 259.6

million and $ 264.1 million, respectively.

September 30, 2025, 2024 and 2023, the components of distributable earnings/(accumulated deficits) on a tax basis detailed below differ

from the amounts reflected in the Company’s Consolidated Statements of Assets and Liabilities by temporary and other book/tax differences,

primarily relating to the tax treatment of certain fee income and organizational expenses, as follows:

the Years Ended September 30

Undistributed ordinary income

Accumulated capital and other losses (1)

Accumulated capital and other

( 523,575,571 )

6 unchanged sentences

( 37,631,079 )

Components of distributable earnings/(accumulated deficits) at year end

Components of distributable

earnings/(accumulated deficits) at year end

$ ( 543,868,352 )

1 unchanged sentence

$ ( 548,108,778 )

the Regulated Investment Company Modernization Act of 2010, net capital losses recognized for tax years beginning after December 22,

2010, may be carried forward indefinitely, and their character is retained as short-term or long-term losses.

As of September 30, 2024,

the Company had a long-term capital loss carryforward available to offset future realized capital gains of $ 512,539,871 and a short-term

capital loss carryforward of $ 2,591,695 .

Net capital losses incurred after October 31 (post-October losses) and net investment losses

incurred after December 31 (late-year losses), and within the taxable year, may be elected to be deferred to the first business day of

the Fund’s next taxable year.

As of the most recent fiscal period ended September 30, 2024, the Fund did not elect to defer any

late year losses.

The Company accounts for income taxes in conformity

with ASC Topic 740 - Income Taxes (“ASC 740”).

ASC 740 provides guidelines for how uncertain tax positions should be recognized,

measured, presented and disclosed in financial statements.

ASC 740 requires the evaluation of tax positions taken or expected to be taken

in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not”

of being sustained by the applicable tax authority.

Tax positions deemed to meet a “more-likely-than-not” threshold would

be recorded as a tax benefit or expense in the current period.

The Company recognizes interest and penalties, if any, related to unrecognized

tax benefits as income tax expense in the Consolidated Statements of Operations.

There were no material uncertain income tax positions

at September 30, 2024.

Although we file federal and state tax returns, our major tax jurisdiction is federal.

The Company’s

federal and state tax returns for the prior three fiscal years remain open, subject to examination by the Internal Revenue Service and

applicable state tax authorities.

The Company invests in various industries.

Company separately evaluates the performance of each of its investment relationships.

However, because each of these investment relationships

has similar business and economic characteristics, they have been aggregated into a single investment segment.

All applicable segment

disclosures are included in or can be derived from the Company’s financial statements.

See Note 3 for further information.

(1) Under the Regulated Investment Company Modernization Act of 2010, net capital losses recognized for tax years beginning after December 22, 2010, may be carried forward indefinitely, and their character is retained as short-term or long-term losses.

As of September 30, 2025, the Company had a long-term capital loss carryforward available to offset future realized capital gains of $ 521,474,790 and a short-term capital loss carryforward of $ 2,100,781 .

Net capital losses incurred after October 31 (post-October losses) and net investment losses incurred after December 31 (late-year losses), and within the taxable year, may be elected to be deferred to the first business day of the Fund’s next taxable year.

As of the most recent fiscal period ended September 30, 2025, the Fund did not elect to defer any late year losses.

Significant Accounting Policies (continued)

Company Investment Risk, Concentration of Credit Risk, and Liquidity

The Company has broad discretion in making investments.

Investments generally consist of debt instruments that may be affected by business, financial market or legal uncertainties.

investments may be volatile, and a variety of factors that are inherently difficult to predict, such as domestic or international economic

and political developments, may significantly affect the results of the Company’s activities and the value of its investments.

addition, the value of the Company’s portfolio may fluctuate as the general level of interest rates fluctuate.

The value of the Company’s investments in

loans may be detrimentally affected to the extent, among other things, that a borrower defaults on its obligations, there is insufficient

collateral and/or there are extensive legal and other costs incurred in collecting on a defaulted loan, observable secondary or primary

market yields for similar instruments issued by comparable companies increase materially or risk premiums required in the market between

smaller companies, such as our borrowers, and those for which market yields are observable increase materially.

The Company’s assets may, at any time, include

securities and other financial instruments or obligations that are illiquid or thinly traded, making purchase or sale of such securities

and financial instruments at desired prices or in desired quantities difficult.

Furthermore, the sale of any such investments may be possible

only at substantial discounts, and it may be extremely difficult to value any such investments accurately.

The composition of our investments as of September

30, 2024 as a percentage of our total portfolio, at amortized cost and fair value were as follows (dollars in thousands):

Amortized Cost

Senior Secured First Lien Term Loans

Company accounts for income taxes in conformity with ASC Topic 740 - Income Taxes (“ASC 740”).

ASC 740 provides guidelines

for how uncertain tax positions should be recognized, measured, presented and disclosed in financial statements.

ASC 740 requires the

evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether

the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority.

Tax positions deemed to

meet a “more-likely-than-not” threshold would be recorded as a tax benefit or expense in the current period.

recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Consolidated Statements

of Operations.

There were no material uncertain income tax positions at September 30, 2025.

Although we file federal and state tax

returns, our major tax jurisdiction is federal.

The Company’s federal and state tax returns for the prior three fiscal years remain

open, subject to examination by the Internal Revenue Service and applicable state tax authorities.

Investment Risk, Concentration of Credit Risk, and Liquidity Risk

Company has broad discretion in making investments.

Investments generally consist of debt instruments that may be affected by business,

financial market or legal uncertainties.

Prices of investments may be volatile, and a variety of factors that are inherently difficult

to predict, such as domestic or international economic and political developments, may significantly affect the results of the Company’s

activities and the value of its investments.

In addition, the value of the Company’s portfolio may fluctuate as the general level

of interest rates fluctuate.

value of the Company’s investments in loans may be detrimentally affected to the extent, among other things, that a borrower defaults

on its obligations, there is insufficient collateral and/or there are extensive legal and other costs incurred in collecting on a defaulted

loan, observable secondary or primary market yields for similar instruments issued by comparable companies increase materially or risk

premiums required in the market between smaller companies, such as our borrowers, and those for which market yields are observable increase

Company’s assets may, at any time, include securities and other financial instruments or obligations that are illiquid or thinly

traded, making purchase or sale of such securities and financial instruments at desired prices or in desired quantities difficult.

the sale of any such investments may be possible only at substantial discounts, and it may be extremely difficult to value any such investments

composition of our investments as of September 30, 2025 as a percentage of our total portfolio, at amortized cost and fair value were

as follows (dollars in thousands):

Senior Secured First Lien Term

Senior Secured Notes

1 unchanged sentence

Equity/Warrants

Total Investments

The composition of our investments as of September

30, 2023 as a percentage of our total portfolio, at amortized cost and fair value were as follows (dollars in thousands):

Amortized Cost

Senior Secured First Lien Term Loans

Investments (continued)

composition of our investments as of September 30, 2024 as a percentage of our total portfolio, at amortized cost and fair value were

as follows (dollars in thousands):

Senior Secured First Lien Term

Senior Secured Notes

1 unchanged sentence

Equity/Warrants

Total Investments

In connection with certain of the Company’s

investments, the Company receives warrants that are obtained for the objective of increasing the total investment returns and are not

held for hedging purposes.

At September 30, 2024 and 2023, the total fair value of warrants was $ 82.7 thousand and $ 206.5 thousand,

respectively, and were included in investments at fair value on the Consolidated Statements of Assets and Liabilities.

During the year

ended September 30, 2024, the Company did not acquire any additional warrants in an existing portfolio company.

During the year ended

September 30, 2023, the Company acquired additional warrants in an existing portfolio company.

During the year ended September 30,

2022, the Company did not acquire any additional warrants in any existing portfolio companies.

Total change in unrealized depreciation related to warrants for the

years ended September 30, 2024, 2023 and 2022 was $ 123.7 thousand, $ 143.9 thousand and $ 299.1 thousand, respectively, and was recorded

on the Consolidated Statements of Operations as net change in unrealized appreciation/(depreciation) on investments.

The warrants are

received in connection with individual investments and are not subject to master netting arrangements.

Investments (continued)

The following table shows the portfolio composition

by industry grouping at fair value at September 30, 2024 (dollars in thousands):

connection with certain of the Company’s investments, the Company receives warrants that are obtained for the objective of increasing

the total investment returns and are not held for hedging purposes.

At September 30, 2025 and 2024, the total fair value of warrants

was $ 815.5 thousand and $ 82.7 thousand, respectively, and were included in investments at fair value on the Consolidated Statements of

Assets and Liabilities.

During the year ended September 30, 2025, the Company acquired two additional warrants in existing portfolio

During the year ended September 30, 2024, the Company did not acquire any additional warrants in an existing portfolio company.

change in unrealized depreciation related to warrants for the years ended September 30, 2025, 2024 and 2023 was $ 46.5 thousand, $ 123.7

thousand and $ 143.9 thousand, respectively, and was recorded on the Consolidated Statements of Operations as net change in unrealized

appreciation/(depreciation) on investments.

The warrants are received in connection with individual investments and are not subject to

master netting arrangements.

following table shows the portfolio composition by industry grouping at fair value at September 30, 2025 (dollars in thousands):

Aerospace & Defense

Hotel, Gaming & Leisure

4 unchanged sentences

Consumer Discretionary

Aerospace & Defense

The following table shows the portfolio composition

by industry grouping at fair value at September 30, 2023 (dollars in thousands):

Banking, Finance, Insurance & Real Estate

Investments (continued)

following table shows the portfolio composition by industry grouping at fair value at September 30, 2024 (dollars in thousands):

Hotel, Gaming & Leisure

High Tech Industries

Construction & Building

High Tech Industries

Metals & Mining

2 unchanged sentences

Aerospace & Defense

The Company invests in portfolio companies principally

located in the United States.

The geographic composition is determined by the location of the corporate headquarters of the portfolio

company, which may not be indicative of the primary source of the portfolio company’s business.

Investments (continued)

The following table shows the portfolio composition

by geographic location at fair value at September 30, 2024 (dollars in thousands):

Company invests in portfolio companies principally located in the United States.

