UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 11, 2021
PHENIXFIN CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 814-00818 | 27-4576073 | ||
|
(State or other jurisdiction of incorporation or organization) |
(Commission file number) |
(I.R.S. employer identification no.) |
| 445 Park Avenue, 9th Floor, New York, NY | 10022 | |
| (Address of principal executive offices) | (Zip code) |
Registrant’s telephone number, including area code: (212) 859-0390
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of exchange on which registered | ||
| Common Stock, par value $0.001 per share | PFX | The NASDAQ Global Market | ||
| 6.125% Notes due 2023 | PFXNL | The NASDAQ Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On August 11, 2021, PhenixFIN Corporation issued a press release announcing its financial results for the quarter ended June 30, 2021. The press release is included as Exhibit 99.1 to this Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |
| 99.1 | Press Release dated August 11, 2021 |
1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, PhenixFIN Corporation has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DATE: August 11, 2021 | PHENIXFIN CORPORATION |
| /s/ David Lorber | |
| Name: David Lorber | |
| Title: Chief Executive Officer |
2
Exhibit 99.1
PhenixFIN Corporation Announces Third Quarter 2021 Financial Results
New York, NY, August 11, 2021 -- PhenixFIN Corporation (NASDAQ: PFX) (the “Company”), a publicly traded business development company, today announced its financial results for the fiscal third quarter of 2021.
Third Quarter 2021 Highlights
| ● | Total investment income of $8.7 million; net investment income of $5.4 million | |
| ● | $52.9 million in cash on June 30, 2021 | |
| ● | Net asset value of $156.7 million, or $58.49 per share as of June 30, 2021 vs. $55.30 per share as of September 30, 2020 |
David Lorber, Chief Executive Officer of the Company, stated: “We are pleased with our performance during the first two quarters of being an internally-managed company. We are encouraged by the improvement in NAV and potential opportunities to deploy capital.”
On January 11, 2021, the Company announced that the Board of Directors approved a share repurchase program authorizing up to $15 million in share repurchases. Under the share repurchase program, the Company is authorized to repurchase from time to time its common stock in open market or other transactions, subject to applicable regulatory requirements. Under this program, 44,788 shares were repurchased through June 30, 2021. In aggregate through August 10, 2021 64,788 shares have been repurchased at an average price of $32.74/share.
Third Quarter 2021 Financial Results
For the quarter ended June 30, 2021, investment income totaled $8.7 million, of which $8.6 million was attributable to portfolio interest and dividend income and $0.1 million was attributable to fee income.
For the quarter ended June 30, 2020, investment income totaled $4.3 million, of which $4.1 million was attributable to portfolio interest and dividend income, and $0.2 million to fee income.
For the quarter ended June 30, 2021, total net expenses were $3.3 million and for the quarter ended June 30, 2020, total net expenses were $5.4 million.
For the quarter ended June 30, 2021, the Company recorded a net realized gain of $0.1 million and net unrealized appreciation of $1.5 million. For the quarter ended June 30, 2020, the Company recorded a net realized loss of $(37.9) million and net unrealized appreciation of $46.9 million.
Portfolio and Investment Activities
As of June 30, 2021, the fair value of the Company’s investment portfolio totaled $181.6 million and consisted of 42 portfolio companies.
As of June 30, 2021, the Company had 10 portfolio company investments on non-accrual status with a fair market value of $13.6 million.
Liquidity and Capital Resources
At June 30, 2021, the Company had $52.9 million in cash and $77.8 million outstanding in aggregate principal amount of 6.125% unsecured notes due 2023.
ABOUT PHENIXFIN CORPORATION
PhenixFIN Corporation is a non-diversified, internally managed closed-end management investment company incorporated in Delaware that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. We completed our initial public offering and commenced operations on January 20, 2011. The Company has elected, and intends to qualify annually, to be treated, for U.S. federal income tax purposes, as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Effective January 1, 2021, the Company operates under an internalized management structure.
Safe Harbor Statement and Other Disclosures
This press release contains “forward-looking” statements. Such forward-looking statements reflect current views with respect to future events and financial performance, and the Company may make related oral forward-looking statements on or following the date hereof. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements, including among other things, PhenixFIN’s ability to deliver value to shareholders, implement its investment objective, capitalize on investment opportunities and perform well and operate effectively under an internalized management structure, and other factors that are enumerated in the Company’s periodic filings with the Securities and Exchange Commission. PhenixFIN Corporation disclaims and does not undertake any obligation to update or revise any forward-looking statement in this press release.