The geographic composition is determined by the location

of the corporate headquarters of the portfolio company, which may not be indicative of the primary source of the portfolio company’s

following table shows the portfolio composition by geographic location at fair value at September 30, 2025 (dollars in thousands):

International

The following table shows the portfolio composition

by geographic location at fair value at September 30, 2023 (dollars in thousands):

Investments (continued)

following table shows the portfolio composition by geographic location at fair value at September 30, 2024 (dollars in thousands):

International

Transactions With Affiliated/Controlled Companies

The Company had investments in portfolio companies designated as Affiliated

Investments and Controlled Investments under the 1940 Act.

Transactions with Affiliated Investments and Controlled Investments during

the years ended September 30, 2024 and 2023 were as follows:

With Affiliated/Controlled Companies

Company had investments in portfolio companies designated as Affiliated Investments and Controlled Investments under the 1940 Act.

with Affiliated Investments and Controlled Investments during the years ended September 30, 2025 and 2024 were as follows:

of Investment (1)(2)

of Investment

September 30, 2023

Value at September 30,

Purchases/(Sales)

of or Advances/

(Distributions)

Transfers In/(Out)

of Affiliates

September 30,

All Around Roustabout, LLC

Secured First Lien Term Loan C

$ ( 1,096,561 )

$ ( 196,411 )

Secured First Lien Term Loan A

( 9,473,068 )

Credit Facility

( 5,112,074 )

for Disabled Vets, LLC (dba Reps for Vets)

Secured First Lien Term Loan

Angus Steakhouses, LLC

3 unchanged sentences

Secured First Lien Super Priority DDTL

Holdings Parent, LLC

Wireless Holdings LLC

Secured First Lien Term Loan B

( 1,920,960 )

( 11,900,000 )

Holdings Parent, LLC

( 1,399,350 )

Precision Investment Holdings LLC

Secured First Lien Term Loan

Secured Delayed Draw Term Loan

Secured First Lien Revolver

Affiliated Investments

$ ( 10,316,867 )

$ ( 196,411 )

$ ( 1,991,456 )

Investments (continued)

of Investment (1)(2)

of Investment

September 30, 2023

Value at September 30,

Purchases/(Sales)

of or Advances/

(Distributions)

Transfers In/(Out)

of Controlled

3 unchanged sentences

$ ( 425,000 )

Operations, LLC

Secured First Lien Term Loan

( 9,153,693 )

( 10,378,988 )

( 7,296,895 )

Captive, Inc.

Secured First Lien Delayed Draw Term Loan

( 1,693,577 )

Secured First Lien Term Loan B

( 2,925,989 )

Total Controlled Investments

Controlled Investments

$ ( 1,960,755 )

$ 121,610,914

Investments (continued)

of Investment (1)(2)

of Investment

September 30, 2022

Value at September 30,

Purchases/(Sales)

of or Advances/

(Distributions)

1 unchanged sentence

September 30,

Affiliated Investments

Industrial Services, LLC

Secured First Lien Term Loan C

$ ( 1,096,561 )

$ ( 196,411 )

Secured First Lien Term Loan A

( 9,473,068 )

Credit Facility

( 5,112,074 )

Angus Steakhouses, LLC

1 unchanged sentence

Secured First Lien Term Loan

Secured First Lien Super Priority Delayed Draw Term Loan

Holdings Parent, LLC

Operations, LLC

Secured First Lien Term Loan

( 1,459,249 )

Secured First Lien Super Priority DDTL

Holdings Parent, LLC

Wireless Holdings LLC

Secured First Lien Term Loan A

( 5,000,704 )

Secured First Lien Term Loan B

Multifamily, LLC

( 7,373,166 )

( 11,900,000 )

( 5,150,000 )

Affiliated Investments

$ ( 25,481,801 )

$ ( 196,411 )

$ ( 1,991,456 )

of Investment (1)(2)

of Investment

September 30, 2022

Value at September 30,

Purchases/(Sales)

of or Advances/

(Distributions)

Transfers In/(Out)

of Controlled

September 30,

Controlled Investments

Capital Corp.

Senior Secured

Promissory Note

Equity Interest

( 2,187,665 )

Operations, LLC

Secured First Lien Term Loan

Secured First Lien Delayed Draw Term Loan

Secured First Lien Term Loan B

Senior Secured First Lien

( 9,153,693 )

( 10,378,988 )

( 7,296,895 )

Captive, Inc.

Senior Secured First Lien

Delayed Draw Term Loan

( 1,693,577 )

Senior Secured First Lien

( 11,900,000 )

Controlled Investments

$ ( 9,153,693 )

$ ( 7,287,134 )

(1) The par amount and additional detail are shown in the Consolidated Schedules of Investments.

(2) Securities with a zero value at the beginning and end of the period, and those that had no transaction activity were excluded from the roll forward.

Purchases/(sales) of or advances to/(distributions)

from Affiliated Investments and Controlled Investments represent the proceeds from sales and settlements of investments, purchases, originations

and participations, investment increases due to PIK interest as well as net amortization of premium/(discount) on investments and are

included in the purchases and sales presented on the Consolidated Statements of Cash Flows for the years ended September 30, 2024, 2023

Transfers in/(out) of Affiliated Investments and Controlled Investments represent the fair value for the quarter an investment

became or was removed as an Affiliated Investment or a Controlled Investment.

Income received from Affiliated Investments and Controlled

Investments is included in total investment income on the Consolidated Statements of Operations for the years ended September 30, 2024,

2023 and 2022.

Investments (continued)

Unconsolidated Significant Subsidiaries

Purchases/(sales)

of or advances to/(distributions) from Affiliated Investments and Controlled Investments represent the proceeds from sales and settlements

of investments, purchases, originations and participations, investment increases due to PIK interest as well as net amortization of premium/(discount)

on investments and are included in the purchases and sales presented on the Consolidated Statements of Cash Flows for the years ended

September 30, 2025, 2024 and 2023.

Transfers in/(out) of Affiliated Investments and Controlled Investments represent the fair value for

the quarter an investment became or was removed as an Affiliated Investment or a Controlled Investment.

Income received from Affiliated

Investments and Controlled Investments is included in total investment income on the Consolidated Statements of Operations for the years

ended September 30, 2025, 2024 and 2023.

Unconsolidated

Significant Subsidiaries

In accordance with the SEC’s Regulation

S-X and GAAP, the Company evaluated and determined that it had one subsidiary, FlexFIN, LLC, that is deemed to be a “significant

subsidiary” as of September 30, 2024.

In accordance with Rule 3-09, separate audited financial statements of FlexFIN, LLC for the

year ended September 30, 2024 are being filed herewith as Exhibit 99.2.

S-X and GAAP, the Company evaluated and determined that it had three unconsolidated subsidiaries, FlexFIN, LLC, NSG Captive Inc., and

NVTN LLC, that are deemed to be a “significant subsidiary” as of September 30, 2025.

For the year ended September 30, 2024,

the Company evaluated and determined that it had one unconsolidated subsidiary, FlexFIN, LLC, that is deemed to be a “significant

subsidiary.” In accordance with Rule 3-09, separate audited financial statements of FlexFIN, LLC for the year ended September 30,

2025 are being filed herewith as Exhibit 99.2.

In accordance with Rule 4-08(g), summarized financial information for September 30, 2025

is presented below for NSG Captive Inc.

and NVTN LLC.

Balance Sheet

September 30,

Total Liabilities

Income Statement

September 30,

Total Expenses

Fair Value Measurements

The Company follows ASC 820 for measuring the

fair value of portfolio investments.

Fair value is the price that would be received in the sale of an asset or paid to transfer a liability

in an orderly transaction between market participants at the measurement date.

Where available, fair value is based on observable market

prices or parameters, or derived from such prices or parameters.

Where observable prices or inputs are not available, valuation models

These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the

price transparency for the instruments or market and the instruments’ complexity.

The Company’s fair value analysis includes

an analysis of the value of any unfunded loan commitments.

Financial investments recorded at fair value in the consolidated financial

statements are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value.

The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the investment as of the measurement

Investments which are valued using NAV as a practical expedient are excluded from this hierarchy, and certain prior period amounts

have been reclassified to conform to the current period presentation.

The three levels are defined below:

Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 - Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

In addition to using the above inputs in investment

valuations, the Company continues to employ a valuation policy approved by the board of directors that is consistent with ASC 820 (see

Consistent with our valuation policy, we evaluate the source of inputs, including any markets in which our investments are trading,

in determining fair value.

The following table presents the fair value measurements

of our investments, by major class according to the fair value hierarchy, as of September 30, 2024 (dollars in thousands):

Fair Value Hierarchy as of September 30, 2024

Senior Secured First Lien Term Loans

Company follows ASC 820 for measuring the fair value of portfolio investments.

Fair value is the price that would be received in the

sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

available, fair value is based on observable market prices or parameters, or derived from such prices or parameters.

Where observable

prices or inputs are not available, valuation models are applied.

These valuation models involve some level of management estimation

and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity.

The Company’s fair value analysis includes an analysis of the value of any unfunded loan commitments.

Financial investments recorded

at fair value in the consolidated financial statements are categorized for disclosure purposes based upon the level of judgment associated

with the inputs used to measure their value.

The valuation hierarchical levels are based upon the transparency of the inputs to the valuation

of the investment as of the measurement date.

Investments which are valued using NAV as a practical expedient are excluded from this

hierarchy, and certain prior period amounts have been reclassified to conform to the current period presentation.

The three levels are

defined below:

Level 1 - Valuations based

on quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 - Valuations based

on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 - Valuations based

on inputs that are unobservable and significant to the overall fair value measurement.

Fair Value Measurements (continued)

addition to using the above inputs in investment valuations, the Company continues to employ a valuation policy approved by the board

of directors that is consistent with ASC 820 (see Note 2).

Consistent with our valuation policy, we evaluate the source of inputs, including

any markets in which our investments are trading, in determining fair value.

following table presents the fair value measurements of our investments, by major class according to the fair value hierarchy, as of

September 30, 2025 (dollars in thousands):

Value Hierarchy as of September 30, 2025

Senior Secured First Lien Term

Senior Secured Notes

Equity/Warrants

Investments measured at net asset value (1)

Total Investments, at fair value

measured at net asset value (1)

Total Investments, at

(1) Certain investments that are measured at fair value using NAV have not been categorized in the fair value hierarchy.

The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amount presented in the Consolidated Statements of Assets and Liabilities.

Fair Value Measurements (continued)

The following table presents the fair value measurements

of our investments, by major class according to the fair value hierarchy, as of September 30, 2023 (dollars in thousands):

Fair Value Hierarchy as of September 30, 2023

Senior Secured First Lien Term Loans

following table presents the fair value measurements of our investments, by major class according to the fair value hierarchy, as of

September 30, 2024 (dollars in thousands):

Value Hierarchy as of September 30, 2024

Senior Secured First Lien Term

Senior Secured Notes

Equity/Warrants

Investments measured at net asset value(1)

Total Investments, at fair value

Certain investments that are measured at fair value using NAV have not been categorized in the fair value hierarchy.

The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amount presented in the Consolidated Statements of Assets and Liabilities.

The following table provides a reconciliation

of the beginning and ending balances for investments that use Level 3 inputs for the year ended September 30, 2024 (dollars in thousands):

Senior Secured

Secured Notes

measured at net asset value (1)

Total Investments, at

investments that are measured at fair value using NAV have not been categorized in the fair

value hierarchy.

The fair value amounts presented in the table are intended to permit reconciliation

of the fair value hierarchy to the amount presented in the Consolidated Statements of Assets

and Liabilities.

following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the year ended

September 30, 2025 (dollars in thousands):

Balance as of September 30, 2024

5 unchanged sentences

Balance as of September 30, 2025

The following table provides a reconciliation

of the beginning and ending balances for investments that use Level 3 inputs for the year ended September 30, 2023 (dollars in thousands):

Senior Secured

Secured Notes

Fair Value Measurements (continued)

following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the year ended

September 30, 2024 (dollars in thousands):

Balance as of September 30, 2023

5 unchanged sentences

Balance as of September 30, 2024

Net change in unrealized gain (loss) for the years

ended September 30, 2024 and 2023 included in earnings related to Level 3 investments still held as of September 30, 2024 and 2023 was

approximately $ 2.1 million and $ 26.5 million, respectively.

Purchases and other adjustments to cost include

purchases of new investments at cost, effects of refinancing/restructuring, accretion/amortization of income from discount/premium on

debt securities, and PIK.

Sales represent net proceeds received from investments

sold, including any repayments or maturities.

Fair Value Measurements (continued)

A review of the fair value hierarchy classifications

is conducted on a quarterly basis.

Changes in the observability of valuation inputs may result in a reclassification for certain financial

assets or liabilities.

Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in/out of the Level 3

category as of the beginning of the quarter in which the reclassifications occur.

During the year ended September 30, 2024, $ 23.1 million

of investments were transferred out of Level 3 and no investments were transferred into Level 3.

During the year ended September 30, 2023,

no investments were transferred in or out of Level 3.

The following table presents the quantitative

information about Level 3 fair value measurements of our investments, as of September 30, 2024 (dollars in thousands):

Fair Value Valuation Methodology Unobservable Input Range

change in unrealized gain (loss) for the years ended September 30, 2024 and 2023 included in earnings related to Level 3 investments

still held as of September 30, 2025 and 2024 was approximately $( 5.7 ) million and $ 2.1 million, respectively.

and other adjustments to cost include purchases of new investments at cost, effects of refinancing/restructuring, accretion/amortization

of income from discount/premium on debt securities, and PIK.

represent net proceeds received from investments sold, including any repayments or maturities.

review of the fair value hierarchy classifications is conducted on a quarterly basis.

Changes in the observability of valuation inputs

may result in a reclassification for certain financial assets or liabilities.

Reclassifications impacting Level 3 of the fair value hierarchy

are reported as transfers in/out of the Level 3 category as of the beginning of the quarter in which the reclassifications occur.

the year ended September 30, 2025, $ 7.9 million of investments were transferred out of Level 3 and no investments were transferred into

During the year ended September 30, 2024, $ 23.1 million of investments were transferred out of Level 3 and no investments were

transferred into Level 3.

following table presents the quantitative information about Level 3 fair value measurements of our investments, as of September 30, 2025

(dollars in thousands):

Fair Value Valuation

Methodology Unobservable

(Weighted Average) Impact to

3 unchanged sentences

Senior Secured First Lien Term Loans 13,428 Market Approach EBITDA Multiple 1.8x - 2.8x (2.3x) Increase

Senior Secured First Lien Term Loans 1,002 Market Approach Market Spread 4.5% - 5.0% (4.75%) Decrease

Senior Secured First Lien Term Loans 350 Cost Approach Collateral Value N/A N/A

Senior Secured Notes 7,422 Recent Purchase Purchase Price N/A N/A

Equity/Warrants 36,683 Cost Approach Collateral Value N/A N/A

Senior Secured First Lien Term Loans 997 Market Approach Market Spread 4.8% - 5.5% (5.1%) Increase

Senior Secured First Lien Term Loans 71 Recent Purchase Purchase Price N/A N/A

Senior Secured Notes 6,997 Cost Approach Collateral Value N/A N/A

Equity/Warrants 78,255 Market Approach EBITDA Multiple 1.3x - 13.0x (11.0x) Increase

Equity/Warrants 101 Recent Purchase Purchase Price N/A N/A

Equity/Warrants 83 Income Approach DLOM (Discount for lack of Marketability) 27.0%-31.0% (29.0%) Decrease

Equity/Warrants 37,181 Cost Approach Replacement Cost N/A N/A

Equity/Warrants 3,948 Market Approach Market Quote N/A N/A

Equity/Warrants 6,000 Market Approach Revenue Multiple 2.5x-3.0x (2.8x) Increase

Equity/Warrants 2,725 Income Approach Market Yield 28.3%-28.8% (28.5%) Decrease

Equity/Warrants 100 Cost Approach Collateral Value N/A N/A

Total $ 224,187

The following table presents the quantitative

information about Level 3 fair value measurements of our investments, as of September 30, 2023 (dollars in thousands):

Fair Value Measurements (continued)

following table presents the quantitative information about Level 3 fair value measurements of our investments, as of September 30, 2024

(dollars in thousands):

Fair Value Valuation Methodology Unobservable Input Range

3 unchanged sentences

Senior Secured First Lien Term Loans $ 65,236 Income Approach Market Yield 3.5% - 42.5% (15.3%) Decrease

Senior Secured First Lien Term Loans 751 Market Approach Revenue Multiple 0.3x - 0.3x (0.3x) Increase

Senior Secured First Lien Term Loans 2,399 Market Approach EBITDA Multiple 1.8x - 2.3x (2.0x) Increase

Senior Secured First Lien Term Loans 866 Market Approach LTM EBITDA Multiple 5.8x - 6.8x (6.3x) Increase

Senior Secured First Lien Term Loans 1,002 Market Approach Market Spread 4.5% - 5.0% (4.75%) Decrease

Senior Secured First Lien Term Loans 350 Cost Approach Collateral Value N/A N/A

Senior Secured Notes 7,422 Recent Purchase Purchase Price N/A N/A

Equity/Warrants 36,683 Cost Approach Collateral Value N/A N/A

Equity/Warrants 11,734 Market Approach LTM Multiple 5.8x - 6.8x (6.3x) Increase

Equity/Warrants 27,014 Market Approach EBITDA Multiple 4.3x - 10.3x (8.4x) Increase

Equity/Warrants 10,000 Recent Purchase Purchase Price N/A - N/A (N/A) N/A

Equity/Warrants 206 Income Approach DLOM (Discount for lack of Marketability) 3.0x - 3.2x (3.1x) Decrease

Equity/Warrants 101 Recent Purchase Purchase Price N/A N/A

Equity/Warrants 83 Income Approach DLOM (Discount for lack of Marketability) 27.0% - 31.0% (29.0%) Decrease

Total $ 140,290

The significant unobservable inputs used in the

fair value measurement of the Company’s debt and derivative investments are market yields.

Increases in market yields would result

in lower fair value measurements.

The significant unobservable inputs used in the

fair value measurement of the Company’s equity/warrants investments are comparable company multiples of revenue or EBITDA for the

latest twelve months (“LTM”), next twelve months (“NTM”) or a reasonable period a market participant would consider.

significant unobservable inputs used in the fair value measurement of the Company’s debt and derivative investments are market

Increases in market yields would result in lower fair value measurements.

significant unobservable inputs used in the fair value measurement of the Company’s equity/warrants investments are comparable

company multiples of revenue or EBITDA for the latest twelve months (“LTM”), next twelve months (“NTM”) or a

reasonable period a market participant would consider.

Increases in EBITDA multiples in isolation would result in higher fair value measurement.

As a BDC, we are generally only allowed to employ

leverage to the extent that our asset coverage, as defined in the 1940 Act, equals at least 200 % after giving effect to such leverage.

The amount of leverage that we employ at any time depends on our assessment of the market and other factors at the time of any proposed

However, in March 2018, the Small Business Credit

Availability Act modified the 1940 Act by allowing a BDC to increase the maximum amount of leverage it may incur from 200 % to 150 %

of asset coverage, if certain requirements under the 1940 Act are met.

Under the 1940 Act, we are allowed to increase our leverage capacity

if stockholders representing at least a majority of the votes cast, when a quorum is present, approve a proposal to do so.

If we receive

stockholder approval, we would be allowed to increase our leverage capacity on the first day after such approval.

Alternatively, the 1940

Act allows the majority of our independent directors to approve an increase in our leverage capacity, and such approval would become effective

after the one-year anniversary of such approval.

In either case, we would be required to make certain disclosures on our website and in

SEC filings regarding, among other things, the receipt of approval to increase our leverage, our leverage capacity and usage, and risks

related to leverage.

No approval was requested or obtained and the Company is still subject to the 200 % requirement.

As of September 30, 2024, the Company’s

asset coverage was 216.8 % after giving effect to leverage and therefore the Company’s asset coverage was greater than 200 %, the

minimum asset coverage requirement applicable presently to the Company under the 1940 Act.

As of September 30, 2023, the Company’s

asset coverage was 270.7 % after giving effect to leverage and therefore the Company’s asset coverage was greater than 200 %, the

minimum asset coverage requirement applicable presently to the Company under the 1940 Act.