The press release contains unaudited financial results. For ease of review, we have excluded the word “approximately” when rounding the results. This press release is for informational purposes only and is not an offer to purchase or a solicitation of an offer to sell shares of PhenixFIN Corporation’s common stock. There can be no assurance that PhenixFIN Corporation will achieve its investment objective.
For PhenixFIN investor relations, please call 212-859-0390. For media inquiries, please contact info@phenixfc.com.
2
PHENIXFIN CORPORATION
Consolidated Statements of Assets and Liabilities
|
June 30,
2021 (Unaudited) |
September 30,
2020 |
|||||||
| Assets: | ||||||||
| Investments at fair value | ||||||||
| Non-controlled, non-affiliated investments (amortized cost of $109,219,571 and $117,360,954, respectively) | $ | 105,407,064 | $ | 114,321,948 | ||||
| Affiliated investments (amortized cost of $78,821,547 and $92,898,755, respectively) | 68,722,983 | 84,873,023 | ||||||
| Controlled investments (amortized cost of $37,489,171 and $117,874,821, respectively) | 7,488,473 | 47,548,578 | ||||||
| Total Investments at fair value | 181,618,520 | 246,743,549 | ||||||
| Cash and cash equivalents | 52,864,911 | 56,522,148 | ||||||
| Receivables: | ||||||||
| Interest receivable | 289,832 | 624,524 | ||||||
| Fees receivable | 106,528 | 119,028 | ||||||
| Dividends receivable | 66,445 | - | ||||||
| Other assets | 1,003,437 | 2,093,559 | ||||||
| Total Assets | $ | 235,949,673 | $ | 306,102,808 | ||||
| Liabilities: | ||||||||
| Notes payable (net of debt issuance costs of $482,346 and $905,624, respectively) | $ | 77,364,454 | $ | 150,960,662 | ||||
| Interest and fees payable | - | 801,805 | ||||||
| Due to affiliate | - | 53,083 | ||||||
| Due to broker | 284,067 | - | ||||||
| Management and incentive fees payable | - | 1,392,022 | ||||||
| Administrator expenses payable | 60,685 | 156,965 | ||||||
| Accounts payable and accrued expenses | 1,547,888 | 2,108,225 | ||||||
| Deferred revenue | 14,003 | 10,529 | ||||||
| Total Liabilities | 79,271,097 | 155,483,291 | ||||||
| Commitments and Contingencies | ||||||||
| Net Assets: | ||||||||
| Common Shares, $0.001 par value; 5,000,000 shares authorized; 2,723,709 shares issued; 2,678,921 and 2,723,709 common shares outstanding, respectively | 2,679 | 2,724 | ||||||
| Capital in excess of par value | 670,122,430 | 672,381,617 | ||||||
| Total distributable earnings (loss) | (513,446,533 | ) | (521,764,824 | ) | ||||
| Total Net Assets | $ | 156,678,576 | $ | 150,619,517 | ||||
| Total Liabilities and Net Assets | $ | 235,949,673 | $ | 306,102,808 | ||||
| Net Asset Value Per Common Share | $ | 58.49 | $ | 55.30 | ||||
3
PHENIXFIN CORPORATION
Consolidated Statements of Operations
(Unaudited)
|
For the Three Months Ended
June 30 |
For the Nine Months Ended
June 30 |
|||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Interest Income: | ||||||||||||||||
| Interest from investments | ||||||||||||||||
| Non-controlled, non-affiliated investments: | ||||||||||||||||
| Cash | $ | 1,578,657 | 1,961,009 | $ | 4,785,374 | 7,499,171 | ||||||||||
| Payment in-kind | 186,733 | 138,018 | 356,762 | 465,339 | ||||||||||||
| Affiliated investments: | ||||||||||||||||
| Cash | 249,157 | 291,569 | 797,776 | 691,010 | ||||||||||||
| Payment in-kind | 286,444 | 487,065 | 286,444 | 2,141,327 | ||||||||||||
| Controlled investments: | ||||||||||||||||
| Cash | - | - | - | 84,505 | ||||||||||||
| Payment in-kind | - | - | - | 500,767 | ||||||||||||