The Company’s outstanding debt excluding

debt issuance costs as of September 30, 2024 and 2023 were as follows (dollars in thousands):

September 30, 2024

September 30, 2023

a BDC, we are generally only allowed to employ leverage to the extent that our asset coverage, as defined in the 1940 Act, equals at

least 200 % after giving effect to such leverage.

The amount of leverage that we employ at any time depends on our assessment of

the market and other factors at the time of any proposed borrowing.

in March 2018, the Small Business Credit Availability Act modified the 1940 Act by allowing a BDC to increase the maximum amount of leverage

it may incur from 200 % to 150 % of asset coverage, if certain requirements under the 1940 Act are met.

Under the 1940 Act, we

are allowed to increase our leverage capacity if stockholders representing at least a majority of the votes cast, when a quorum is present,

approve a proposal to do so.

If we receive stockholder approval, we would be allowed to increase our leverage capacity on the first day

after such approval.

Alternatively, the 1940 Act allows the majority of our independent directors to approve an increase in our leverage

capacity, and such approval would become effective after the one-year anniversary of such approval.

In either case, we would be required

to make certain disclosures on our website and in SEC filings regarding, among other things, the receipt of approval to increase our

leverage, our leverage capacity and usage, and risks related to leverage.

No approval was requested or obtained and the Company

is still subject to the 200 % requirement.

of September 30, 2025, the Company’s asset coverage was 207.8 % after giving effect to leverage and therefore the Company’s

asset coverage was greater than 200 %, the minimum asset coverage requirement applicable presently to the Company under the 1940 Act.

of September 30, 2024, the Company’s asset coverage was 216.8 % after giving effect to leverage and therefore the Company’s

asset coverage was greater than 200 %, the minimum asset coverage requirement applicable presently to the Company under the 1940 Act.

Company’s outstanding debt excluding debt issuance costs as of September 30, 2025 and 2024 were as follows (dollars in thousands):

Available (1)

Principal Amount Outstanding

Carrying Value

Available (1)

Principal Amount Outstanding

Carrying Value

Promissory Note

Revolving Credit Facility

(1) For the 2028 Notes and 2028 Promissory Note, this represents

the total principal amount and for the Revolving Credit Facility, this represents the undrawn principal amount.

Borrowings (continued)

Credit Facility

On December 15, 2022, the Company entered into

a 3 year $ 50.0 million revolving credit facility (the “Credit Facility”) with Woodforest National Bank (“Woodforest’).

(1) For the 2028 Notes and 2028 Promissory Note, this represents the total principal amount and for the Revolving Credit Facility, this represents the undrawn principal amount.

Borrowings (continued)

December 15, 2022, the Company entered into a 3 year $ 50.0 million revolving credit facility (the “Credit Facility”) with

Woodforest National Bank (“Woodforest”).

Woodforest is the administrative agent, sole bookrunner and sole lead arranger.

The Credit Facility has a maturity date of December 15, 2025 .

On January 17, 2023, the Company borrowed $ 23.2 million

under the Credit Facility and used these proceeds to redeem $ 22.6 million in aggregate principal amount of the issued and outstanding

2023 Notes, comprising all issued and outstanding 2023 Notes.

The 2023 Notes were redeemed at 100 % of their principal amount, plus

accrued and unpaid interest thereon from September 30, 2022 through, but excluding January 17, 2023 (the “Redemption Date”).

On February 21, 2024 (the “First Amendment

Effective Date”), in order to increase the size of the Credit Facility, the parties to the Credit Facility amended the terms of

the Credit Facility, effective as of the First Amendment Effective Date (the “First Amendment”).

The First Amendment increased

the principal amount of loan available under the Credit Facility by $ 12.5 million to $ 62.5 million.

All other material terms

of the Credit Facility remain unchanged.

On August 5, 2024 (the “Second Amendment

Effective Date”), in order to increase the size of the Credit Facility, the parties to the Credit Facility amended the Credit Facility,

effective as of the Second Amendment Effective Date (the “Second Amendment”).

The Second Amendment increased the principal

amount of loan available under the Credit Facility by $ 25 million to $ 87.5 million.

All other material terms of the Credit Facility remain

Under the Credit Facility, the Company is required

to comply with various covenants, reporting requirements and other customary requirements for similar revolving credit facilities, including,

without limitation, covenants related to:

(a) limitations on the incurrence of additional indebtedness and liens, (b) limitations on certain

investments, (c) limitations on certain restricted payments, (d) maintaining a certain minimum stockholders’ equity, (e) maintaining

a ratio of total assets to total indebtedness of the Company and its consolidated subsidiaries (subject to certain exceptions) of not

less than 2.0:1.0, (f) limitations on pledging certain unencumbered assets, and (g) limitations on the creation or existence of agreements

that prohibit liens on certain properties of the Company and certain of its subsidiaries.

These covenants are subject to important limitations

and exceptions that are described in the documents governing the Credit Facility.

Amounts available to borrow under the Credit Facility

(and the incurrence of certain other permitted debt) are also subject to compliance with a borrowing base that applies different advance

rates to different types of assets (based on their value as determined pursuant to the Credit Facility) that are pledged as collateral.

As of September 30, 2024, the Company was in compliance in all respects with the terms of the Credit Facility.

As of September 30, 2024 and September 30, 2023,

there was $ 78.1 million and $ 28.4 million outstanding, respectively, under the Credit Facility.

Outstanding loans under the Credit Facility bear

a monthly interest rate at Term SOFR + 2.90 %.

The Company is also subject to a commitment fee of 0.25 %, which shall accrue on the actual

daily amount of the undrawn portion of the revolving credit.

Unsecured Notes

On March 18, 2013, the Company issued $ 60.0 million

in aggregate principal amount of 6.125 % unsecured notes that matured on March 30, 2023 (the “2023 Notes”).

On March 26, 2013, the Company closed an additional $ 3.5 million in aggregate principal amount of the 2023 Notes, pursuant to the

partial exercise of the underwriters’ option to purchase additional notes.

As of March 30, 2016, the 2023 Notes may be redeemed

in whole or in part at any time or from time to time at the Company’s option.

The 2023 Notes bore interest at a rate of 6.125 %

per year, payable quarterly on March 30, June 30, September 30 and December 30 of each year, beginning June 30, 2013.

January 17, 2023, the Company borrowed $ 23.2 million under the Credit Facility and used these proceeds to redeem $ 22.6 million in aggregate

principal amount of the issued and outstanding 2023 Notes, comprising all issued and outstanding 2023 Notes.

The 2023 Notes were redeemed

at 100 % of their principal amount, plus accrued and unpaid interest thereon from September 30, 2022 through, but excluding January 17,

2023 (the “Redemption Date”).

February 21, 2024 (the “First Amendment Effective Date”), in order to increase the size of the Credit Facility, the parties

to the Credit Facility amended the terms of the Credit Facility, effective as of the First Amendment Effective Date (the “First

The First Amendment increased the principal amount of loan available under the Credit Facility by $ 12.5 million to

$ 62.5 million.

All other material terms of the Credit Facility remain unchanged.

August 5, 2024 (the “Second Amendment Effective Date”), in order to increase the size of the Credit Facility, the parties

to the Credit Facility amended the Credit Facility, effective as of the Second Amendment Effective Date (the “Second Amendment”).

The Second Amendment increased the principal amount of loan available under the Credit Facility by $ 25 million to $ 87.5 million.

other material terms of the Credit Facility remain unchanged.

April 17, 2025 (the “Third Amendment Effective Date”), in order to extend the term and increase the size of the Credit Facility,

the parties to the Credit Facility amended the terms of the Credit Facility, effective as of the Third Amendment Effective Date (the

“Third Amendment”).

The Third Amendment increased the principal amount of the loan available under the Credit Facility by

$ 12.5 million to $ 100.0 million (with potential access to up to an additional $ 50.0 million pursuant to an uncommitted accordion provision)

and appointed BankUnited, N.A.

to assume all agency and syndication responsibilities from the prior agent and lenders.

Outstanding loans

under the terms of the Amendment bear a monthly interest rate ranging from ABR + 1.35 % to ABR + 1.75 % for any alternative base rate loans

and from Term SOFR + 2.35 % to Term SOFR + 2.75 % for any term benchmark loans based on the total debt to tangible net worth ratio.

Amendment also extended the term of the credit facility to April 17, 2030, five years from the Third Amendment Effective Date.

material terms remain substantially unchanged.

the Credit Facility, the Company is required to comply with various covenants, reporting requirements and other customary requirements

for similar revolving credit facilities, including, without limitation, covenants related to:

(a) limitations on the incurrence of additional

indebtedness and liens, (b) limitations on certain investments, (c) limitations on certain restricted payments, (d) maintaining a certain

minimum stockholders’ equity, (e) maintaining a ratio of total assets to total indebtedness of the Company and its consolidated

subsidiaries (subject to certain exceptions) of not less than 2.0:1.0, (f) limitations on pledging certain unencumbered assets, and (g)

limitations on the creation or existence of agreements that prohibit liens on certain properties of the Company and certain of its subsidiaries.

These covenants are subject to important limitations and exceptions that are described in the documents governing the Credit Facility.

Amounts available to borrow under the Credit Facility (and the incurrence of certain other permitted debt) are also subject to compliance

with a borrowing base that applies different advance rates to different types of assets (based on their value as determined pursuant

to the Credit Facility) that are pledged as collateral.

As of September 30, 2025, the Company was in compliance in all respects with

the terms of the Credit Facility.

of September 30, 2025 and September 30, 2024, there was $ 90.0 million and $ 78.1 million outstanding, respectively, under the Credit Facility.

Borrowings (continued)

On December 12, 2016, the Company entered into

an “At-The-Market” (“ATM”) debt distribution agreement with FBR Capital Markets & Co., through which the Company

could offer for sale, from time to time, up to $ 40.0 million in aggregate principal amount of the 2023 Notes.

The Company sold $ 1,573,872 of

the 2023 Notes at an average price of $ 25.03 per note, and raised $ 38.6 million in net proceeds, through the ATM debt distribution

On March 10, 2018, the Company redeemed $ 13.0 million

in aggregate principal amount of the 2023 Notes.

On December 31, 2018, the Company redeemed $ 12.0 million in aggregate principal

loans under the Credit Facility bear a monthly interest rate at Term SOFR + 2.50 %.

The Company is also subject to a commitment fee of

0.25 %, which shall accrue on the actual daily amount of the undrawn portion of the revolving credit.

March 18, 2013, the Company issued $ 60.0 million in aggregate principal amount of 6.125 % unsecured notes that matured on March

30, 2023 (the “2023 Notes”).

On March 26, 2013, the Company closed an additional $ 3.5 million in aggregate principal

amount of the 2023 Notes, pursuant to the partial exercise of the underwriters’ option to purchase additional notes.

30, 2016, the 2023 Notes may be redeemed in whole or in part at any time or from time to time at the Company’s option.

Notes bore interest at a rate of 6.125 % per year, payable quarterly on March 30, June 30, September 30 and December 30 of each year,

beginning June 30, 2013.

December 12, 2016, the Company entered into an “At-The-Market” (“ATM”) debt distribution agreement with FBR Capital

Markets & Co., through which the Company could offer for sale, from time to time, up to $ 40.0 million in aggregate principal

amount of the 2023 Notes.

The redemption was accounted for as a debt extinguishment in accordance with ASC 470-50, Modifications and Extinguishments,

which resulted in a realized loss of $ 0.3 million and was recorded on the Consolidated Statements of Operations as a loss on extinguishment

On December 21, 2020, the Company announced that

it completed the application process for and was authorized to transfer the listing of the 2023 Notes to the NASDAQ Global Market.

listing and trading of the 2023 Notes on the NYSE ceased at the close of trading on December 31, 2020.

Effective January 4, 2021, the

2023 Notes began trading on the NASDAQ Global Market under the trading symbol “PFXNL.”

On November 15, 2021, the Company caused notices

to be issued to the holders of the 2023 Notes regarding the Company’s exercise of its option to redeem $ 55,325,000 in aggregate

principal amount of the issued and outstanding 2023 Notes on December 16, 2021.

On December 16, 2021, the Company redeemed $ 55,325,000 in

aggregate principal amount of the issued and outstanding 2023 Notes.

The redemption was accounted for as a debt extinguishment in accordance

with ASC 470-50, Modifications and Extinguishments, which resulted in a realized loss of $ 0.3 million and was recorded on the Consolidated

Statements of Operations as a loss on extinguishment of debt.

On December 15, 2022, the Company caused notices

to be issued to the holders of its 2023 Notes regarding the Company’s exercise of its option to redeem $ 22,521,800 in aggregate

principal amount of issued and outstanding 2023 Notes, comprising all issued and outstanding 2023 Notes, at a price equal to 100 %

of the principal amount of the 2023 Notes, plus accrued and unpaid interest thereon from September 30, 2022, through, but excluding, January

17, 2023 in accordance with the terms of the indenture governing the 2023 Notes.

The redemption was completed on January 17, 2023.

Company funded the redemption of the 2023 Notes with loans obtained under the Credit Facility.

On November 9, 2021, the Company entered into

an underwriting agreement, by and between the Company and Oppenheimer & Co.

Inc., as representative of the several underwriters, in

connection with the issuance and sale (the “Offering”) of $ 57,500,000 (including the underwriters’ option to purchase

up to $ 7,500,000 aggregate principal amount) in aggregate principal amount of its 5.25 % Notes that mature on November 1,

2028 (the “2028 Notes” or the “Notes”).

The Offering occurred on November 15, 2021, pursuant to the Company’s

effective shelf registration statement on Form N-2 previously filed with the SEC.

Effective November 16, 2021, the 2028 Notes began trading

on the NASDAQ Global Market under the trading symbol “PFXNZ.”

On November 15, 2021, the Company and U.S.

National Association, as trustee, entered into a Fourth Supplemental Indenture to its base Indenture, dated February 7, 2012, between

the Company and the Trustee.

The Fourth Supplemental Indenture relates to the Offering of the 2028 Notes.

The Company sold 1,573,872 of the 2023 Notes at an average price of $ 25.03 per note, and raised

$ 38.6 million in net proceeds, through the ATM debt distribution agreement.

March 10, 2018, the Company redeemed $ 13.0 million in aggregate principal amount of the 2023 Notes.

On December 31, 2018, the Company

redeemed $ 12.0 million in aggregate principal amount of the 2023 Notes.

The redemption was accounted for as a debt extinguishment

in accordance with ASC 470-50, Modifications and Extinguishments, which resulted in a realized loss of $ 0.3 million and was recorded

on the Consolidated Statements of Operations as a loss on extinguishment of debt.

December 21, 2020, the Company announced that it completed the application process for and was authorized to transfer the listing of

the 2023 Notes to the NASDAQ Global Market.

The listing and trading of the 2023 Notes on the NYSE ceased at the close of trading on December

Effective January 4, 2021, the 2023 Notes began trading on the NASDAQ Global Market under the trading symbol “PFXNL.”

November 15, 2021, the Company caused notices to be issued to the holders of the 2023 Notes regarding the Company’s exercise of

its option to redeem $ 55,325,000 in aggregate principal amount of the issued and outstanding 2023 Notes on December 16, 2021.

December 16, 2021, the Company redeemed $ 55,325,000 in aggregate principal amount of the issued and outstanding 2023 Notes.

redemption was accounted for as a debt extinguishment in accordance with ASC 470-50, Modifications and Extinguishments, which resulted

in a realized loss of $ 0.3 million and was recorded on the Consolidated Statements of Operations as a loss on extinguishment of

December 15, 2022, the Company caused notices to be issued to the holders of its 2023 Notes regarding the Company’s exercise of

its option to redeem $ 22,521,800 in aggregate principal amount of issued and outstanding 2023 Notes, comprising all issued and outstanding

2023 Notes, at a price equal to 100 % of the principal amount of the 2023 Notes, plus accrued and unpaid interest thereon from September

30, 2022, through, but excluding, January 17, 2023 in accordance with the terms of the indenture governing the 2023 Notes.

The redemption

was completed on January 17, 2023.

The Company funded the redemption of the 2023 Notes with loans obtained under the Credit Facility.

November 9, 2021, the Company entered into an underwriting agreement, by and between the Company and Oppenheimer & Co.

Inc., as representative

of the several underwriters, in connection with the issuance and sale (the “Offering”) of $ 57,500,000 (including the

underwriters’ option to purchase up to $ 7,500,000 aggregate principal amount) in aggregate principal amount of its 5.25 %

Notes that mature on November 1, 2028 (the “2028 Notes” or the “Notes”).

The Offering occurred on November

15, 2021, pursuant to the Company’s effective shelf registration statement on Form N-2 previously filed with the SEC.

November 16, 2021, the 2028 Notes began trading on the NASDAQ Global Market under the trading symbol “PFXNZ.”

Borrowings (continued)

November 15, 2021, the Company and U.S.

Bank National Association, as trustee, entered into a Fourth Supplemental Indenture to its base

Indenture, dated February 7, 2012, between the Company and the Trustee.

The Fourth Supplemental Indenture relates to the Offering of

the 2028 Notes.

Promissory Note

On May 2, 2024, the Company issued a 5.25 %

note due November 1, 2028 in the principal amount of $ 1,661,498 to National Security Insurance Company (the “2028 Promissory

May 2, 2024, the Company issued a 5.25 % note due November 1, 2028 in the principal amount of $ 1,661,498 to National Security

Insurance Company (the “2028 Promissory Note”).

The financial terms of the note are substantially the same as the 2028 Notes.

Borrowings (continued)

Fair Value of Debt Obligations

The fair values of our debt obligations are

determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in

an orderly transaction between market participants at the measurement date under current market conditions.

The fair value of the

2028 Notes, which are publicly traded, is based upon closing market quotes as of the measurement date.

As of September 30, 2024 and

September 30, 2023, the 2028 Notes are deemed to be Level 1 in the fair value hierarchy, as defined in Note 4.

Value of Debt Obligations

fair values of our debt obligations are determined in accordance with ASC 820, which defines fair value in terms of the price that would

be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions.

The fair value of the 2028 Notes, which are publicly traded, is based upon closing market quotes as of the measurement date.

As of September

30, 2025 the 2028 Notes are deemed to be Level 1 in the fair value hierarchy, as defined in Note 4.

As of September 30, 2025 and September

30, 2024, the 2028 Promissory Note is deemed to be Level 3 in the fair value hierarchy, as defined in Note 4.

of September 30, 2024 and September 30, 2023, the Credit Facility is deemed to be Level 3 in the fair value hierarchy, as defined in

Debt issuance costs related to the 2028 Notes

are reported on the Consolidated Statements of Assets and Liabilities as a direct deduction from the face amount of the 2028 Notes.

of September 30, 2024 and September 30, 2023, debt issuance costs related to the 2023 Notes and the 2028 Notes were as follows (dollars

in thousands):

For the year ended

September 30, 2024

September 30, 2023

2028 Promissory Note

Total debt issuance costs at beginning of period

Debt issuance costs during the period

Amortized debt issuance costs

Unamortized debt issuance costs

For the years ended September 30, 2024, 2023 and

2022, the components of interest expense, amortized debt issuance costs, amortized deferred financing costs, weighted average stated interest

rate and weighted average outstanding debt balance for the 2023 Notes, 2028 Notes and Credit Facility were as follows (dollars in thousands):

For the Years Ended September 30,

As of September 30, 2025

and September 30, 2024, the Credit Facility is deemed to be Level 3 in the fair value hierarchy, as defined in Note 4.

issuance costs related to the 2028 Notes are reported on the Consolidated Statements of Assets and Liabilities as a direct deduction

from the face amount of the 2028 Notes.

As of September 30, 2025 and September 30, 2024, debt issuance costs related to the 2023

Notes and the 2028 Notes were as follows (dollars in thousands):

debt issuance costs at beginning of period

issuance costs during the period

debt issuance costs

the years ended September 30, 2025, 2024 and 2023, the components of interest expense, amortized debt issuance costs, amortized deferred

financing costs, weighted average stated interest rate and weighted average outstanding debt balance for the 2023 Notes, 2028 Notes and

Credit Facility were as follows (dollars in thousands):

the Years Ended September 30,

2023 Notes Interest

7 unchanged sentences

Weighted average debt outstanding

Administration Agreement

In connection with the adoption by the board

of directors of an internalized management structure, on November 19, 2020, the Company entered into a Fund Accounting Servicing

Agreement and an Administration Servicing Agreement on customary terms with U.S.