| Total interest income | 2,300,991 | 2,877,661 | 6,226,356 | 11,382,119 | ||||||||||||
| Dividend income | 6,307,408 | 1,225,000 | 20,979,143 | 4,725,000 | ||||||||||||
| Interest from cash and cash equivalents | 3,862 | 4,319 | 5,308 | 376,747 | ||||||||||||
| Fee income | 71,443 | 202,122 | 650,323 | 617,654 | ||||||||||||
| Other income | - | - | 78,204 | - | ||||||||||||
| Total Investment Income | 8,683,704 | 4,309,102 | 27,939,334 | 17,101,520 | ||||||||||||
| Expenses: | ||||||||||||||||
| Base management fees | - | 1,317,223 | 1,146,403 | 4,966,728 | ||||||||||||
| Interest and financing expenses | 1,260,825 | 2,736,136 | 4,538,520 | 12,312,183 | ||||||||||||
| General and administrative expenses | 294,022 | 540,066 | 856,396 | 3,140,305 | ||||||||||||
| Salaries and Benefits | 679,229 | - | 1,011,546 | - | ||||||||||||
| Administrator expenses | 106,578 | 614,535 | 546,372 | 1,742,419 | ||||||||||||
| Insurance expenses | 444,832 | 333,816 | 1,404,312 | 988,394 | ||||||||||||
| Directors fees | 179,000 | 347,500 | 875,217 | 960,000 | ||||||||||||
| Professional fees, net | 289,200 | (511,519 | ) | 113,797 | (4,796,964 | ) | ||||||||||
| Expenses before expense support reimbursement and management and incentive fee waivers | 3,253,686 | 5,377,757 | 10,492,563 | 19,313,065 | ||||||||||||
| Expense support reimbursement | - | (349,427 | ) | - | (349,427 | ) | ||||||||||
| Total expenses net of expense support reimbursement and management and incentive fee waivers | 3,253,686 | 5,028,330 | 10,492,563 | 18,963,638 | ||||||||||||
| Net Investment Income | 5,430,018 | (719,228 | ) | 17,446,771 | (1,862,118 | ) | ||||||||||
| Realized and unrealized gains (losses) on investments | ||||||||||||||||
| Net realized gains (losses): | ||||||||||||||||
| Non-controlled, non-affiliated investments | 38,852 | (532,253 | ) | 4,093,500 | (690,167 | ) | ||||||||||
| Affiliated investments | 19,811 | - | (10,433,117 | ) | - | |||||||||||
| Controlled investments | 1,850 | (37,389,588 | ) | (40,145,720 | ) | (39,076,425 | ) | |||||||||
| Total net realized gains (losses) | 60,513 | (37,921,841 | ) | (46,485,337 | ) | (39,766,592 | ) | |||||||||
| Net change in unrealized gains (losses): | ||||||||||||||||
| Non-controlled, non-affiliated investments | (1,794,173 | ) | 7,379,695 | (773,501 | ) | (8,422,875 | ) | |||||||||
| Affiliated investments | 1,513,353 | 8,137,213 | (2,072,831 | ) | 2,558,480 | |||||||||||
| Controlled investments | 1,759,025 | 31,389,160 | 40,325,544 | (17,062,311 | ) | |||||||||||
| Total net change in unrealized gains (losses) | 1,478,205 | 46,906,068 | 37,479,212 | (22,926,706 | ) | |||||||||||
| Change in provision for deferred taxes on unrealized (appreciation) depreciation on investments | - | 35,970 | - | (49,694 | ) | |||||||||||
| Loss on extinguishment of debt | - | (697,191 | ) | (122,355 | ) | (2,481,374 | ) | |||||||||
| Total realized and unrealized gains (losses) | 1,538,718 | 8,323,006 | (9,128,480 | ) | (65,224,366 | ) | ||||||||||
| Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 6,968,736 | $ | 7,603,778 | $ | 8,318,291 | $ | (67,086,484 | ) | |||||||
| Weighted Average Basic and diluted earnings per common share | $ | 2.60 | $ | 2.79 | $ | 3.07 | $ | (24.63 | ) | |||||||
| Weighted Average Basic and diluted net investment income (loss) per common share | $ | 2.02 | $ | (0.26 | ) | $ | 6.44 | $ | (0.68 | ) | ||||||
| Weighted Average Common Shares Outstanding - Basic and Diluted | 2,683,093 | 2,723,711 | 2,707,794 | 2,723,711 | ||||||||||||
4