Bancorp affiliate also served as

the Company’s custodian.

Administration

connection with the adoption by the board of directors of an internalized management structure, on November 19, 2020, the Company entered

into a Fund Accounting Servicing Agreement and an Administration Servicing Agreement on customary terms with U.S.

affiliate also served as the Company’s custodian.

The Company’s administrative and custodial relationship with U.S.

Bancorp terminated on August

SS&C has since served as administrator of the Company and has provided the Company with fund accounting and financial

reporting services pursuant to the services agreement with the Company.

Effective September 12, 2022, Computershare serves as

custodian for the Company pursuant to its Loan Administration and Custodial Agreement with the Company.

For each of the years ended

September 30, 2024, 2023 and 2022, we incurred $ 0.3 million in administrator expenses.

As of September 30, 2024 and 2023, $ 0.0 million

was included in “administrator expenses payable” in the accompanying Consolidated Statements

of Assets and Liabilities.

Agreements (continued)

Long-Term Cash Incentive Plan

On May 9, 2022, the board of directors of the

Company adopted the PhenixFIN 2022 Long-Term Cash Incentive Plan (the “CIP”) pursuant to the recommendation by the Compensation

Committee of the board of directors.

The CIP provides for performance-based cash awards to key employees of the Company, as approved by

the Compensation Committee, based on the achievement of pre-established financial goals for the approved performance period.

The performance

goals may be expressed as one or a combination of net asset value of the Company, net asset value per share of the Company’s common

stock, changes in the market price of shares of the Company’s common stock, individual performance metrics and/or such other goals

and objectives the Committee considers relevant in connection with accomplishing the purposes of the CIP.

In connection with the approval of the CIP, the

Compensation Committee in April 2022, approved awards for the three-year performance period commencing on October 1, 2021 and ending on

September 30, 2024 (the “2022 LTIP Plan”).

Each participant is eligible to receive an amount of cash equal to 0 %- 200 %

of the target award set forth in the table below (“Target Performance Award”), based on the achievement of net asset value

(“NAV”) and NAV per share goals (weighted at 30 % and 70 %, respectively) as of the end of the performance period

(the “Performance Goals”).

Performance is evaluated separately for each Performance Goal.

No payment is made with respect

to a Performance Goal if a threshold level of performance is not achieved.

Each Performance Goal is subject to (i) a threshold level of

performance at which a percentage of the Target Performance Award attributable to that Performance Goal may be paid and below which no

payment is made pursuant to an award, (ii) a target level of performance at which 100 % of the Target Performance Award attributable

to that Performance Goal may be paid and (iii) a maximum level of performance, at which 200 % of the Target Performance Award attributable

to that Performance Goal may be paid, in each case subject to such other terms and conditions of an award.

Between threshold, target and

maximum performance levels for each Performance Goal, the portion of that award attributed to the Performance Goal shall be interpolated

in a linear progression.

In December 2022, pursuant to the CIP, the Compensation

Committee approved awards for Mr.

terminated on August 9, 2022.

SS&C has since served as administrator of the Company and has provided the Company with fund accounting

and financial reporting services pursuant to the services agreement with the Company.

Effective September 12, 2022, Computershare serves

as custodian for the Company pursuant to its Loan Administration and Custodial Agreement with the Company.

For the years ended September

30, 2025, 2024 and 2023, we incurred $ 0.4 million, $ 0.3 million and $ 0.3 million in administrator expenses, respectively.

of September 30, 2025 and 2024, $ 0.0 million and $ 0.0 million, respectively, were included in “administrator expenses payable”

in the accompanying Consolidated Statements of Assets and Liabilities.

Cash Incentive Plan

May 9, 2022, the board of directors of the Company adopted the PhenixFIN 2022 Long-Term Cash Incentive Plan (the “CIP”) pursuant

to the recommendation by the Compensation Committee of the board of directors.

The CIP provides for performance-based cash awards to

key employees of the Company, as approved by the Compensation Committee, based on the achievement of pre-established financial goals

for the approved performance period.

The performance goals may be expressed as one or a combination of net asset value of the Company,

net asset value per share of the Company’s common stock, changes in the market price of shares of the Company’s common stock,

individual performance metrics and/or such other goals and objectives the Committee considers relevant in connection with accomplishing

the purposes of the CIP.

connection with the approval of the CIP, the Compensation Committee in April 2022, approved awards for the three-year performance period

commencing on October 1, 2021 and ending on September 30, 2024 (the “2022 LTIP Plan”).

Each participant is eligible to receive

an amount of cash equal to a percentage of the target award amount set forth above based on the factors described above.

The Compensation

Committee, in approving the awards, evaluated each Performance Goal separately.

2022, pursuant to the CIP, the Compensation Committee approved awards for Mr.

Lorber and Ms.

McMillan for the three-year performance period commencing on October 1, 2022 and ending

on September 30, 2025 (the “2023 LTIP Plan”).

Each participant is eligible to receive an amount of cash equal to a percentage

of the target award amount set forth above based on the factors described above.

The Compensation Committee, in approving the awards,

evaluated each Performance Goal separately.

In December 2023, pursuant to the CIP, the Compensation

Committee approved awards for Mr.

McMillan for the three-year performance

period commencing on October 1, 2022 and ending on September 30, 2025 (the “2023 LTIP Plan”).

Each participant is eligible

to receive an amount of cash equal to a percentage of the target award amount set forth above based on the factors described above.

Compensation Committee, in approving the awards, evaluated each Performance Goal separately.

December 2023, pursuant to the CIP, the Compensation Committee approved awards for Mr.

Lorber and Ms.

McMillan for the three-year performance period commencing on October 1, 2023 and ending

on September 30, 2026 (the “2024 LTIP Plan”).

Each participant is eligible to receive an amount of cash equal to a percentage

of their target award amount set forth above based on the factors described above.

The Compensation Committee, in approving the awards,

evaluated each Performance Goal separately.

The Target Performance Award for each executive

officer for the 2022 LTIP Plan, 2023 LTIP Plan, and the 2024 LTIP Plan is set forth in the table below:

Name and Title

Dollar Value of Target Award

David Lorber, Chairman of the Board and Chief Executive Officer

McMillan for the three-year performance

period commencing on October 1, 2023 and ending on September 30, 2026 (the “2024 LTIP Plan”).

Each participant is eligible

to receive an amount of cash equal to a percentage of their target award amount set forth above based on the factors described above.

The Compensation Committee, in approving the awards, evaluated each Performance Goal separately.

December 2024, pursuant to the CIP, the Compensation Committee approved awards for Mr.

Lorber and Ms.

McMillan for the three-year performance

period commencing on October 1, 2024 and ending on September 30, 2027 (the “2025 LTIP Plan”).

Each participant is eligible

to receive an amount of cash equal to a percentage of their target award amount set forth above based on the factors described above.

The threshold, target, and maximum performance levels are structured similar to those of the 2022 LTIP Plan.

The Compensation Committee,

in approving the awards, evaluated each Performance Goal separately.

Agreements (continued)

Target Performance Award for each executive officer for the 2023 LTIP Plan, the 2024 LTIP Plan, and the 2025 LTIP Plan is set forth in

the tables below:

David Lorber, Chairman of the Board

and Chief Executive Officer

Ellida McMillan, Chief Financial Officer

During the years ended September 30, 2024 and

September 30, 2023, the Company recorded an accrual of $ 2,798,437 and $ 317,000 , respectively, for these awards.

During the year ended

September 30, 2022 the Company did not record an accrual.

To date, no amounts have been paid under these awards.

David Lorber, Chairman of the Board

and Chief Executive Officer

Ellida McMillan, Chief Financial Officer

David Lorber, Chairman of the Board

and Chief Executive Officer

Ellida McMillan, Chief Financial Officer

the years ended September 30, 2025, September 30, 2024 and September 30, 2023 the Company recorded an expense of $ 1,425,922 , $ 2,798,437

and $ 317,000 , respectively, for these awards.

During the year ended September 30, 2025, the Company paid out $ 2,002,790 for the 2022

LTIP Plan based on achievement of the Performance Goals.

During the year ended September 30, 2024, the Company did not pay out anything

for these awards.

Related Party Transactions

During the year ended September 30, 2024, the Company entered into

a related party transaction with NVTN LLC whereby the $ 11.9 million of equity of Maritime Wireless Holdings LLC was transferred to NVTN

Due from/to Affiliates

Due from affiliates at September 30, 2024 and

September 30, 2023 consists of certain legal and general and administrative expenses paid by the Company on behalf of certain of its affiliates.

Due to affiliates at September 30, 2024 and September 30, 2023 consists of certain expenses payable by the Company to certain of its affiliates.

Unfunded commitments

As of September 30, 2024 and 2023, we had commitments

under loan and financing agreements to fund up to $ 1.6 million to two portfolio companies and $ 3.4 million to four portfolio companies,

respectively.

These commitments are primarily composed of senior secured delayed draw term loans and revolvers, and the determination

of their fair value is included in the Consolidated Schedules of Investments.

The commitments are generally subject to the borrowers meeting

certain criteria such as compliance with covenants and certain operational metrics.

The terms of the borrowings and financings subject

to commitment are comparable to the terms of other loan and equity securities in our portfolio.

A summary of the composition of the unfunded

commitments as of September 30, 2024 and 2023 is shown in the table below (dollars in thousands):

the year ended September 30, 2024, the Company entered into a related party transaction with NVTN LLC whereby the $ 11.9 million of equity

of Maritime Wireless Holdings LLC was transferred to NVTN LLC.

Company has entered into contracts with its affiliated portfolio companies, The National Security Group (and certain of its affiliates)

and ECC Capital Corporation, pursuant to which the Company (and/or certain of its subsidiaries) provide such affiliated portfolio companies

certain services, including managing a portion of their investment assets.

During the year ended September 30, 2025, the Company recognized

$ 0.7 million of income related to these contracts.

from/to Affiliates

from affiliates at September 30, 2025 and September 30, 2024 consists of certain legal and general and administrative expenses paid by

the Company on behalf of certain of its affiliates.

Due to affiliates at September 30, 2025 and September 30, 2024 consists of certain

expenses payable by the Company to certain of its affiliates.

of September 30, 2025 and 2024, we had commitments under loan and financing agreements to fund up to $ 5.5 million to six portfolio companies

and $ 1.6 million to two portfolio companies, respectively.

These commitments are primarily composed of senior secured delayed draw term

loans and revolvers, and the determination of their fair value is included in the Consolidated Schedules of Investments.

The commitments

are generally subject to the borrowers meeting certain criteria such as compliance with covenants and certain operational metrics.

terms of the borrowings and financings subject to commitment are comparable to the terms of other loan and equity securities in our portfolio.

The Company maintains adequate liquidity to fund its unfunded commitments.

A summary of the composition of the unfunded commitments as

of September 30, 2025 and 2024 is shown in the table below (dollars in thousands):

September 30,

Secure Acquisition Inc.

(dba Paragon Films) - Senior Secured First Lien Delayed Draw Term Loan

NVTN LLC - Senior Secured First Lien Delayed Draw Term Loan

Deer Management Systems LLC - Senior Secured First Lien Delayed Draw Term Loan

XYZ Roofco, LLC (dba SMC Roofing Solutions LLC) - First Out Delayed Draw Term Loan

XYZ Roofco, LLC (dba SMC Roofing Solutions LLC) - Last Out Delayed Draw Term Loan

Tamarix Capital Partners II, L.P.

Precision Investment Holdings LLC - Senior Secured First Lien Revolver

Precision Investment Holdings LLC - Senior Secured Delayed Draw Term Loan

Associates - Revolver

Group, LLC - Revolver

Acquisition, LLC (dba Soccer Shots Franchising) - Revolver

Capital Partners II, L.P.

- Fund Investment

Total unfunded commitments

Lease obligations

The Company evaluates its leases to determine

whether they should be classified as operating or financing leases.

PhenixFIN identified one operating lease for its office space.

lease commenced September 1, 2021 and expires November 30, 2026.

Upon entering into the lease on September 1, 2021,

PhenixFIN recorded a right-of-use asset and a lease liability as of that date.

Total operating lease cost incurred by PhenixFIN

for the years ended September 30, 2024, 2023 and 2022 was $ 141,330 , $ 141,330 and $ 129,552 , respectively.

As of September 30, 2024 and

2023, the asset related to the operating lease was $ 322,131 and $ 449,815 , respectively, and is included in the Other assets balance on

the Consolidated Balance Sheet.

As of September 30, 2024 and 2023, the lease liability was $ 294,063 and $ 432,698 , respectively, and is

included in the Other liabilities balance on the Consolidated Statements of Assets and Liabilities.

As of September 30, 2024 and 2023,

the remaining lease term was approximately two and three years , respectively, for each of the respective periods and the implied borrowing

rate was 5.25 % for each of the respective periods.

Commitments (continued)

The following table shows future minimum payments

under PhenixFIN’s operating lease as of September 30, 2024:

For the Years Ended September 30,

Difference between undiscounted and discounted cash flows

Fee income consists of amendment fees, prepayment

penalty and other miscellaneous fees which are non-recurring in nature, as well as administrative agent fees, which are recurring in nature.

The following table summarizes the Company’s fee income for the years ended September 30, 2024, 2023 and 2022 (dollars in thousands):

For the Years Ended September 30,

Global, LLC - Revolver

Roofco, LLC (dba SMC Roofing Solutions LLC) - First Out Delayed Draw Term Loan

Roofco, LLC (dba SMC Roofing Solutions LLC) - Last Out Delayed Draw Term Loan

unfunded commitments

Company evaluates its leases to determine whether they should be classified as operating or financing leases.

PhenixFIN identified one

operating lease for its office space.

The lease commenced September 5, 2021.

On December 18, 2024, the Company amended the terms of the

lease, extending the lease term until August 31, 2035, with a right to terminate on the 36th and 60th month anniversaries of September

5, 2025, as well as any time on or after the 84th month anniversary of September 5, 2025.

entering into the lease on September 5, 2021, PhenixFIN recorded a right-of-use asset and a lease liability as of that date.

of September 30, 2025 and 2024, the asset related to the operating lease was $ 2.5 million and $ 0.3 million, respectively, and is included

in the Other assets balance on the Consolidated Balance Sheet.

As of September 30, 2025 and 2024, the lease liability was $ 2.4 million

and $ 0.3 , million, respectively, and is included in the Other liabilities balance on the Consolidated Statements of Assets and Liabilities.

As of September 30, 2025 and September 30, 2024, the remaining lease term was approximately ten years and two years , respectively, and

the implied borrowing rate was 6.85 % and 5.25 % for September 30, 2025 and September 30, 2024, respectively.

following table shows future minimum payments under PhenixFIN’s operating lease as of September 30, 2025:

Years Ended September 30,

Difference between undiscounted

and discounted cash flows

( 1,014,219 )

income consists of amendment fees, prepayment penalty and other miscellaneous fees which are non-recurring in nature, as well as administrative

agent fees and management fees, which are recurring in nature.

The following table summarizes the Company’s fee income for the

years ended September 30, 2025, 2024 and 2023 (dollars in thousands):

the Years Ended September 30,

Prepayment fee

1 unchanged sentence

Amendment fee

Management fee

Directors Fees

For the calendar year 2022, the Company’s

independent directors each received an annual fee of $ 100,000 .

In addition, the lead independent director received an annual retainer

of $ 30,000 ;

the chair of the Audit Committee received an annual retainer of $ 25,000 , and each of its other members received an annual

retainer of $ 12,500 ;

and the chairs of the Nominating and Corporate Governance Committee and of the Compensation Committee each received

an annual retainer of $ 15,000 and each of the other members of these committees received annual retainers of $ 8,000 .

The Company’s

independent directors also received a fee of $ 3,000 for each board meeting and $ 2,500 for each committee meeting that they attended.

For the 2023 calendar period through April 30,

2023, the independent directors were subject to the foregoing fee structure.

Effective May 1, 2023, the structure was modified (simplified)

such that each of the Company’s independent directors receives an annual fee of $ 150,000 .

In addition, the lead independent director

receives an annual retainer of $ 30,000 ;

the chair of the Audit Committee receives an annual retainer of $ 25,000 , and each of its other

members receives an annual retainer of $ 12,500 ;

and the chairs of the Nominating and Corporate Governance Committee and of the Compensation

Committee each receives an annual retainer of $ 15,000 and each of the other members of these committees receives annual retainers

The Company’s independent directors no longer receive fees for each board and committee meeting that they attend.

No board service compensation is paid to directors

who are “interested persons” of the Company (as such term is defined in the 1940 Act).

For the years ended September 30, 2024,

2023 and 2022, the Company recognized $ 0.8 million, $ 0.7 million and $ 0.7 million, for directors’ fees expense, respectively.

May 1, 2023 to September 30, 2024, the Company’s independent directors received an annual fee of $ 150,000 .

In addition, the lead

independent director received an annual retainer of $ 30,000 ;

the chair of the Audit Committee received an annual retainer of $ 25,000 ,

and each of its other members received an annual retainer of $ 12,500 ;

and the chairs of the Nominating and Corporate Governance Committee

and of the Compensation Committee each received an annual retainer of $ 15,000 and each of the other members of these committees received

annual retainers of $ 8,000 .

The Company’s independent directors no longer receive fees for each board and committee meeting that

October 1, 2024, the structure was modified such that each of the Company’s independent directors receives an annual fee of $ 165,000 .

In addition, the lead independent director receives an annual retainer of $ 30,000 ;

the chair of the Audit Committee receives an annual

retainer of $ 19,000 and each of its other members receives an annual retainer of $ 12,500 ;

the chair of the Nominating and Corporate Governance

Committee receives an annual retainer of $ 12,000 and each of its other members receives an annual retainer of $ 11,000 ;

and the chair

of the Compensation Committee receives an annual retainer of $ 15,000 and each of its other members receives an annual retainer of $ 11,000 .

board service compensation is paid to directors who are “interested persons” of the Company (as such term is defined in the

For the years ended September 30, 2025, 2024 and 2023, the Company recognized $ 0.8 million, $ 0.8 million and $ 0.7 million

for directors’ fees expense, respectively.

Earnings Per Share

In accordance with the provisions of ASC Topic

260 - Earnings per Share, basic earnings per share is computed by dividing earnings available to common stockholders by the weighted average

number of shares outstanding during the period.

Other potentially dilutive common shares, and the related impact to earnings, are considered

when calculating earnings per share on a diluted basis.

The Company does not have any potentially dilutive common shares as of September

30, 2024, 2023 and 2022.

The following information sets forth the computation

of the weighted average basic and diluted net increase/(decrease) in net assets per share from operations for the years ended September

30, 2024, 2023 and 2022 (amounts in thousands, except shares and per share amounts):

For the Years Ended September 30,

accordance with the provisions of ASC Topic 260 - Earnings per Share, basic earnings per share is computed by dividing earnings available

to common stockholders by the weighted average number of shares outstanding during the period.

Other potentially dilutive common shares,

and the related impact to earnings, are considered when calculating earnings per share on a diluted basis.

The Company does not have

any potentially dilutive common shares as of September 30, 2025, 2024 and 2023.

following information sets forth the computation of the weighted average basic and diluted net increase/(decrease) in net assets per

share from operations for the years ended September 30, 2025, 2024 and 2023 (amounts in thousands, except shares and per share amounts):

the Year Ended September 30,

Basic and diluted:

Net increase (decrease) in net assets resulting from operations

Weighted average shares of common stock outstanding - basic and diluted

Earnings (loss) per share of common stock - basic and diluted

Net increase (decrease) in net

assets resulting from operations

Weighted average shares of common stock outstanding

- basic and diluted

Earnings (loss) per share of common stock -

basic and diluted

Financial Highlights

The following is a schedule of financial highlights for the years ended

September 30, 2024, 2023, 2022, 2021 and 2020:

For the Years Ended September 30,

The following

is a schedule of financial highlights for the years ended September 30, 2025, 2024, 2023, 2022 and 2021:

the Year Ended September 30,

Per share data

Net Asset Value per share at Beginning of Period

Net Asset Value

per share at Beginning of Period

Results of Operations:

Net Investment Income/(Loss) (1)

Net Realized Gain/(Loss) on Investments

Net Unrealized Gain/(Loss) on Investments

Net loss on extinguishment of debt

Deferred tax benefit (expense)

Net Increase (Decrease) in Net Assets Resulting from Operations

Investment Income/(Loss) (1)

Realized Gain/(Loss) on Investments

Unrealized Gain/(Loss) on Investments

loss on extinguishment of debt

tax benefit (expense)

(Decrease) in Net Assets Resulting from Operations

Capital Share Transactions

Distributions declared

Repurchase of common stock under stock repurchase program (2)

Net Increase (Decrease) Resulting from Capital Share Transactions

Net Asset Value per share at End of Period

Net Assets at End of Period

Shares Outstanding at End of Period

Per share market value at end of period

Total return based on market value (3)

Total return based on net asset value (4)

Portfolio turnover rate

Ratio of net investment/(loss) income to average net assets after waivers, discounts and reimbursements (5)

Ratio of total expenses to average net assets

Supplemental Data:

Percentage of non-recurring fee income (5)

Distributions

of common stock under stock repurchase program (2)

Increase (Decrease) Resulting from Capital Share Transactions

Asset Value per share at End of Period

at End of Period

$ 160,774,300

$ 160,307,773

$ 146,705,535

$ 120,845,408

$ 143,693,981

Shares Outstanding at End

Per share market value

at end of period

return based on market value (3)

return based on net asset value (4)

turnover rate

of net investment/(loss) income to average net assets after waivers, discounts and reimbursements (5)

of total expenses to average net assets

of non-recurring fee income (5)

debt outstanding (6)

$ 144,153,179

Average debt outstanding

Average debt outstanding per weighted average common share

Asset coverage ratio per unit (7)

Senior Securities Outstanding (8)

2021 Notes (9)

per weighted average common share

coverage ratio per unit (7)

Securities Outstanding (8)

Promissory Note

Credit Facility

(1) Net investment income/(loss) excluding

management and incentive fee waivers, discounts and reimbursements based on total weighted average common stock outstanding equals $ 2.32 ,

$ 3.11 , $ 1.48 , $ 6.92 and $( 3.35 ) per share for the years ended September 30, 2024, 2023, 2022, 2021, and 2020, respectively.

(1) Net investment income/(loss) excluding management and incentive fee waivers, discounts and reimbursements based on total weighted average common stock outstanding equals $ 2.55 , $ 2.32 , $ 3.11 , $ 1.48 and $ 6.92 per share for the years ended September 30, 2025, 2024, 2023, 2022, and 2021, respectively.

Financial Highlights (continued)

(2) The amount shown at this caption is the balancing amount derived from the other figures in the schedule.

The amount shown at this caption for a share outstanding throughout the period may not agree with the repurchase of common stock because of the timing of repurchase of the Company’s shares.

Financial Highlights (Continued)

(3) Total return is historical and assumes changes in share price, reinvestments of all dividends and distributions at prices obtained under the Company’s dividend reinvestment plan, and no sales charge for the period.

6 unchanged sentences

(8) Total amount of each class of senior securities outstanding at the end of the period excluding debt issuance costs.

(9) During the year ended September

30, 2021, the 2021 Notes were redeemed in full and ceased trading on November 20, 2020.

The average price for the year ended September

30, 2021 reflects the period from October 1, 2020 through November 20, 2020.

Any dividends and distributions to common stockholders

are recorded on the ex-dividend date.

Any amounts to be paid out as a dividend are determined by our board of directors.

We have adopted an “opt out” dividend

reinvestment plan for our common stockholders.

As a result, if we declare a cash dividend or other distribution, each stockholder that

has not “opted out” of our dividend reinvestment plan will have its dividends automatically reinvested in additional shares

of our common stock rather than receiving cash dividends.

Stockholders who receive distributions in the form of shares of common stock

will be subject to the same federal, state and local tax consequences as if they received cash distributions.

On May 9, 2024, the Board of Directors declared

a special dividend of $ 1.31 per share.

This dividend was paid on June 10, 2024 to stockholders of record as of May 27, 2024.

dividends declared during the year ended September 30, 2024 were derived from net investment income, determined on a tax basis.

the year ended September 30, 2022, a special dividend was declared in the amount of $ 265,798 on June 24, 2022 payable on July 13, 2022

to Stockholders of record on July 5, 2022.

The Company did not declare any regular distribution payments during the years ended September

30, 2024, 2023 and 2022.

dividends and distributions to common stockholders are recorded on the ex-dividend date.

Any amounts to be paid out as a dividend are

determined by our board of directors.

have adopted an “opt out” dividend reinvestment plan for our common stockholders.

As a result, if we declare a cash dividend

or other distribution, each stockholder that has not “opted out” of our dividend reinvestment plan will have its dividends

automatically reinvested in additional shares of our common stock rather than receiving cash dividends.

Stockholders who receive distributions

in the form of shares of common stock will be subject to the same federal, state and local tax consequences as if they received cash

distributions.

May 9, 2024, the Board of Directors declared a special dividend of $ 1.31 per share.

This dividend was paid on June 10, 2024 to stockholders

of record as of May 27, 2024.

The dividends declared during the year ended September 30, 2024 were derived from net investment income,

determined on a tax basis.

February 6, 2025, the Board of Directors declared a special dividend of $ 1.43 per share.

This dividend was paid on February 19,

2025 to stockholders of record as of February 17, 2025.

The dividends declared during the year ended September 30, 2025 were derived

from net investment income, determined on a tax basis.

The Company did not declare any regular distribution payments during the years

ended September 30, 2025, 2024 and 2023.

Share Transactions

On February 8, 2023, the Board of Directors approved

the expansion of the amount authorized for repurchase under the Company’s share repurchase program from $ 25 million to $ 35 million.

Since announcing this share repurchase program on January 11, 2021, the Company has repurchased an aggregate of 703,931 shares

of common stock through September 30, 2024 with a total cost of approximately $ 28.1 million, or 25.8 % of shares outstanding

as of the program’s inception.

The total remaining amount authorized under the expanded share repurchase program is approximately

$ 6.9 million.

The following table sets forth the number of

shares of common stock repurchased by the Company at an average price of $ 39.93 per share under its share repurchase program from February

10, 2021 through September 30, 2024:

Shares Repurchased

Repurchase Price

Aggregate Consideration for Repurchased Shares

February 8, 2023, the Board of Directors approved the expansion of the amount authorized for repurchase under the Company’s share

repurchase program from $ 25 million to $ 35 million.

Since announcing this share repurchase program on January 11, 2021, the

Company has repurchased an aggregate of 719,940 shares of common stock through September 30, 2025 with a total cost of approximately

$ 28.9 million, or 26.4 % of shares outstanding as of the program’s inception.

The total remaining amount authorized under

the expanded share repurchase program is approximately $ 6.1 million.

Share Transactions (continued)

following table sets forth the number of shares of common stock repurchased by the Company at an average price of $ 40.15 per share under

its share repurchase program from February 10, 2021 through September 30, 2025:

Price Per Share

Consideration for

Repurchased Shares

February 2021

37 unchanged sentences

$ 44.82 - $44.82

During the year ended September 30, 2024, 54,060

shares were transferred into treasury, including 125 shares that were repurchased during the year ended September 30, 2023 and transferred

into treasury during the year ended September 30, 2024.

$ 50.03 - $50.03

September 2025

$ 47.68 - $47.68

of September 30, 2025, there were 100 shares that were not yet transferred into treasury.

Segment Reporting

Company has determined that it has a single operating segment in accordance with Topic 280, Segment Reporting (“ASC 820”).

The Company’s Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer and the Chief Financial Officer.

While the Company derives income and capital appreciation by providing investments to companies across various industries, the Company

and the CODM evaluate and monitor performance of the business on a consolidated basis.

Further, each investment is evaluated and managed

using similar processes and shared operations support functions such as deal origination, underwriting, and loan servicing as well as

the administrative functions of human resources, legal, finance, and information technology.

CODM uses consolidated net investment income and net increase (decrease) in net assets resulting from operations when allocating resources

and assessing the Company’s performance.

Net investment income is comprised of consolidated total investment income (“segment

revenues”) and consolidated total net operating expenses (“significant segment expenses”).

The net increase (decrease)

in net assets resulting from operations is comprised of consolidated net investment income, consolidated net realized gains (losses)

from investments, and consolidated net change in unrealized gains (losses) from investments.

These performance metrics are considered

the key segment measure of profit or loss reviewed by the CODM.

As the Company’s operations comprise of a single reporting segment,

the segment assets are reflected on the accompanying Consolidated Statements of Assets and Liabilities as Total Assets, investments held

on the Consolidated Schedule of Investments, and the significant segment expenses are listed on the accompanying Consolidated Statements

of Operations.

Subsequent Events

Management has evaluated subsequent events through

the date of issuance of the consolidated financial statements included herein.

Other than the items disclosed herein, there have been

no subsequent events that occurred during such period that would require disclosure in this Form 10-K or would be required to be recognized

in the Consolidated Financial Statements as of and for the year ended September 30, 2024.

On October 1, 2024, the Company consummated the acquisition of approximately

80 % of the equity of The National Security Group, an Alabama based insurance holding company (“NSG”).

NSG is a nationwide

underwriter of life, accident, and health insurance.

In addition, NSG is a specialty underwriter of property and casualty insurance throughout

the southeast, other than Florida and Louisiana.

The Company has entered into a contract with NSG to manage a portion of its investment

Changes in and Disagreements with Accountants

on Accounting and Financial Disclosure

has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein.

Other than the

items disclosed herein, there have been no subsequent events that occurred during such period that would require disclosure in this Form

10-K or would be required to be recognized in the Consolidated Financial Statements as of and for the year ended September 30, 2025.

December 8, 2025, the Company redeemed in aggregate its principal amount of the issued and outstanding 2028 Promissory Note, comprising

all issued and outstanding 2028 Promissory Notes, at a price equal to the closing market price of the 2028 Notes on December 5,

2025, plus accrued and unpaid interest thereon from November 1, 2025, through, but excluding, December 8, 2025 in accordance with the

terms of the indenture governing the 2028 Promissory Note.

The redemption was completed on December 8, 2025.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk