UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)
ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended December 31, 2017
or
¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2024

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from       to

Commission file number: 1-35040

PHENIXFIN CORPORATION

MEDLEY CAPITAL CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware27-4576073
Delaware27-4576073
(State or Other Jurisdiction of(I.R.S. Employer
Incorporation or Organization)Identification No.)

280445 Park Avenue, 6th10th Floor, East, New York, NY 100171001710022
(Address of Principal Executive Offices)(Zip Code)

(212) 759-0777859-0390

(Registrant’s Telephone Number, Including Area Code)

 _____________________________________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per sharePFXThe NASDAQ Global Market
5.25% Notes due 2028PFXNZThe NASDAQ Global Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý ☒ No ¨☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ ☒ No ¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨☐ Accelerated filer ý☐ Non-accelerated filer ¨ (Do not check if a smaller reporting company)      

☒ Smaller reporting company ¨☐ 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. ¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes ¨☐ No ý☒

The Registrant had 54,474,2112,019,790 shares of common stock, $0.001 par value, outstanding as of February 5, 2018.May 10, 2024.





MEDLEY CAPITAL

PHENIXFIN CORPORATION


TABLE OF CONTENTS



Part I.Financial Information
 Page
ItemPART I.Financial Statements
Information 
Item 1. Financial Statements
Consolidated Statements of Assets and Liabilities as of DecemberMarch 31, 20172024 (unaudited) and September 30, 20172023
F-1
 1
Consolidated Statements of Operations for the three and six months ended DecemberMarch 31, 20172024 and 20162023 (unaudited)
F-2
 2
Consolidated Statements of Changes in Net Assets for the three and six months ended DecemberMarch 31, 20172024 and 20162023 (unaudited)
F-3
 3
Consolidated Statements of Cash Flows for the threesix months ended DecemberMarch 31, 20172024 and 20162023 (unaudited)
F-4
 4
Consolidated Schedules of Investments as of DecemberMarch 31, 20172024 (unaudited) and September 30, 20172023
F-5
 5
Notes to Consolidated Financial Statements (unaudited)
F-21
 21
Item 2.
Management's Management’s Discussion and Analysis of Financial Condition and Results of Operations
1
 46
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
15
 59
Item 4.
Controls and Procedures
16
 60
Part II.Other Information
 
Item 1.
Legal ProceedingsPart II. Other Information
17
 61
Item 1A.
Risk Factors
17
 
Item 1. Legal Proceedings61
Item 1A. Risk Factors61
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
17
 76
Item 3.
Defaults Upon Senior Securities
18
 76
Item 4.
Mine Safety Disclosures
18
 76
Item 5.
Other Information
18
 
Item 6.
Exhibits5. Other Information
18
 77
SIGNATURES 
Item 6. Exhibits77
SIGNATURES79



i

PHENIXFIN CORPORATION



Medley Capital Corporation

Consolidated Statements of Assets and Liabilities

  March 31,
2024
(Unaudited)		  September 30,
2023		 
Assets:      
Investments at fair value      
Non-controlled, non-affiliated investments (amortized cost of $138,055,022 and $134,339,121 respectively) $132,407,942  $125,531,031 
Affiliated investments (amortized cost of $20,564,242 and $48,233,910, respectively)  14,333,867   37,289,617 
Controlled investments (amortized cost of $90,793,284 and $82,437,692, respectively)  73,307,525   63,640,043 
Total Investments at fair value  220,049,334   226,460,691 
Cash and cash equivalents  19,123,796   5,988,223 
Receivables:        
Interest receivable  920,769   971,115 
Dividends receivable  243,302   161,479 
Other receivable  -   31,425 
Due from Affiliate  5,326,933   409,214 
Other assets  1,173,608   833,000 
Deferred financing costs  724,568   699,124 
Prepaid share repurchase  132,295   199,019 
Receivable for investments sold  -   3,940,175 
Total Assets $247,694,605  $239,693,465 
         
Liabilities:        
Credit facility and note payable (net of debt issuance costs of $1,522,586 and $1,688,835, respectively) $84,419,355  $84,253,106 
Payable for investments purchased  5,036,284   4,123,059 
Accounts payable and accrued expenses  2,707,303   3,066,984 
Interest and fees payable  724,564   690,398 
Other liabilities  360,477   432,698 
Due to Affiliate  99,725   - 
Administrator expenses payable (see Note 6)  75,000   - 
Deferred revenue  -   421,685 
Total Liabilities  93,422,708   92,987,930 
         
Commitments and Contingencies (see Note 8)        
         
Net Assets:        
Common Shares, $0.001 par value; 5,000,000 shares authorized; 2,723,709 shares issued; 2,020,490 and 2,073,713 common shares outstanding, respectively  2,021   2,074 
Capital in excess of par value  692,472,513   694,812,239 
Total distributable earnings (loss)  (538,202,637)  (548,108,778)
Total Net Assets  154,271,897   146,705,535 
Total Liabilities and Net Assets $247,694,605  $239,693,465 
         
Net Asset Value Per Common Share $76.35  $70.75 

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


 December 31, 2017 September 30, 2017
 (unaudited)  
ASSETS 
  
Investments at fair value 
  
Non-controlled/non-affiliated investments (amortized cost of $649,624,352 and $625,108,198, respectively)$565,541,395
 $575,495,698
Affiliated investments (amortized cost of $92,464,353 and $91,026,729, respectively)95,792,257
 90,071,365
Controlled investments (amortized cost of $210,068,394 and $197,918,352, respectively)174,569,385
 171,423,836
Total investments at fair value835,903,037

836,990,899
Cash and cash equivalents50,008,401
 108,571,958
Interest receivable9,474,622
 9,371,048
Other assets3,488,194
 3,321,822
Fees receivable754,578
 765,756
Deferred offering costs339,172
 307,015
Receivable for dispositions and investments sold55,969
 231,895
Total assets$900,023,973

$959,560,393
    
LIABILITIES 
  
Revolving credit facility payable (net of debt issuance costs of $1,618,750 and $1,777,181, respectively)$45,381,250
 $66,222,819
Term loan payable (net of debt issuance costs of $952,656 and $1,045,895, respectively)101,047,344
 100,954,105
Notes payable (net of debt issuance costs of $3,871,214 and $4,122,533, respectively)173,002,422
 172,751,776
SBA debentures payable (net of debt issuance costs of $2,702,965 and $2,845,694, respectively)147,297,035
 147,154,306
Management and incentive fees payable (see Note 6)4,067,841
 4,312,004
Interest and fees payable5,063,062
 3,759,891
Accounts payable and accrued expenses1,981,890
 1,863,546
Administrator expenses payable (see Note 6)867,331
 859,794
Deferred tax liability821,927
 911,936
Due to affiliate377,231
 81,347
Deferred revenue315,028
 259,552
Offering costs payable32,157
 —
Total liabilities$480,254,518

$499,131,076
    
Guarantees and Commitments (see Note 8) 
  
    
NET ASSETS 
  
Common stock, par value $0.001 per share, 100,000,000 common shares authorized, 54,474,211 and 54,474,211 common shares issued and outstanding, respectively$54,474
 $54,474
Capital in excess of par value705,046,098
 705,046,098
Accumulated undistributed net investment income7,991,654
 9,528,367
Accumulated net realized gain/(loss) from investments(176,684,365) (176,662,889)
Net unrealized appreciation/(depreciation) on investments, net of deferred taxes(116,638,406) (77,536,733)
Total net assets419,769,455
 460,429,317
Total liabilities and net assets$900,023,973

$959,560,393
    
NET ASSET VALUE PER SHARE$7.71
 $8.45
See accompanying notes to consolidated financial statements.

PHENIXFIN CORPORATION



Medley Capital Corporation

Consolidated Statements of Operations

(Unaudited)

  For the Three Months Ended
March 31,		  For the Six Months Ended
March 31,		 
  2024  2023  2024  2023 
             
Interest Income:            
Interest from investments            
Non-controlled, non-affiliated investments:            
Cash $1,950,898  $2,116,741  $4,633,041  $4,032,782 
Payment in-kind  90,530   119,593   181,204   225,780 
Affiliated investments:                
Cash  276,484   261,028   732,176   459,481 
Payment in-kind  -   -   -   - 
Controlled investments:                
Cash  294,028   57,188   580,266   251,815 
Payment in-kind  118,864   155,994   268,831   245,737 
Total interest income  2,730,804   2,710,544   6,395,518   5,215,595 
Dividend income  1,652,262   1,503,375   3,665,988   3,535,733 
Interest from cash and cash equivalents  199,266   125,471   240,374   217,697 
Fee income (see Note 9)  76,517   171,055   78,625   244,654 
Other income  -   401,986   22   401,986 
Total Investment Income  4,658,849   4,912,431   10,380,527   9,615,665 
                 
Expenses:                
Interest and financing expenses  1,567,352   1,381,596   3,109,413   2,614,772 
Salaries and benefits  1,524,508   802,090   2,949,500   1,659,623 
General and administrative expenses  310,776   201,181   635,837   421,158 
Professional fees, net  343,150   377,229   700,704   725,146 
Directors fees  187,500   176,500   375,000   370,500 
Insurance expenses  96,694   121,387   194,450   245,471 
Administrator expenses (see Note 6)  57,550   77,937   135,402   155,821 
Total expenses  4,087,530   3,137,920   8,100,306   6,192,491 
Net Investment Income  571,319   1,774,511   2,280,221   3,423,174 
                 
Realized and unrealized gains (losses) on investments                
Non-controlled, non-affiliated investments  200,754   (838,070)  430,558   (824,622)
Affiliated investments  (1,991,456)  -   (1,991,456)  - 
Controlled investments  -   23,273   -   23,273 
Total net realized gains (losses)  (1,790,702)  (814,797)  (1,560,898)  (801,349)
Net change in unrealized gains (losses):                
Non-controlled, non-affiliated investments  1,796,767   803,513   3,161,010   2,326,612 
Affiliated investments  2,282,655   274,063   4,713,918   989,600 
Controlled investments  2,512,263   4,670,928   1,311,890   4,722,097 
Total net change in unrealized gains (losses)  6,591,685   5,748,504   9,186,818   8,038,309 
Total realized and unrealized gains (losses)  4,800,983   4,933,707   7,625,920   7,236,960 
                 
Net Increase (Decrease) in Net Assets Resulting from Operations $5,372,302  $6,708,218  $9,906,141  $10,660,134 
                 
Weighted average basic and diluted earnings per common share $2.62  $3.20  $4.81  $5.08 
Weighted average common shares outstanding - basic and diluted (see Note 11)  2,048,622   2,095,193   2,060,723   2,098,041 

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


 For the three months ended December 31
 2017 2016
 (unaudited) (unaudited)
INVESTMENT INCOME: 
  
Interest from investments 
  
Non-controlled/non-affiliated investments: 
  
Cash$13,090,352
 $18,520,378
Payment-in-kind1,641,133
 2,962,050
Affiliated investments: 
  
Cash577,309
 166,750
Payment-in-kind849,495
 —
Controlled investments: 
  
Cash429,762
 343,158
Payment-in-kind718,518
 1,971,560
Total interest income17,306,569

23,963,896
Dividend income, net of provisional taxes ($0 and $0, respectively)1,443,750
 644,953
Interest from cash and cash equivalents31,769
 23,412
Fee income (see Note 9)1,848,760
 1,423,804
Total investment income20,630,848

26,056,065
    
EXPENSES: 
  
Base management fees (see Note 6)4,067,841
 4,514,615
Incentive fees (see Note 6)—
 895,675
Interest and financing expenses6,759,199
 7,773,971
Administrator expenses (see Note 6)867,331
 916,066
General and administrative757,255
 697,005
Professional Fees585,667
 651,111
Directors fees147,180
 169,784
Insurance133,214
 99,455
Expenses before management and incentive fee waivers13,317,687

15,717,682
Management fee waiver (see Note 6)—
 (19,945)
Incentive fee waiver (see Note 6)—
 (43,663)
Total expenses net of management and incentive fee waivers13,317,687

15,654,074
Net investment income before excise taxes7,313,161
 10,401,991
Excise tax expense(134,000) (267,183)
NET INVESTMENT INCOME7,179,161
 10,134,808
    
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS: 
  
Net realized gain/(loss) from investments   
Non-controlled/non-affiliated investments(21,476) (6,298,431)
Affiliated investments—
 —
Controlled investments—
 —
Net realized gain/(loss) from investments(21,476) (6,298,431)
Net unrealized appreciation/(depreciation) on investments   
Non-controlled/non-affiliated investments(34,470,457) 1,625,294
Affiliated investments4,283,268
 —
Controlled investments(9,004,493) 863,902
Net unrealized appreciation/(depreciation) on investments(39,191,682) 2,489,196
Change in provision for deferred taxes on unrealized (appreciation)/depreciation on investments90,009
 —
Net gain/(loss) on investments(39,123,149) (3,809,235)
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS$(31,943,988) $6,325,573
    
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS PER COMMON SHARE$(0.59) $0.12
WEIGHTED AVERAGE - BASIC AND DILUTED NET INVESTMENT INCOME PER COMMON SHARE$0.13
 $0.19
WEIGHTED AVERAGE COMMON STOCK OUTSTANDING - BASIC AND DILUTED (SEE NOTE 11)54,474,211
 54,474,211
DIVIDENDS DECLARED PER COMMON SHARE$0.16
 $0.22
See accompanying notes to consolidated financial statements.

PHENIXFIN CORPORATION



Medley Capital Corporation

Consolidated Statements of Changes in Net Assets

(Unaudited)

 For the three months ended December 31
 2017 2016
 (unaudited) (unaudited)
OPERATIONS: 
  
Net investment income$7,179,161
 $10,134,808
Net realized gain/(loss) from investments(21,476) (6,298,431)
Net unrealized appreciation/(depreciation) on investments(39,191,682) 2,489,196
Change in provision for deferred taxes on unrealized (appreciation)/depreciation on investments90,009
 —
Net increase/(decrease) in net assets from operations(31,943,988) 6,325,573
SHAREHOLDER DISTRIBUTIONS: 
  
Distributions from net investment income(8,715,874) (11,984,328)
Net decrease in net assets from shareholder distributions(8,715,874) (11,984,328)
Total increase/(decrease) in net assets(40,659,862) (5,658,755)
Net assets at beginning of period460,429,317

516,919,142
Net assets at end of period including accumulated undistributed net investment income of $7,991,654 and $8,962,242, respectively$419,769,455
 $511,260,387
    
Net asset value per common share$7.71
 $9.39
Common shares outstanding at end of period54,474,211
 54,474,211
  Common Stock       
  Shares  Par Amount  Capital in
Excess of
Par Value		  Total
Distributable
Earnings/(Loss)		  Total Net
Assets		 
Balance at December 31, 2022  2,099,824  $2,100  $675,297,285  $(550,606,580) $124,692,805 
OPERATIONS                    
Net investment income (loss)  -   -   -   1,774,511   1,774,511 
Net realized gains (losses) on investments  -   -   -   (814,797)  (814,797)
Net change in unrealized appreciation (depreciation) on investments  -   -   -   5,748,504   5,748,504 
CAPITAL SHARE TRANSACTIONS                    
Repurchase of common shares  (8,186)  (8)  (250,126)  -   (250,134)
Total Increase (Decrease) in Net Assets  (8,186)  (8)  (250,126)  6,708,218   6,458,084 
                     
Balance at March 31, 2023  2,091,638  $2,092  $675,047,159  $(543,898,362) $131,150,889 
                     
Balance at December 31, 2023  2,060,490  $2,061  $694,273,678  $(543,574,939) $150,700,800 
OPERATIONS                    
Net investment income (loss)  -   -   -   571,319   571,319 
Net realized gains (losses) on investments  -   -   -   (1,790,702)  (1,790,702)
Net change in unrealized appreciation (depreciation) on investments  -   -   -   6,591,685   6,591,685 
CAPITAL SHARE TRANSACTIONS                    
Repurchase of common shares  (40,000)  (40)  (1,801,165)  -   (1,801,205)
Total Increase (Decrease) in Net Assets  (40,000)  (40)  (1,801,165)  5,372,302   3,571,097 
                     
Balance at March 31, 2024  2,020,490  $2,021  $692,472,513  $(538,202,637) $154,271,897 
                     
Balance at September 30, 2022  2,102,129  $2,102  $675,401,802  $(554,558,496) $120,845,408 
OPERATIONS                    
Net investment income (loss)  -   -   -   3,423,174   3,423,174 
Net realized gains (losses) on investments  -   -   -   (801,349)  (801,349)
Net change in unrealized appreciation (depreciation) on investments  -   -   -   8,038,309   8,038,309 
Total Increase (Decrease) in Net Assets  -   -   -         
CAPITAL SHARE TRANSACTIONS                    
Repurchase of common shares  (10,491)  (10)  (354,643)  -   (354,653)
Total Increase (Decrease) in Net Assets  (10,491)  (10)  (354,643)  10,660,134   10,305,481 
                     
Balance at March 31, 2023  2,091,638  $2,092  $675,047,159  $(543,898,362) $131,150,889 
                     
Balance at September 30, 2023  2,073,713  $2,074  $694,812,239  $(548,108,778) $146,705,535 
OPERATIONS                    
Net investment income (loss)  -   -   -   2,280,221   2,280,221 
Net realized gains (losses) on investments  -   -   -   (1,560,898)  (1,560,898)
Net change in unrealized appreciation (depreciation) on investments  -   -   -   9,186,818   9,186,818 
CAPITAL SHARE TRANSACTIONS                    
Repurchase of common shares  (53,223)  (53)  (2,339,726)  -   (2,339,779)
Total Increase (Decrease) in Net Assets  (53,223)  (53)  (2,339,726)  9,906,141   7,566,362 
                     
Balance at March 31, 2024  2,020,490  $2,021  $692,472,513  $(538,202,637) $154,271,897 

See

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



PHENIXFIN CORPORATION



Medley Capital Corporation

Consolidated Statements of Cash Flows

(Unaudited)

  For the Six Months Ended
March 31,		 
  2024  2023 
Cash Flows from Operating Activities:      
Net increase (decrease) in net assets resulting from operations $9,906,141  $10,660,134 
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  45,595,165   26,919,844 
Purchases, originations and participations  (30,835,453)  (25,975,213)
Investment increases due to payment-in-kind interest  (450,035)  (471,517)
Net amortization of premium (discount) on investments  (272,400)  (368,824)
Amortization of debt issuance cost  166,249   204,079 
Amortization of deferred financing cost  212,333   113,963 
Net realized (gains) losses from investments  1,560,898   801,349 
Net unrealized (gains) losses on investments  (9,186,818)  (8,038,309)
(Increase) decrease in operating assets:        
Interest receivable  50,346   1,927 
Due from affiliate  (4,917,719)  (121,627)
Receivable for investments sold  3,940,175   - 
Dividends receivable  (81,823)  - 
Paydown receivable  -   112,500 
Other receivable  31,425   36,992 
Prepaid share repurchase  66,724   364,828 
Other assets  (340,608)  474,188 
Increase (decrease) in operating liabilities:        
Due to broker  -   (16,550,000)
Payable for investments purchased  913,225   1,026,818 
Accounts payable and accrued expenses  (359,681)  (673,784)
Due to Affiliate  99,725   - 
Administrator expenses payable  75,000   (73,011)
Interest and fees payable  34,166   170,169 
Deferred revenue  (421,685)  9,905 
Other liabilities  (72,221)  (72,188)
Net cash provided by (used in) operating activities  15,713,129   (11,447,777)
Cash Flows from Financing Activities:        
Debt issuance  -   23,241,941 
Paydowns on debt  -   (22,521,800)
Debt issuance costs paid  -   (9,751)
Deferred financing costs  (237,777)  (912,275)
Repurchase of common shares  (2,339,779)  (354,653)
Net cash provided by (used in) financing activities  (2,577,556)  (556,538)
Net increase (decrease) in cash and cash equivalents  13,135,573   (12,004,315)
Cash and cash equivalents, beginning of period  5,988,223   22,768,066 
Cash and cash equivalents, end of period $19,123,796  $10,763,751 
         
Supplemental information:        
Interest paid during the period $2,667,051  $1,854,240 
Non-cash purchase of investments $11,900,000  $- 
Non-cash sale of investments $11,900,000  $- 

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


 For the three months ended December 31
 2017 2016
 (unaudited) (unaudited)
Cash flows from operating activities 
  
NET INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS$(31,943,988) $6,325,573
ADJUSTMENTS TO RECONCILE NET INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS TO NET CASH PROVIDED/(USED) BY OPERATING ACTIVITIES:   
Investment increases due to payment-in-kind interest(3,136,782) (4,823,083)
Net amortization of premium/(discount) on investments(239,606) (350,100)
Amortization of debt issuance costs645,044
 997,329
Net realized (gain)/loss from investments21,476
 6,298,431
Net deferred income taxes(90,009) —
Net unrealized (appreciation)/depreciation on investments39,191,682
 (2,489,196)
Proceeds from sale and settlements of investments47,978,251
 40,117,661
Purchases, originations and participations(82,727,159) (42,182,104)
(Increase)/decrease in operating assets:   
Interest receivable(103,574) (2,024,597)
Other assets(166,371) 143,067
Fees receivable11,178
 764,524
Receivable for dispositions and investments sold175,926
 133,631
Increase/(decrease) in operating liabilities:   
Management and incentive fees payable, net(244,163) 788,063
Interest and fees payable1,303,171
 2,317,959
Accounts payable and accrued expenses118,344
 (456,158)
Administrator expenses payable7,537
 (74,170)
Due to affiliate295,884
 114,038
Deferred revenue55,476
 (59,740)
NET CASH PROVIDED/(USED) BY OPERATING ACTIVITIES(28,847,683) 5,541,128
    
Cash flows from financing activities 
  
Borrowings on debt9,000,000
 18,379,732
Paydowns on debt(30,000,000) (14,000,000)
Debt issuance costs paid—
 (285,408)
Payments of cash dividends(8,715,874) (11,984,328)
Offering costs paid—
 (1,381)
NET CASH PROVIDED/(USED) BY FINANCING ACTIVITIES(29,715,874) (7,891,385)
    
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS(58,563,557) (2,350,257)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD108,571,958
 104,485,263
CASH AND CASH EQUIVALENTS, END OF PERIOD$50,008,401
 $102,135,006
    
Supplemental Information: 
  
Interest paid during the period$4,792,028
 $4,439,248
Supplemental non-cash information:   
Payment-in-kind interest income$3,209,146
 $4,933,610
Net amortization of premium/(discount) on investments$239,606
 $350,100
Amortization of debt issuance costs$(645,044) $(997,329)
Non-cash purchase of investments$—
 $58,615,663
Non-cash sale of investments$—
 $58,615,663
See accompanying notes to consolidated financial statements.

PHENIXFIN CORPORATION



Medley Capital Corporation

Consolidated Schedule of Investments

December

As of March 31, 2017

(unaudited)
2024

(Unaudited)

Company(1)
 Industry 
Type of Investment(6)
 Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
               
Non-Controlled/Non-Affiliated Investments:
            
               
3SI Security Systems, Inc. Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor)(14)
 6/16/2023 17,456,250
 17,456,250
 17,608,119
 4.2%
        17,456,250
 17,456,250
 17,608,119
  
               
Accupac, Inc.(7)
 Containers, Packaging & Glass 
Senior Secured First Lien Term Loan (LIBOR + 4.50% Cash, 1.00% LIBOR Floor)(13)(18)
 9/14/2023 9,862,951
 9,862,951
 9,862,951
 2.3%
        9,862,951
 9,862,951
 9,862,951
  
               
Advanced Diagnostic Holdings, LLC Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 0.875% LIBOR Floor)(14)
 12/11/2020 14,582,109
 14,582,109
 14,582,109
 3.5%
        14,582,109
 14,582,109
 14,582,109
  
               
Alpine SG, LLC(7)
 High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(14)
 11/16/2022 13,500,000
 13,500,000
 13,500,000
 3.2%
    
Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(14)(22)
 11/16/2022 4,642,857
 4,642,857
 4,642,857
 1.1%
    
Revolving Credit Facility (LIBOR + 6.50% Cash, 1.00% LIBOR
Floor)(14)(17)
 11/16/2022 —
 —
 —
 0.0%
        18,142,857
 18,142,857
 18,142,857
  
               
American Dental Partners, Inc. Healthcare & Pharmaceuticals 
Senior Secured Second Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(14)
 9/25/2023 6,500,000
 6,500,000
 6,578,000
 1.6%
        6,500,000
 6,500,000
 6,578,000
  
               
Autosplice, Inc. High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash, 1.00% LIBOR Floor)(14)
 6/30/2019 14,169,522
 14,169,522
 14,277,210
 3.4%
        14,169,522
 14,169,522
 14,277,210
  
               
Barry's Bootcamp Holdings, LLC(7)
 Services:  Consumer 
Senior Secured First Lien Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(14)
 7/14/2022 7,628,570
 7,628,570
 7,628,570
 1.8%
    
Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(14)
 7/14/2022 —
 —
 —
 0.0%
    
Revolving Credit Facility (LIBOR + 6.50% Cash, 1.00% LIBOR
Floor)(14)(17)
 7/14/2022 —
 —
 —
 0.0%
        7,628,570
 7,628,570
 7,628,570
  
               
Be Green Packaging, LLC Containers, Packaging & Glass Equity - 417 Common Units   —
 416,250
 —
 0.0%
        —
 416,250
 —
  
               
Company(1) Industry Type of
Investment		 Maturity Par Amount/
Shares/Units(2)		  Amortized
Cost(3)		  Fair
Value(4)		  % of
Net
Assets(5)		 
                   
Non-Controlled/Non-Affiliated Investments: 
                   
1888 Industrial Services, LLC Energy: Oil & Gas Senior Secured First Lien Term Loan C 8/31/2024  350,000  $196,411  $350,000   0.23%
         350,000   196,411   350,000   0.23%
                       
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  13,700,174   10,725,095   10,042,228   6.50%
    Warrants(21) 5/22/2027  97,899   -   133,143   0.08%
         13,798,073   10,725,095   10,175,371   6.58%
                       
Arcline FM Holdings, LLC Aerospace & Defense First Lien Term Loans (SOFR + CSA + 4.75%, 0.75% Floor)(20)(24) 6/23/2028  2,665,823   2,577,794   2,652,493   1.71%
         2,665,823   2,577,794   2,652,493   1.71%
                       
Be Green Packaging, LLC Containers, Packaging & Glass Equity - 417 Common Units(21)    417   416,250   -   0.00%
         417   416,250   -   0.00%
                       
Boostability Seotowncenter, Inc. Services: Business Equity - 833,152 Common Units(21)    833,152   66,475   -   0.00%
         833,152   66,475   -   0.00%
                       
CB&L Associates Holdco I, LLC Real Estate First Lien Term Loan (SOFR + CSA+ 2.75%, 1.00% Floor)(14)(20)(23) 11/1/2025  5,827,281   4,915,259   5,302,825   3.44%
         5,827,281   4,915,259   5,302,825   3.44%
                       
Chimera Investment Corp.(11) Real Estate Equity - 117,310 Class C Preferred Units(13)(15)    117,310   2,884,724   2,404,855   1.56%
    Equity - 163,601 Class D Preferred Units, (SOFR + 5.38%)(13)(24)    193,754   4,182,010   4,793,474   3.11%
         311,064   7,066,734   7,198,329   4.67%
                       
Copper Property CTL Pass Through Trust Real Estate Equity Certificates(14)    622,795   7,767,811   6,118,961   3.97%
         622,795   7,767,811   6,118,961   3.97%
                       
Deer Management Systems LLC Consumer Discretionary First Lien Term Loan (SOFR + CSA + 8.25%, 3.00% Floor)(8)(20)(24) 5/1/2028  3,315,000   3,243,748   3,348,150   2.17%
         3,315,000   3,243,748   3,348,150   2.17%



PHENIXFIN CORPORATION

Company(1)
 Industry 
Type of Investment(6)
 Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
               
Black Angus Steakhouses, LLC(7)
 Hotel, Gaming & Leisure 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(14)
 4/24/2020 7,649,554
 7,649,554
 7,325,796
 1.7%
    
Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(14)
 4/24/2020 —
 —
 —
 0.0%
    
Revolving Credit Facility (LIBOR + 9.00% Cash, 1.00% LIBOR
Floor)(14)(17)
 4/24/2020 357,143
 357,143
 324,104
 0.1%
        8,006,697
 8,006,697
 7,649,900
  
               
Brook & Whittle Holdings Corp.(7)
 Containers, Packaging & Glass 
Senior Secured First Lien Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor)(14)
 10/17/2023 1,330,274
 1,330,274
 1,330,274
 0.3%
    
Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor)(14)(17)
 10/17/2023 —
 —
 —
 0.0%
        1,330,274
 1,330,274
 1,330,274
  
               
Central States Dermatology Services, LLC(7)
 Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(14)
 4/20/2022 1,084,519
 1,084,519
 1,084,519
 0.2%
    
Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(14)(18)
 4/20/2022 209,355
 209,355
 209,355
 0.0%
        1,293,874
 1,293,874
 1,293,874
  
               
Comfort Holding, LLC Consumer goods:  Durable 
Senior Secured Second Lien Term Loan (LIBOR + 10.00% Cash, 1.00% LIBOR Floor)(13)
 2/3/2025 1,000,000
 962,572
 844,600
 0.2%
        1,000,000
 962,572
 844,600
  
               
CP OPCO, LLC Services:  Consumer 
Senior Secured First Lien Term Loan B (ABR + 5.50% PIK, 4.50% ABR Floor)(10)
 4/1/2019 1,274,828
 1,210,237
 338,467
 0.1%
    
Senior Secured First Lien Term Loan C (ABR + 8.50% PIK, 4.50% ABR Floor)(10)
 4/1/2019 9,380,638
 4,060,507
 —
 0.0%
    
Preferred Facility (ABR + 7.00% PIK, 4.50% ABR Floor)(10)
 4/1/2019 5,883,641
 —
 —
 0.0%
    Revolving Credit Facility (ABR + 3.50% Cash, 4.50% ABR Floor) 4/1/2019 —
 —
 —
 0.0%
    Equity - 232 Common Units   —
 —
 —
 0.0%
        16,539,107
 5,270,744
 338,467
  
               
CPI International, Inc. Aerospace & Defense 
Senior Secured Second Lien Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor)(13)
 7/26/2025 5,000,000
 4,975,920
 4,975,000
 1.2%
        5,000,000
 4,975,920
 4,975,000
  
               
Crow Precision Components, LLC Aerospace & Defense 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(14)
 9/30/2019 13,190,000
 13,190,000
 13,190,000
 3.1%
    Equity - 350 Common Units   —
 700,000
 273,809
 0.1%
        13,190,000
 13,890,000
 13,463,809
  
               
CT Technologies Intermediate Holdings, Inc.(12)
 Healthcare & Pharmaceuticals 
Senior Secured Second Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(13)
 12/1/2022 7,500,000
 7,500,000
 7,540,500
 1.8%
        7,500,000
 7,500,000
 7,540,500
  
               

Consolidated Schedule of Investments

As of March 31, 2024

(Unaudited)

Company(1) Industry Type of
Investment		 Maturity Par Amount/
Shares/Units(2)		  Amortized
Cost(3)		  Fair
Value(4)		  % of
Net
Assets(5)		 
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  3,812,783   3,812,783   3,827,081   2.48%
    First Lien Term Loan (SOFR + CSA + 5.25%, .0.75% Floor)(23) 8/2/2029  977,500   965,281   976,278   0.63%
         4,790,283   4,778,064   4,803,359   3.11%
                       
Epic Y-Grade Services, LP Energy: Oil & Gas First Lien Term Loan (SOFR + CSA + 6.00%, 1.00% Floor)(24) 6/30/2027  5,994,859   5,939,961   5,979,871   3.88%
         5,994,859   5,939,961   5,979,871   3.88%
                       
First Brands Group, LLC Automotive Senior Secured First Lien Term Loan (SOFR + CSA + 5.00%, 1.00% Floor)(20)(25) 3/30/2027  3,899,498   3,899,498   3,860,503   2.50%
         3,899,498   3,899,498   3,860,503   2.50%
                       
Franklin BSP Realty Trust, Inc.(11) Real Estate Equity - 66,107 Common Units(13)    66,107   907,782   883,190   0.57%
         66,107   907,782   883,190   0.57%
                       
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 8.50% Senior Secured Notes(14) 2/1/2026  4,250,000   3,714,663   3,065,313   1.99%
         4,250,000   3,714,663   3,065,313   1.99%
                       
Invesco Mortgage Capital, Inc.(11) Real Estate Equity - 205,000 Class C Preferred Units(13)(16)    205,000   5,035,506   4,532,550   2.94%
         205,000   5,035,506   4,532,550   2.94%
                       
NGS-WCS Group Holdings Construction & Building Senior Secured First Lien Term Loan B (SOFR + CSA+ 5.50%, 1.00% Floor)(20)(23) 11/12/2026  844,021   846,435   846,131   0.55%
JFL-NGS-WCS Partners, LLC Construction & Building Equity - 10,000,000 Units(21)    10,000,000   10,000,000   10,759,154   6.97%
         10,844,021   10,846,435   11,605,285   7.52%
                       
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%



PHENIXFIN CORPORATION

Company(1)
 Industry 
Type of Investment(6)
 Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
               
DHISCO Electronic Distribution, Inc. Hotel, Gaming & Leisure 
Senior Secured First Lien Term Loan A (LIBOR + 8.50% PIK, 1.50% LIBOR Floor)(14)
 11/10/2019 4,107,239
 4,107,239
 4,107,239
 1.0%
    
Senior Secured First Lien Term Loan B (LIBOR + 11.00% PIK, 1.50% LIBOR Floor)(10)(14)
 11/10/2019 15,203,145
 14,896,413
 6,134,469
 1.5%
    
Senior Secured First Lien Term Loan C (LIBOR + 12.25% PIK, 1.50% LIBOR Floor)(10)(14)
 11/10/2019 13,200,369
 11,600,575
 —
 0.0%
    
Senior Secured First Lien Term Loan D (LIBOR + 13.25% PIK, 1.50% LIBOR Floor)(10)(14)
 11/10/2019 12,407,459
 4,701,476
 —
 0.0%
    Equity - 1,230,769 Class A Units   —
 1,230,769
 —
 0.0%
        44,918,212
 36,536,472
 10,241,708
  
               
Dream Finders Homes, LLC Construction & Building 
Senior Secured First Lien Term Loan B (LIBOR + 14.50% Cash)(16)
 10/1/2018 3,399,550
 3,366,894
 3,430,146
 0.8%
    Preferred Equity (8.00% PIK)   3,644,300
 3,644,300
 3,644,300
 0.9%
        7,043,850
 7,011,194
 7,074,446
  
               
Dynamic Energy Services International LLC Energy:  Oil & Gas 
Senior Secured First Lien Term Loan (13.50% PIK + LIBOR)(16)
 6/6/2018 18,829,092
 18,829,092
 16,027,324
 3.8%
        18,829,092
 18,829,092
 16,027,324
  
               
Engineered Machinery Holdings, Inc.(7)
 Capital Equipment 
Senior Secured Second Lien Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor)(14)
 7/18/2025 1,519,149
 1,504,503
 1,503,958
 0.4%
    
Senior Secured Second Lien Delayed Draw Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor)(14)(19)
 7/18/2025 151,915
 150,405
 150,106
 0.0%
        1,671,064
 1,654,908
 1,654,064
  
               
FKI Security Group, LLC(12)
 Capital Equipment 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(14)
 3/30/2020 11,562,500
 11,562,500
 11,562,500
 2.8%
        11,562,500
 11,562,500
 11,562,500
  
               
Footprint Acquisition, LLC Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash)(15)
 2/27/2020 5,051,388
 5,051,388
 5,051,388
 1.2%
    Preferred Equity (8.75% PIK)   6,259,256
 6,259,256
 5,546,952
 1.3%
    Equity - 150 Common Units   —
 —
 —
 0.0%
        11,310,644
 11,310,644
 10,598,340
  
               
Freedom Powersports, LLC Automotive 
Senior Secured First Lien Term Loan (LIBOR + 10.00% Cash, 1.50% LIBOR Floor)(14)
 9/26/2019 12,040,000
 12,040,000
 12,160,400
 2.9%
        12,040,000
 12,040,000
 12,160,400
  
               
Friedrich Holdings, Inc. Construction & Building 
Senior Secured First Lien Term Loan (LIBOR + 7.00% Cash, 1.00% LIBOR Floor)(13)
 2/7/2023 10,000,000
 10,000,000
 10,143,000
 2.4%
        10,000,000
 10,000,000
 10,143,000
  
               
Global Accessories Group, LLC(12)
 Consumer goods:  Non-durable Equity - 3.8% Membership Interest   —
 151,337
 151,339
 0.0%
        —
 151,337
 151,339
  
               
Harrison Gypsum, LLC(12)
 Construction & Building 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% PIK, 1.50% LIBOR Floor)(13)
 12/21/2018 51,608,547
 51,608,547
 51,608,547
 12.3%
        51,608,547
 51,608,547
 51,608,547
  
               
Heligear Acquisition Co.(8)
 Aerospace & Defense Senior Secured First Lien Note (10.25% Cash) 10/15/2019 20,000,000
 20,000,000
 20,424,000
 4.9%
        20,000,000
 20,000,000
 20,424,000
  
               

Consolidated Schedule of Investments

As of March 31, 2024

(Unaudited)

Company(1) Industry Type of
Investment		 Maturity Par Amount/
Shares/Units(2)		  Amortized
Cost(3)		  Fair
Value(4)		  % of
Net
Assets(5)		 
Lucky Bucks, LLC Consumer Discretionary Priority Second Out Term LoanTL(SOFR + CSA + 7.50%, 1.00% Floor)(20)(23) 10/2/2029 $1,357,837  $1,330,680  $1,357,836   0.88%
    Priority First Out Exit Term LoanTL(SOFR + CSA + 7.50%, 1.00% Floor)(20)(23) 10/2/2028  687,817   624,953   687,817   0.45%
    Equity - 180,739 Membership Units(21)    180,739   174,393   1,566,290   1.02%
         2,226,393   2,130,026   3,611,943   2.35%
                       
McKissock Investment Holdings, LLC (dba Colibri) Services: Consumer Senior Secured First Lien Term Loan (SOFR + CSA + 5.00%, 0.75% Floor)(20)(24) 3/10/2029  4,899,999   4,861,787   4,850,543   3.14%
         4,899,999   4,861,787   4,850,543   3.14%
                       
MFA Financial, Inc.(11) Real Estate Equity - 97,426 Class C Preferred Units(13)(24)    97,426   2,318,487   2,160,909   1.40%
         97,426   2,318,487   2,160,909   1.40%
                       
New York Mortgage Trust, Inc.(11) Real Estate Equity - 165,000 Class E Preferred Units(13)(18)    165,000   4,102,076   3,790,050   2.46%
         165,000   4,102,076   3,790,050   2.46%
                       
PHH Mortgage Corp. Banking, Finance, Insurance & Real Estate 7.875% Senior Secured Note(14) 3/15/2026  9,686,000   8,780,720   9,306,631   6.03%
         9,686,000   8,780,720   9,306,631   6.03%
                       
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  6,884,353   6,485,730   6,195,918   4.02%
         6,884,353   6,485,730   6,195,918   4.02%
                       
Rithm Capital Corp.(11) Banking Equity - 206,684 Class B Preferred Units(13)(24)    206,684   5,129,170   5,047,223   3.27%
         206,684   5,129,170   5,047,223   3.27%
                       
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  3,527,463   3,516,477   3,527,463   2.29%
         3,527,463   3,516,477   3,527,463   2.29%



PHENIXFIN CORPORATION

Company(1)
 Industry 
Type of Investment(6)
 Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
               
Imagine! Print Solutions, LLC Media: Advertising, Printing & Publishing 
Senior Secured Second Lien Term Loan (LIBOR + 8.75% Cash, 1.00% LIBOR Floor)(14)
 6/21/2023 3,000,000
 2,957,827
 2,955,000
 0.7%
        3,000,000
 2,957,827
 2,955,000
  
               
Impact Sales, LLC(7)
 Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 7.00% Cash, 1.00% LIBOR Floor)(14)
 12/30/2021 2,598,750
 2,598,750
 2,542,877
 0.6%
    
Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 7.00% Cash, 1.00% LIBOR Floor)(14)(18)
 12/30/2021 119,410
 119,410
 100,617
 0.0%
        2,718,160
 2,718,160
 2,643,494
  
               
InterFlex Acquisition Company, LLC Containers, Packaging & Glass 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash, 1.00% LIBOR Floor)(13)
 8/18/2022 14,625,000
 14,625,000
 14,625,000
 3.5%
        14,625,000
 14,625,000
 14,625,000
  
               
JD Norman Industries, Inc. Automotive 
Senior Secured First Lien Term Loan (LIBOR + 12.25% Cash)(15)
 3/6/2019 19,800,000
 19,800,000
 19,800,000
 4.7%
        19,800,000
 19,800,000
 19,800,000
  
               
L & S Plumbing Partnership, Ltd. Construction & Building 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(14)
 2/15/2022 20,812,500
 20,812,500
 21,076,819
 5.0%
        20,812,500
 20,812,500
 21,076,819
  
               
Lighting Science Group Corporation Containers, Packaging & Glass 
Senior Secured Second Lien Term (LIBOR + 10.00% Cash, 2.00% PIK)(16)
 2/19/2019 13,936,111
 13,657,725
 13,765,393
 3.3%
    
Warrants - 0.81% of Outstanding Equity(21)
 2/19/2024 —
 955,680
 —
 0.0%
        13,936,111
 14,613,405
 13,765,393
  
               
Manna Pro Products, LLC(7)
 Consumer goods:  Non-durable 
Senior Secured First Lien Term Loan (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(14)
 12/8/2023 8,000,000
 8,000,000
 8,000,000
 1.9%
    
Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(14)(18)
 12/8/2023 —
 —
 —
 0.0%
        8,000,000
 8,000,000
 8,000,000
  
               
Merchant Cash and Capital, LLC Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 13.00% Cash, 3.00% LIBOR Floor)(13)
 5/31/2017 2,633,340
 2,633,340
 2,633,340
 0.6%
    
Senior Secured Second Lien Term Loan (17.00% PIK)(10)
 5/4/2017 16,196,491
 15,167,277
 7,759,739
 1.8%
        18,829,831
 17,800,617
 10,393,079
  
               
Oxford Mining Company, LLC Metals & Mining 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 3.00% PIK, 0.75% LIBOR Floor)(14)
 12/31/2018 21,202,310
 21,202,310
 21,202,310
 5.1%
        21,202,310
 21,202,310
 21,202,310
  
               
Path Medical, LLC(7)
 Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 9.50% Cash, 1.00% LIBOR Floor)(14)
 10/11/2021 8,305,335
 7,901,696
 8,349,354
 2.0%
    
Senior Secured First Lien Term Loan A (LIBOR + 9.50% Cash, 1.00% LIBOR Floor)(14)
 10/11/2021 2,808,500
 2,808,500
 2,861,148
 0.7%
    Warrants - 1.56% of Outstanding Equity 1/9/2027 —
 499,751
 83,018
 0.0%
        11,113,835
 11,209,947
 11,293,520
  
               

Consolidated Schedule of Investments

As of March 31, 2024

(Unaudited)

Company(1) Industry Type of
Investment		 Maturity Par Amount/
Shares/Units(2)		  Amortized
Cost(3)		  Fair
Value(4)		  % of
Net
Assets(5)		 
SMC Roofing Services: Consumer First Out Term Loan (SOFR + CSA + 3.50%, 2.00% Floor)(24) 10/16/2028  660,714   654,107   654,107   0.42%
    First Out Delayed Draw Term Loan (SOFR + CSA + 3.50%, 2.00% Floor)(8)(24) 10/16/2028  -   (446)  -   0.00%
    Last Out Term Loan (SOFR + CSA + 11.75%, 2.00% Floor)(24) 10/16/2028  1,863,568   1,821,638   1,821,638   1.18%
    Last Out Delayed Draw Term Loan (SOFR + CSA + 11.75%, 2.00% Floor)(8)(24) 10/16/2028  -   (3,864)  -   0.00%
         2,524,282   2,471,435   2,475,745   1.60%
                       
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   6,602,650   6,666,667   4.32%
    Senior Secured First Lien Delayed Draw Term Loan  (SOFR + CSA + 6.50%, 1.00% Floor)(20)(23) 12/30/2026  3,200,000   3,165,673   3,200,000   2.07%
         9,866,667   9,768,323   9,866,667   6.39%
                       
Stancor (dba Industrial Flow Solutions Holdings, LLC) Services: Business Equity - 358,867 Class A Units(21)    358,867   345,491   375,719   0.24%
         358,867   345,491   375,719   0.24%
                       
Staples, Inc. Services: Consumer First Lien Term Loan (LIBOR + 4.50%)(14)(22) 9/12/2024  3,672,879   3,636,583   3,661,401   2.38%
         3,672,879   3,636,583   3,661,401   2.38%
                       
Tamarix Capital Partners II, L.P.(8)(11) Banking Fund Investment(8)(21)     N/A   1,026,818   783,465   0.52%
         -   1,026,818   783,465   0.52%
                       
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  6,869,478   6,809,553   6,878,065   4.47%
         6,869,478   6,809,553   6,878,065   4.47%
                       
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%
                       
Wingman Holdings, Inc. Aerospace & Defense Equity - 350 Common Shares(21)    350   700,000   -   0.00%
         350   700,000   -   0.00%
                       
Subtotal Non-Controlled/Non-Affiliated Investments        116,548,907  $138,055,022  $132,407,942   
85.841
%



PHENIXFIN CORPORATION

Company(1)
 Industry 
Type of Investment(6)
 Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
               
The Plastics Group, Inc. Chemicals, Plastics & Rubber Senior Secured First Lien Term Loan (11.00% Cash, 2.00% PIK) 2/28/2019 21,865,403
 21,865,403
 3,028,358
 0.7%
    Senior Secured First Lien Term Loan 2 (11.00% Cash, 2.00% PIK) 2/28/2018 467,652
 467,652
 467,652
 0.1%
        22,333,055
 22,333,055
 3,496,010
  
               
Point.360 Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 6.00% PIK)(10)(16)
 7/8/2020 2,103,712
 2,103,712
 1,860,313
 0.4%
    
Equity - 479,283 Common Units(20)
   —
 129,406
 33,550
 0.0%
    
Warrants - 2.8% of Outstanding Equity(21)
 7/8/2020 —
 52,757
 21,103
 0.0%
        2,103,712
 2,285,875
 1,914,966
  
               
Prince Mineral Holding Corp.(8)
 Wholesale 
Senior Secured First Lien Note (11.50% Cash)(21)
 12/15/2019 6,800,000
 6,770,826
 6,995,840
 1.7%
        6,800,000
 6,770,826
 6,995,840
  
               
Reddy Ice Corporation Beverage & Food 
Senior Secured Second Lien Term Loan (LIBOR + 9.50% Cash, 1.25% LIBOR Floor)(14)
 11/1/2019 17,000,000
 17,000,000
 16,265,600
 3.9%
        17,000,000
 17,000,000
 16,265,600
  
               
RESIC Enterprises, LLC Beverage & Food 
Senior Secured Second Lien Term Loan (LIBOR + 8.75% Cash, 1.00% LIBOR Floor)(14)
 11/10/2025 10,000,000
 10,000,000
 10,000,000
 2.4%
        10,000,000
 10,000,000
 10,000,000
  
               
RMS Holding Company, LLC(7)
 Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 6.00% Cash, 1.00% LIBOR Floor)(14)
 11/16/2022 12,468,750
 12,468,750
 12,468,750
 3.0%
    
Revolving Credit Facility (LIBOR + 6.00% Cash, 1.00% LIBOR
Floor)(14)(17)
 11/16/2022 1,073,204
 1,073,204
 1,073,204
 0.3%
        13,541,954
 13,541,954
 13,541,954
  
               
SavATree, LLC(7)
 Environmental Industries 
Senior Secured First Lien Term Loan (LIBOR + 5.25% Cash, 1.00% LIBOR Floor)(14)(18)
 6/2/2022 1,872,964
 1,872,964
 1,884,386
 0.4%
        1,872,964
 1,872,964
 1,884,386
  
               
Sendero Drilling Company, LLC Energy:  Oil & Gas Warrants - 5.52% of Outstanding Equity 3/18/2019 —
 793,523
 1,923,944
 0.5%
        —
 793,523
 1,923,944
  
               
Seotowncenter, Inc.(12)
 Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(14)
 9/11/2019 23,478,660
 23,478,660
 23,478,660
 5.6%
    Equity - 3,249.697 Common Units   —
 500,000
 476,763
 0.1%
        23,478,660
 23,978,660
 23,955,423
  
               
SFP Holding, Inc.(7)
 Construction & Building 
Senior Secured First Lien Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor)(14)(17)
 9/1/2022 6,222,222
 6,222,222
 6,222,222
 1.5%
    Equity - 1.42% Company Interest   —
 600,000
 600,000
 0.1%
        6,222,222
 6,822,222
 6,822,222
  
               
Ship Supply Acquisition Corporation Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash, 1.00% LIBOR Floor)(14)
 7/31/2020 7,542,564
 7,542,564
 7,235,582
 1.7%
        7,542,564
 7,542,564
 7,235,582
  
               
SMART Financial Operations, LLC(7)
 Retail 
Senior Secured First Lien Term Loan (LIBOR + 10.00% Cash, 1.00% LIBOR Floor)(14)
 11/22/2021 2,775,000
 2,775,000
 2,848,500
 0.7%
    Equity - 700,000 Class A Preferred Units   —
 700,000
 735,000
 0.2%
        2,775,000
 3,475,000
 3,583,500
  
               

Consolidated Schedule of Investments

As of March 31, 2024

(Unaudited)

Company(1) Industry Type of
Investment		 Maturity Par Amount/
Shares/Units(2)		  Amortized
Cost(3)		  Fair
Value(4)		  % of
Net
Assets(5)		 
  
Affiliated Investments:(6) 
                       
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  908,080   $875,749  $ 875,749   0.57%
    Senior Secured First Lien Term Loan (SOFR + CSA + 9.00% PIK, 1.00% Floor)(10)(20)(23) 1/31/2025  13,513,874   7,767,533   810,832   0.53%
    Senior Secured First Lien Super Priority Delayed Draw Term Loan (SOFR + CSA + 9.00% PIK, 1.00% Floor)(10)(20)(23) 1/31/2025  1,991,878   1,920,960   1,920,960   1.25%
    Equity - 17.92% Membership Interest(21)    -   -   -   0.00%
         16,413,832   10,564,242   3,607,541   2.35%
                       
FST Holdings Parent, LLC High Tech Industries Equity - 625,548 Class A Units    625,548   10,000,000   10,726,326   6.95%
         625,548   10,000,000   10,726,326   6.95%
                       
Subtotal Affiliated Investments        17,039,380  $20,564,242  $14,333,867   9.30%



Company(1)
 Industry 
Type of Investment(6)
 Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
               
SRS Software, LLC High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 7.00% Cash, 1.00% LIBOR Floor)(14)
 2/17/2022 7,443,750
 7,443,750
 7,508,511
 1.8%
        7,443,750
 7,443,750
 7,508,511
  
               
Stancor, Inc. Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash, 0.75% LIBOR Floor)(13)
 8/19/2019 4,105,932
 4,105,932
 4,105,932
 1.0%
    Equity - 263,814.43 Class A Units   —
 263,814
 211,052
 0.1%
        4,105,932
 4,369,746
 4,316,984
  
               
Starfish Holdco, LLC High Tech Industries 
Senior Secured Second Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(14)
 8/18/2025 4,000,000
 3,941,779
 3,940,000
 0.9%
        4,000,000
 3,941,779
 3,940,000
  
               
Taylored Freight Services, LLC Services:  Business 
Senior Secured Second Lien Term Loan (LIBOR + 9.50% Cash, 2.00% PIK, 1.50% LIBOR Floor)(14)
 11/1/2017 14,819,981
 14,819,981
 14,819,981
 3.5%
        14,819,981
 14,819,981
 14,819,981
  
               
Trans-Fast Remittance LLC(7)
 Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash, 1.00% LIBOR Floor)(13)(17)
 12/2/2021 3,567,857
 3,567,857
 3,660,357
 0.9%
    
Revolving Credit Facility (LIBOR + 8.00% Cash, 1.00% LIBOR Floor)(13)
 12/2/2021 1,875,000
 1,875,000
 1,875,000
 0.4%
        5,442,857
 5,442,857
 5,535,357
  
               
Vail Holdco Corp Chemicals, Plastics & Rubber Equity - 9,750 Shares of Series A Preferred Stock (12.50% PIK)   9,750,000
 9,324,213
 9,323,925
 2.2%
    Equity - 7,700 Shares of Junior Convertible Preferred Stock   7,700,000
 7,700,000
 7,700,000
 1.8%
    Warrants - 5.52% of Outstanding Equity   —
 425,787
 425,763
 0.1%
        17,450,000
 17,450,000
 17,449,688
  
               
Velocity Pooling Vehicle, LLC Automotive Senior Secured First Lien Term Loan (12.00% Cash) 8/15/2018 813,301
 813,301
 813,301
 0.2%
    
Senior Secured First Lien Term Loan (LIBOR + 4.00% Cash, 1.00% LIBOR Floor)(9)(10)
 5/14/2021 1,958,668
 1,109,768
 215,454
 0.1%
    
Senior Secured Second Lien Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor)(9)(10)
 5/13/2022 24,000,000
 21,696,167
 240,000
 0.1%
        26,771,969
 23,619,236
 1,268,755
  
               
Watermill-QMC Midco, Inc. Automotive 
Equity - 1.3% Partnership Interest(23)
   —
 518,283
 672,213
 0.2%
        —
 518,283
 672,213
  
               
Wheels Up Partners LLC(12)
 Aerospace & Defense 
Senior Secured First Lien Delayed Draw (LIBOR + 8.55% Cash, 1.00% LIBOR Floor)(14)
 10/15/2021 9,169,027
 9,169,027
 8,893,956
 2.1%
        9,169,027
 9,169,027
 8,893,956
  
               
Subtotal Non-Controlled/Non-Affiliated Investments   $668,097,514
 $649,624,352
 $565,541,395
  
             


Company(1)
 Industry 
Type of Investment(6)
 Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
               
Affiliated Investments:      
  
  
  
               
AAR Intermediate Holdings, LLC(7)
 Energy:  Oil & Gas 
Senior Secured First Lien Term Loan A (LIBOR + 5.00% Cash, 1.00% LIBOR Floor)(14)
 9/30/2021 8,984,232
 8,984,232
 8,984,232
 2.1%
    
Senior Secured First Lien Term Loan B (LIBOR + 8.00% PIK, 1.00% LIBOR Floor)(14)
 9/30/2021 20,225,610
 17,330,588
 20,225,610
 4.8%
    
Revolving Credit Facility (LIBOR + 5.00% Cash, 1.00% LIBOR
Floor)(14)(17)
 9/30/2021 539,054
 539,054
 539,054
 0.1%
    Equity - 21,562.16 Class A Units   —
 —
 —
 0.0%
        29,748,896
 26,853,874
 29,748,896
  
               
Access Media Holdings, LLC(7)
 Media:  Broadcasting & Subscription Senior Secured First Lien Term Loan (5.00% Cash, 5.00% PIK) 7/22/2020 8,446,384
 8,446,384
 8,446,384
 2.0%
    Preferred Equity Series A   1,600,000
 1,600,000
 —
 0.0%
    Preferred Equity Series AA   800,000
 800,000
 —
 0.0%
    Preferred Equity Series AAA   532,800
 532,800
 148,800
 0.0%
    Equity - 16 Common Units   —
 —
 —
 0.0%
        11,379,184
 11,379,184
 8,595,184
  
               
Brantley Transportation LLC(12)
 Energy:  Oil & Gas 
Senior Secured First Lien Term Loan (12.00% PIK)(10)
 8/2/2017 11,703,521
 9,000,000
 7,956,054
 1.9%
    
Senior Secured First Lien Delayed Draw (LIBOR + 5.00% Cash, 1.00% LIBOR Floor)(13)
 8/2/2017 668,105
 668,105
 668,105
 0.2%
    Equity - 7.5 Common Units   —
 —
 —
 0.0%
        12,371,626
 9,668,105
 8,624,159
  
               
JFL-NGS Partners, LLC Construction & Building Preferred Equity - A-2 Preferred (3.00% PIK)   30,552,190
 30,552,190
 30,552,190
 7.3%
    Preferred Equity - A-1 Preferred (3.00% PIK)   3,953,700
 3,953,700
 3,953,700
 0.9%
    Equity - 57,300 Class B Units   —
 57,300
 4,318,128
 1.0%
        34,505,890
 34,563,190
 38,824,018
  
               
US Multifamily, LLC(11)
 Banking, Finance, Insurance & Real Estate Senior Secured First Lien Term Loan (10.00% Cash) 9/10/2019 6,670,000
 6,670,000
 6,670,000
 1.6%
    Equity - 33,300 Preferred Units   —
 3,330,000
 3,330,000
 0.8%
        6,670,000
 10,000,000
 10,000,000
  
               
Subtotal Affiliated Investments     $94,675,596
 $92,464,353
 $95,792,257
  
             
Controlled Investments:(5)
      
  
  
  
               
Capstone Nutrition(12)
 Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 12.50% PIK, 1.00% LIBOR Floor)(10)(14)
 9/25/2020 27,049,193
 20,803,397
 16,056,401
 3.8%
    
Senior Secured First Lien Delayed Draw (LIBOR + 12.50% PIK, 1.00% LIBOR Floor)(10)(14)
 9/25/2020 11,704,163
 9,153,997
 6,947,591
 1.7%
    Equity - 4,664.6 Class B Units and 9,424.4 Class C Units   —
 12
 —
 0.0%
    Equity - 2,932.3 Common Units   —
 400,003
 —
 0.0%
        38,753,356
 30,357,409
 23,003,992
  
               
MCC Senior Loan Strategy JV I LLC(11)
 Multisector Holdings Equity - 87.5% ownership of MCC Senior Loan Strategy JV I LLC   —
 66,762,500
 67,405,603
 16.1%
        —
 66,762,500
 67,405,603
  
                  


PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of March 31, 2024

Company(1)
 Industry 
Type of Investment(6)
 Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
               
NVTN LLC Hotel, Gaming & Leisure 
Senior Secured First Lien Term Loan (LIBOR + 4.00% Cash, 1.00% LIBOR Floor)(13)
 11/9/2020 3,505,990
 3,505,990
 3,505,990
 0.8%
    
Senior Secured First Lien Term Loan B (LIBOR + 9.25% PIK, 1.00% LIBOR Floor)(13)
 11/9/2020 10,888,153
 10,888,153
 10,888,153
 2.6%
    
Senior Secured First Lien Term Loan C (LIBOR + 12.00% PIK, 1.00% LIBOR Floor)(13)
 11/9/2020 6,738,610
 6,738,610
 6,738,610
 1.6%
    Equity - 787.4 Class A Units   —
 9,550,922
 9,550,922
 2.3%
        21,132,753
 30,683,675
 30,683,675
  
               
OmniVere, LLC Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 13.00% PIK)(10)(16)
 5/5/2019 26,405,280
 22,880,599
 17,691,538
 4.2%
    Senior Secured First Lien Term Loan (8.00% PIK) 5/5/2019 2,029,701
 2,029,701
 2,029,701
 0.5%
    
Unsecured Debt (8.00% PIK)(10)
 7/24/2025 27,209,866
 22,727,575
 —
 0.0%
    Equity - 5,055.56 Common Units   —
 872,698
 —
 0.0%
        55,644,847
 48,510,573
 19,721,239
  
               
URT Acquisition Holdings Corporation Services:  Business 
Senior Secured Second Lien Term Loan (LIBOR + 8.00% Cash, 2.00% LIBOR Floor)(14)
 5/2/2022 14,966,563
 14,966,563
 14,966,563
 3.6%
    Preferred Equity (12.00% PIK)   5,850,795
 5,850,795
 5,850,795
 1.4%
    Equity - 397,466 Common Units   —
 12,936,879
 12,937,518
 3.1%
        20,817,358
 33,754,237
 33,754,876
  
               
Subtotal Controlled Investments     $136,348,314
 $210,068,394
 $174,569,385
  
             
Total Investments, December 31, 2017     $899,121,424
 $952,157,099
 $835,903,037
 199.1%

(Unaudited)


Company(1) Industry Type of
Investment		 Maturity Par Amount/
Shares/Units(2)		  Amortized
Cost(3)		  Fair
Value(4)		  % of
Net
Assets(5)		 
                       
Controlled Investments:(7)                      
                       
FlexFIN, LLC Services: Business Equity Interest    34,729,225  $34,729,225  $34,729,225   22.51%
         34,729,225   34,729,225   34,729,225   22.51%
                       
Kemmerer Operations, LLC Metals & Mining Senior Secured First Lien Term Loan (15.00% PIK) 6/21/2025  3,286,036   3,286,036   3,286,036   2.13%
Kemmerer Holdings, LLC Metals & Mining Equity - 37 Common Units(21)    37   4,136,157   12,166,174   7.89%
         3,286,073   7,422,193   15,452,210   10.02%
                       
NSG Captive, Inc. Insurance Equity - 100,000 Units(21)    100,000   100,000   100,000   0.06%
         100,000   100,000   100,000   0.06%
                       
NVTN LLC Hotel, Gaming & Leisure Senior Secured First Lien Delayed Draw Term Loan  (SOFR + 8.25%, 2.00% Floor)(23) 12/31/2026  5,500,000   5,604,805   5,500,000   3.57%
    Senior Secured First Lien Term Loan B  (SOFR + 9.25% PIK, 2.00% Floor)(10) 12/31/2026  17,552,420   13,916,082   17,526,090   11.36%
    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%
         34,559,579   48,541,866   23,026,090   14.93%
                       
Subtotal Control Investments    72,674,877  $90,793,284  $73,307,525   47.52%
                       
  Total Investments, March 31, 2024  206,263,164  $249,412,548  $220,049,334   142.66%

(1)All of our investments are domiciled in the United States. Certain investments also have international operations.
(2)Par amount is presented for debt investments and the amount includes accumulated PIKpayment-in-kind (“PIK”) interest, as applicable, and is net of repayments.
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.
(3)Gross unrealized appreciation, grossNet unrealized depreciation and net unrealized depreciation for U.S. federal income tax purposes totaled $18,698,678, $126,023,083, and $107,324,405, respectively.$(29,363,214). The tax cost basis of investments is $943,227,442$249,412,548 as of DecemberMarch 31, 2017.
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.
(4)Percentage is based on net assets of $419,769,455 as of December 31, 2017.
(5)Controlled 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.
(6)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).
(7)The investment has an unfunded commitment as of December 31, 2017 (see Note 8), and includes an analysis of the value of any unfunded commitments.
(8)Securities are exempt from registration under Rule 144A of the Securities Act of 1933. These securities represent a fair value of $36,743,765 and 8.8% of net assets as of December 31, 2017, and are considered restricted securities.
(9)The interest rate on these loans is subject to the greater of a London Interbank Offering Rate (''LIBOR'') floor, or 6 month LIBOR plus a base rate. The 6 month LIBOR as of December 31, 2017 was 1.84%.
(10)The investment was on non-accrual status as of December 31, 2017.
(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 December 31, 2017, 9.3% of the Company's portfolio investments were non-qualifying assets.
(12)A portion of this investment was sold via a participation agreement. The amount stated is the portion retained by Medley Capital Corporation (see Note 3).
(13)The interest rate on these loans is subject to the greater of a LIBOR floor, or 1 month LIBOR plus a base rate. The 1 month LIBOR as of December 31, 2017 was 1.57%.
(14)The interest rate on these loans is subject to the greater of a LIBOR floor, or 3 month LIBOR plus a base rate. The 3 month LIBOR as of December 31, 2017 was 1.69%.
(15)The interest rate on these loans is subject to 1 month LIBOR plus a base rate. The 1 month LIBOR as of December 31, 2017 was 1.57%.
(16)The interest rate on these loans is subject to 3 month LIBOR plus a base rate. The 3 month LIBOR as of December 31, 2017 was 1.67%.
(17)This investment earns 0.50% commitment fee on all unused commitment as of December 31, 2017.
(18)This investment earns 1.00% commitment fee on all unused commitment as of December 31, 2017.
(19)This investment earns 7.25% commitment fee on all unused commitment as of December 31, 2017.
(20)This investment represents a Level 1 security in the ASC 820 table as of December 31, 2017 (see Note 4).
(21)This investment represents a Level 2 security in the ASC 820 table as of December 31, 2017 (see Note 4).
(22)This investment earns 0.25% commitment fee on all unused commitment as of December 31, 2017.
(23)Represents 1.3% partnership interest in Watermill-QMC Partners, LP, and Watermill-EMI Partners, LP.

See accompanying notes to consolidated financial statements.


Medley Capital Corporation
Consolidated Schedule of Investments
September 30, 2017
Company(1)
 Industry 
Type of Investment(6)
 Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
               
Non-Controlled/Non-Affiliated Investments:
            
               
3SI Security Systems, Inc. Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor)(14)
 6/16/2023 17,500,000
 17,500,000
 17,500,000
 3.8%
        17,500,000
 17,500,000
 17,500,000
  
               
Accupac, Inc.(7)
 Containers, Packaging & Glass 
Senior Secured First Lien Term Loan (LIBOR + 4.50% Cash, 1.00% LIBOR Floor)(13)(18)
 9/14/2023 9,887,670
 9,887,670
 9,887,670
 2.2%
        9,887,670
 9,887,670
 9,887,670
  
               
Advanced Diagnostic Holdings, LLC Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(14)
 12/11/2020 14,776,537
 14,776,537
 14,776,537
 3.2%
        14,776,537
 14,776,537
 14,776,537
  
               
American Dental Partners, Inc. Healthcare & Pharmaceuticals 
Senior Secured Second Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(14)
 9/25/2023 6,500,000
 6,500,000
 6,578,000
 1.4%
        6,500,000
 6,500,000
 6,578,000
  
               
Autosplice, Inc. High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash, 1.00% LIBOR Floor)(14)
 6/30/2019 14,262,133
 14,262,133
 14,342,001
 3.1%
        14,262,133
 14,262,133
 14,342,001
  
               
Avantor Performance Materials Holdings, LLC Chemicals, Plastics & Rubber 
Senior Secured Second Lien Term Loan (LIBOR + 8.25% Cash, 1.00% LIBOR Floor)(13)
 3/10/2025 1,000,000
 990,465
 1,020,000
 0.2%
        1,000,000
 990,465
 1,020,000
  
               
Barry's Bootcamp Holdings, LLC(7)
 Services:  Consumer 
Senior Secured First Lien Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(14)
 7/14/2022 7,628,570
 7,628,570
 7,628,570
 1.7%
    
Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(14)
 7/14/2022 —
 —
 —
 0.0%
    
Revolving Credit Facility (LIBOR + 6.50% Cash, 1.00% LIBOR
Floor)(14)(17)
 7/14/2022 —
 —
 —
 0.0%
        7,628,570
 7,628,570
 7,628,570
  
               
Be Green Packaging, LLC Containers, Packaging & Glass Equity - 417 Common Units   —
 416,250
 —
 0.0%
        —
 416,250
 —
  
               
Black Angus Steakhouses, LLC(7)
 Hotel, Gaming & Leisure 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(14)
 4/24/2020 7,700,893
 7,700,893
 7,375,190
 1.6%
    
Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(14)
 4/24/2020 —
 —
 —
 0.0%
    
Revolving Credit Facility (LIBOR + 9.00% Cash, 1.00% LIBOR
Floor)(14)(17)
 4/24/2020 376,360
 376,360
 343,324
 0.1%
        8,077,253
 8,077,253
 7,718,514
  
               


Company(1)
 Industry 
Type of Investment(6)
 Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
               
Central States Dermatology Services, LLC(7)
 Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(14)
 4/20/2022 1,087,248
 1,087,248
 1,087,248
 0.2%
    
Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 6.50% Cash, 1.00% LIBOR Floor)(14)(18)
 4/20/2022 155,930
 155,930
 155,930
 0.0%
        1,243,178
 1,243,178
 1,243,178
  
               
Comfort Holding, LLC Consumer goods:  Durable 
Senior Secured Second Lien Term Loan (LIBOR + 10.00% Cash, 1.00% LIBOR Floor)(13)
 2/3/2025 1,000,000
 961,738
 850,200
 0.2%
        1,000,000
 961,738
 850,200
  
               
CP OPCO, LLC(7)
 Services:  Consumer 
Senior Secured First Lien Term Loan B (ABR + 5.50% PIK, 4.25% ABR Floor)(10)
 3/31/2019 1,244,335
 1,210,237
 338,459
 0.1%
    
Senior Secured First Lien Term Loan C (ABR + 8.50% PIK, 4.25% ABR Floor)(10)
 3/31/2019 9,088,659
 4,060,507
 —
 0.0%
    
Preferred Facility (ABR + 7.00% PIK, 3.75% ABR Floor)(10)
 3/31/2019 5,297,476
 —
 —
 0.0%
    Revolving Credit Facility (ABR + 3.50% Cash, 4.25% ABR Floor) 3/31/2019 —
 —
 —
 0.0%
    Equity - 232 Common Units   —
 —
 —
 0.0%
        15,630,470
 5,270,744
 338,459
  
               
CPI International, Inc. Aerospace & Defense 
Senior Secured Second Lien Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor)(13)
 7/26/2025 5,000,000
 4,975,352
 4,975,000
 1.1%
        5,000,000
 4,975,352
 4,975,000
  
               
Crow Precision Components, LLC Aerospace & Defense 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(14)
 9/30/2019 13,277,500
 13,277,500
 13,246,962
 2.9%
    Equity - 350 Common Units   —
 700,000
 273,808
 0.1%
        13,277,500
 13,977,500
 13,520,770
  
               
CT Technologies Intermediate Holdings, Inc.(12)
 Healthcare & Pharmaceuticals 
Senior Secured Second Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(13)
 12/1/2022 7,500,000
 7,500,000
 7,500,000
 1.6%
        7,500,000
 7,500,000
 7,500,000
  
               
DHISCO Electronic Distribution, Inc. Hotel, Gaming & Leisure 
Senior Secured First Lien Term Loan A (LIBOR + 8.50% PIK, 1.50% LIBOR Floor)(14)
 11/10/2019 4,005,143
 4,005,143
 4,005,143
 0.9%
    
Senior Secured First Lien Term Loan B (LIBOR + 11.00% PIK, 1.50% LIBOR Floor)(14)
 11/10/2019 14,732,716
 14,732,716
 14,732,716
 3.2%
    
Senior Secured First Lien Term Loan C (LIBOR + 12.25% PIK, 1.50% LIBOR Floor)(10)(14)
 11/10/2019 12,751,998
 11,600,575
 6,375,999
 1.4%
    
Senior Secured First Lien Term Loan D (LIBOR + 13.25% PIK, 1.50% LIBOR Floor)(10)(14)
 11/10/2019 11,956,119
 4,701,476
 —
 0.0%
    Equity - 1,230,769 Class A Units   —
 1,230,769
 —
 0.0%
        43,445,976
 36,270,679
 25,113,858
  
               
Dream Finders Homes, LLC Construction & Building 
Senior Secured First Lien Term Loan B (LIBOR + 14.50% Cash)(16)
 10/1/2018 3,460,972
 3,417,279
 3,495,581
 0.8%
    Preferred Equity (8.00% PIK)   3,571,500
 3,571,500
 3,571,500
 0.8%
        7,032,472
 6,988,779
 7,067,081
  
               
Dynamic Energy Services International LLC Energy:  Oil & Gas 
Senior Secured First Lien Term Loan (13.50% PIK + LIBOR)(16)
 6/6/2018 18,201,153
 18,201,153
 15,492,821
 3.4%
        18,201,153
 18,201,153
 15,492,821
  
               


Company(1)
 Industry 
Type of Investment(6)
 Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
               
Engineered Machinery Holdings, Inc.(7)
 Capital Equipment 
Senior Secured Second Lien Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor)(14)
 7/18/2025 1,519,149
 1,504,143
 1,503,957
 0.3%
    
Senior Secured Second Lien Delayed Draw Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor)(14)(19)
 7/18/2025 21,702
 21,487
 19,894
 0.0%
        1,540,851
 1,525,630
 1,523,851
  
               
FKI Security Group, LLC(12)
 Capital Equipment 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(14)
 3/30/2020 11,656,250
 11,656,250
 11,656,250
 2.5%
        11,656,250
 11,656,250
 11,656,250
  
               
Footprint Acquisition, LLC Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash)(15)
 2/27/2020 5,117,626
 5,117,626
 5,117,626
 1.1%
    Preferred Equity (8.75% PIK)   6,124,188
 6,124,188
 5,427,255
 1.2%
    Equity - 150 Common Units   —
 —
 —
 0.0%
        11,241,814
 11,241,814
 10,544,881
  
               
Freedom Powersports, LLC Automotive 
Senior Secured First Lien Term Loan (LIBOR + 10.00% Cash, 1.50% LIBOR Floor)(14)
 9/26/2019 12,410,000
 12,410,000
 12,517,967
 2.7%
        12,410,000
 12,410,000
 12,517,967
  
               
Friedrich Holdings, Inc. Construction & Building 
Senior Secured First Lien Term Loan (LIBOR + 7.00% Cash, 1.00% LIBOR Floor)(13)
 2/7/2023 10,000,000
 10,000,000
 10,094,000
 2.2%
        10,000,000
 10,000,000
 10,094,000
  
               
Global Accessories Group, LLC(12)
 Consumer goods:  Non-durable Equity - 3.8% Membership Interest   —
 151,337
 151,339
 0.0%
        —
 151,337
 151,339
  
               
Harrison Gypsum, LLC(12)
 Construction & Building 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% PIK, 1.50% LIBOR Floor)(13)
 12/21/2018 52,137,471
 52,137,471
 50,667,194
 11.0%
        52,137,471
 52,137,471
 50,667,194
  
               
Heligear Acquisition Co.(8)
 Aerospace & Defense Senior Secured First Lien Note (10.25% Cash) 10/15/2019 20,000,000
 20,000,000
 20,478,000
 4.4%
        20,000,000
 20,000,000
 20,478,000
  
               
Imagine! Print Solutions LLC Media: Advertising, Printing & Publishing 
Senior Secured Second Lien Term Loan (LIBOR + 8.75% Cash, 1.00% LIBOR Floor)(14)
 6/21/2023 3,000,000
 2,956,403
 2,955,000
 0.6%
        3,000,000
 2,956,403
 2,955,000
  
               
Impact Sales, LLC(7)
 Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 7.00% Cash, 1.00% LIBOR Floor)(14)
 12/30/2021 2,605,312
 2,605,312
 2,621,986
 0.6%
    
Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 7.00% Cash, 1.00% LIBOR Floor)(14)(18)
 12/30/2021 119,711
 119,711
 125,307
 0.0%
        2,725,023
 2,725,023
 2,747,293
  
               
InterFlex Acquisition Company, LLC Containers, Packaging & Glass 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash, 1.00% LIBOR Floor)(13)
 8/18/2022 14,812,500
 14,812,500
 14,812,500
 3.2%
        14,812,500
 14,812,500
 14,812,500
  
               
JD Norman Industries, Inc. Automotive 
Senior Secured First Lien Term Loan (LIBOR + 12.25% Cash)(15)
 3/6/2019 20,100,000
 20,100,000
 20,071,860
 4.4%
        20,100,000
 20,100,000
 20,071,860
  
               


Company(1)
 Industry 
Type of Investment(6)
 Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
               
L & S Plumbing Partnership, Ltd. Construction & Building 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 1.00% LIBOR Floor)(14)
 2/15/2022 21,234,375
 21,234,375
 21,412,744
 4.7%
        21,234,375
 21,234,375
 21,412,744
  
               
Lighting Science Group Corporation Containers, Packaging & Glass 
Senior Secured Second Lien Term (LIBOR + 10.00% Cash, 2.00% PIK)(16)
 2/19/2019 13,865,893
 13,531,508
 13,386,133
 2.9%
    
Warrants - 0.98% of Outstanding Equity(21)
 2/19/2024 —
 955,680
 —
 0.0%
        13,865,893
 14,487,188
 13,386,133
  
               
Merchant Cash and Capital, LLC Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Delayed Draw Term Loan (LIBOR + 13.00% Cash, 3.00% LIBOR Floor)(13)
 5/31/2017 4,915,635
 4,915,635
 4,915,635
 1.1%
    
Senior Secured Second Lien Term Loan (17.00% PIK)(10)
 5/4/2017 15,519,966
 15,167,277
 7,759,983
 1.7%
        20,435,601
 20,082,912
 12,675,618
  
               
Nation Safe Drivers Holdings, Inc. Banking, Finance, Insurance & Real Estate 
Senior Secured Second Lien Term Loan (LIBOR + 8.00% Cash, 2.00% LIBOR Floor)(14)
 9/29/2020 35,278,846
 35,278,846
 35,278,846
 7.7%
        35,278,846
 35,278,846
 35,278,846
  
               
Oxford Mining Company, LLC Metals & Mining 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 3.00% PIK, 0.75% LIBOR Floor)(14)
 12/31/2018 21,127,331
 21,127,331
 21,127,331
 4.6%
        21,127,331
 21,127,331
 21,127,331
  
               
The Plastics Group, Inc. Chemicals, Plastics & Rubber Senior Secured First Lien Term Loan (11.00% Cash, 2.00% PIK) 2/28/2019 21,755,233
 21,755,233
 18,992,318
 4.1%
        21,755,233
 21,755,233
 18,992,318
  
               
Path Medical, LLC Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 9.50% Cash, 1.00% LIBOR Floor)(14)
 10/11/2021 8,459,113
 8,034,525
 8,503,947
 1.8%
    
Senior Secured First Lien Term Loan A (LIBOR + 9.50% Cash, 1.00% LIBOR Floor)(14)
 10/11/2021 2,808,500
 2,808,500
 2,823,385
 0.6%
    Warrants - 1.56% of Outstanding Equity 1/9/2027 —
 499,751
 83,018
 0.0%
        11,267,613
 11,342,776
 11,410,350
  
               
Point.360 Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 6.00% PIK)(16)
 7/8/2020 2,085,870
 2,085,870
 1,844,534
 0.4%
    
Equity - 479,283 Common Units(20)
   —
 129,406
 38,343
 0.0%
    
Warrants - 2.8% of Outstanding Equity(21)
 7/8/2020 —
 52,757
 21,103
 0.0%
        2,085,870
 2,268,033
 1,903,980
  
               
Prince Mineral Holding Corp.(8)
 Wholesale 
Senior Secured First Lien Note (11.50% Cash)(21)
 12/15/2019 6,800,000
 6,767,560
 7,066,560
 1.5%
        6,800,000
 6,767,560
 7,066,560
  
               
Reddy Ice Corporation Beverage & Food 
Senior Secured Second Lien Term Loan (LIBOR + 9.50% Cash, 1.25% LIBOR Floor)(14)
 11/1/2019 17,000,000
 17,000,000
 16,117,700
 3.5%
        17,000,000
 17,000,000
 16,117,700
  
               
SavATree, LLC(7)
 Environmental Industries 
Senior Secured First Lien Term Loan (LIBOR + 5.25% Cash, 1.00% LIBOR Floor)(14)(18)
 6/2/2022 1,330,000
 1,330,000
 1,330,000
 0.3%
        1,330,000
 1,330,000
 1,330,000
  
               


Company(1)
 Industry 
Type of Investment(6)
 Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
               
Sendero Drilling Company, LLC Energy:  Oil & Gas Warrants - 5.52% of Outstanding Equity 3/18/2019 —
 793,523
 2,188,676
 0.5%
        —
 793,523
 2,188,676
  
               
Seotowncenter, Inc.(12)
 Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(14)
 9/11/2019 23,697,976
 23,697,976
 23,697,976
 5.1%
    Equity - 3,249.697 Common Units   —
 500,000
 419,731
 0.1%
        23,697,976
 24,197,976
 24,117,707
  
               
SFP Holding, Inc.(7)
 Construction & Building 
Senior Secured First Lien Term Loan (LIBOR + 6.25% Cash, 1.00% LIBOR Floor)(14)(17)
 9/1/2022 6,222,222
 6,222,222
 6,222,222
 1.4%
    Equity - 1.42% Company Interest   —
 600,000
 600,000
 0.1%
        6,222,222
 6,822,222
 6,822,222
  
               
Ship Supply Acquisition Corporation Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash, 1.00% LIBOR Floor)(14)
 7/31/2020 7,648,798
 7,648,798
 7,337,492
 1.6%
        7,648,798
 7,648,798
 7,337,492
  
               
SMART Financial Operations, LLC(7)
 Retail 
Senior Secured First Lien Term Loan (LIBOR + 10.00% Cash, 1.00% LIBOR Floor)(14)
 11/22/2021 2,775,000
 2,775,000
 2,848,500
 0.6%
    Equity - 700,000 Class A Preferred Units   —
 700,000
 735,000
 0.2%
        2,775,000
 3,475,000
 3,583,500
  
               
SRS Software, LLC High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 7.00% Cash, 1.00% LIBOR Floor)(14)
 2/17/2022 7,462,500
 7,462,500
 7,527,424
 1.6%
        7,462,500
 7,462,500
 7,527,424
  
               
Stancor, Inc. Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 8.50% Cash, 0.75% LIBOR Floor)(13)
 8/19/2019 4,346,364
 4,346,364
 4,346,364
 0.9%
    Equity - 263,814.43 Class A Units   —
 263,814
 205,775
 0.0%
        4,346,364
 4,610,178
 4,552,139
  
               
Starfish Holdco, LLC High Tech Industries 
Senior Secured Second Lien Term Loan (LIBOR + 9.00% Cash, 1.00% LIBOR Floor)(14)
 8/18/2025 4,000,000
 3,940,532
 3,940,000
 0.9%
        4,000,000
 3,940,532
 3,940,000
  
               
Taylored Freight Services, LLC Services:  Business 
Senior Secured Second Lien Term Loan (LIBOR + 9.50% Cash, 2.00% PIK, 1.50% LIBOR Floor)(14)
 11/1/2017 14,895,052
 14,895,052
 14,895,052
 3.2%
        14,895,052
 14,895,052
 14,895,052
  
               
Trans-Fast Remittance LLC(7)
 Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 8.00% Cash, 1.00% LIBOR Floor)(13)(17)
 12/2/2021 3,567,857
 3,567,857
 3,661,282
 0.8%
    
Revolving Credit Facility (LIBOR + 8.00% Cash, 1.00% LIBOR Floor)(13)
 12/2/2021 1,875,000
 1,875,000
 1,875,000
 0.4%
        5,442,857
 5,442,857
 5,536,282
  
               
Velocity Pooling Vehicle, LLC Automotive 
Senior Secured First Lien Term Loan (LIBOR + 4.00% Cash, 1.00% LIBOR Floor)(9)
 5/14/2021 1,958,668
 1,109,768
 1,091,958
 0.2%
    
Senior Secured Second Lien Term Loan (LIBOR + 7.25% Cash, 1.00% LIBOR Floor)(9)
 5/13/2022 24,000,000
 21,696,167
 4,080,000
 0.9%
        25,958,668
 22,805,935
 5,171,958
  
               


Company(1)
 Industry 
Type of Investment(6)
 Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
               
Watermill-QMC Midco, Inc. Automotive 
Equity - Partnership Interest(23)
   —
 518,283
 672,213
 0.1%
        —
 518,283
 672,213
  
               
Wheels Up Partners LLC(12)
 Aerospace & Defense 
Senior Secured First Lien Delayed Draw (LIBOR + 8.55% Cash, 1.00% LIBOR Floor)(14)
 10/15/2021 14,676,659
 14,676,659
 14,676,659
 3.2%
        14,676,659
 14,676,659
 14,676,659
  
               
Subtotal Non-Controlled/Non-Affiliated Investments   $640,893,679
 $625,108,198
 $575,495,698
  
             
Affiliated Investments:
      
  
  
  
               
AAR Intermediate Holdings, LLC(7)
 Energy:  Oil & Gas 
Senior Secured First Lien Term Loan A (LIBOR + 5.00% Cash, 1.00% LIBOR Floor)(14)
 9/30/2021 8,984,232
 8,984,232
 8,984,232
 2.0%
    
Senior Secured First Lien Term Loan B (LIBOR + 8.00% PIK, 1.00% LIBOR Floor)(14)
 9/30/2021 19,746,290
 16,707,477
 19,746,290
 4.3%
    
Revolving Credit Facility (LIBOR + 5.00% Cash, 1.00% LIBOR
Floor)(14)(17)
 9/30/2021 —
 —
 —
 0.0%
    Equity - 21,562.16 Class A Units   —
 —
 —
 0.0%
        28,730,522
 25,691,709
 28,730,522
  
               
Access Media Holdings, LLC(7)
 Media:  Broadcasting & Subscription Senior Secured First Lien Term Loan (5.00% Cash, 5.00% PIK) 7/22/2020 8,340,525
 8,340,525
 8,340,525
 1.8%
    Preferred Equity Series A   1,600,000
 1,600,000
 —
 0.0%
    Preferred Equity Series AA   800,000
 800,000
 —
 0.0%
    Preferred Equity Series AAA   363,200
 363,200
 43,200
 0.0%
    Equity - 16 Common Units   —
 —
 —
 0.0%
        11,103,725
 11,103,725
 8,383,725
  
               
Brantley Transportation LLC(7)(12)
 Energy:  Oil & Gas 
Senior Secured First Lien Term Loan (12.00% PIK)(10)
 8/2/2017 11,355,575
 9,000,000
 7,719,520
 1.7%
    
Senior Secured First Lien Delayed Draw (LIBOR + 5.00% Cash, 1.00% LIBOR Floor)(13)
 8/2/2017 668,105
 668,105
 668,105
 0.1%
    Equity - 7.5 Common Units   —
 —
 —
 0.0%
        12,023,680
 9,668,105
 8,387,625
  
               
JFL-NGS Partners, LLC Construction & Building Preferred Equity - A-2 Preferred (3.00% PIK)   30,552,190
 30,552,190
 30,552,190
 6.6%
    Preferred Equity - A-1 Preferred (3.00% PIK)   3,953,700
 3,953,700
 3,953,700
 0.9%
    Equity - 57,300 Class B Units   —
 57,300
 63,603
 0.0%
        34,505,890
 34,563,190
 34,569,493
  
               
US Multifamily, LLC(11)
 Banking, Finance, Insurance & Real Estate Senior Secured First Lien Term Loan (10.00% Cash) 9/10/2019 6,670,000
 6,670,000
 6,670,000
 1.5%
    Equity - 33,300 Preferred Units   —
 3,330,000
 3,330,000
 0.7%
        6,670,000
 10,000,000
 10,000,000
  
               
Subtotal Affiliated Investments     $93,033,817
 $91,026,729
 $90,071,365
  
               


Company(1)
 Industry 
Type of Investment(6)
 Maturity 
Par Amount(2)
 
Cost(3)
 Fair Value 
% of
Net Assets(4)
               
Controlled Investments:(5)
      
  
  
  
               
Capstone Nutrition(12)
 Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 12.50% PIK, 1.00% LIBOR Floor)(10)(14)
 9/25/2020 26,124,967
 20,803,397
 18,002,715
 3.9%
    
Senior Secured First Lien Delayed Draw (LIBOR + 12.50% PIK, 1.00% LIBOR Floor)(10)(14)
 9/25/2020 11,304,251
 9,153,997
 7,789,760
 1.7%
    Equity - 4,664.6 Class B Units and 9,424.4 Class C Units   —
 12
 —
 0.0%
    Equity - 2,932.3 Common Units   —
 400,003
 —
 0.0%
        37,429,218
 30,357,409
 25,792,475
  
               
MCC Senior Loan Strategy JV I LLC(11)
 Multisector Holdings Equity - 87.5% ownership of MCC Senior Loan Strategy JV I LLC   —
 56,087,500
 56,137,946
 12.2%
        —
 56,087,500
 56,137,946
  
               
NVTN LLC(7)(22)
 Hotel, Gaming & Leisure 
Senior Secured First Lien Term Loan (LIBOR + 4.00% Cash, 1.00% LIBOR Floor)(13)
 11/9/2020 3,505,990
 3,505,990
 3,505,990
 0.8%
    
Senior Secured First Lien Term Loan B (LIBOR + 9.25% PIK, 1.00% LIBOR Floor)(13)
 11/9/2020 10,604,502
 10,604,502
 10,604,502
 2.3%
    
Senior Secured First Lien Term Loan C (LIBOR + 12.00% PIK, 1.00% LIBOR Floor)(13)
 11/9/2020 6,518,046
 6,518,046
 6,518,046
 1.4%
    Equity - 787.4 Class A Units   —
 9,550,922
 9,550,922
 2.1%
        20,628,538
 30,179,460
 30,179,460
  
               
OmniVere, LLC Services:  Business 
Senior Secured First Lien Term Loan (LIBOR + 13.00% PIK)(10)(16)
 5/5/2019 25,470,636
 22,880,599
 24,500,205
 5.3%
    Senior Secured First Lien Term Loan (8.00% PIK) 5/5/2019 1,409,669
 1,409,669
 1,409,669
 0.3%
    
Unsecured Debt (8.00% PIK)(10)
 7/24/2025 26,666,961
 22,727,575
 —
 0.0%
    Equity - 5,055.56 Common Units   —
 872,698
 —
 0.0%
        53,547,266
 47,890,541
 25,909,874
  
               
URT Acquisition Holdings Corporation Services:  Business 
Senior Secured Second Lien Term Loan (LIBOR + 8.00% Cash, 2.00% LIBOR Floor)(14)
 5/2/2022 14,966,563
 14,966,563
 14,966,563
 3.3%
    Preferred Equity (12.00% PIK)   5,500,000
 5,500,000
 5,500,000
 1.2%
    Equity - 397,466 Common Units   —
 12,936,879
 12,937,518
 2.8%
        20,466,563
 33,403,442
 33,404,081
  
               
Subtotal Controlled Investments     $132,071,585
 $197,918,352
 $171,423,836
  
             
Total Investments, September 30, 2017     $865,999,081
 $914,053,279
 $836,990,899
 181.8%

(1)All of our investments are domiciled in the United States. Certain investments also have international operations.
(2)Par amount includes accumulated PIK interest and is net of repayments.
(3)Gross unrealized appreciation, gross unrealized depreciation, and net unrealized depreciation for federal income tax purposes totaled $15,157,028, $82,394,835, and $67,237,807, respectively. The tax cost basis of investments is $903,754,350 as of September 30, 2017.
(4)(5)Percentage is based on net assets of $460,429,317$154,271,897  as of September 30, 2017.
March 31, 2024.
(5)(6)ControlledAffiliated 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 March 31, 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 loan. The negative fair value, if applicable, is the result of the capitalized discount on the loan.
(6)(9)Not in use.
(10)The investment was on non-accrual status as of March 31, 2024.


PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of March 31, 2024

(Unaudited)

(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 March 31, 2024, non-qualifying assets represented 17.97% of total assets.
(12)This investment earns 0.50% commitment fee on all unused commitment as of March 31, 2024, 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 March 31, 2024 (see Note 4).
(14)This investment represents a Level 2 security in the ASC 820 table as of March 31, 2024 (see Note 4).
(15)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 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)Not in use
(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.
(19)Not in use
(20)Credit Spread Adjustment (“CSA”)
(21)Non-income producing security.
(22)The interest rate on these loans is subject to 1 month LIBOR, which as of March 31, 2024 was 5.44%.
(23)The interest rate on these loans is subject to 1 month SOFR, which as of March 31, 2024 was 5.32%
(24)The interest rate on these loans is subject to 3 month SOFR, which as of March 31, 2024 was 5.35%.
(25)The interest rate on these loans is subject to 6 month SOFR, which as of March 31, 2024 was 5.39%.

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


PHENIXFIN CORPORATION

Consolidated Schedule of Investments

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
Assets(5)		 
                   
Non-Controlled/Non-Affiliated Investments:              
               
Altisource S.A.R.L.(11) Services: Business Senior Secured First Lien Term Loan B
(SOFR + CSA + 5.00%, 3.75% PIK)(20)(25)		 4/30/2025 $9,565,710  $8,507,963  $7,805,619   5.31%
    Warrants(21) 5/22/2027  75,080   -   206,470   0.14%
         9,640,790   8,507,963   8,012,089   5.45%
                       
Arcline FM Holdings, LLC Aerospace & Defense First Lien Term Loans
(SOFR + CSA + 4.75%, 0.75% Floor)(20)(25)		 6/23/2028  2,679,494   2,591,013   2,644,660   1.80%
         2,679,494   2,591,013   2,644,660   1.80%
                       
Be Green Packaging, LLC Containers, Packaging & Glass Equity - 417 Common Units(21)    417   416,250   -   0.00%
         417   416,250   -   0.00%
                       
Boostability Seotowncenter, Inc. Services: Business Equity - 833,152 Common Units(21)    833,152   66,475   -   0.00%
         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)(24)		 11/1/2025  5,916,102   4,990,179   5,191,380   3.53%
         5,916,102   4,990,179   5,191,380   3.53%
                       
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%
    Equity - 163,601 Class D Preferred Units(13)(9)    163,601   3,463,275   3,414,353   2.32%
         280,911   6,347,999   5,530,624   3.76%


PHENIXFIN CORPORATION

Consolidated Schedule of Investments

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
Assets(5)		 
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)(25)		 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)(25)		 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)(25)		 5/1/2028  3,357,500   3,294,306   3,323,925   2.26%
                       
DirecTV Financing, LLC Media: Broadcasting & Subscription Senior Secured First Lien Term Loan
(SOFR + CSA + 5.00%, 0.75% Floor)(14)(20)(24)		 8/2/2027  4,100,000   4,100,000   4,003,908   2.72%
         4,100,000   4,100,000   4,003,908   2.72%
                       
First Brands Group, LLC Automotive Senior Secured First Lien Term Loan
(SOFR + CSA + 5.00%, 1.00% Floor)(20)(26)		 3/30/2027  3,919,598   3,919,598   3,880,402   2.64%
         3,919,598   3,919,598   3,880,402   2.64%
                       
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%
         226,107   3,572,788   2,993,657   2.04%


PHENIXFIN CORPORATION

Consolidated Schedule of Investments

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
Assets(5)		 
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 8.50% Senior Secured Notes(14) 2/1/2026  2,750,000   2,615,913   2,076,250   1.41%
         2,750,000   2,615,913   2,076,250   1.41%
                       
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%
         205,000   5,035,506   3,989,300   2.71%
                       
JFL-NGS-WCS Partners, LLC Construction & Building Senior Secured First Lien Term Loan B
(SOFR + CSA+ 5.50%, 1.00% Floor)(20)(24)		 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%
         10,861,605   10,864,482   12,599,438   8.57%
                       
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%
                       
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)(24)		 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)(24)		 10/2/2028  689,541   626,519   689,541   0.47%
         2,231,520   2,134,927   3,596,099   2.45%


PHENIXFIN CORPORATION

Consolidated Schedule of Investments

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
Assets(5)		 
McKissock Investment Holdings, LLC (dba Colibri) Services: Consumer Senior Secured First Lien Term Loan
(SOFR + CSA + 5.00%, 0.75% Floor)(20)(25)		 3/12/2029  4,924,535   4,883,570   4,776,799   3.25%
                       
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%
         97,426   2,318,487   1,856,940   1.26%
                       
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%
         165,000   4,102,076   3,677,850   2.50%
                       
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%
         29,500   1,921,275   1,964,700   1.34%
                       
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%
         7,686,000   6,895,720   6,845,344   4.66%
                       
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%


PHENIXFIN CORPORATION

Consolidated Schedule of Investments

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
Assets(5)		 
Power Stop LLC Automotive Senior Secured First Lien Term Loan
(SOFR + CSA + 4.75%, 0.50% Floor)(20)(24)		 1/26/2029  6,919,937   6,515,010   5,639,748   3.84%
         6,919,937   6,515,010   5,639,748   3.84%
                       
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%
         206,684   5,129,170   4,695,860   3.20%
                       
Secure Acquisition Inc. (dba Paragon Films) Packaging Senior Secured First Lien Term Loan
(SOFR + CSA + 5.00%, 0.50% Floor)(20)(25)		 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)(25) 12/16/2028  -   (970)  -   0.00%
         3,430,517   3,417,600   3,396,212   2.31%
                       
SS Acquisition, LLC
(dba Soccer Shots Franchising)		 Services: Consumer Senior Secured First Lien Term Loan (SOFR + CSA + 6.50%, 1.00% Floor)(20)(24) 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)(24) 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%
         700,000   700,000   978,140   0.67%
                       
Stancor (dba Industrial
Flow Solutions
Holdings, LLC)		 Services: Business Equity - 338,736.11 Class A Units(21)    338,736   308,652   200,566   0.14%
         338,736   308,652   200,566   0.14%
                       
Staples, Inc. Services: Consumer First Lien Term Loan (LIBOR + 4.50%)(14) 9/12/2024  3,692,159   3,655,672   3,648,315   2.48%
         3,692,159   3,655,672   3,648,315   2.48%


PHENIXFIN CORPORATION

Consolidated Schedule of Investments

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
Assets(5)		 
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%
         -   1,026,818   792,346   0.54%
                       
Thryv Holdings, Inc.(11) Media: Broadcasting & Subscription Senior Secured First Lien Term Loan (SOFR + CSA + 8.50%, 1.00% Floor)(14)(20)(24) 3/1/2026  7,656,442   7,604,838   7,661,227   5.21%
         7,656,442   7,604,838   7,661,227   5.21%
                       
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%
                       
Wingman Holdings, Inc. Aerospace & Defense Equity - 350 Common Shares(21)    350   700,000   -   0.00%
         350   700,000   -   0.00%
                       
Subtotal Non-Controlled/
Non-Affiliated Investments		       $106,630,423  $134,339,121  $125,531,031   85.4%


PHENIXFIN CORPORATION

Consolidated Schedule of Investments

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
Assets(5)		 
                 
Affiliated Investments:(6)                
                 
1888 Industrial Services, LLC Energy: Oil & Gas Senior Secured First Lien Term Loan A (SOFR + 5.00% PIK, 1.00% Floor)(10)(21)(25) 8/31/2024 $9,946,741  $9,473,068  $-   0.00%
    Senior Secured First Lien Term Loan C (SOFR + 5.00%, 1.00% Floor)(25) 8/31/2024  1,231,932   1,191,257   751,479   0.51%
    Revolving Credit Facility (SOFR + 5.00%, 1.00% Floor)(12)(25) 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)(20)(24) 1/31/2024  875,749   875,749   875,749   0.60%
    Senior Secured First Lien Term Loan (SOFR + CSA + 9.00% PIK, 1.00% Floor)(10)(20)(24) 1/31/2024  13,029,115   7,767,533   1,459,249   0.99%
    Senior Secured First Lien Super Priority Delayed Draw Term Loan (SOFR + CSA + 9.00% PIK, 1.00% Floor)(20)(24) 1/31/2024  1,920,960   1,920,960   1,920,960   1.31%
    Equity - 17.92% Membership Interest(21)    -   -   -   0.00%
         15,825,824   10,564,242   4,255,958   2.90%
                       
FST Holdings Parent, LLC High Tech Industries Equity - 625,548 Class A Units    625,548   10,000,000   10,000,003   6.81%
         625,548   10,000,000   10,000,003   6.81%
                       
Maritime Wireless Holdings LLC Hotel, Gaming & Leisure Senior Secured First Lien Term Loan B (SOFR + CSA + 9.00%, 1.00% Floor)(20)(24) 5/31/2027  7,500,000   7,373,166   7,500,000   5.10%
    Equity - 500,000 Class A Units(21)    500,000   5,000,000   10,150,000   6.91%
         12,500,000   12,373,166   17,650,000   12.01%
                       
Subtotal Affiliated Investments       $44,783,784  $48,233,910  $37,289,617   25.38%


PHENIXFIN CORPORATION

Consolidated Schedule of Investments

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
Assets(5)		 
                 
Controlled Investments:(7)                
                 
FlexFIN, LLC Services: Business Equity Interest   $38,870,711  $38,870,711  $38,870,711   26.45%
         38,870,711   38,870,711   38,870,711   26.45%
                       
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%
         3,383,908   5,220,034   12,516,929   8.52%
                       
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%
    Equity - 1,000 Class A Units(21)    1,000   9,550,924   -   0.00%
         36,369,131   38,346,947   12,252,403   8.34%
                       
Subtotal Control Investments       $78,623,750  $82,437,692  $63,640,043   43.31%
                       
Total Investments, September 30, 2023       $230,037,957  $265,010,723  $226,460,691   154.40%

(1)All of our investments are domiciled in the United States. Certain investments also have international operations.
(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.
(3)Net unrealized depreciation for U.S. federal income tax purposes totaled $(38,550,032).
The tax cost basis of investments is $265,010,723 as of September 30, 2023.
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).
(7)(5)Percentage is based on net assets of $146,705,535 as of September 30, 2023.


PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of September 30, 2023

(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.
(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, 20172023 (see Note 8), and fair value includes an analysis of 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 commitment.
(8)(9)Securities are exempt from registration under Rule 144A of the Securities Act of 1933. These securities represent a fair value of $27,544,560 and 5.9% of net assets as of September 30, 2017, and are considered restricted securities.
(9)The interest rate on these loansthis investment is subjectfixed-to-floating and will shift to the greater of a LIBOR floor, or 63 month LIBORSOFR plus a base rate. The 6 month LIBOR asCSA of September 30, 2017 was 1.50%.
0.262% plus a 5.379% spread on 3/30/2024.
(10)The investment was on non-accrual status as of September 30, 2017.


2023.
(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, 2017, 7.9%2023, non-qualifying assets represented 20.21% of the Company's portfolio investments were non-qualifyingtotal assets.
(12)A portion of this investment was sold via a participation agreement. The amount stated is the portion retained by Medley Capital Corporation (see Note 3).
(13)The interest rate on these loans is subject to the greater of a LIBOR floor, or 1 month LIBOR plus a base rate. The 1 month LIBOR as of September 30, 2017 was 1.24%.
(14)The interest rate on these loans is subject to the greater of a LIBOR floor, or 3 month LIBOR plus a base rate. The 3 month LIBOR as of September 30, 2017 was 1.33%.
(15)The interest rate on these loans is subject to 1 month LIBOR plus a base rate. The 1 month LIBOR as of September 30, 2017 was 1.24%.
(16)The interest rate on these loans is subject to 3 month LIBOR plus a base rate. The 3 month LIBOR as of September 30, 2017 was 1.33%.
(17)This investment earns 0.50% commitment fee on all unused commitment as of September 30, 2017.
2023, and is recorded as a component of interest income on the Consolidated Statements of Operations.
(18)(13)This investment earns 1.00% commitment fee on all unused commitment as of September 30, 2017.
(19)This investment earns 7.25% commitment fee on all unused commitment as of September 30, 2017.
(20)This investment represents a Level 1 security in the ASC 820 table as of September 30, 20172023 (see Note 4).
(21)(14)This investment represents a Level 2 security in the ASC 820 table as of September 30, 20172023 (see Note 4).
(22)(15)Investment changed its name from DLR Restaurants LLC during fiscal year 2017.
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 4.743% spread on 9/30/2025.
(23)(16)Represents 1.3% partnershipThe interest in Watermill-QMC Partners, LP,rate on this preferred equity is fixed-to-floating and Watermill-EMI Partners, LP.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.
(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.
(19)The interest rate on this preferred equity is fixed-to-floating and will shift to 3 month LIBOR plus a 5.345% spread on 3/31/2025.
(20)Credit Spread Adjustment (“CSA”)
(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%.
(24)The interest rate on these loans is subject to 1 month SOFR, which as of September 30, 2023 was 5.32%.
(25)The interest rate on these loans is subject to 3 month SOFR, which as of September 30, 2023 was 5.27%.
(26)The interest rate on these loans is subject to 6 month SOFR, which as of September 30, 2023 was 5.17%.

See

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



MEDLEY CAPITAL

PHENIXFIN CORPORATION



Notes to Consolidated Financial Statements
December
March 31, 20172024
(Unaudited)

(unaudited)

Note 1. Organization


Medley Capital

PhenixFIN Corporation (the(“PhenixFIN.” the “Company,” “we” and “us”) is aan internally-managed non-diversified closed endclosed-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 qualifiedintends 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”). We areOn November 18, 2020, the board of directors of the Company approved the adoption of an internalized management structure, effective January 1, 2021. Until close of business on December 31, 2020 we were externally managed and advised by MCC Advisors LLC (“MCC Advisors”), a registered investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), pursuant to an investment management agreement. MCC Advisors iswas a majoritywholly owned subsidiary of Medley LLC, which iswas controlled by Medley Management Inc. (OTCM: MDLM), a publicly traded asset management firm, which in turn iswas controlled by Medley Group LLC, an entity wholly-ownedwholly owned by the senior professionals of Medley LLC. We use the term “Medley” to refer collectively to the activities and operations of Medley Capital LLC, Medley LLC, Medley Management Inc.,MDLM, Medley Group LLC, MCC Advisors, associated investment funds and their respective affiliates.

Medley Capital BDC LLC (the “LLC”), a Delaware limited liability company, was formed on April 23, 2010. On Since January 18, 2011, the LLC, in accordance with Delaware law, converted into Medley Capital Corporation, a Delaware corporation, and on January 20, 2011,1, 2021 the Company filed an election to be regulated as a BDC under the 1940 Act.
On January 20, 2011, the Company consummated its IPO, sold 11,111,112 shares of common stock at $12.00 per share and commenced its operations and investment activities. On February 24, 2011, an additional 450,000 shares of common stock were issued at a price of $12.00 per sharehas been managed pursuant to the partial exercise of the underwriters’ option to purchase additional shares. Net of underwriting fees and offering costs, the Company received total cash proceeds of approximately $129.6 million.
On January 20, 2011, the Company’s shares began trading on the New York Stock Exchange (“NYSE”) under the symbol “MCC”.
Prior to the consummation of our IPO, Medley Opportunity Fund LP (“MOF LP”), a Delaware limited partnership, and Medley Opportunity Fund, Ltd. (“MOF LTD”), a Cayman Islands exempted limited liability company, which are managed by an affiliate of MCC Advisors, transferred all of their respective interests in six loan participations in secured loans to middle market companies with a combined fair value, plus payment-in-kind interest and accrued interest thereon, of approximately $84.95 million (the “Loan Assets”) to MOF I BDC LLC (“MOF I BDC”), a Delaware limited liability company, in exchange for membership interests in MOF I BDC. As a result, MOF LTD owned approximately 90% of the outstanding MOF I BDC membership interests and MOF LP owned approximately 10% of the outstanding MOF I BDC membership interests.
On January 18, 2011, each of MOF LTD and MOF LP contributed their respective MOF I BDC membership interests to the LLC in exchange for LLC membership interests. As a result, MOF I BDC became a wholly-owned subsidiary of the LLC. As a result of the LLC’s conversion noted above, MOF LTD and MOF LP’s LLC membership interests were exchanged for 5,759,356 shares of the Company’s common stock at $14.75 per share. On February 23, 2012, MOF LTD and MOF LP collectively sold 4,406,301 shares of common stock in an underwritten public offering. See Note 7 for further information.
On March 26, 2013, our wholly-owned subsidiary, Medley SBIC LP (“SBIC LP”), a Delaware limited partnership which we own directly and through our wholly-owned subsidiary, Medley SBIC GP LLC, received a license from the Small Business Administration (“SBA”) to operate as a Small Business Investment Company (“SBIC”) under Section 301(c) of the Small Business Investment Company Act of 1958, as amended.
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 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.

The Company’s investment objective is to generate current income and capital appreciation by lendingappreciation. The management team seeks to privately-held middle market companies,achieve this objective primarily through directly originated transactions,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 help these companies fund acquisitions, growth or refinancing.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, and senior secured second lien term loans. In some of our investments,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 the 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.”


Note 2. Significant Accounting Policies

Basis of Presentation

The Company followsis an investment company following the accounting and reporting guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 946 (“ASC 946”)., Financial Services – Investment Companies. The accompanying unaudited 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 subsidiary SBICwholly owned subsidiaries PhenixFIN Small Business Fund, LP (“PhenixFIN Small Business Fund”) and PhenixFIN SLF Funding I LLC (“PhenixFIN SLF”), and its wholly-ownedwholly owned Taxable Subsidiaries. All references made to the “Company,” “we,” and “us” herein include Medley CapitalPhenixFIN Corporation and its consolidated subsidiaries, except as stated otherwise. Additionally, the accompanying unaudited consolidated financial statements of the Company and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X of the Securities Act of 1933. In the opinion of management, the unaudited consolidated financial statements reflect all adjustments and reclassifications, which are of a normal recurring nature, that are necessary for the fair presentation of financial results as of and for the periods presented. Therefore, this Form 10-Q should be read in conjunction with the Company's Annual ReportCompany’s annual report on Form 10-K for the fiscal year ended September 30, 2017.2023. The current period's



period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the fullfiscal year ending September 30, 2018. All intercompany balances and transactions have been eliminated. 

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.
2024. 

Use of Estimates in the Preparation of Financial Statements

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. Actual results could differ from those estimates.

Deferred Offering Costs

Deferred offering costs consist

PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 31, 2024
(Unaudited)

Note 2. Significant Accounting Policies (continued)

Cash, Restricted Cash and Cash Equivalents

The Company considers cash equivalents to be highly liquid investments with original maturities of feesthree months or less. Cash and expenses incurredcash equivalents include deposits in connection with the public offeringa money market account. The Company deposits its cash in financial institutions and, saleat times, such balances may be in excess of the Company’s common stock, including legal, accounting, printing feesFederal Deposit Insurance Corporation insurance limits. As of March 31, 2024 and other related expenses, as well as costs incurredSeptember 30, 2023, we had $19.1 million and $6.0 million in connection with the filingcash and cash equivalents, respectively, none of a shelf registration statement. These amounts are capitalized when incurred and recognized as a reduction of offering proceeds when the offering becomes effective or expensed upon expiration of the registration statement.

which is restricted.

Debt Issuance Costs

and Deferred Financing Costs

Debt issuance costs, incurred in connection with our credit facilities, unsecured notes and SBA Debentures (see Note 5) are deferred and amortized over the life of the respective facility or 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 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 premiumspremium and accretion of discounts,discount, is recorded on an accrual basis. DividendDiscounts and premiums to par value on investments purchased are accreted and amortized into interest income which represents dividends from equity investmentsover the life of the respective investment. Loan origination fees, original issue discount (“OID”) and distributions from Taxable Subsidiaries, is recorded onmarket discounts or premiums are capitalized and amortized into interest income using the ex-dividend date and when the distribution is received, respectively.

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 due.  For the three and six months ended DecemberMarch 31, 2017 and 2016,2024, the Company earned approximately $3.2$0.2 million and $4.9$0.5 million in PIK interest, respectively.


Origination/closing, amendment For the three and six months ended March 31, 2023, the Company earned approximately $0.3 million and $0.5 million in PIK interest, respectively.

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. Fee income forFor the three and six months ended DecemberMarch 31, 2017 and 20162024, fee income was approximately $1.8$0.1 million and $1.4approximately $0.1 million, respectively (see Note 9).


For the three and six months ended March 31, 2023, fee income was approximately $0.2 million and $0.2 million, respectively (see Note 9).

Investment transactions are accounted for on a trade date basis. 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. There were no realized gains orNo losses relatedrelating to non-cash restructuring transactions foroccurred during the three and six months ended DecemberMarch 31, 2017. During2024 and 2023. Realized gains relating to restructuring transactions that occurred during the three and six months ended DecemberMarch 31, 2016, $6.42024 were $6.9 million of our realized losses were relatedand $6.9 million, respectively. No gains relating to certain non-cash restructuring transactions which is recorded onoccurred during the Consolidated Statements of Operations as a component of net realized gain/(loss) from investments.three and six months ended March 31, 2023. The Company reports changes in fair value of investments as a component of the net unrealized appreciation/(depreciation) on investments in the Consolidated Statements of Operations.


PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 31, 2024
(Unaudited)

Note 2. Significant Accounting Policies (continued)

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 uncollectible.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 DecemberMarch 31, 2017,2024, certain investments in eightthree portfolio companies held by the Company were on non-accrual status with a combined fair value of approximately $65.2$21.1 million, or 7.8%9.6% of the fair value of our portfolio. At September 30, 2017,2023, certain investments in sixfour portfolio companies held by the Company were on non-accrual status with a combined fair value of approximately $72.5$6.5 million, or 8.7%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. We refer to 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. 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 4. Fair value is a market-based measure considered from the perspective of thea market participant who holds the financial instrument 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.


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 board of directorsValuation Designee, based upon input from management and third partythird-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 value. Fair values are generally determined utilizing the net asset value (“NAV”)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 “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)

PHENIXFIN CORPORATION
Notes 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.Consolidated Financial Statements
March 31, 2024
(Unaudited)


Note 2. Significant Accounting Policies (continued)

The Company useshas engaged third-party valuation firms (the “Valuation Firms”) to assist the board of directorsit and its Valuation Designee (the Chief Financial Officer) in the valuation of its portfolio investments. The valuation reports generated by the third-party valuation firmsValuation Firms consider the evaluation of financing and sale transactions with third parties, expected cash flows and market basedmarket-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 isare 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 into consideration.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.


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 (“Acquisition Price Approach”);

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”); and

estimating the value to potential buyers.



●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”); and

●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); and

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

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

●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 begins with each portfolio investment being internally valued by the valuation professionals;

preliminary valuation conclusions are then documented and discussed with senior management; and

an independent valuation firm engaged by our board of directors reviews approximately one third of these preliminary valuations each quarter on a rotating quarterly basis on non-fiscal year-end quarters, such that each of these investments will be valued by independent valuation firms at least twice per annum when combined with the fiscal year-end review of all the investments by independent valuation firms.

In addition, all of our investments are subject to the following valuation process:

the audit committee of our board of directors reviews the preliminary valuations of the investment professionals, senior management and independent valuation firms; and

our board of directors discusses valuations and determines the fair value of each investment in our portfolio in good faith based on the input of MCC Advisors, the respective independent valuation firms and the audit committee.

●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.

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. 


PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 31, 2024
(Unaudited)

Note 2. Significant Accounting Policies (continued)

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

Recent Accounting Pronouncements

In May 2014,March 2020, the FASB issued ASU 2014-09, Revenue from Contracts with Customers2020-04, “Reference rate reform (Topic 606), which provides848)—Facilitation of the effects of reference rate reform on financial reporting.” The amendments in this update provide optional expedients and exceptions for applying U.S. GAAP to certain contracts and hedging relationships that an entity should recognize revenue to depict the transfer of promised goodsreference LIBOR or services to customers in an amount that reflects the consideration to which the entity expectsanother reference rate expected to be entitleddiscontinued due to reference rate reform and became effective upon issuance for all entities. The Company has agreements that have LIBOR as a reference rate with certain portfolio companies and also with certain lenders. Many of these agreements include language for choosing an alternative successor rate if LIBOR reference is no longer considered to be appropriate. Contract modifications are required to be evaluated in exchange for such goods or services. To achieve this core principle, an entity should applydetermining whether the following steps: (1) identify the contracts with a customer, (2) identify the performance obligationsmodifications result in the establishment of new contracts (3) determineor the transaction prices, (4) allocate the transaction prices to the performance obligations in the contracts, and (5) recognize revenue when, or as, the entity satisfies a performance obligation. The guidance also requires advanced disclosures regarding the nature, amount, timing and uncertaintycontinuation of revenue and cash flows arising from an entity's contracts with customers.existing contracts. In March 2016,January 2021, the FASB issued ASU 2016-08, Revenue from Contracts with Customers2021-01, “Reference rate reform (Topic 606)848),” which expanded the scope of Topic 848. ASU 2020-04 and ASU 2021-01 are effective through December 31, 2022. On December 21, 2022, the Financial Accounting Standards Board (FASB) issued a new Accounting Standards Update ASU 2022-06, “Reference Rate Reform (Topic 848): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifiedDeferral of the implementation guidance on principal versus agent considerations. Sunset Date of Topic 848,” that extends the sunset (or expiration) date of Accounting Standards Codification (ASC) Topic 848 to December 31, 2024. This gives reporting entities two additional years to apply the accounting relief provided under ASC Topic 848 for matters related to reference rate reform.

In April 2016,June 2022, the FASB issued ASU 2016-10, Revenue2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which applies to all equity securities measured at fair value that are subject to contractual sale restrictions. This change prohibits entities from Contracts with Customers (Topic 606): Identifying Performance Obligationstaking into account contractual restrictions on the sale of equity securities when estimating fair value and Licensing, which clarified the implementation guidance regarding performance obligations and licensing arrangements.introduces required disclosures for such transactions. The new standard will become effective for the Company on October 1, 2018, with early application permitted to the effective date of October 1, 2017.fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is evaluatingwill assess any impact from the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effectadoption of the standard on its ongoing financial reporting. Thethis guidance does not apply to revenue associated with financial instruments, including loans and notes that are accounted for under other U.S. GAAP. As a result, the Company does not expect the new revenue recognition guidance to have a material impact on the elements of its Consolidated Statements of Operations, most closely associated with financial instruments, including realized gains, fees, interest and dividend income. The Company plans to adopt the revenue recognition guidanceif such transactions occur in the first quarter of fiscal year 2019. The Company’s implementation efforts include the identification of revenue within the scope of the guidance, as well as the evaluation of revenue contracts and related accounting policies. While the Company has not yet identified any material changes in the timing of revenue recognition, the Company's review is ongoing, and it continues to evaluate the presentation of certain contract costs.

future.

Federal Income Taxes

The Company has elected, and intends to continue to qualify annually, to be treated as a RIC under Subchapter M of the Code and operates in a manner so as to continue to qualify for the tax treatment applicable to RICs.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”) including PIK,, as defined by the Code, including PIK interest, and net tax exempt interest income (which is the excess of our gross tax exempt interest income over certain disallowed deductions) for each taxable year in order to be eligible for tax treatment under Subchapter M of the Code.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 such ICTI.

The Company is subject to a nondeductible U.S. federal excise tax of 4% on undistributed income if it does not distribute at least 98% of its ordinary income in any calendar year and 98.2% of its capital gain net income for each one-year period ending on October 31 of such calendar year.year and any income realized, but not distributed, in preceding years and on which it did not pay federal income tax. To the extent that the Company determines that its estimated current year annual taxable income will be in excess of estimated current year dividend distributions for excise tax purposes, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned. For the calendar year ended December 31, 2017, the Company did not distribute at least 98% of its ordinary income and 98.2% of its capital gains. Accordingly, with respect to the calendar year ended December 31, 2017, anThere was no provision for federal excise tax expense of $0.1 million was recorded.


at March 31, 2024 and September 30, 2023.

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 DecemberMarch 31, 20172024 and September 30, 2017,2023, the Company recordeddid not record a deferred tax liability of $0.8 million and $0.9 million, 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 three and six months ended DecemberMarch 31, 2017,2024 and 2023, the change in provision for deferred taxes on the unrealized depreciation on investments was $0.1 million. For the three months ended December 31, 2016, there was noCompany did not record a change in provision for deferred taxes on the unrealized (appreciation)/depreciation on investments.


On December 22, 2017,

PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 31, 2024
(Unaudited)

Note 2. Significant Accounting Policies (continued)

As of March 31, 2024 and September 30, 2023, the United States enactedCompany had a deferred tax reform legislation through the Tax Cutsasset of $23.8 million and Jobs Act, which significantly changes the existing U.S. tax laws, including a reduction in the corporate tax rate from 35% to 21% , a move from a worldwide tax system to a territorial system, as well as other changes. The Company’s Taxable Subsidiaries provisional tax will be based$23.1 million, respectively, consisting primarily of net operating losses and net unrealized losses on the new lower blended federal corporate tax rateinvestments held within its Taxable Subsidiaries. As of 24.25% for the fiscal year endedMarch 31, 2024 and September 30, 2018.  The Taxable Subsidiaries current interpretation2023, the Company has booked a valuation allowance of the Tax Act may change, possibly materially, as we complete our analysis$23.8 million and receive additional clarification and implementation guidance.


$23.1 million, respectively, against its deferred tax asset.

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 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. ICTI also excludes net unrealized appreciation or depreciation, as investment gains or losses are not included in taxable income until they are realized.


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 DecemberMarch 31, 2017.2024. 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.

Service and applicable state tax authorities.

Segments

The Company invests in various industries. The 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.

Company Investment Risk, Concentration of Credit Risk, and Liquidity Risk

MCC Advisors

The Company has broad discretion in making investments for the Company.investments. Investments will 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.


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. MCC Advisors may attempt to minimize this risk by maintaining low loan-to-liquidation values with each loan and the collateral underlying the loan.

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. 





PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 31, 2024
(Unaudited)

Note 3. Investments

The composition of our investments as of DecemberMarch 31, 20172024 as a percentage of our total portfolio, at amortized cost and fair value were as follows (dollars in thousands):

 Amortized Cost Percentage Fair Value Percentage
Senior Secured First Lien Term Loans$594,793
 62.5% $532,308
 63.7%
Senior Secured Second Lien Term Loans135,801
 14.3
 106,304
 12.7
Senior Secured First Lien Notes26,771
 2.8
 27,420
 3.3
Unsecured Debt22,728
 2.4
 —
 —
MCC Senior Loan Strategy JV I LLC66,762
 7.0
 67,406
 8.0
Equity/Warrants105,302
 11.0
 102,465
 12.3
Total$952,157
 100.0% $835,903
 100.0%

  Amortized
Cost		  Percentage  Fair Value  Percentage 
Senior Secured First Lien Term Loans $119,674   48.0% $106,607   48.4%
Senior Secured Notes  12,495   5.0   12,372   5.6 
Fund Investment  1,027   0.4   783   0.4 
Equity/Warrants  116,217   46.6   100,287   45.6 
Total Investments $249,413   100.0% $220,049   100.0%

The composition of our investments as of September 30, 20172023 as a percentage of our total portfolio, at amortized cost and fair value were as follows (dollars in thousands):

 Amortized Cost Percentage Fair Value Percentage
Senior Secured First Lien Term Loans$559,461
 61.2% $537,163
 64.2%
Senior Secured Second Lien Term Loans161,885
 17.7
 135,826
 16.2
Senior Secured First Lien Notes26,768
 2.9
 27,545
 3.3
Unsecured Debt22,728
 2.5
 —
 —
MCC Senior Loan Strategy JV I LLC56,087
 6.1
 56,138
 6.7
Equity/Warrants87,124
 9.6
 80,319
 9.6
Total$914,053
 100.0% $836,991
 100.0%

  Amortized
Cost		  Percentage  Fair Value  Percentage 
Senior Secured First Lien Term Loans $139,103   52.5% $103,004   45.6%
Senior Secured Notes  9,512   3.6   8,922   3.9 
Fund Investment  1,027   0.4   792   0.3 
Equity/Warrants  115,369   43.5   113,743   50.2 
Total Investments $265,011   100.0% $226,461   100.0%

In connection with certain of the Company’s investments, the Company receives warrants whichthat are obtained for the objective of increasing the total investment returns and are not held for hedging purposes. At DecemberMarch 31, 20172024 and September 30, 2017,2023, the total fair value of warrants was $2.5 million$133.1 thousand and $2.3 million,$206.5 thousand, respectively, and were included in investments at fair value on the Consolidated Statements of Assets and Liabilities. TheDuring the three and six months ended March 31, 2024, the Company did not acquire any additional warrants in an existing portfolio company. During the three and six months ended March 31, 2023, the Company acquired warrants in one warrant position during each ofexisting portfolio company.

For the three and six months ended DecemberMarch 31, 20172024, there was $95.5 thousand and 2016.


Total$73.3 thousand, respectively, in unrealized depreciation related to warrants for the three months ended December 31, 2017 and 2016 was $0.3 million and $0.2 million, respectively, and was recorded on the Consolidated Statements of Operations as net unrealized appreciation/(depreciation) on investments. For the three and six months ended March 31, 2023, there was $210.2 thousand and $147.6 thousand, respectively, in unrealized appreciation related to warrants. The warrants are received in connection with individual investments and are not subject to master netting arrangements.



The following table shows the portfolio composition by industry grouping at fair value at DecemberMarch 31, 20172024 (dollars in thousands):

  Fair Value  Percentage 
       
Services: Business $45,281   20.5%
Hotel, Gaming & Leisure  26,635   12.1 
Real Estate  39,293   17.9 
Services: Consumer  20,854   9.5 
Construction & Building  14,671   6.7 
Metals & Mining  15,452   7.0 
Media: Broadcasting & Subscription  11,681   5.3 
High Tech Industries  10,726   4.9 
Automotive  10,056   4.6 
Energy: Oil & Gas  6,330   2.9 
Consumer Discretionary  6,960   3.2 
Banking  5,831   2.6 
Packaging  3,527   1.6 
Aerospace & Defense  2,652   1.2 
Insurance  100   - 
Total $220,049   100.0%


 Fair Value Percentage
Services:  Business$150,111
 18.0%
Construction & Building135,549
 16.2
Multisector Holdings67,405
 8.1
Healthcare & Pharmaceuticals64,292
 7.7
Energy:  Oil & Gas56,324
 6.7
Hotel, Gaming & Leisure48,575
 5.8
Aerospace & Defense47,757
 5.7
High Tech Industries43,869
 5.3
Containers, Packaging & Glass39,584
 4.7
Automotive33,901
 4.1
Beverage & Food26,266
 3.1
Banking, Finance, Insurance & Real Estate25,928
 3.1
Metals & Mining21,202
 2.5
Chemicals, Plastics & Rubber20,946
 2.5
Capital Equipment13,217
 1.6
Media:  Broadcasting & Subscription8,595
 1.0
Consumer goods:  Non-durable8,151
 1.0
Services:  Consumer7,967
 1.0
Wholesale6,996
 0.8
Retail3,584
 0.4
Media: Advertising, Printing & Publishing2,955
 0.4
Environmental Industries1,884
 0.2
Consumer goods:  Durable845
 0.1
Total$835,903
 100.0%

PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 31, 2024
(Unaudited)

Note 3. Investments (continued)

The following table shows the portfolio composition by industry grouping at fair value at September 30, 20172023 (dollars in thousands):

 Fair Value Percentage
Services:  Business$142,912
 17.1%
Construction & Building130,633
 15.6
Healthcare & Pharmaceuticals67,301
 8.0
Banking, Finance, Insurance & Real Estate63,491
 7.6
Hotel, Gaming & Leisure63,012
 7.5
Multisector Holdings56,138
 6.7
Energy:  Oil & Gas54,800
 6.5
Aerospace & Defense53,650
 6.4
Automotive38,434
 4.6
Containers, Packaging & Glass38,086
 4.6
High Tech Industries25,809
 3.1
Metals & Mining21,127
 2.5
Chemicals, Plastics & Rubber20,012
 2.4
Beverage & Food16,118
 1.9
Capital Equipment13,180
 1.6
Media:  Broadcasting & Subscription8,384
 1.0
Services:  Consumer7,967
 1.0
Wholesale7,067
 0.8
Retail3,584
 0.4
Media: Advertising, Printing & Publishing2,955
 0.4
Environmental Industries1,330
 0.2
Consumer goods:  Durable850
 0.1
Consumer goods:  Non-durable151
 0.0
Total$836,991
 100.0%

  Fair Value  Percentage 
       
Services: Business $47,083   20.7%
Banking, Finance, Insurance & Real Estate  43,755   19.3 
Hotel, Gaming & Leisure  34,158   15.1 
Services: Consumer  18,292   8.1 
High Tech Industries  15,472   6.8 
Construction & Building  14,676   6.5 
Metals & Mining  12,517   5.5 
Media: Broadcasting & Subscription  11,665   5.2 
Automotive  9,520   4.2 
Consumer Discretionary  6,920   3.1 
Energy: Oil & Gas  5,384   2.4 
Packaging  3,396   1.5 
Aerospace & Defense  2,645   1.2 
Retail  978   0.4 
Total $226,461   100.0%

The Company invests in portfolio companies principally located in North America.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.



The following table shows the portfolio composition by geographic location at fair value at DecemberMarch 31, 20172024 (dollars in thousands):

 Fair Value Percentage
West$172,641
 20.7%
Midwest171,821
 20.5
Northeast160,601
 19.2
Southwest145,508
 17.4
Southeast110,384
 13.2
Mid-Atlantic74,948
 9.0
Total$835,903
 100.0%

  Fair Value  Percentage 
Northeast $85,267   38.7%
Southeast  61,506   28.0 
Midwest  36,360   16.5 
West  19,487   8.9 
International  10,175   4.6 
Southwest  6,878   3.1 
Mid-Atlantic  376   0.2 
Total $220,049   100.0%

The following table shows the portfolio composition by geographic location at fair value at September 30, 20172023 (dollars in thousands):

  Fair Value  Percentage 
Northeast $92,081   40.7%
Southeast  60,116   26.5 
Midwest  32,782   14.5 
West  25,608   11.3 
Southwest  7,661   3.4 
Mid-Atlantic  201   0.1 
International  8,012   3.5 
Total $226,461   100.0%


 Fair Value Percentage
Midwest$188,957
 22.6%
Southwest152,883
 18.3
Northeast152,662
 18.2
Southeast152,469
 18.2
West133,190
 15.9
Mid-Atlantic56,830
 6.8
Total$836,991
 100.0%

PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 31, 2024
(Unaudited)

Note 3. Investments (continued)

Transactions With Affiliated/Controlled Companies

During the three months ended December 31, 2017 and 2016, the

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 six months ended March 31, 2024 and 2023 were as follows (prior period table modified to conform to the current period presentation): follows:

Name of Investment(1)(2) Type of Investment Fair Value at
September 30,
2023		  Purchases/
(Sales) of or
Advances/
(Distributions)		  Transfers
In/(Out)
of Affiliates		  Unrealized
Gain/(Loss)		  Realized
Gain/(Loss)		  Fair
Value at
March 31, 2024		  Earned
Income		 
Affiliated Investments                     
1888 Industrial Services, LLC Senior Secured First Lien Term Loan C $751,479  $(1,096,561) $(196,411) $439,778  $101,715  $-  $37,645 
  Senior Secured First Lien Term Loan A  -   -   -   9,473,068   (9,473,068)  -   - 
  Revolving Credit Facility  4,632,177   (5,112,074)  -   -   479,897   -   158,674 
Black Angus Steakhouses, LLC Senior Secured First Lien Delayed Draw Term Loan  875,749   -   -   -   -   875,749   - 
  Senior Secured First Lien Term Loan  1,459,249   -   -   (648,417)  -   810,832   - 
  Senior Secured First Lien Super Priority DDTL  1,920,960   -   -   -   -   1,920,960   - 
FST Holdings Parent, LLC Equity  10,000,003   -   -   726,323   -   10,726,326   - 
Maritime Wireless Holdings LLC Senior Secured First Lien Term Loan B  7,500,000   (7,373,166)  -   (126,834)  -   -   535,857 
  Equity  10,150,000   (11,900,000)  -   (5,150,000)  6,900,000   -   - 
Total Affiliated Investments   $37,289,617  $(25,481,801) $(196,411) $4,713,918  $(1,991,456) $14,333,867  $732,176 

Name of Investment(3)
 Type of Investment Fair Value at September 30, 2017 Purchases/(Sales) of or Advances/(Distributions) Transfers In/(Out) of Affiliates Unrealized Gain/(Loss) Realized Gain/(Loss) Fair Value at December 31, 2017 Income Earned
                 
Affiliated Investments    
  
  
  
  
  
  
AAR Intermediate Holdings, LLC Senior Secured First Lien Term Loan A $8,984,232
 $—
 $—
 $—
 $—
 $8,984,232
 $145,390
  Senior Secured First Lien Term Loan B 19,746,290
 623,111
 —
 (143,791) —
 20,225,610
 626,037
  Revolving Credit Facility —
 539,054
 —
 —
 —
 539,054
 4,333
  Equity —
 —
 —
 —
 —
 —
 —
Access Media Holdings, LLC Senior Secured First Lien Term Loan 8,340,525
 105,859
 —
 —
 —
 8,446,384
 212,657
  Preferred Equity Series A —
 —
 —
 —
 —
 —
 —
  Preferred Equity Series AA —
 —
 —
 —
 —
 —
 —
  Preferred Equity Series AAA 43,200
 169,600
 —
 (64,000) —
 148,800
 —
  Equity —
 —
 —
 —
 —
 —
 —
Brantley Transportation LLC Senior Secured First Lien Term Loan 7,719,520
 —
 —
 236,534
 —
 7,956,054
 —
  Senior Secured First Lien Delayed Draw Term Loan 668,105
 —
 —
 —
 —
 668,105
 10,716
  Equity —
 —
 —
 —
 —
 —
 —


PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 31, 2024
(Unaudited)

Note 3. Investments (continued)

Name of Investment(1)(2) Type of Investment Fair Value at
September 30, 2023		  Purchases/
(Sales) of or
Advances/
(Distributions)		  Transfers
In/(Out)
of Controlled		  Unrealized
Gain/(Loss)		  Realized
Gain/(Loss)		  Fair
Value at
March 31, 2024		  Earned
Income		 
Controlled Investments                     
FlexFIN, LLC Equity Interest $38,870,711  $(4,141,486) $      -  $-          -  $34,729,225  $2,233,395 
Kemmerer Operations, LLC Senior Secured First Lien Term Loan  3,383,877   (97,841)  -   -   -   3,286,036   268,831 
  Equity  9,133,052   2,300,000   -   733,122   -   12,166,174   - 
NSG Captive, Inc. Equity  -   100,000   -   -   -   100,000   - 
NVTN LLC Senior Secured First Lien Delayed Draw Term Loan  7,214,856   (1,705,081)  -   (9,775)  -   5,500,000   580,266 
  Senior Secured First Lien Term Loan B  5,037,547   -   -   12,488,543   -   17,526,090   - 
  Equity  -   11,900,000   -   (11,900,000)  -   -   - 
Total Controlled Investments   $63,640,043  $8,355,592  $-  $1,311,890  $-  $73,307,525  $3,082,492 

Name of Investment(3)
 Type of Investment Fair Value at September 30, 2017 Purchases/(Sales) of or Advances/(Distributions) Transfers In/(Out) of Affiliates Unrealized Gain/(Loss) Realized Gain/(Loss) Fair Value at December 31, 2017 Income Earned
                 
JFL-NGS Partners, LLC Preferred Equity A-2 30,552,190
 —
 —
 —
 —
 30,552,190
 231,025
  Preferred Equity A-1 3,953,700
 —
 —
 —
 —
 3,953,700
 29,896
  Equity 63,603
 —
 —
 4,254,525
 —
 4,318,128
 —
US Multifamily, LLC Senior Secured First Lien Term Loan 6,670,000
 —
 —
 —
 —
 6,670,000
 166,750
  Equity 3,330,000
 —
 —
 —
 —
 3,330,000
 —
Total Affiliated Investments   $90,071,365

$1,437,624

$—

$4,283,268

$—

$95,792,257

$1,426,804
                 
Controlled Investments                
Capstone Nutrition Senior Secured First Lien Term Loan 18,002,715
 —
 —
 (1,946,314) —
 16,056,401
 —
  Senior Secured First Lien Delayed Draw Term Loan 7,789,760
 —
 —
 (842,169) —
 6,947,591
 —
  Equity - Class B and C Units —
 —
 —
 —
 —
 —
 —
  Equity - Common Units —
 —
 —
 —
 —
 —
 —
MCC Senior Loan Strategy JV I LLC(1)(2)
 Equity 56,137,946
 10,675,000
 —
 592,657
 —
 67,405,603
 1,443,750
NVTN LLC Senior Secured First Lien Term Loan 3,505,990
 —
 —
 —
 —
 3,505,990
 47,284
  Senior Secured First Lien Term Loan B 10,604,502
 283,651
 —
 —
 —
 10,888,153
 290,458
  Senior Secured First Lien Term Loan C 6,518,046
 220,564
 —
 —
 —
 6,738,610
 226,221
  Equity 9,550,922
 —
 —
 —
 —
 9,550,922
 —
OmniVere LLC Senior Secured First Lien Term Loan 24,500,205
 —
 —
 (6,808,667) —
 17,691,538
 —
  Senior Secured First Lien Term Loan 1,409,669
 620,032
 —
 —
 —
 2,029,701
 35,366
  Unsecured Debt —
 —
 —
 —
 —
 —
 —
  Equity —
 —
 —
 —
 —
 —
 —
URT Acquisition Holdings Corporation Senior Secured Second Lien Term Loan 14,966,563
 —
 —
 —
 —
 14,966,563
 382,479
  Preferred Equity 5,500,000
 350,795
 —
 —
 —
 5,850,795
 166,472
  Equity 12,937,518
 —
 —
 —
 —
 12,937,518
 —
Total Controlled Investments $171,423,836

$12,150,042

$—

$(9,004,493)
$—

$174,569,385

$2,592,030


Name of Investment(3)
 Type of Investment Fair Value at September 30, 2016 Purchases/(Sales) of or Advances/(Distributions) Transfers In/(Out) of Affiliates Unrealized Gain/(Loss) Realized Gain/(Loss) Fair Value at December 31, 2016 Income Earned
                 
Affiliated Investments                
US Multifamily, LLC Senior Secured First Lien Term Loan 6,670,000
 —
 —
 —
 —
 6,670,000
 166,750
  Equity 3,330,000
 —
 —
 —
 —
 3,330,000
 —
Total Affiliated Investments $10,000,000
 $—
 $—
 $—
 $—
 $10,000,000
 $166,750
                 


PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 31, 2024
(Unaudited)

Name of Investment(3)
 Type of Investment Fair Value at September 30, 2016 Purchases/(Sales) of or Advances/(Distributions) Transfers In/(Out) of Affiliates Unrealized Gain/(Loss) Realized Gain/(Loss) Fair Value at December 31, 2016 Income Earned
                 
Controlled Investments    
  
  
  
  
  
  
AAR Intermediate Holdings, LLC Senior Secured First Lien Term Loan A $8,984,232
 $—
 $—
 $—
 $—
 $8,984,232
 $137,758
  Senior Secured First Lien Term Loan B 14,889,405
 —
 —
 —
 —
 14,889,405
 548,806
  Revolving Credit Facility —
 431,243
 —
 —
 —
 431,243
 8,292
  Equity —
 —
 —
   —
 —
 —
Capstone Nutrition Senior Secured First Lien Term Loan 14,615,564
 —
 —
 504,446
 —
 15,120,010
 —
  Senior Secured First Lien Delayed Draw Term Loan 6,324,142
 —
 —
 218,274
 —
 6,542,416
 —
  Equity - Class B and C Units —
 —
 —
 —
 —
 —
 —
  Equity - Common Units —
 —
 —
 —
 —
 —
 —
Lydell Jewelry Design Studio, LLC Senior Secured First Lien Term Loan 5,707,522
 —
 —
 108,890
 —
 5,816,412
 —
  Senior Secured First Lien Delayed Draw Term Loan 1,500,000
 650,000
 —
 —
 —
 2,150,000
 29,611
  Equity —
 —
 —
 —
 —
 —
  
  Equity —
 —
 —
 —
 —
 —
  
NVTN LLC Senior Secured First Lien Term Loan —
 —
 1,525,201
 —
 —
 1,525,201
 17,837
  Senior Secured First Lien Term Loan B —
 —
 10,604,502
 —
 —
 10,604,502
 149,647
  Senior Secured First Lien Term Loan C —
 —
 6,518,046
 —
 —
 6,518,046
 113,530
  Equity —
 —
 9,550,922
 —
 —
 9,550,922
 —
MCC Senior Loan Strategy JV I LLC(1)(2)
 Equity 31,252,416
 7,262,500
 —
 903,299
 —
 39,418,215
 568,750
OmniVere LLC Senior Secured First Lien Term Loan 22,360,258
 553,494
 —
 (25,227) —
 22,888,525
 828,405
  Unsecured Debt 11,336,861
 1,972,687
 —
 (833,855) —
 12,475,693
 —
  Equity —
 —
 —
 —
 —
 —
 —
United Road Towing, Inc Senior Secured Second Lien Term Loan 18,725,607
 470,367
 —
 —
 —
 19,195,974
 480,832
  Preferred Equity Class C 1,186,268
 9,554
 —
 (9,554) —
 1,186,268
 —
  Preferred Equity Class C-1 —
 —
 —
 —
 —
 —
 —
  Preferred Equity Class A-2 —
 2,371
 —
 (2,371) —
 —
 —
  Equity —
 —
 —
 —
 —
 —
 —
Total Controlled Investments $136,882,275
 $11,352,216
 $28,198,671
 $863,902
 $—
 $177,297,064
 $2,883,468


Note 3. Investments (continued)

Name of Investment(1)(2) Type of Investment Fair Value at
September 30,
2022		  Purchases/
(Sales) of or
Advances/
(Distributions)		  Transfers
In/(Out)
of Affiliates		  Unrealized
Gain/(Loss)		  Realized
Gain/(Loss)		  Fair
Value at
March 31, 2023		  Earned
Income		 
Affiliated Investments                     
1888 Industrial Services, LLC Senior Secured First Lien Term Loan C $-  $-  $-  $566,689  $      -  $566,689  $(96,875)
  Revolving Credit Facility  4,151,562   215,622   -   264,993   -   4,632,177   406,160 
Black Angus Steakhouses, LLC Senior Secured First Lien Delayed Draw Term Loan  758,929   -   -   -   -   758,929   50,500 
  Senior Secured First Lien Term Loan  1,547,918   -   -   117,776   -   1,665,694   - 
  Senior Secured First Lien Super Priority Delayed Draw Term Loan  1,500,000   -   -   -   -   1,500,000   99,696 
Kemmerer Operations, LLC Senior Secured First Lien Term Loan  2,378,510   -   (2,378,510)  -   -   -   - 
  Equity  694,702   -   (962,717)  268,015   -   -   - 
US Multifamily, LLC Equity  1,282,571   (131,465)  -   (227,873)  -   923,233   - 
Total Affiliated Investments   $12,314,192  $84,157  $(3,341,227) $989,600  $-  $10,046,722  $459,481 

Name of Investment(1)(2) Type of
Investment		 Fair Value at
September 30,
2022		  Purchases/
(Sales) of or
Advances/
(Distributions)		  Transfers In/(Out) of
Controlled		  Unrealized
Gain/(Loss)		  Realized
Gain/(Loss)		  Fair
Value at
March 31, 2023		  Earned
Income		 
Controlled Investments                     
FlexFIN, LLC Equity Interest $47,136,146  $(9,085,316) $-  $-   -  $38,050,830  $1,927,203 
Kemmerer Operations, LLC Senior Secured First Lien Term Loan  -   3,630,773   2,378,510   182   23,273   6,032,738   245,738 
  Equity  -   873,440   962,717   4,237,819   -   6,073,976   - 
NVTN LLC Senior Secured First Lien Delayed Draw Term Loan  7,192,927   -   -   14,620   -   7,207,547   251,814 
  Senior Secured First Lien Term Loan B  3,697,109   -   -   469,476   -   4,166,585   - 
Total Controlled Investments   $58,026,182  $(4,581,103) $3,341,227  $4,722,097  $23,273  $61,531,676  $2,424,755 

(1)
(1)The Company and Great American Life Insurance Company (“GALIC”) are the members of MCC Senior Loan Strategy JV I LLC (“MCC JV”), a joint venture formed as a Delaware limited liability company that is not consolidated by either member for financial reporting purposes. The members of MCC JV make capital contributions as investments by MCC JV are completed, and all portfolio and other material decisions regarding MCC JV must be submitted to MCC JV’s board of managers, which is comprised of an equal number of members appointed by each of the Company and GALIC. Approval of MCC JV’s board of managers requires the unanimous approval of a quorum of the board of managers, with a quorum consisting of equal representation of members appointed by each of the Company and GALIC. Because management of MCC JV is shared equally between the Company and GALIC, the Company does not have operational control over the MCC JV for purposes of the 1940 Act or otherwise.



(2)Amount represents distributions from MCC JV to the Company and is a component of dividend income, net of provisional taxes in the Consolidated Statements of Operations.

(3)The par amount and additional detail are shown in the consolidated scheduleConsolidated Schedules of investments.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.


PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 31, 2024
(Unaudited)

Note 3. Investments (continued)

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 threesix months ended DecemberMarch 31, 20172024 and 2016.2023. Transfers in/(out) of Affiliated Investments and Controlled Investments represent the fair value for the month 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 threesix months ended DecemberMarch 31, 20172024 and 2016.

Loan Participation Sales
The Company may sell portions of its investments via participation agreements to a managed account, managed by an affiliate and non-affiliate of the Company. At December 31, 2017 there were eight participation agreements outstanding with an aggregate fair value of $118.8 million. At September 30, 2017, there were eight participation agreements outstanding with an aggregate fair value of $124.5 million. The transfer of the participated portion of the investments met the criteria set forth in ASC 860, Transfers and Servicing for treatment as a sale. In each case, the Company’s loan participation agreements satisfy the following conditions:

transferred investments have been isolated from the Company - put presumptively beyond the reach of the Company and its creditors, even in bankruptcy or other receivership,

each participant has the right to pledge or exchange the transferred investments it received, and no condition both constrains the participant from taking advantage of its right to pledge or exchange and provides more than a trivial benefit to the Company; and

the Company, its consolidated affiliates or its agents do not maintain effective control over the transferred investments through either: (i) an agreement that entitles and/or obligates the Company to repurchase or redeem the assets before maturity, or (ii) the ability to unilaterally cause the holder to return specific assets, other than through a cleanup call.

Such investments where the Company has retained proportionate interests are included in the consolidated schedule of investments. All of these investments are classified within Level 3 of the fair value hierarchy, as defined in Note 4.

During the three months ended December 31, 2017 and 2016, the Company collected interest and principal payments on behalf of the participant in aggregate amounts of $2.0 million and $6.0 million, respectively. Under the terms of the participation agreements, the Company will collect and remit periodic payments to the participant equal to the participant's proportionate share of any principal and interest payments received by the Company from the underlying investee companies.
MCC Senior Loan Strategy JV I LLC
On March 27, 2015, the Company and GALIC entered into a limited liability company operating agreement to co-manage MCC JV. All portfolio and other material decisions regarding MCC JV must be submitted to MCC JV’s board of managers, which is comprised of four members, two of whom are selected by the Company and the other two of whom are selected by GALIC. The Company has concluded that it does not operationally control MCC JV. As the Company does not operationally control MCC JV, it does not consolidate the operations of MCC JV within the consolidated financial statements. As a practical expedient, the Company uses NAV to determine the value of its investment in MCC JV; therefore, this investment has been presented as a reconciling item within the fair value hierarchy (see Note 4). Investments held by MCC JV are measured at fair value using the same valuation methodologies as described in Note 2.

As of December 31, 2017, MCC JV had total capital commitments of $100.0 million, with the Company providing $87.5 million and GALIC providing $12.5 million. Approximately $76.3 million was funded as of December 31, 2017 relating to these commitments, of which $66.8 million was from the Company. As of December 31, 2017, MCC JV’s board of managers had approved advances of capital of up to $6.7 million of the remaining capital commitments, of which $5.9 million is from the Company.

On August 4, 2015, MCC JV entered into a senior secured revolving credit facility (the “JV Facility”) led by Credit Suisse, AG (“CS”) with commitments of $100 million subject to leverage and borrowing base restrictions. On March 30, 2017, the Company amended the JV Facility previously administered by CS and facilitated the assignment of all rights and obligations of CS under the JV Facility to Deutsche Bank AG, New York Branch, (“DB”) and increased the total loan commitments to $200 million. The JV Facility bears interest at a rate of LIBOR (with no minimum) + 2.50% per annum. The JV Facility reinvestment period ends on March 30, 2019 and the stated maturity date is March 30, 2022. As of December 31, 2017 and September 30, 2017, there was approximately $153.4 million and $130.5 million outstanding under the JV Facility, respectively.

At December 31, 2017 and September 30, 2017, MCC JV had total investments at fair value of $210.4 million and $184.2 million, respectively. As of December 31, 2017 and September 30, 2017, MCC JV’s portfolio was comprised of senior secured first lien term loans to 50 and 46 borrowers, respectively. As of December 31, 2017 and September 30, 2017, certain investments in one portfolio company held by MCC JV were on non-accrual status.



Below is a summary of MCC JV’s portfolio, excluding equity investments, followed by a listing of the individual investments in MCC JV’s portfolio as of December 31, 2017 and September 30, 2017:
 December 31, 2017 September 30, 2017
Senior secured loans(1)
$213,650,199
 $187,473,188
Weighted average current interest rate on senior secured loans(2)
6.90% 6.69%
Number of borrowers in MCC JV50
 46
Largest loan to a single borrower(1)
$11,289,143
 $11,346,929
Total of five largest loans to borrowers(1)
$44,597,092
 $44,015,117
(1)At par value

(2)Computed as the (a) annual stated interest rate on accruing senior secured loans, divided by (b) total senior secured loans at par.



MCC JV Loan Portfolio as of December 31, 2017
(unaudited)
Company Industry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets(4)
               
4 Over International, LLC Media: Advertising, Printing & Publishing 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 6/7/2022 11,289,143
 11,289,143
 11,289,143
 14.7%
        11,289,143
 11,289,143
 11,289,143
  
               
AccentCare, Inc. Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.25%, 1.00% LIBOR Floor)(1)
 3/3/2022 5,761,669
 5,735,654
 5,761,669
 7.5%
        5,761,669
 5,735,654
 5,761,669
  
               
Acrisure, LLC Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 4.25%, 1.00% LIBOR Floor)(1)
 11/22/2023 2,965,069
 2,957,868
 2,957,656
 3.8%
        2,965,069
 2,957,868
 2,957,656
  
               
Amplify Snack Brands, Inc. Beverage & Food 
Senior Secured First Lien Term Loan (LIBOR + 5.50%, 1.00% LIBOR Floor)(1)
 9/4/2023 1,807,004
 1,792,346
 1,797,247
 2.3%
        1,807,004
 1,792,346
 1,797,247
  
               
Apco Holdings, Inc. Automotive 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 1/31/2022 3,437,331
 3,367,013
 3,437,331
 4.5%
        3,437,331
 3,367,013
 3,437,331
  
               
API Technologies Corp. Aerospace and Defense 
Senior Secured First Lien Term Loan (LIBOR + 6.50%, 1.00% LIBOR Floor)(1)
 4/22/2022 2,932,500
 2,890,142
 2,932,500
 3.8%
        2,932,500
 2,890,142
 2,932,500
  
               
Associated Asphalt Partners, LLC Construction & Building 
Senior Secured First Lien Term Loan (LIBOR + 5.25%, 1.00% LIBOR Floor)(1)
 4/5/2024 991,786
 987,339
 991,786
 1.3%
        991,786
 987,339
 991,786
  
               
Avantor, Inc. Chemicals, Plastics and Rubber 
Senior Secured First Lien Term Loan (LIBOR + 4.00%, 1.00% LIBOR Floor)(1)
 11/21/2024 7,250,000
 7,143,270
 7,280,450
 9.5%
        7,250,000
 7,143,270
 7,280,450
  
               
Blount International, Inc. Capital Equipment 
Senior Secured First Lien Term Loan (LIBOR + 4.25%, 1.00% LIBOR Floor)(1)
 4/12/2023 2,375,000
 2,369,269
 2,398,750
 3.1%
        2,375,000
 2,369,269
 2,398,750
  
        

 

 

  
Canyon Valor Companies, Inc. Media: Diversified & Production 
Senior Secured First Lien Term Loan (LIBOR + 4.25%, 1.00% LIBOR Floor)(1)
 6/16/2023 997,500
 995,170
 1,007,475
 1.3%
        997,500
 995,170
 1,007,475
  
        

 

 

  
Cardenas Markets LLC Retail 
Senior Secured First Lien Term Loan (LIBOR + 5.75%, 1.00% LIBOR Floor)(1)
 11/29/2023 5,445,000
 5,399,007
 5,445,000
 7.1%
        5,445,000
 5,399,007
 5,445,000
  
        

 

 

  
CD&R TZ Purchaser, Inc Services: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 7/21/2023 3,456,250
 3,414,831
 3,456,250
 4.5%
        3,456,250
 3,414,831
 3,456,250
  
        

 

 

  


Company Industry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets(4)
               
Covenant Surgical Partners, Inc. Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 4.75%, 1.00% LIBOR Floor)(1)
 10/4/2024 8,117,949
 8,093,997
 8,117,949
 10.6%
        8,117,949
 8,093,997
 8,117,949
  
        

 

 

  
CP OPCO, LLC Services: Consumer 
Senior Secured First Lien Term Loan B (ABR + 5.50% PIK, 4.50% ABR Floor)(1)(3)
 4/1/2019 224,970
 213,451
 59,729
 0.1%
    
Senior Secured First Lien Term Loan C (ABR + 8.50% PIK, 4.50% ABR Floor)(1)(3)
 4/1/2019 1,655,407
 717,016
 —
 0.0%
    
Senior Secured First Lien Term Loan D (ABR + 7.00% PIK, 4.50% ABR Floor)(1)(3)
 4/1/2019 1,038,290
 —
 —
 0.0%
    
Revolving Credit Facility (ABR + 3.50% Cash, 4.25% ABR Floor)(1)
 4/1/2019 —
 —
 —
 0.0%
    Common Stock (41 Units) 4/1/2019 —
 —
 —
 0.0%
        2,918,667
 930,467
 59,729
  
        

 

 

  
CSP Technologies North America, LLC Containers, Packaging and Glass 
Senior Secured First Lien Term Loan (LIBOR + 5.25%, 1.00% LIBOR Floor)(1)
 1/31/2022 2,474,374
 2,474,374
 2,474,374
 3.2%
        2,474,374
 2,474,374
 2,474,374
  
        

 

 

  
CT Technologies Intermediate Holdings, Inc. Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 4.25%, 1.00% LIBOR Floor)(1)
 12/1/2021 4,207,418
 4,089,965
 4,207,418
 5.5%
        4,207,418
 4,089,965
 4,207,418
  
        

 

 

  
DigiCert, Inc. High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 4.75%, 1.00% LIBOR Floor)(1)
 10/31/2024 4,500,000
 4,478,083
 4,545,000
 5.9%
        4,500,000
 4,478,083
 4,545,000
  
        

 

 

  
Elite Comfort Solutions, Inc. Chemicals, Plastics and Rubber 
Senior Secured First Lien Term Loan (LIBOR + 6.50%, 1.00% LIBOR Floor)(1)
 1/15/2021 5,734,863
 5,734,863
 5,734,863
 7.5%
        5,734,863
 5,734,863
 5,734,863
  
        

 

 

  
Evo Payments International, LLC Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 4.00%, 1.00% LIBOR Floor)(1)
 12/22/2023 3,473,750
 3,443,885
 3,496,677
 4.5%
        3,473,750
 3,443,885
 3,496,677
  
        

 

 

  
GK Holdings, Inc. Services: Business 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 1/20/2021 2,961,832
 2,950,966
 2,901,114
 3.8%
        2,961,832
 2,950,966
 2,901,114
  
        

 

 

  
Global Eagle Entertainment Inc. Telecommunications 
Senior Secured First Lien Term Loan (LIBOR + 7.50%, 1.00% LIBOR Floor)(1)
 1/6/2023 4,147,500
 4,082,934
 4,147,500
 5.4%
        4,147,500
 4,082,934
 4,147,500
  
        

 

 

  
Golden West Packaging Group LLC Forest Products & Paper 
Senior Secured First Lien Term Loan (LIBOR + 5.25%, 1.00% LIBOR Floor)(1)
 6/20/2023 6,691,375
 6,691,375
 6,691,375
 8.7%
        6,691,375
 6,691,375
 6,691,375
  
        

 

 

  
High Ridge Brands Co. Consumer Goods: Non-Durable 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 6/30/2022 1,846,875
 1,825,286
 1,846,875
 2.4%
        1,846,875
 1,825,286
 1,846,875
  
      �� 

 

 

  


Company Industry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets(4)
               
Highline Aftermarket Acquisitions, LLC Automotive 
Senior Secured First Lien Term Loan (LIBOR + 4.25%, 1.00% LIBOR Floor)(1)
 3/18/2024 3,102,770
 3,088,949
 3,102,770
 4.0%
        3,102,770
 3,088,949
 3,102,770
  
        

 

 

  
Imagine! Print Solutions, LLC Media: Advertising, Printing & Publishing 
Senior Secured First Lien Term Loan (LIBOR + 4.75%, 1.00% LIBOR Floor)(1)
 6/21/2022 7,940,000
 7,868,404
 7,860,600
 10.2%
        7,940,000
 7,868,404
 7,860,600
  
        

 

 

  
Infogroup, Inc. Services: Business 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 4/3/2023 4,962,500
 4,918,712
 4,941,161
 6.4%
        4,962,500
 4,918,712
 4,941,161
  
        

 

 

  
Keystone Acquisition Corp. Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.25%, 1.00% LIBOR Floor)(1)
 5/1/2024 6,272,748
 6,165,433
 6,304,111
 8.2%
        6,272,748
 6,165,433
 6,304,111
  
        

 

 

  
KNB Holdings Corporation Consumer Goods: Durable 
Senior Secured First Lien Term Loan (LIBOR + 5.50%, 1.00% LIBOR Floor)(1)
 4/26/2024 6,459,375
 6,342,525
 6,475,523
 8.4%
        6,459,375
 6,342,525
 6,475,523
  
        

 

 

  
LegalZoom.com, Inc. Services: Business 
Senior Secured First Lien Term Loan (LIBOR + 4.50%, 1.00% LIBOR Floor)(1)
 11/21/2024 2,000,000
 1,980,371
 1,980,000
 2.6%
        2,000,000
 1,980,371
 1,980,000
  
        

 

 

  
LifeMiles Ltd. Services: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 5.50%, 1.00% LIBOR Floor)(1)
 8/18/2022 4,875,000
 4,829,405
 4,826,250
 6.3%
        4,875,000
 4,829,405
 4,826,250
  
        

 

 

  
Lighthouse Network, LLC Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 4.50%, 1.00% LIBOR Floor)(1)
 11/29/2024 10,000,000
 9,950,757
 9,950,000
 12.9%
        10,000,000
 9,950,757
 9,950,000
  
        

 

 

  
Manna Pro Products, LLC Consumer Goods: Non-Durable 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 12/8/2023 3,083,333
 3,083,333
 3,083,333
 4.1%
        3,083,333
 3,083,333
 3,083,333
  
        

 

 

  
MB Aerospace ACP Holdings II Corp. Aerospace and Defense 
Senior Secured First Lien Term Loan (LIBOR + 5.50%, 1.00% LIBOR Floor)(1)
 12/15/2022 5,150,539
 5,116,917
 5,150,539
 6.7%
        5,150,539
 5,116,917
 5,150,539
  
        

 

 

  
New Media Holdings II LLC Media: Advertising, Printing & Publishing 
Senior Secured First Lien Term Loan (LIBOR + 6.25%, 1.00% LIBOR Floor)(1)
 7/14/2022 2,924,991
 2,924,991
 2,924,991
 3.8%
        2,924,991
 2,924,991
 2,924,991
  
               
Peraton Corp. Aerospace and Defense 
Senior Secured First Lien Term Loan (LIBOR + 5.25%, 1.00% LIBOR Floor)(1)
 4/29/2024 4,975,000
 4,952,439
 4,950,125
 6.4%
        4,975,000
 4,952,439
 4,950,125
  
               
PetroChoice Holdings, Inc. Chemicals, Plastics and Rubber 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 8/19/2022 4,949,367
 4,949,367
 4,949,367
 6.4%
        4,949,367
 4,949,367
 4,949,367
  
               


Company Industry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets(4)
               
PT Network, LLC Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.50%, 1.00% LIBOR Floor)(1)
 11/30/2021 4,950,094
 4,950,191
 4,950,094
 6.4%
        4,950,094
 4,950,191
 4,950,094
  
               
Quorum Health Corporation Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 6.75%, 1.00% LIBOR Floor)(1)
 4/29/2022 1,133,768
 1,117,333
 1,140,911
 1.5%
        1,133,768
 1,117,333
 1,140,911
  
               
RESIC Enterprises, LLC Beverage & Food 
Senior Secured First Lien Term Loan (LIBOR + 4.25%, 1.00% LIBOR Floor)(1)
 11/11/2024 3,750,000
 3,731,694
 3,731,250
 4.9%
        3,750,000
 3,731,694
 3,731,250
  
               
Rough Country, LLC Automotive 
Senior Secured First Lien Term Loan (LIBOR + 4.50%, 1.00% LIBOR Floor)(1)
 5/25/2023 4,731,098
 4,688,066
 4,711,227
 6.1%
        4,731,098
 4,688,066
 4,711,227
  
               
Salient CRGT Inc. High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 5.75%, 1.00% LIBOR Floor)(1)
 2/28/2022 2,886,607
 2,838,152
 2,889,494
 3.8%
        2,886,607
 2,838,152
 2,889,494
  
               
SCS Holdings I Inc. (Sirius Computer Solutions, Inc.) Wholesale 
Senior Secured First Lien Term Loan (LIBOR + 4.25%, 1.00% LIBOR Floor)(1)
 10/31/2022 4,431,163
 4,389,341
 4,420,085
 5.7%
        4,431,163
 4,389,341
 4,420,085
  
               
Starfish Holdco, LLC High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 8/16/2024 4,987,500
 4,939,831
 4,937,625
 6.4%
        4,987,500
 4,939,831
 4,937,625
  
               
The Octave Music Group, Inc. Media: Diversified & Production 
Senior Secured First Lien Term Loan (LIBOR + 4.75%, 1.00% LIBOR Floor)(1)
 5/28/2021 4,961,832
 4,961,832
 4,961,832
 6.4%
        4,961,832
 4,961,832
 4,961,832
  
               
ThoughtWorks, Inc. High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 4.50%, 1.00% LIBOR Floor)(1)
 10/11/2024 4,000,000
 3,990,419
 3,990,000
 5.2%
        4,000,000
 3,990,419
 3,990,000
  
               
United Road Services, Inc Transportation: Cargo 
Senior Secured First Lien Term Loan (LIBOR + 5.25%, 1.00% LIBOR Floor)(1)
 9/1/2024 3,970,000
 3,950,852
 3,950,150
 5.1%
        3,970,000
 3,950,852
 3,950,150
  
               
VCVH Holding Corp. Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 6/1/2023 2,955,000
 2,931,741
 2,967,411
 3.9%
        2,955,000
 2,931,741
 2,967,411
  
               
VIP Cinema Holdings, Inc. Consumer Goods: Durable 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 3/1/2023 472,034
 469,991
 476,377
 0.6%
        472,034
 469,991
 476,377
  
               
Wheels Up Partners LLC Aerospace and Defense 
Senior Secured First Lien Term Loan (LIBOR + 8.55%, 1.00% LIBOR Floor)(1)
 10/15/2020 5,000,000
 4,852,786
 4,850,000
 6.3%
        5,000,000
 4,852,786
 4,850,000
  
               


Company Industry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets(4)
               
Z-Medica, LLC Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.50%, 1.00% LIBOR Floor)(1)
 9/29/2022 2,942,625
 2,942,625
 2,942,625
 3.8%
        2,942,625
 2,942,625
 2,942,625
  
               
Total Investments, December 31, 2017     $213,650,199
 $210,063,704
 $210,395,982
 273.5%

(1)Represents the weighted average annual current interest rate as of December 31, 2017. All interest rates are payable in cash, unless otherwise noted.
(2)Represents the fair value in accordance with ASC 820 as reported by MCC JV. The determination of such fair value is not included in the Company’s board of directors’ valuation process described elsewhere herein.
(3)This investment was on non-accrual status as of December 31, 2017.
(4)Percentage is based on MCC JV's net assets of $76,932,383 as of December 31, 2017.



MCC JV Loan Portfolio as of September 30, 2017
Company Industry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets(4)
               
4Over International, LLC Media: Advertising, Printing & Publishing 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 6/7/2022 11,346,929
 11,346,929
 11,346,929
 17.7%
        11,346,929
 11,346,929
 11,346,929
  
               
AccentCare, Inc. Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.75%, 1.00% LIBOR Floor)(1)
 10/1/2021 5,006,781
 4,978,815
 4,981,747
 7.8%
        5,006,781
 4,978,815
 4,981,747
  
               
Acrisure, LLC Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 11/22/2023 497,500
 496,327
 502,475
 0.8%
        497,500
 496,327
 502,475
  
               
Amplify Snack Brands, Inc. Beverage & Food 
Senior Secured First Lien Term Loan (LIBOR + 5.50%, 1.00% LIBOR Floor)(1)
 9/4/2023 1,811,579
 1,796,231
 1,781,688
 2.8%
        1,811,579
 1,796,231
 1,781,688
  
               
Apco Holdings, Inc. Automotive 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 1/31/2022 3,508,277
 3,432,083
 3,508,277
 5.5%
        3,508,277
 3,432,083
 3,508,277
  
               
API Technologies Corp. Aerospace and Defense 
Senior Secured First Lien Term Loan (LIBOR + 6.50%, 1.00% LIBOR Floor)(1)
 4/22/2022 2,951,250
 2,906,128
 2,951,250
 4.6%
        2,951,250
 2,906,128
 2,951,250
  
               
Associated Asphalt Partners, LLC Construction & Building 
Senior Secured First Lien Term Loan (LIBOR + 5.25%, 1.00% LIBOR Floor)(1)
 4/5/2024 997,500
 992,848
 992,513
 1.5%
        997,500
 992,848
 992,513
  
               
Avantor Performance Materials Holdings, Inc. Chemicals, Plastics and Rubber 
Senior Secured First Lien Term Loan (LIBOR + 4.00%, 1.00% LIBOR Floor)(1)
 3/11/2024 2,985,000
 2,978,117
 2,985,000
 4.7%
        2,985,000
 2,978,117
 2,985,000
  
               
Blount International, Inc. Capital Equipment 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 4/12/2023 2,962,500
 2,918,684
 2,962,500
 4.6%
    
Senior Secured First Lien Term Loan (ABR + 4.00%, 4.25% ABR Floor)(1)
 4/12/2023 7,500
 7,389
 7,500
 0.0%
        2,970,000
 2,926,073
 2,970,000
  
               
Canyon Valor Companies, Inc. (fka GTCR Valor Companies, Inc.) Media: Diversified & Production 
Senior Secured First Lien Term Loan (LIBOR + 4.25%, 1.00% LIBOR Floor)(1)
 6/16/2023 2,475,000
 2,468,952
 2,499,750
 3.9%
        2,475,000
 2,468,952
 2,499,750
  
               
Cardenas Markets LLC Retail 
Senior Secured First Lien Term Loan (LIBOR + 5.75%, 1.00% LIBOR Floor)(1)
 11/29/2023 5,458,750
 5,410,676
 5,450,016
 8.5%
        5,458,750
 5,410,676
 5,450,016
  
               
CD&R TZ Purchaser, Inc Services: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 7/21/2023 3,465,000
 3,421,596
 3,456,338
 5.4%
        3,465,000
 3,421,596
 3,456,338
  
               


Company Industry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets(4)
               
CP OPCO, LLC Services: Consumer 
Senior Secured First Lien Term Loan B (ABR + 5.50% PIK, 4.25% ABR Floor)(1)(3)
 4/1/2019 219,589
 213,451
 59,728
 0.1%
    
Senior Secured First Lien Term Loan C (ABR + 8.50% PIK, 4.25% ABR Floor)(1)(3)
 4/1/2019 1,603,881
 717,016
 —
 0.0%
    
Preferred Facility (ABR + 7.00% PIK, 3.75% ABR
Floor)(1)(3)
 4/1/2019 934,849
 —
 —
 0.0%
    
Revolving Credit Facility (ABR + 3.50% Cash, 4.25% ABR Floor)(1)
 4/1/2019 —
 —
 —
 0.0%
    Common Stock   41
 —
 —
 0.0%
        2,758,360
 930,467
 59,728
  
               
CSP Technologies North America, LLC Containers, Packaging and Glass 
Senior Secured First Lien Term Loan (LIBOR + 5.25%, 1.00% LIBOR Floor)(1)
 1/31/2022 2,480,781
 2,480,781
 2,480,781
 3.9%
        2,480,781
 2,480,781
 2,480,781
  
               
CT Technologies Intermediate Holdings, Inc. Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 4.25%, 1.00% LIBOR Floor)(1)
 12/1/2021 5,218,206
 5,063,171
 5,218,206
 8.1%
        5,218,206
 5,063,171
 5,218,206
  
               
Elite Comfort Solutions, Inc. Chemicals, Plastics and Rubber 
Senior Secured First Lien Term Loan (LIBOR + 6.50%, 1.00% LIBOR Floor)(1)
 1/15/2021 5,810,616
 5,810,616
 5,810,616
 9.1%
        5,810,616
 5,810,616
 5,810,616
  
               
Evo Payments International, LLC Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 12/22/2023 3,482,500
 3,451,297
 3,517,325
 5.5%
        3,482,500
 3,451,297
 3,517,325
  
               
Explorer Holdings, Inc. Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 3.75%, 1.00% LIBOR Floor)(1)
 5/2/2023 979,038
 976,115
 982,758
 1.5%
        979,038
 976,115
 982,758
  
               
GK Holdings, Inc. Services: Business 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 1/20/2021 2,969,466
 2,957,674
 2,908,592
 4.5%
        2,969,466
 2,957,674
 2,908,592
  
               
Global Eagle Entertainment Inc. Telecommunications 
Senior Secured First Lien Term Loan (LIBOR + 7.00%, 1.00% LIBOR Floor)(1)
 1/6/2023 4,147,500
 4,079,692
 4,116,394
 6.4%
        4,147,500
 4,079,692
 4,116,394
  
               
Golden West Packaging Group LLC Forest Products & Paper 
Senior Secured First Lien Term Loan (LIBOR + 5.25%, 1.00% LIBOR Floor)(1)
 6/20/2023 6,708,188
 6,708,188
 6,708,188
 10.5%
        6,708,188
 6,708,188
 6,708,188
  
               
High Ridge Brands Co. Consumer Goods: Non-Durable 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 6/30/2022 1,851,563
 1,828,706
 1,773,982
 2.8%
        1,851,563
 1,828,706
 1,773,982
  
               
Highline Aftermarket Acquisitions, LLC Automotive 
Senior Secured First Lien Term Loan (LIBOR + 4.25%, 1.00% LIBOR Floor)(1)
 3/18/2024 3,110,895
 3,096,476
 3,110,895
 4.8%
        3,110,895
 3,096,476
 3,110,895
  
               


Company Industry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets(4)
               
Imagine! Print Solutions, LLC Media: Advertising, Printing & Publishing 
Senior Secured First Lien Term Loan (LIBOR + 4.75%, 1.00% LIBOR Floor)(1)
 6/21/2022 7,960,000
 7,884,180
 7,880,400
 12.3%
        7,960,000
 7,884,180
 7,880,400
  
               
Infogroup, Inc. Services: Business 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 4/3/2023 4,975,000
 4,928,990
 4,925,250
 7.7%
        4,975,000
 4,928,990
 4,925,250
  
               
Keystone Acquisition Corp. Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.25%, 1.00% LIBOR Floor)(1)
 5/1/2024 8,000,000
 7,857,692
 8,000,000
 12.5%
        8,000,000
 7,857,692
 8,000,000
  
               
KNB Holdings Corporation Consumer Goods: Durable 
Senior Secured First Lien Term Loan (LIBOR + 5.50%, 1.00% LIBOR Floor)(1)
 4/26/2024 6,500,000
 6,377,734
 6,516,250
 10.3%
        6,500,000
 6,377,734
 6,516,250
  
               
LifeMiles Ltd. Services: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 5.50%, 1.00% LIBOR Floor)(1)
 8/18/2022 5,000,000
 4,950,691
 4,950,000
 7.7%
        5,000,000
 4,950,691
 4,950,000
  
               
Lighthouse Network, LLC Banking, Finance, Insurance & Real Estate 
Senior Secured First Lien Term Loan (LIBOR + 4.75%, 1.00% LIBOR Floor)(1)
 10/13/2023 4,466,250
 4,427,648
 4,466,250
 7.1%
        4,466,250
 4,427,648
 4,466,250
  
               
MB Aerospace ACP Holdings II Corp. Aerospace and Defense 
Senior Secured First Lien Term Loan (LIBOR + 5.50%, 1.00% LIBOR Floor)(1)
 12/15/2022 5,163,678
 5,128,257
 5,163,678
 8.0%
        5,163,678
 5,128,257
 5,163,678
  
               
New Media Holdings II LLC Media: Advertising, Printing & Publishing 
Senior Secured First Lien Term Loan (LIBOR + 6.25%, 1.00% LIBOR Floor)(1)
 7/14/2022 2,932,340
 2,932,340
 2,932,340
 4.6%
        2,932,340
 2,932,340
 2,932,340
  
               
Peraton Corp. Aerospace and Defense 
Senior Secured First Lien Term Loan (LIBOR + 5.25%, 1.00% LIBOR Floor)(1)
 4/29/2024 4,987,500
 4,963,982
 4,962,563
 7.7%
        4,987,500
 4,963,982
 4,962,563
  
               
PetroChoice Holdings, Inc. Chemicals, Plastics and Rubber 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 8/22/2022 4,962,025
 4,962,025
 4,962,025
 7.7%
        4,962,025
 4,962,025
 4,962,025
  
               
Pomeroy Group LLC Services: Business 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 11/30/2021 2,343,582
 2,288,650
 2,329,989
 3.6%
    
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 11/30/2021 419,501
 409,668
 417,068
 0.7%
        2,763,083
 2,698,318
 2,747,057
  
               
PT Network, LLC Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 6.50%, 1.00% LIBOR Floor)(1)
 11/30/2021 4,962,500
 4,921,159
 4,996,741
 7.8%
        4,962,500
 4,921,159
 4,996,741
  
               


Company Industry Type of Investment Maturity 
Par
Amount
 Cost 
Fair
Value(2)
 
% of
Net Assets(4)
               
Quorum Health Corporation Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 6.75%, 1.00% LIBOR Floor)(1)
 4/29/2022 1,176,137
 1,158,096
 1,191,191
 1.9%
        1,176,137
 1,158,096
 1,191,191
  
               
Rough Country, LLC Automotive 
Senior Secured First Lien Term Loan (LIBOR + 4.50%, 1.00% LIBOR Floor)(1)
 5/25/2023 4,987,500
 4,940,019
 4,937,625
 7.7%
        4,987,500
 4,940,019
 4,937,625
  
               
Salient CRGT Inc. High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 5.75%, 1.00% LIBOR Floor)(1)
 2/28/2022 2,948,214
 2,895,729
 2,935,832
 4.6%
        2,948,214
 2,895,729
 2,935,832
  
               
SCS Holdings I Inc. Wholesale 
Senior Secured First Lien Term Loan (LIBOR + 4.25%, 1.00% LIBOR Floor)(1)
 10/31/2022 2,778,498
 2,737,893
 2,806,283
 4.4%
        2,778,498
 2,737,893
 2,806,283
  
               
Starfish Holdco, LLC High Tech Industries 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 8/16/2024 5,000,000
 4,950,395
 4,950,000
 7.7%
        5,000,000
 4,950,395
 4,950,000
  
               
Sundial Group Holdings LLC Consumer Goods: Non-Durable 
Senior Secured First Lien Term Loan (LIBOR + 4.75%, 1.00% LIBOR Floor)(1)
 8/15/2024 10,000,000
 9,852,004
 9,850,000
 15.4%
        10,000,000
 9,852,004
 9,850,000
  
               
Survey Sampling International, LLC Services: Business 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 12/16/2020 2,954,530
 2,934,263
 2,954,530
 4.6%
        2,954,530
 2,934,263
 2,954,530
  
               
TouchTunes Interactive Networks, Inc. Media: Diversified & Production 
Senior Secured First Lien Term Loan (LIBOR + 4.75%, 1.00% LIBOR Floor)(1)
 5/28/2021 4,974,555
 4,974,555
 5,005,894
 7.8%
        4,974,555
 4,974,555
 5,005,894
  
               
TrialCard Incorporated Services: Consumer 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 10/26/2021 3,300,075
 3,273,215
 3,300,075
 5.1%
        3,300,075
 3,273,215
 3,300,075
  
               
VCVH Holding Corp. Healthcare & Pharmaceuticals 
Senior Secured First Lien Term Loan (LIBOR + 5.00%, 1.00% LIBOR Floor)(1)
 6/1/2023 2,962,500
 2,938,097
 2,958,353
 4.6%
        2,962,500
 2,938,097
 2,958,353
  
               
VIP Cinema Holdings, Inc. Consumer Goods: Durable 
Senior Secured First Lien Term Loan (LIBOR + 6.00%, 1.00% LIBOR Floor)(1)
 3/1/2023 728,165
 724,860
 735,446
 1.1%
        728,165
 724,860
 735,446
  
               
Total Investments, September 30, 2017     $187,473,229
 $183,950,100
 $184,241,231
 287.6%

(1)Represents the weighted average annual current interest rate as of September 30, 2017. All interest rates are payable in cash, unless otherwise noted.
(2)Represents the fair value in accordance with ASC 820 as reported by MCC JV. The determination of such fair value is not included in the Company’s board of directors’ valuation process described elsewhere herein.
(3)This investment was on non-accrual status as of September 30, 2017.
(4)Percentage is based on MCC JV's net assets of $64,157,655 as of September 30, 2017.



Below is certain summarized financial Information for MCC JV as of December 31, 2017 and September 30, 2017, and for the three months ended December 31, 2017 and 2016:
 December 31, 2017 September 30, 2017
 (unaudited)  
Selected Consolidated Statement of Assets and Liabilities Information: 
  
Investments in loans at fair value (cost: of $210,063,704 and $183,950,100, respectively)$210,395,982
 $184,241,231
Cash18,449,700
 8,908,117
Other assets686,391
 597,831
Total assets$229,532,073

$193,747,179
    
Line of credit (net of debt issuance costs of $1,689,663 and $1,789,953, respectively)$151,690,337
 $128,690,047
Other liabilities354,436
 440,959
Interest payable554,917
 458,518
Total liabilities152,599,690

129,589,524
Members' capital76,932,383
 64,157,655
Total liabilities and members' capital$229,532,073

$193,747,179

 For the three months ended December 31
 2017 2016
 (unaudited) (unaudited)
Selected Consolidated Statement of Operations Information:   
Total revenues$3,862,003
 $2,002,357
Total expenses(1,931,382) (975,360)
Net unrealized appreciation/(depreciation)(53,471) 549,454
Net realized gain/(loss)432,965
 105,892
Net income/(loss)$2,310,115
 $1,682,343

2023.

Unconsolidated Significant Subsidiaries


In accordance with Rules 3-09 and 4-08(g) ofthe SEC’s Regulation S-X and GAAP, the Company must determine which of its unconsolidated Control Investments, if any, are considered “significant subsidiaries.” In evaluating these investments, there are three tests utilized to determine if any Controlled Investments are considered significant subsidiaries: the investment test, the asset testevaluated and the income test. Rule 3-09 of Regulation S-X requires the Company to include separate audited financial statements of any unconsolidated majority-owneddetermined that it had one subsidiary, (Control Investments inFlexFIN, LLC, for which the Company owns greater thanowned 50% of the voting securities) in an annual report if any of the three tests exceed 20%. Rule 4-08(g) of Regulation S-X requires summarized financial information of Control Investments in an annual report if any of the three tests exceeds 10%, and summarized financial information inthat is deemed to be a quarterly report if any of the three tests exceeds 20% pursuant to Rule 10-01(b)(1) of Regulation S-X.


As of December 31, 2017, the Company had no single Control Investment that represented greater than 20% of its total Investment Portfolio at fair value and no single investment whose total assets represented greater than 20% of its total assets. After performing the income test for the three months ended December 31, 2017, the Company determined that its income from one of its Control Investments individually generated more than 20% of its total income, primarily due to the unrealized depreciation that was recognized on the investment during the three months ended December 31, 2017. As such, OmniVere, LLC was considered a significant subsidiary at the 20% level“significant subsidiary” as of DecemberMarch 31, 2017.

The following tables show2024 for which summarized unaudited financial information for OmniVere, LLC, which met the 20% income test for the three months ended December 31, 2017:
 December 31, 2017 September 30, 2017
Balance Sheet Data(1)
   
Current assets$8,457,083
 $10,632,181
Non-current assets46,969,847
 48,750,429
Current liabilities7,952,292
 8,500,394
Non-current liabilities102,639,377
 99,927,509



 For the three months ended
 December 31, 2017 December 31, 2016
Summary of Operations(1)
   
Total revenues$5,007,107
 $8,558,339
Cost of sales3,789,896
 5,948,374
Operating expenses4,321,778
 2,131,400
Other expenses3,014,879
 4,583,165
Net loss$(6,119,446) $(4,104,600)

(1)All amounts are unaudited.

The Company also determined that the assets of MCC JV represented greater than 20% of its total assets and also generated more than 20% of the Company’s total income primarily due to dividend income. Accordingly, the related summary financial information is presented below (dollars in the “MCC Senior Loan Strategy JV I LLC” heading above.thousands):

Balance Sheet March 31,
2024
(Unaudited)		  September 30,
2023
(Audited)		 
Total Assets $35,929  $38,871 
Total Liabilities  1,852   279 

Income Statement 

For the
Six Months

Ended
March 31,
2024
(Unaudited)

  For the
Year Ended
September 30,
2023
(Audited)		 
Total Income $2,173  $4,385 
Total Expenses  448   815 
Net Income $1,725  $3,570 


Note 4. 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 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. The three levels are defined below. Investments which are valued using NAV as a practical expedient are excluded from this hierarchy:


Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities athierarchy, and certain prior period amounts have been reclassified to conform to the measurement date.

Level 2 - Valuations based on inputs other than quoted prices in active markets included in Level 1, whichcurrent period presentation. The three levels are either directly or indirectly observable at the measurement date. This category includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in non-active markets including actionable bids from third parties for privately held assets or liabilities, and observable inputs other than quoted prices such as yield curves and forward currency rates that are entered directly into valuation models to determine the value of derivatives or other assets or liabilities.

Level 3 - Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement date. The inputs for the determination of fair value may require significant management judgment or estimation and are based upon management’s assessment of the assumptions that market participants would use in pricing the assets or liabilities. These investments include debt and equity investments in private companies or assets valued using the Market or Income Approach and may involve pricing models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates, beta and EBITDA multiples. The information may also include pricing information or broker quotes which include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level 3 information, assuming no additional corroborating evidence.

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 thea 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.



PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 31, 2024
(Unaudited)

Note 4. 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 DecemberMarch 31, 20172024 (dollars in thousands):

 Level 1 Level 2 Level 3 Total
Senior Secured First Lien Term Loans$—
 $—
 $532,308
 $532,308
Senior Secured Second Lien Term Loans—
 —
 106,304
 106,304
Senior Secured First Lien Notes—
 —
 27,420
 27,420
Unsecured Debt—
 —
 —
 —
Equity/Warrants34
 21
 102,410
 102,465
Total$34
 $21
 $768,442
 $768,497
MCC Senior Loan Strategy JV I LLC(1)
 
  
  
 $67,406
Total Investments, at fair value 
  
  
 $835,903

  Fair Value Hierarchy as of
March 31, 2024		 
Investments: Level 1  Level 2  Level 3  Total 
Senior Secured First Lien Term Loans $-  $26,626  $79,981  $106,607 
Senior Secured Notes  -   12,372   -   12,372 
Equity/Warrants  23,612   6,119   70,556   100,287 
Total $23,612  $45,117  $150,537  $219,266 
Investments measured at net asset value(1)              783 
Total Investments, at fair value             $220,049 

(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.

The following table presents the fair value measurements of our investments, by major class according to the fair value hierarchy, as of September 30, 20172023 (dollars in thousands):

  Fair Value Hierarchy as of
September 30, 2023		 
Investments: Level 1  Level 2  Level 3  Total 
Senior Secured First Lien Term Loans $-  $20,505  $82,499  $103,004 
Senior Secured Notes  -   8,922   -   8,922 
Equity/Warrants  24,709   6,217   82,817   113,743 
Total $24,709  $35,644  $165,316  $225,669 
Investments measured at net asset value(1)              792 
Total Investments, at fair value             $226,461 

(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.


 Level 1 Level 2 Level 3 Total
Senior Secured First Lien Term Loans$—
 $—
 $537,163
 $537,163
Senior Secured Second Lien Term Loans—
 —
 135,826
 135,826
Senior Secured First Lien Notes—
 7,067
 20,478
 27,545
Unsecured Debt—
 —
 —
 —
Equity/Warrants38
 21
 80,260
 80,319
Total$38

$7,088

$773,727

$780,853
MCC Senior Loan Strategy JV I LLC(1)
 
  
  
 $56,138
Total Investments, at fair value 
  
  
 $836,991

(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

PHENIXFIN CORPORATION
Notes to permit reconciliation of the fair value hierarchy to the amount presented in the Consolidated Financial Statements of Assets and Liabilities.
March 31, 2024
(Unaudited)

Note 4. Fair Value Measurements (continued)

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the threesix months ended DecemberMarch 31, 20172024 (dollars in thousands): 

 
Senior
Secured
First Lien
Term
Loans
 
Senior
Secured
Second
Lien Term
Loans
 
Senior
Secured
First Lien
Notes
 
Unsecured
Debt
 Equities/Warrants Total
Balance as of September 30, 2017$537,163
 $135,826
 $20,478
 $—
 $80,260
 $773,727
Purchases and other adjustments to cost2,641
 10,335
 3
 —
 728
 13,707
Originations44,271
 —
 —
 —
 17,450
 61,721
Sales(4,850) —
 —
 —
 —
 (4,850)
Settlements(6,580) (36,429) —
 —
 —
 (43,009)
Net realized gains/(losses) from investments(150) 9
 —
 —
 —
 (141)
Net transfers in and/or out of Level 3—
 —
 7,067
 —
 —
 7,067
Net unrealized gains/(losses)(40,187) (3,437) (128) —
 3,972
 (39,780)
Balance as of December 31, 2017$532,308

$106,304

$27,420

$—

$102,410

$768,442


  Senior Secured
First Lien
Term Loans		  Equities/
Warrants		  Total 
Balance as of September 30, 2023 $82,499  $82,817  $165,316 
Purchases and other adjustments to cost  14,352   20,098   34,450 
Sales (including repayments or maturities)  (30,946)  (22,806)  (53,752)
Net realized gains/(losses) from investments  (8,676)  7,204   (1,472)
Net unrealized gains/(losses)  22,752   (16,757)  5,995 
Transfer in/(out)  -   -   - 
Balance as of March 31, 2024 $79,981  $70,556  $150,537 

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the threesix months ended DecemberMarch 31, 20162023 (dollars in thousands):

 
Senior
Secured
First Lien
Term
Loans
 
Senior
Secured
Second
Lien Term
Loans
 
Senior
Secured
First Lien
Notes
 
Unsecured
Debt
 Equities/Warrants Total
Balance as of September 30, 2016$565,329
 $213,537
 $21,048
 $52,809
 $23,112
 $875,835
Purchases and other adjustments to cost4,119
 768
 —
 1,058
 12
 5,957
Originations75,349
 —
 —
 1,973
 10,875
 88,197
Sales—
 —
 —
 —
 —
 —
Settlements(79,227) —
 —
 (15,000) —
 (94,227)
Net realized gains/(losses) from investments(6,089) —
 —
 (289) —
 (6,378)
Net transfers in and/or out of Level 3—
 —
 —
 —
 —
 —
Net unrealized gains/(losses)3,009
 566
 (1) (906) (955) 1,713
Balance as of December 31, 2016$562,490

$214,871

$21,047

$39,645

$33,044

$871,097

  Senior Secured
First Lien
Term Loans		  Senior Secured
Second Lien
Term Loans		  Equities/
Warrants		  Fund
Investment		  Total 
Balance as of September 30, 2022 $74,252  $2,607  $69,816  $-  $146,675 
Purchases and other adjustments to cost  15,443   -   8,723   1,027   25,193 
Sales (including repayments or maturities)  (3,657)  (2,607)  (18,041)  -   (24,305)
Net realized gains/(losses) from investments  85   5   (927)  -   (837)
Net unrealized gains/(losses)  (2,964)  (5)  7,509   -   4,540 
Transfer in/(out)  -   -   -   -   - 
Balance as of March 31, 2023 $83,159  $-  $67,080  $1,027  $151,266 

Net change in unrealized lossgain (loss) for the six months ended March 31, 2024 and 2023 included in earnings related to Level 3 investments still held as of DecemberMarch 31, 20172024 and 2016,2023 was approximately $39.2$3.4 million and $23.0$2.4 million, respectively.


PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 31, 2024
(Unaudited)

Note 4. Fair Value Measurements (continued)

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.

Settlements represent principal paydowns received.
sold, including any repayments or maturities.

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 threesix months ended DecemberMarch 31, 2017, one of our senior secured first lien notes with a fair value of $7.0 million transferred from Level 2 to Level 3 because of the decrease in availability of the transaction data or the inputs to the valuation. During the three months ended December 31, 2016, none of our2024, no investments were transferred in or out of Level 3.


During the six months ended March 31, 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 DecemberMarch 31, 20172024 (dollars in thousands):

 Fair Value Valuation Technique Unobservable Input Range (Weighted Average)
        
Senior Secured First Lien Term Loans$300,547
 Income Approach (DCF) Market yield 7.26% - 15.40% (10.89%)
Senior Secured First Lien Term Loans2,972
 Enterprise Value Analysis Expected Proceeds $0.0M - $2.6M ($2.3M)
Senior Secured First Lien Term Loans148,141
 Market Approach (Guideline Comparable)/Market Approach (Comparable Transactions)/Income Approach (DCF)/ Enterprise Value Analysis 
Revenue Multiple(1), EBITDA Multiple(1), Discount rate, Expected Proceeds
 0.63x - 2.00x (1.13x) / 5.50x - 10.00x (7.51x) / 10.00% - 22.00% (17.67%) / $4.0M - $18.3M ($9.6M)
Senior Secured First Lien Term Loans80,648
 Recent Arms-Length Transaction Recent Arms Length Transaction N/A
Senior Secured First Lien Notes27,420
 Income Approach (DCF) Market yield 8.96% - 11.50% (9.61%)
Senior Secured Second Lien Term Loan62,769
 Income Approach (DCF) Market yield 10.30% - 16.28% (13.45%)
Senior Secured Second Lien Term Loans7,760
 Enterprise Value Analysis Expected Proceeds $0.0M-$7.8M ($7.8M)
Senior Secured Second Lien Term Loan15,207
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
Revenue Multiple(1), EBITDA Multiple(1), Discount Rate
 0.70x - 0.70x (0.70x) / 7.25x - 10.00x (7.29x) / 17.50% - 17.50% (17.50%)
Senior Secured Second Lien Term Loan20,568
 Recent Arms-Length Transaction Recent Arms Length Transaction N/A


 Fair Value Valuation Technique Unobservable Input Range (Weighted Average)
        
Unsecured Debt—
 Market Approach (Guideline Comparable)/Market Approach (Comparable Transactions)/Income Approach (DCF)/Enterprise Value Analysis 
Revenue Multiple(1), Discount Rate, Expected Proceeds
 1.00x-1.40x (1.20x) / 17.50%-23.50% (20.50%) / $3.0M - $5.0M ($4.0M)
Equity21,845
 Recent Arms-Length Transaction Recent Arms Length Transaction N/A
Equity80,565
 Market Approach (Guideline Comparable)/Market Approach (Comparable Transactions)/Income Approach (DCF)/Enterprise Value Analysis 
Revenue Multiple(1), EBITDA Multiple(1), Discount rate, Expected Proceeds
 0.70x - 2.00x (0.74x) / 5.00x - 9.63x (8.45x) / 10.00%-20.50% (15.96%) / $4.0M - $18.3M ($5.0M)
Equity—
 Enterprise Value Analysis Expected Proceeds $0.0M
Total$768,442
      

  Fair Value  Valuation
Methodology		 Unobservable
Input		 Range
(Weighted Average)		 Impact to
Valuation
From
An Increase
In Input
Senior Secured First Lien Term Loans $75,177  Income Approach Market Yield 9.0% - 37.5% (15.4%) Decrease
Senior Secured First Lien Term Loans  3,958  Market Approach EBITDA Multiple 1.6x - 5.0x (4.0x) Increase
Senior Secured First Lien Term Loans  846  Market Approach LTM EBITDA Multiple 6.3x - 7.3x (6.8x) Increase
Equity/Warrants  34,729  Cost Approach Collateral Value N/A N/A
Equity/Warrants  10,759  Market Approach LTM Multiple 6.3x - 7.3x (6.8x) Increase
Equity/Warrants  24,835  Market Approach EBITDA Multiple 1.0x - 36.8x (5.8x) Increase
Equity/Warrants  133  Income Approach DLOM (Discount for lack of Marketability) 29.5% - 29.5% (29.5%) Decrease
Equity/Warrants  100  Recent Purchase Recent Purchase N/A N/A
Total $150,537         

The following table has been modified to conform to the current period presentation, and presents the quantitative information about Level 3 fair value measurements of our investments, as of September 30, 20172023 (dollars in thousands):

 Fair Value Valuation Technique Unobservable Input Range (Weighted Average)
        
Senior Secured First Lien Term Loans$288,134
 Income Approach (DCF) Market yield 8.63% - 14.74% (11.15%)
Senior Secured First Lien Term Loans5,254
 Enterprise Value Analysis Expected Proceeds $0.0M - $4.9M ($4.6M)
Senior Secured First Lien Term Loans184,059
 Market Approach (Guideline Comparable)/Market Approach (Comparable Transactions)/Income Approach (DCF) 
Revenue Multiple(1), EBITDA Multiple(1), Discount rate
 0.60x - 3.00x (1.42x) / 5.50x - 8.00x (6.77x) / 10.00% - 22.00% (17.79%)
Senior Secured First Lien Term Loans59,716
 Recent Arms-Length Transaction Recent Arms Length Transaction N/A
Senior Secured First Lien Notes20,478
 Income Approach (DCF) Market yield 8.85% - 8.85% (8.85%)
Senior Secured Second Lien Term Loan88,126
 Income Approach (DCF) Market yield 9.92% - 16.16% (12.22%)
Senior Secured Second Lien Term Loans7,760
 Enterprise Value Analysis Expected Proceeds $0.0M - $15.5M ($7.8M)
Senior Secured Second Lien Term Loan20,894
 Recent Arms-Length Transaction Recent Arms-Length Transaction N/A
Senior Secured Second Lien Term Loan19,046
 Market Approach (Guideline Comparable)/Income Approach (DCF) 
Revenue Multiple(1), EBITDA Multiple(1), Discount Rate
 
0.55x - 0.70x (0.67x) / 7.00x - 9.13x (8.06x) / 17.50% - 18.00% (17.61%)

Unsecured Debt—
 Market Approach (Guideline Comparable)/Market Approach (Comparable Transactions)/Income Approach (DCF) 
Revenue Multiple(1), Discount rate
 1.00x-1.40x (1.20x) / 17.50%-23.50% (20.50%)
Equity38,893
 Recent Arms-Length Transaction Recent Arms Length Transaction N/A
Equity41,367
 Market Approach (Guideline Comparable)/Market Approach (Comparable Transactions)/Income Approach (DCF) 
Revenue Multiple(1), EBITDA Multiple(1), Discount rate, Expected Proceeds
 0.70x - 3.00x (0.74x) / 5.00x - 8.63x (7.10x) / 10.00%-20.50% (16.42%) / $1.9M - $8.0M ($5.0M)
Equity—
 Enterprise Value Analysis Expected Proceeds $0.0M
Total$773,727
      

(1)Represents inputs used when the Company has determined that market participants would use such multiples when measuring the fair value of these investments.

  Fair Value  Valuation
Methodology		 Unobservable
Input		 Range
(Weighted Average)		 Impact to
Valuation
From
An Increase
In Input
Senior Secured First Lien Term Loans $69,943  Income Approach Market Yield 8.50% - 32.0% (13.78%) 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  10,939  Market Approach EBITDA Multiple 1.7x - 5.0x (3.1x) Increase
Senior Secured First Lien Term Loans  866  Market Approach LTM EBITDA Multiple 5.8x - 6.8x (6.3x) Increase
Equity/Warrants  38,870  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  22,007  Market Approach EBITDA Multiple 1.8x – 36.8x (2.8x) 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
Total $165,316         

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 holding all other variables constant.measurements.




PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 31, 2024
(Unaudited)

Note 4. Fair Value Measurements (continued)

The significant unobservable inputs used in the fair value measurement of the Company’s equity/warrants investments are comparable company multiples of Revenuerevenue or EBITDA (earnings before interest, taxes, depreciation and amortization) for the lastlatest 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 measurements.


measurement.

In September 2017, the Company entered into an agreement with Global Accessories Group, LLC (“Global Accessories”), in which itthe Company exchanged its full position in Lydell Jewelry Design Studio, LLC for a 3.8% membership interest in Global Accessories, which is included in the Consolidated Schedule of Investments. As part of the agreement, the Company is entitled to a contingent consideration in the form of cash payments (“Earnout”), as well as up to an additional 5% membership interest (“AMI”), provided Global Accessories achieves certain financial benchmarks over specified time frames.through calendar year ended 2022. The Earnout and AMI were initially recorded with an aggregate fair value of $2.4 million on the transaction date using the Income Approach and were included on the Consolidated Statements of Assets and Liabilities in other assets. The contingent consideration will beis remeasured to fair value at each reporting date until the contingency is resolved. Any changes in fair value will be recognized in earnings. As of DecemberMarch 31, 2017, there was no change in fair value of2024 and September 30, 2023, the Company deemed the contingent consideration.consideration to be uncollectible and has been recorded at $0.


Note 5. Borrowings

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 borrowing.


On November 16, 2012, we obtained an exemptive order

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 the SEC200% to permit us to exclude the debt of the SBIC LP guaranteed by the SBA from our 200% asset coverage test150%, if certain requirements under the 1940 Act. The exemptive order provides us with increased flexibility underAct are met. Under the 200% asset coverage test by permitting SBIC LP1940 Act, we are allowed to borrow upincrease our leverage capacity if stockholders representing at least a majority of the votes cast, when a quorum is present, approve a proposal to $150 million more than itdo so. If we receive stockholder approval, we would otherwise be ableallowed to absentincrease 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 this exemptive order.


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 March 31, 2024 and September 30, 2023, the Company’s asset coverage was 279.5% and 270.7%, respectively, 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 DecemberMarch 31, 20172024 and September 30, 2017 was as follows (dollars in thousands):

 December 31, 2017 September 30, 2017
 
Aggregate
Principal
Amount
Available
 
Principal
Amount
Outstanding
 
Carrying
Value
 
Fair
Value
 
Aggregate
Principal
Amount
Available
 
Principal
Amount
Outstanding
 
Carrying
Value
 
Fair
Value
Revolving Credit Facility$200,000
 $47,000
 $47,000
 $47,000
 $200,000
 $68,000
 $68,000
 $68,000
Term Loan Facility102,000
 102,000
 102,000
 102,000
 102,000
 102,000
 102,000
 102,000
2019 Notes—
 —
 —
 —
 —
 —
 —
 —
2021 Notes74,013
 74,013
 74,013
 76,381
 74,013
 74,013
 74,013
 77,121
2023 Notes102,847
 102,847
 102,847
 103,834
 102,847
 102,847
 102,847
 103,464
SBA Debentures150,000
 150,000
 150,000
 150,000
 150,000
 150,000
 150,000
 150,000
Total$628,860

$475,860

$475,860

$479,215

$628,860

$496,860

$496,860

$500,585
Credit Facility
The Company has a Senior Secured Term Loan Credit Agreement, as amended (the ‘‘Term Loan Facility’’) and a Senior Secured Revolving Credit Agreement, as amended (the ‘‘Revolving Credit Facility’’ and collectively with the Term Loan Facility, the ‘‘Facilities’’) with ING Capital LLC, as Administrative Agent, in order to borrow funds to make additional investments.

The pricing in the case of the Term Loan Facility for LIBOR loans is LIBOR (with no minimum) plus 3.00%. The pricing on the Revolving Credit Facility, is LIBOR (with no minimum) plus 2.75%. The pricing on both the Term Loan Facility and Revolving Credit Facility will decrease by an additional 25 basis points upon receiving an investment grade rating from Standard & Poor’s.

The Term Loan Facility’s bullet maturity is July 28, 2020 and the Revolving Credit Facility’s revolving period ends July 28, 2019, followed by a one-year amortization period and a final maturity on July 28, 2020.

On February 14, 2017, the Company elected to reduce the total commitment of the Revolving Credit Facility to $200.0 million from $343.5 million. The reduction was accounted for as a debt modification to a line-of credit or revolving-debt arrangement in accordance with ASC 470-50, Modifications and Extinguishments, which attributed to an acceleration of debt issuance costs in the amount of $1.3 million and recorded on the Consolidated Statements of Operations as a component of interest and financing expenses.

On September 1, 2017, the Company reduced the Term Loan Facility commitment to $102.0 million from $174.0 million. The reduction was accounted for as a debt extinguishment in accordance with ASC 470-50, Modifications and Extinguishments, which attributed to a realized loss of $0.6 million and recorded on the Consolidated Statements of Operations as a loss on extinguishment of debt.

Borrowings under the Facilities are subject to, among other things, a minimum borrowing/collateral base, and substantially all of the Company’s assets are pledged as collateral under the Facilities. In addition, the Facilities require the Company to, among other things (i) make representations and warranties regarding the collateral as well the Company’s business and operations, (ii) agree to certain indemnification obligations and (iii) agree to comply with various affirmative and negative covenants. The documentation for each of the Facilities also includes default provisions such as the failure to make timely payments under the Facilities, the occurrence of a change in control and the failure by the Company to materially perform under the operative agreements governing the Facilities, which, if not complied with, could accelerate repayment under the Facilities, thereby materially and adversely affecting the Company’s liquidity, financial condition and results of operations.



At December 31, 2017, the carrying amount of our borrowings under the Facilities approximated their fair value. 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 our borrowings under the Facilities are estimated based upon market interest rates for our own borrowings or entities with similar credit risk, adjusted for nonperformance risk, if any. As of December 31, 2017 and September 30, 2017, the valuation of the Facilities would be deemed to be Level 3 in the fair value hierarchy, as defined in Note 4.

In accordance with ASU 2015-03, the debt issuance costs related to the Facilities are reported on the Consolidated Statements of Assets and Liabilities as a direct deduction from the face amount of the Facilities. As of December 31, 2017 and September 30, 2017, debt issuance costs related to the Facilities2023 were as follows (dollars in thousands):
 December 31, 2017 September 30, 2017
 
Revolving
Facility
 
Term
Facility
 
Revolving
Facility
 
Term
Facility
Total Debt Issuance Costs$8,546
 $4,490
 $8,546
 $4,490
Amortized Debt Issuance Costs6,927
 3,537
 6,769
 3,444
Unamortized Debt Issuance Costs$1,619

$953

$1,777

$1,046
The following table shows

  March 31, 2024  September 30, 2023 
  Aggregate
Principal
Available(1)		  Principal
Amount
Outstanding		  Carrying
Value		  Fair Value  Aggregate
Principal
Available(1)		  Principal
Amount
Outstanding		  Carrying
Value		  Fair Value 
2028 Notes $  57,500  $57,500  $55,977  $51,957  $57,500  $57,500  $55,811  $49,105 
Revolving Credit Facility  34,058   28,442   28,442   28,442   21,558   28,442   28,442   28,442 
Total debt $91,558  $85,942  $84,419  $80,399  $79,058  $85,942  $84,253  $77,547 

(1)For the 2028 Notes, this represents the total principal amount and for the Revolving Credit Facility, this represents the undrawn principal amount.

Credit Facility

On December 15, 2022, the componentsCompany 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.

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 interest expense, commitment fees relatedadditional 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 Facilities, amortized debt issuance costs, weighted average statedCredit Facility) that are pledged as collateral. As of March 31, 2024, the Company was in compliance in all respects with the terms of the Credit Facility.


PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 31, 2024
(Unaudited)

Note 5. Borrowings (continued)

As of March 31, 2024 and September 30, 2023, there was $28.4 million and $28.4 million outstanding, respectively, under the Credit Facility.

Outstanding loans under the Credit Facility bear a monthly interest rate and weighted average outstanding debt balance forat Term SOFR + 2.90%. The Company is also subject to a commitment fee of 0.25%, which shall accrue on the Facilities foractual daily amount of the three months ended December 31, 2017 and 2016 (dollars in thousands):

 For the three months ended December 31
 2017 2016
Revolving Facility interest$410
 $21
Revolving Facility commitment fee410
 872
Term Facility interest1,122
 1,600
Amortization of debt issuance costs252
 559
Agency and other fees18
 19
Total$2,212

$3,071
Weighted average stated interest rate4.3% 3.7%
Weighted average outstanding balance$141,402
 $176,087
Unsecured Notes

2019 Notes

undrawn portion of the revolving credit.

On March 21, 2012,January 17, 2023, the Company issued $40.0borrowed $23.2 million in aggregate principal amount of 7.125% unsecured notes which were scheduled to mature on March 30, 2019 (the "2019 Notes"). The 2019 Notes bore interest at a rate of 7.125% per year, and were payable quarterly on March 30, June 30, September 30 and December 30 of each year, beginning June 30, 2012. The 2019 Notes were listed on the NYSE and traded thereon under the trading symbol “MCQ”. On February 22, 2017, the 2019 Notes were redeemed at par plus accruedCredit Facility and unpaid interest. The redemption was accounted for as a debt extinguishment in accordance with ASC 470-50, Modifications and Extinguishments, which attributedused these proceeds to a realized loss of $0.5 million.


2021 Notes

On December 17, 2015, the Company issued $70.8 million in aggregate principal amount of 6.50% unsecured notes that mature on January 30, 2021 (the “2021 Notes”). On January 14, 2016, the Company closed an additional $3.25redeem $22.6 million in aggregate principal amount of the 2021issued and outstanding 2023 Notes, pursuantcomprising 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 “Effective Date”), in order to increase the size of the Credit Facility, the parties to the partial exerciseCredit Facility amended the terms of the underwriters’ option to purchase additional notes.Credit Facility, effective as of the Effective Date (the “Amendment”). The 2021 Notes may be redeemed in whole or in part at any time or from time to time atAmendment increased the Company’s option on or after January 30, 2019. The 2021 Notes bear interest at a rateprincipal amount of 6.50% per year, payable quarterly on January 30, April 30, July 30 and October 30 of each year, beginning January 30, 2016. The 2021 Notes are listed on the NYSE and trade thereonloan available under the trading symbol “MCX”.


Credit Facility by $12.5 million to $62.5 million. All other material terms of the Credit Facility remain unchanged.

Unsecured Notes

2023 Notes


On March 18, 2013, the Company issued $60.0 million in aggregate principal amount of 6.125% unsecured notes that maturematured on March 30, 2023 (the "2023 Notes," and together with the 2019 Notes and 2021 Notes, the “Unsecured“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'sCompany’s option. The 2023 Notes bearbore 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. The 2023 Notes are listed on the NYSE and trade thereon under the trading symbol “MCV”.


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 has sold 1,573,872 of the 2023 Notes at an average price of $25.03 per note, and has raised $38.6 million in net proceeds, since inception ofthrough the ATM debt distribution agreement.

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 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.

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. The 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.




PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 31, 2024
(Unaudited)

Note 5. Borrowings (continued)

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. The Company funded the redemption of the 2023 Notes with loans obtained under the Credit Facility.

2028 Notes

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. 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.

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 Unsecured2028 Notes, which are publicly traded, is based upon closing market quotes as of the measurement date. As of DecemberMarch 31, 20172024 and September 30, 2017,2023, the Unsecured Notes would beare deemed to be Level 1 in the fair value hierarchy, as defined in Note 4.


In accordance with ASU 2015-03,As of March 31, 2024 and September 30, 2023, the debtCredit Facility is deemed to be Level 3 in the fair value hierarchy, as defined in Note 4.

Debt issuance costs related to the Unsecured2028 Notes are reported on the Consolidated Statements of Assets and Liabilities as a direct deduction from the face amount of and the Unsecured2028 Notes. As of DecemberMarch 31, 20172024 and September 30, 2017,2023, debt issuance costs related to the Unsecured2023 Notes and the 2028 Notes were as follows (dollars in thousands):

 December 31, 2017 September 30, 2017
 
2019
Notes
 
2021
Notes
 
2023
Notes
 Total 
2019
Notes
 
2021
Notes
 
2023
Notes
 Total
Total Debt Issuance Costs$1,475
 $3,226
 $3,102
 $7,803
 $1,475
 3226
 $3,102
 $7,803
Amortized Debt Issuance Costs1,475
 1,286
 1,171
 3,932
 1,475
 1127
 1,078
 3,680
Unamortized Debt Issuance Costs$—

$1,940

$1,931

$3,871

$—

$2,099

$2,024

$4,123

  For the six months ended  For the year ended 
  March 31, 2024  September 30, 2023 
  2023 Notes  2028 Notes  Total  2023 Notes  2028 Notes  Total 
Total debt issuance costs at beginning of period $  -  $1,689  $1,689  $39  $2,020  $2,059 
Amortized debt issuance costs  -   166   166   39   331   370 
Unamortized debt issuance costs $-  $1,523  $1,523  $-  $1,689  $1,689 

For the three and six months ended DecemberMarch 31, 20172024 and 2016,2023, 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 Unsecured2023 Notes, the 2028 Notes and the Credit Facility were as follows (dollars in thousands):

  For the Three Months Ended
March 31,		  For the Six Months Ended
March 31,		 
  2024  2023  2024  2023 
2023 Notes Interest $-  $65   -  $820 
2028 Notes Interest  754   779   1,508   1,124 
Credit facility interest  593   353   1,191   353 
Commitment fees  17   -   31   - 
Amortization of Credit Facility deferred financing costs  121   84   213   114 
Amortization of debt issuance costs  82   101   166   204 
Total $1,567  $1,382   3,109  $2,615 
Weighted average stated interest rate  6.3%  6.0%  6.3%  5.7%
Weighted average debt outstanding $85,942  $80,606  $85,942  $80,311 

 For the three months ended December 31
 2017 2016
2019 Unsecured Notes interest$—
 $713
2021 Unsecured Notes interest1,203
 1,203
2023 Unsecured Notes interest1,575
 973
2023 Unsecured Notes premium(1) N/A
Amortization of debt issuance costs251
 267
Total$3,028

$3,156
Weighted average stated interest rate6.2% 6.5%
Weighted average outstanding balance$176,860
 $177,534

SBA Debentures


On

PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 26, 2013, SBIC LP received31, 2024
(Unaudited)

Note 6. Agreements

Administration Agreement

In connection with the adoption by the board of directors of an SBIC license frominternalized management structure, on November 19, 2020, the SBA.


Company entered into a Fund Accounting Servicing Agreement and an Administration Servicing Agreement on customary terms with U.S. Bancorp. A U.S. Bancorp affiliate also served as the Company’s custodian. The SBIC license allows SBIC LP to obtain leverage by issuing SBA-guaranteed debentures, subjectCompany’s administrative and custodial relationship with U.S. Bancorp 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 issuance of a capital commitment byservices agreement with the SBACompany. Effective September 12, 2022, Computershare serves as custodian for the Company pursuant to its Loan Administration and other customary procedures. SBA-guaranteed debentures are non-recourse, interest only debenturesCustodial Agreement with interest payable semi-annuallythe Company. For the three and have a ten year maturity. The principal amount of SBA-guaranteed debentures is not required to be paid prior to maturity but may be prepaid at any time without penalty. The interest rate of SBA-guaranteed debentures is fixed on a semi-annual basis at a market-driven spread over U.S. Treasury Notes with 10-year maturities. The SBA, as a creditor, will have a superior claim to the SBIC LP’s assets over our stockholders in the eventsix months ended March 31, 2024, we liquidate the SBIC LP or the SBA exercises its remedies under the SBA-guaranteed debentures issued by the SBIC LP upon an event of default.

SBA regulations currently limit the amount that the SBIC LP may borrow to a maximum of $150incurred approximately $0.1 million when it has at least $75and $0.1 million in regulatory capital, receives a capital commitment fromadministrator expenses, respectively. For the SBAthree and has been through an examination by the SBA subsequent to licensing.

six months ended March 31, 2023, we incurred approximately $0.1 million and $0.2 million in administrator expenses, respectively.

As of DecemberMarch 31, 20172024 and September 30, 2017, SBIC LP had $75.02023, $0.1 million in regulatory capital and had $150.0$0 million SBA Debentures outstanding that mature between September 2023 and September 2025.

Our fixed-rate SBA Debentures as of December 31, 2017 and September 30, 2017 were as follows (dollars in thousands):
 December 31, 2017 September 30, 2017
Rate Fix Date
Debenture
Amount
 
Fixed All-in
Interest Rate
 
Debenture
Amount
 
Fixed All-in
 Interest Rate
September 2013$5,000
 4.404% $5,000
 4.404%
March 201439,000
 3.951
 39,000
 3.951
September 201450,000
 3.370
 50,000
 3.370
September 20146,000
 3.775
 6,000
 3.775
September 201550,000
 3.571
 50,000
 3.571
Weighted Average Rate/Total$150,000
 3.639% $150,000
 3.639%
As of December 31, 2017, the carrying amount of the SBA Debentures approximated their fair value. The fair values of the SBA Debentures 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 SBA Debentures are estimated based upon market interest rates for our own borrowings or entities with similar credit risk, adjusted for nonperformance risk, if any. As of December 31, 2017 and September 30, 2017, the SBA Debentures would be deemed to be Level 3 in the fair value hierarchy, as defined in Note 4.



In accordance with ASU 2015-03, the debt issuance costs related to the SBA Debentures are reported on the Consolidated Statements of Assets and Liabilities as a direct deduction from the face amount of the SBA Debentures. As of December 31, 2017 and September 30, 2017, debt issuance costs related to the SBA Debentures were as follows (dollars in thousands):  
 December 31, 2017 September 30, 2017
Total Debt Issuance Costs$5,138
 $5,138
Amortized Debt Issuance Costs2,435
 2,292
Unamortized Debt Issuance Costs$2,703

$2,846
For the three months ended December 31, 2017 and 2016, the components of interest, amortized debt issuance costs, weighted average stated interest rate and weighted average outstanding debt balance for the SBA Debentures were as follows (dollars in thousands): 
 For the three months ended December 31
 2017 2016
SBA Debentures interest$1,376
 $1,376
Amortization of debt issuance costs143
 171
Total$1,519

$1,547
Weighted average stated interest rate3.6% 3.6%
Weighted average outstanding balance$150,000
 $150,000
Note 6. Agreements
Investment Management Agreement

We entered into an investment management agreement with MCC Advisors. Mr. Brook Taube, our Chairman and Chief Executive Officer, is a managing partner and senior portfolio manager of MCC Advisors, and Mr. Seth Taube, one of our directors, is a managing partner of MCC Advisors.

Under the terms of our investment management agreement, MCC Advisors:

determines the composition of our portfolio, the nature and timing of the changes to our portfolio and the manner of implementing such changes;

identifies, evaluates and negotiates the structure of the investments we make (including performing due diligence on our prospective portfolio companies); and

executes, closes, monitors and administers the investments we make, including the exercise of any voting or consent rights.

MCC Advisors’ services under the investment management agreement are not exclusive, and it is free to furnish similar services to other entities so long as its services to us are not impaired.

Pursuant to our investment management agreement, we pay MCC Advisors a fee for investment advisory and management services consisting of a base management fee and a two-part incentive fee.

On December 3, 2015, MCC Advisors recommended and, in consultation with the Board, agreed to reduce fees under the investment management agreement. Beginning January 1, 2016, the base management fee was reduced to 1.50% on gross assets above $1 billion. In addition, MCC Advisors reduced its incentive fee from 20% on pre-incentive fee net investment income over an 8% hurdle, to 17.5% on pre-incentive fee net investment income over a 6% hurdle. Moreover, the revised incentive fee includes a netting mechanism and is subject to a rolling three-year look back from January 1, 2016 forward. Under no circumstances will the new fee structure result in higher fees to MCC Advisors than fees under the prior investment management agreement.

The following discussion of our base management fee and two-part incentive fee reflect the terms of the fee waiver agreement executed by MCC Advisors on February 8, 2016 (the “Fee Waiver Agreement”). The terms of the Fee Waiver Agreement are effective as of January 1, 2016, and are a permanent reduction in the base management fee and incentive fee on net investment income payable to MCC Advisors for the investment advisory and management services it provides under the investment management agreement. The Fee Waiver Agreement does not change the second component of the incentive fee, which is the incentive fee on capital gains.

Base Management Fee

For providing investment advisory and management services to us, MCC Advisors receives a base management fee. The base management fee is calculated at an annual rate of 1.75% (0.4375% per quarter) of up to $1.0 billion of the Company’s gross assets and 1.50% (0.375% per quarter) of any amounts over $1.0 billion of the Company’s gross assets, and is payable quarterly in arrears. The base management fee will be calculated based on the average value of the Company’s gross assets at the end of the two most recently completed calendar quarters and will be appropriately pro-rated for any partial quarter.



Incentive Fee

The incentive fee has two components, as follows:

Incentive Fee Based on Income

The first component of the incentive fee is payable quarterly in arrears and is based on our pre-incentive fee net investment income earned during the calendar quarter for which the incentive fee is being calculated. MCC Advisors is entitled to receive the incentive fee on net investment income from us if our Ordinary Income (as defined below) exceeds a quarterly “hurdle rate” of 1.5%. The hurdle amount is calculated after making appropriate adjustments to the Company’s net assets, as determined as of the beginning of each applicable calendar quarter, in order to account for any capital raising or other capital actions as a result of any issuances by the Company of its common stock (including issuances pursuant to our dividend reinvestment plan), any repurchase by the Company of its own common stock, and any dividends paid by the Company, each as may have occurred during the relevant quarter.

Beginning with the calendar quarter that commenced on January 1, 2016, the incentive fee on net investment income is determined and paid quarterly in arrears at the end of each calendar quarter by reference to our aggregate net investment income, as adjusted as described below, from the calendar quarter then ending and the eleven preceding calendar quarters (or if shorter, the number of quarters that have occurred since January 1, 2016). We refer to such period as the “Trailing Twelve Quarters.”

The hurdle amount for the incentive fee on net investment income is determined on a quarterly basis, and is equal to 1.5% multiplied by the Company’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The hurdle amount is calculated after making appropriate adjustments to the Company’s net assets, as determined as of the beginning of each applicable calendar quarter, in order to account for any capital raising or other capital actions as a result of any issuances by the Company of its common stock (including issuances pursuant to our dividend reinvestment plan), any repurchase by the Company of its own common stock, and any dividends paid by the Company, each as may have occurred during the relevant quarter. The incentive fee for any partial period will be appropriately prorated. Any incentive fee on net investment income will be paid to MCC Advisors on a quarterly basis, and will be based on the amount by which (A) aggregate net investment income (“Ordinary Income”) in respect of the relevant Trailing Twelve Quarters exceeds (B) the hurdle amount for such Trailing Twelve Quarters. The amount of the excess of (A) over (B) described in this paragraph for such Trailing Twelve Quarters is referred to as the “Excess Income Amount.” For the avoidance of doubt, Ordinary Income is net of all fees and expenses, including the reduced base management fee but excluding any incentive fee on Pre-Incentive Fee net investment income or on the Company’s capital gains.

Determination of Quarterly Incentive Fee Based on Income

The incentive fee on net investment income for each quarter is determined as follows:

No incentive fee on net investment income is payable to MCC Advisors for any calendar quarter for which there is no Excess Income Amount;

100% of the Ordinary Income, if any, that exceeds the hurdle amount, but is less than or equal to an amount, which we refer to as the “Catch-up Amount,” determined as the sum of 1.8182% multiplied by the Company’s net assets at the beginning of each applicable calendar quarter, as adjusted as noted above, comprising the relevant Trailing Twelve Quarters is included in the calculation of the incentive fee on net investment income; and

17.5% of the Ordinary Income that exceeds the Catch-up Amount is included in the calculation of the incentive fee on net investment income.

The amount of the incentive fee on net investment income that will be paid to MCC Advisors for a particular quarter will equal the excess of the incentive fee so calculated minus the aggregate incentive fees on net investment income that were paid in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant Trailing Twelve Quarters but not in excess of the Incentive Fee Cap (as described below).

The incentive fee on net investment income that is paid to MCC Advisors for a particular quarter is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap for any quarter is an amount equal to (a) 17.5% of the Cumulative Net Return (as defined below) during the relevant Trailing Twelve Quarters minus (b) the aggregate incentive fees on net investment income that were paid in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant Trailing Twelve Quarters.

“Cumulative Net Return” means (x) the Ordinary Income in respect of the relevant Trailing Twelve Quarters minus (y) any Net Capital Loss (as described below), if any, in respect of the relevant Trailing Twelve Quarters. If, in any quarter, the Incentive Fee Cap is zero or a negative value, the Company will pay no incentive fee on net investment income to MCC Advisors for such quarter. If, in any quarter, the Incentive Fee Cap for such quarter is a positive value but is less than the incentive fee on net investment income that is payable to MCC Advisors for such quarter (before giving effect to the Incentive Fee Cap) calculated as described above, the Company will pay an incentive fee on net investment income to MCC Advisors equal to the Incentive Fee Cap for such quarter. If, in any quarter, the Incentive Fee Cap for such quarter is equal to or greater than the incentive fee on net investment income that is payable to MCC Advisors for such quarter (before giving effect to the Incentive Fee Cap) calculated as described above, the Company will pay an incentive fee on net investment income to MCC Advisors, calculated as described above, for such quarter without regard to the Incentive Fee Cap.

“Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, and dilution to the Company’s net assets due to capital raising or capital actions, in such period and (ii) aggregate capital gains, whether realized or unrealized and accretion to the Company’s net assets due to capital raising or capital action, in such period.

Dilution to the Company’s net assets due to capital raising is calculated, in the case of issuances of common stock, as the amount by which the net asset value per share was adjusted over the transaction price per share, multiplied by the number of shares issued. Accretion to the Company’s net assets due to capital raising is calculated, in the case of issuances of common stock (including issuances pursuant to our dividend reinvestment plan), as the excess of the transaction price per share over the amount by which the net asset value per share was adjusted, multiplied by the number of shares issued. Accretion


to the Company’s net assets due to other capital action is calculated, in the case of repurchases by the Company of its own common stock, as the excess of the amount by which the net asset value per share was adjusted over the transaction price per share multiplied by the number of shares repurchased by the Company.

Incentive Fee Based on Capital Gains

The second component of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the investment management agreement as of the termination date) and equals 20.0% of our cumulative aggregate realized capital gains less cumulative realized capital losses, unrealized capital depreciation (unrealized depreciation on a gross investment-by-investment basis at the end of each calendar year) and all capital gains upon which prior performance-based capital gains incentive fee payments were previously made to the investment adviser.

Under GAAP, the Company calculates the second component of the incentive fee as if the Company had realized all assets at their fair values as of the reporting date. Accordingly, the Company accrues a provisional capital gains incentive fee taking into account any unrealized gains or losses. As the provisional capital gains incentive fee is subject to the performance of investments until there is a realization event, the amount of the provisional capital gains incentive fee accrued at a reporting date may vary from the capital gains incentive that is ultimately realized and the differences could be material.

Base Management Fee - Prior to Fee Waiver Agreement

The base management fee was calculated at an annual rate of 1.75% of our gross assets (which is defined as all the assets of Medley Capital, including those acquired using borrowings for investment purposes), and was payable quarterly in arrears. The base management fee was based on the average value of our gross assets at the end of the two most recently completed calendar quarters.

Incentive Fee - Prior to Fee Waiver Agreement

The incentive fee based on net investment income was calculated as 20.0% of the amount, if any, by which our pre-incentive fee net investment income, expressed as a rate of return on the value of our net assets calculated as of the end of the calendar quarter immediately preceding the calendar quarter for which the incentive fee is being calculated, exceeds a 2.0% (which is 8.0% annualized) hurdle rate but also includes a “‘catch-up’ provision. Under this provision, in any calendar quarter, our investment adviser receives no incentive fee until our net investment income equals the hurdle rate of 2.0%, but then receives, as a “catch-up”, 100% of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 2.5%. The effect of this provision is that, if pre-incentive fee net investment income exceeds 2.5% in any calendar quarter, our investment adviser will receive 20% of our pre-incentive fee net investment income as if the hurdle rate did not apply. For this purpose, pre-incentive fee net investment income means interest income, dividend income and any other income including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive from portfolio companies accrued during the calendar quarter, minus our operating“administrator expenses for the quarter including the base management fee, expenses payable under the administration agreement, and any interest expense and any dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee. Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with PIK interest and zero coupon securities), accrued income that we have not yet received in cash.

For the avoidance of doubt, the purpose of the new incentive fee calculation under the Fee Waiver Agreement is to permanently reduce aggregate fees payable to MCC Advisors by the Company, effective as of January 1, 2016. In order to ensure that the Company will pay MCC Advisors lesser aggregate fees on a cumulative basis, as calculated beginning January 1, 2016, we will, at the end of each quarter, also calculate the base management fee and incentive fee on net investment income owed by the Company to MCC Advisors based on the formula in place prior to January 1, 2016. If, at any time beginning January 1, 2016, the aggregate fees on a cumulative basis, as calculated based on the formula in place after January 1, 2016, would be greater than the aggregate fees on a cumulative basis, as calculated based on the formula in place prior to January 1, 2016, MCC Advisors shall only be entitled to the lesser of those two amounts.

For the three months ended December 31, 2017 and 2016, the Company incurred base management fees to MCC Advisors of $4.1 million and $4.5 million, respectively.

For the three months ended December 31, 2017 and 2016, base management fees, net of $0 and $19,945 waived under the Fee Waiver Agreement were $4.1 million and $4.5 million, respectively.

The incentive fees shown in the Consolidated Statements of Operations are calculated using the fee structure set forth in investment management agreement, and then adjusted to reflect the terms of the Fee Waiver Agreement. Pursuant to the investment management agreement, pre -incentive fee net investment income is compared to a hurdle rate of 2.0% of the net asset value at the beginning of the period and is calculated as follows:

1)No incentive fee is recorded during the quarter in which our pre-incentive fee net investment income does not exceed the hurdle rate;

2)100% of pre-incentive fee net investment income that exceeds the hurdle rate but is less than 2.5% in the quarter; and

3)20.0% of the amount of pre-incentive fee net investment income, if any, that exceeds 2.5% of the hurdle rate.

For purposes of implementing the fee waiver under the Fee Waiver Agreement, we calculate the incentive fee based upon the formula that exists under the investment management agreement, and then apply the terms of wavier set forth in the Fee Waiver Agreement, if applicable.

For the three months ended December 31, 2017, the Company did not incur any incentive fees on net investment income because pre-incentive fee net investment income did not exceed the hurdle amount under the formula that exists under the investment management agreement. For the three months ended December 31, 2016, we incurred $0.9 million of incentive fees related to pre-incentive fee net investment income.



For the three months ended December 31, 2017 and 2016, incentive fees, net of $0 and $43,663 waived under the Fee Waiver Agreement were $0 and $0.9 million.

As of December 31, 2017 and September 30, 2017, $4.1 million and $4.3 million, respectively, were included in “management and incentive fees payable” in the accompanying Consolidated Statements of Assets and Liabilities.
Administration Agreement

Long-Term Cash Incentive Plan

On January 19, 2011,May 9, 2022, the board of directors of the Company entered into an administration agreement with MCC Advisors. Pursuant to this agreement, MCC Advisors furnishes us with office facilities and equipment, clerical, bookkeeping, recordkeeping and other administrative services relatedadopted the PhenixFIN 2022 Long-Term Cash Incentive Plan (the “CIP”) pursuant to the operationsrecommendation by the Compensation Committee of the Company. We reimburse MCC Advisorsboard of directors. The CIP provides for our allocableperformance-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 overheadthat 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. Lorber and other expenses incurred by it performing its obligations underMs. McMillan for the administration agreement, including rentthree-year performance period commencing on October 1, 2022 and our allocable portionending on September 30, 2025 (the “2023 LTIP Plan”). Each participant is eligible to receive an amount of cash equal to a percentage of the costtarget 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. 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 certaincash equal to a percentage of our officerstheir 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 their respective staff. From time to time, our administrator may pay amounts owed by us to third-party service providers and we will subsequently reimburse our administrator for such amounts paid on our behalf. Forthe 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 $890,000 
Ellida McMillan, Chief Financial Officer  380,000 

During the three and six months ended DecemberMarch 31, 20172024, the Company recorded an expense of $504,890 and 2016, we incurred $0.9 million$809,690, respectively, for these awards. During the three and $0.9 million in administrator expenses, respectively.six months ended March 31, 2023, the Company did not record an expense for these awards.


PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 31, 2024
(Unaudited)

Note 7. Related Party Transactions


The Company entered into a related party transaction with NVTN LLC whereby the equity of Wireless Maritime Services was transferred to NVTN LLC.

Due to Affiliate


from Affiliates

Due to affiliatefrom affiliates at March 31, 2024 and September 30, 2023 consists of certain legal and general and administrative expenses paid by an affiliatethe Company on behalf of the Company.


Other Related Party Transactions

Certain affiliates of MCC Advisors, Medley Capital LLC, their respective affiliates and some of their employees purchased in the IPO an aggregate of 833,333 shares of common stock at the IPO price per share of $12.00. The Company received the full proceeds from the sale of these shares, and no underwriting discounts or commissions were paid in respect of these shares.

Opportunities for co-investments may arise when MCC Advisors or an affiliated investment adviser becomes aware of investment opportunities that may be appropriate for the Company and other clients, or affiliated funds. The Company obtained an exemptive order from the SEC on November 25, 2013 (the “Prior Exemptive Order”). On March 29, 2017, the Company, MCC Advisors and certain other affiliated funds and investment advisers received an exemptive order (the “Exemptive Order”) that supersedes the Prior Exemptive Order and allows affiliated registered investment companies to participate in co-investment transactions with us that would otherwise have been prohibited under Section 17(d) and 57(a)(4) of the 1940 Act and Rule 17d-1 thereunder. On October 4, 2017, the Company, MCC Advisors and certain of our affiliates received an exemptive order that supersedes the Exemptive Order (the “New Exemptive Order”) and allows, in addition to the entities already covered by the Exemptive Order, Medley LLC and its subsidiary, Medley Capital LLC, to the extent they hold financial assets in a principal capacity, and any direct or indirect, wholly- or majority-owned subsidiary of Medley LLC that is formed in the future, to participate in co-investment transactions with us that would otherwise be prohibited by either or both of Sections 17(d) and 57(a)(4) of the 1940 Act. The terms of the New Exemptive Order are otherwise substantially similar to the Exemptive Order. Co-investment under the Exemptive Order is subject to certain conditions, including the condition that, in the case of each co-investment transaction, our board of directors determines that it would to be in our best interest to participate in the transaction. However, neither we nor the affiliated funds are obligated to invest or co-invest when investment opportunities are referred to us or them.  affiliates.


Note 8. Commitments

Guarantees

The Company has a guarantee to issue up to $7.0 million in standby letters of credit through a financial intermediary on behalf of a certain portfolio company. Under this arrangement, if the standby letters of credit were to be issued, the Company would be required to make payments to third parties if the portfolio company was to default on its related payment obligations.

Unfunded commitments

As of DecemberMarch 31, 2017, the Company had not issued any standby letters of credit under the commitment on behalf of the portfolio company. The guarantee will renew annually until cancellation.


Unfunded commitments

As of December 31, 20172024 and September 30, 2017,2023, we had commitments under loan and financing agreements to fund up to $34.0$3.1 million to 17three portfolio companies and $23.7$3.4 million to 15four portfolio companies, respectively. These commitments are primarily composed of senior secured delayed draw term loans and revolvers, and an analysisthe determination of their fair value is included in the Consolidated ScheduleSchedules 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 DecemberMarch 31, 20172024 and September 30, 20172023 is shown in the table below (dollars in thousands):

  March 31,
2024		  September 30,
2023		 
Secure Acquisition Inc. (dba Paragon Films) - Senior Secured First Lien Delayed Draw Term Loan $-  $517 
NVTN LLC - Senior Secured First Lien Delayed Draw Term Loan  -   220 
SMC Roofing - First Out Delayed Draw Term Loan  89   - 
SMC Roofing - Last Out Delayed Draw Term Loan  386   - 
Deer Management Systems LLC - Senior Secured First Lien Delayed Draw Term Loan  600   600 
Tamarix Capital Partners II, L.P. - Fund Investment  2,038   2,038 
Total unfunded commitments $3,113  $3,375 

Contingencies

In December 2023, the Company established a subsidiary to serve as a regulated insurance company. The Company purchased 100,000 shares of the subsidiary’s common stock for a purchase price of $1.00 per share on February 8, 2024. This subsidiary also entered into a merger agreement pursuant to which it agreed to acquire a controlling interest in VR Insurance SPV, LLC, a company primarily engaged in the insurance business through its subsidiaries (“VR”), and to provide additional capital to such company. The Company’s total investment in the insurance subsidiary and VR is expected to approximate $49 million. The merger transaction is presently expected to close in the first half of 2024, subject to various closing conditions, including insurance regulatory approvals.

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. The 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.

As of March 31, 2024 and September 30, 2023, the asset related to the operating lease was $385,050 and $449,815, respectively, and is included in the Other assets balance on the Consolidated Balance Sheet. As of March 31, 2024 and September 30, 2023, the lease liability was $360,477 and $432,698, respectively, and is included in the Other liabilities balance on the Consolidated Statements of Assets and Liabilities. As of March 31, 2024 and September 30, 2023, the remaining lease term was approximately three years for each of the respective periods and the implied borrowing rate was 5.25% for each of the respective periods.



 December 31, 2017 September 30, 2017
Path Medical, LLC - Delayed Draw Term Loan B$7,125
 $—
SMART Financial Operations, LLC - Delayed Draw Term Loan4,725
 4,725
Barry's Bootcamp Holdings, LLC - Revolver4,400
 4,400
Accupac, Inc. - Delayed Draw Term Loan2,612
 2,612
RMS Holding Company, LLC - Revolver2,327
 —
Alpine SG, LLC - Delayed Draw Term Loan1,857
 —
SFP Holding, Inc. - Delayed Draw Term Loan1,778
 1,778
Manna Pro Products, LLC - Delayed Draw Term Loan1,600
 —
Barry's Bootcamp Holdings, LLC - Delayed Draw Term Loan1,271
 1,271
AAR Intermediate Holdings, LLC - Revolver1,258
 1,797
Trans-Fast Remittance LLC - Delayed Draw Term Loan1,057
 1,057
Alpine SG, LLC - Revolver1,000
 —
Black Angus Steakhouses, LLC - Delayed Draw Term Loan893
 893
Impact Sales, LLC - Delayed Draw Term Loan755
 755
Black Angus Steakhouses, LLC - Revolver535
 516
Brook & Whittle Holdings Corp. - Delayed Draw Term Loan310
 —
Central States Dermatology Services, LLC - Delayed Draw Term Loan200
 254
SavATree, LLC - Delayed Draw Term Loan167
 167
Access Media Holdings, LLC - Series AAA Preferred Equity107
 277
Engineered Machinery Holdings, Inc. - Delayed Draw Term Loan29
 159
CP OPCO, LLC - Revolver—
 1,973
Brantley Transportation LLC - Delayed Draw Term Loan—
 788
NVTN LLC - Delayed Draw Term Loan—
 250
Total$34,006

$23,672
Legal Proceedings
We are a party

PHENIXFIN CORPORATION
Notes to certain legal proceedings incidental to the normal courseConsolidated Financial Statements
March 31, 2024
(Unaudited)

Note 8. Commitments (continued)

The following table shows future minimum payments under PhenixFIN’s operating lease as of our business, including where third parties may try to seek to impose liability on us in connection with the activities of our portfolio companies. While the outcome of these legal proceedings cannot at this time be predicted with certainty, we do not expect that these proceedings will have a material effect on our financial condition or results of operations.March 31, 2024:

For the Years Ended September 30, Amount 
2024 $78,239 
2025  156,971 
2026  161,680 
2027  27,417 
Thereafter  - 
   424,307 
Difference between undiscounted and discounted cash flows  (63,830)
  $360,477 


Note 9. Fee Income

Fee income consists of origination/closing fee, amendment fee,fees, prepayment penalty administrative agent fee, and other miscellaneous fees.fees which are non-recurring in nature, as well as administrative agent fees, which are recurring in nature. The following tables summarizetable summarizes the Company’s fee income for the three and six months ended DecemberMarch 31, 20172024 and 20162023 (dollars in thousands):

  For the Three Months Ended
March 31,		  For the Six Months Ended
March 31,		 
  2024  2023  2024  2023 
Prepayment fee $-  $-  $-  $- 
Administrative agent fee  75   75   75   75 
Amendment fee  -   -   -   - 
Other fees  2   96   4   170 
Fee income $77  $171  $79  $245 


 For the three months ended December 31
 2017 2016
Origination fee$1,456
 $727
Amendment fee179
 105
Administrative agent fee162
 205
Other fees32
 218
Prepayment fee20
 169
Fee income$1,849

$1,424

PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 31, 2024
(Unaudited)

Note 10. Directors Fees

On December 7, 2016,

For each of calendar years 2021 and 2022, the board of directors approved an amendment to the compensation model pursuant to which theCompany’s independent directors earn fees for their service oneach received an annual fee of $100,000. In addition, the board of directors. Prior to the amendment, as compensation for serving on our board of directors, eachlead independent director received an annual feeretainer of $55,000. Independent directors also received $7,500 ($1,500 for telephonic attendance) plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending each board meeting and received $2,500 ($1,500 for telephonic attendance) plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending each committee meeting. In addition,$30,000; the Chairmanchair of the Audit Committee received an annual feeretainer of $25,000, and each chairperson of anyits 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 receivedmeeting that they attended.

From January 1, 2023 through April 30, 2023, the independent directors were subject to the foregoing fee structure. Effective May 1, 2023, the structure was modified such that each of the Company’s independent directors receives an annual fee of $10,000, and other members$150,000. In addition, the lead independent director receives an annual retainer of $30,000; the chair of the Audit Committee and any other standing committees receivedreceives an annual feeretainer of $12,500$25,000, and $6,000, respectively, for their additional services ineach 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 capacities.


committees receives annual retainers of $8,000. The compensation model approved by the board ofCompany’s independent directors on December 7, 2016, which was retroactively effective as of October 1, 2016, amended the prior model by increasing the annual fee received by each independent director from $55,000 to $90,000, but decreasing the per board meeting fee from $7,500 to $3,000. In addition, there will no longer be a different feereceive fees for participating ineach board and/orand committee meetings telephonically.

meeting that they attend.

No board service compensation is paid to directors who are ‘‘interested persons’’“interested persons” of the Company (as such term is defined in the 1940 Act). For the three and six months ended DecemberMarch 31, 2017 and 2016, we accrued $0.12024, the Company recognized $0.2 million and $0.2$0.4 million for directors’ fees expense, respectively. For the three and six months ended March 31, 2023, the Company recognized $0.2 million and $0.4 million for directors’ fees expense, respectively.




Note 11. 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 shareholdersstockholders 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 DecemberMarch 31, 2017.

2024.

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 three and six months ended DecemberMarch 31, 20172024 and 20162023 (dollars in thousands, except share and per share amounts):

  For the Three Months Ended
March 31,		  For the Six Months Ended
March 31,		 
  2024  2023  2024  2023 
Basic and diluted:                
Net increase (decrease) in net assets resulting from operations $5,372  $6,708  $9,906  $10,660 
Weighted average shares of common stock outstanding - basic and diluted  2,048,622   2,095,193   2,060,723   2,098,041 
Earnings (loss) per share of common stock - basic and diluted $2.62  $3.20  $4.81  $5.08 

 For the three months ended December 31
 2017 2016
Basic and diluted: 
  
Net increase/(decrease) in net assets from operations$(31,944) $6,326
Weighted average common shares outstanding54,474,211
 54,474,211
Earnings per common share-basic and diluted$(0.59) $0.12

PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 31, 2024
(Unaudited)

Note 12. Financial Highlights

The following is a schedule of financial highlights for the threesix months ended DecemberMarch 31, 20172024 and 2016:

 For the three months ended December 31
 2017 2016
Per share data:(1)
   
Net asset value per share at beginning of period$8.45
 $9.49
    
Net investment income(2)
0.13
 0.19
Net realized gains/(losses) on investments—
 (0.12)
Net unrealized appreciation/(depreciation) on investments(0.72) 0.05
Change in provision for deferred taxes on unrealized appreciation/(depreciation) on investments—
 —
Net increase/(decrease) in net assets(0.59) 0.12
    
Distributions from net investment income(0.16) (0.22)
Distributions from net realized gains—
 —
Distributions from tax return of capital—
 —
    
Net asset value at end of period$7.71
 $9.39
Net assets at end of period$419,769,455
 $511,260,387
Shares outstanding at end of period54,474,211
 54,474,211
    
Per share market value at end of period$5.22
 $7.51
Total return based on market value(3)
(9.97)% 1.28%
Total return based on net asset value(4)
(6.05)% 1.81%
Portfolio turnover rate(5)
22.70 % 17.94%



The following is a schedule of ratios and supplemental data for the three months ended December 31, 2017 and 2016:
 For the three months ended December 31
 2017 2016
Ratios: 
  
Ratio of net investment income to average net assets after waivers(5)(6)
6.25% 8.29%
Ratio of total expenses to average net assets after waivers(5)(6)
11.46% 11.40%
Ratio of incentive fees to average net assets after waivers(6)
—% 0.16%
    
Supplemental Data: 
  
Ratio of net operating expenses and credit facility related expenses to average net assets(5)(6)
11.46% 11.24%
Percentage of non-recurring fee income(7)
8.18% 4.68%
Average debt outstanding(8)
$468,261,799
 $503,620,657
Average debt outstanding per common share$8.60
 $9.25
Asset coverage ratio per unit(9)
2,288
 2,382
    
Average market value per unit: 
  
Facilities(10)
N/A
 N/A
SBA debentures(10)
N/A
 N/A
Notes due 2019N/A
 $25.40
Notes due 2021$25.83
 $25.53
Notes due 2023$25.21
 $24.86

2023:

  For the Six Months Ended
March 31,		 
  2024  2023 
Per share data      
Net Asset Value per share at Beginning of Period $70.75  $57.49 
         
Results of Operations:        
Net Investment Income/(Loss)  1.11   1.63 
Net Realized Gain/(Loss) on Investments  (0.76)  (0.38)
Net Unrealized Gain/(Loss) on Investments  4.46   3.83 
Net loss on extinguishment of debt  -   - 
Net Increase (Decrease) in Net Assets Resulting from Operations  4.81   5.08 
         
Capital Share Transactions        
Repurchase of common stock under stock repurchase program(8)  0.79   0.13 
Net Increase (Decrease) Resulting from Capital Share Transactions  0.79   0.13 
Net Asset Value per share at End of Period $76.35  $62.70 
         
Net Assets at End of Period $154,271,897  $131,150,889 
Shares Outstanding at End of Period  2,020,490   2,091,638 
         
Per share market value at end of period $44.10  $37.00 
Total return based on market value(1)  16.36%  6.08%
Total return based on net asset value(2)  5.16%  9.06%
Portfolio turnover rate  13.83%  13.70%
         
Ratios:        
Ratio of net investment/(loss) income to average net assets after waivers, discounts and reimbursements(3)  3.08%  5.47%
Ratio of total expenses to average net assets(3)  10.95%  9.90%
         
Supplemental Data:        
Percentage of non-recurring fee income(4)  0.76%  2.54%
Average debt outstanding(5) $85,941,941  $80,310,648 
Average debt outstanding per weighted average common share $41.70  $38.33 
Asset coverage ratio per unit(6) $2,795  $2,663 
Senior Securities Outstanding(7)        
2023 Notes $-  $- 
2028 Notes $57,500,000  $57,500,000 
Credit Facility $28,441,941  $28,241,941 

(1)Table may not foot due to rounding.
(2)Net investment income excluding management and incentive fee waivers based on total weighted average common stock outstanding equals $0.13 and $0.18 per share for the three months ended December 31, 2017 and 2016, respectively.
(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.
Calculation is not annualized.
(4)(2)Total return is historical and assumes changes in NAV, reinvestments of all dividends and distributions at prices obtained under the Company’s dividend reinvestment plan, and no sales chargecharges for the period.
Calculation is not annualized.
(5)(3)Ratios are annualized during interim periods.
(4)
(6)For the three months ended December 31, 2017, excluding management and incentive fee waivers, the ratios of net investment income, total expenses, incentive fees, and operating expenses and credit facility related expenses to average net assets were 6.25%, 11.46%, 0.00%, and 11.46%, respectively. For the three months ended December 31, 2016, excluding management and incentive fee waivers, the ratios of net investment income, total expenses, incentive fees, and operating expenses and credit facility related expenses to average net assets were 8.27%, 11.43%, 0.17%, and 11.26%, respectively.
(7)Represents the impact of the non-recurring fees overas a percentage of total investment income.
(8)(5)Based on daily weighted average carrying value of debt outstanding during the period.
(9)(6)Asset coverage per unit is the ratio of the carrying value of our total consolidated assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness. AssetAs of March 31, 2024, the Company’s asset coverage ratio per unit does not include unfunded commitments. was 279.5% after giving effect to leverage and therefore the Company’s asset coverage was above 200%, the minimum asset coverage requirement under the 1940 Act.
(7)Total amount of each class of senior securities outstanding at the end of the period excluding debt issuance costs.
(8)The inclusion of unfunded commitmentsamount shown at this caption is the balancing amount derived from the other figures in the calculationschedule. 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 asset coverage ratio per unit would not cause us to be belowtiming of repurchase of the required amount of regulatory coverage.
(10)The Facilities and SBA Debentures are not registered for public trading.Company’s shares.


PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 31, 2024
(Unaudited)

Note 13. Dividends

Dividends

Any dividends and distributions to common stockholders are recorded on the ex-dividend date. The amountAny amounts to be paid out as a dividend isare 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.

The following table summarizes the Company’s dividend distributionsCompany did not declare any regular distribution payments during the three and six months ended DecemberMarch 31, 20172024 and 2016: 

2023.

Date Declared Record Date Payment Date Amount Per Share
During the three months ended December 31, 2017      
10/31/2017 11/22/2017 12/22/2017 $0.16
      $0.16



Date Declared Record Date Payment Date Amount Per Share
During the three months ended December 31, 2016      
11/3/2016 11/23/2016 12/23/2016 $0.22
      $0.22

Note 14. Stock Repurchase Program

Share Transactions

On February 5, 2015, our board8, 2023, the Board of directorsDirectors approved athe expansion of the amount authorized for repurchase under the Company’s share repurchase program pursuantfrom $25 million to which we could purchase up to an aggregate amount of $30.0 million of our common stock between the period of the approval date and February 5, 2016. On December 4, 2015, the board of directors extended the duration of the$35 million. Since announcing this share repurchase program through December 31, 2016, and increased the aggregate amount to $50.0 million. On December 7, 2016, the board of directors extended the duration of the share repurchase program through December 31, 2017. Any stock repurchases will be made through the open market at times, and in such amounts, as management deems appropriate. As of December 31, 2017,on January 11, 2021, the Company has repurchased an aggregate of 4,259,073703,219 shares of common stock at an average price of $8.00 per sharethrough March 31, 2024 with a total cost of approximately $34.1 million. Since the inception$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 Company's net asset valuenumber of shares of common stock repurchased by the Company at an average price of $39.93 per share was increased by approximately $0.23 as a resultunder its share repurchase program from February 10, 2021 through March 31, 2024: 

Month Ended Shares
Repurchased		  Repurchase
Price Per
Share		  Aggregate
Consideration
for
Repurchased
Shares		 
February 2021  13,082  $30.25 - $30.96   397,384 
March 2021  12,241  $30.25 - $34.42   393,938 
April 2021  14,390  $33.11 - $34.89   491,469 
May 2021  25,075  $34.56 - $39.93   976,440 
August 2021  141,700  $41.03 - $42.28   5,944,213 
January 2022  7,312  $39.07 - $40.88   293,756 
February 2022  170,589  $39.53 - $41.00   6,908,864 
March 2022  132,054  $39.24 - $40.57   5,306,885 
April 2022  2,942  $39.07 - $41.00   117,758 
May 2022  3,391  $37.70 - $39.78   131,338 
June 2022  3,515  $37.28 - $39.19   135,063 
July 2022  700  $36.40 - $37.23   25,864 
August 2022  3,081  $28.24 - $37.70   112,456 
September 2022  91,508  $36.80 - $37.50   3,443,845 
October 2022  701  $35.20 - $36.14   14,434 
November 2022  1,103  $34.53 - $35.28   38,790 
December 2022  1,501  $33.26 - $34.84   51,295 
January 2023  2,052  $32.78 - $34.84   68,665 
February 2023  3,131  $33.06 - $39.03   115,430 
March 2023  2,003  $37.02 - $38.89   76,214 
April 2023  649  $35.79 - $37.03   23,671 
May 2023  100  $36.53 - $36.53   3,658 
June 2023  2,300  $33.63 - $38.76   85,556 
August 2023  14,751  $36.98 - $39.41   575,728 
September 2023  125  $38.11 - $38.11   4,772 
November 2023  475  $37.03 - $37.78   17,825 
December 2023  12,748  $37.53 - $41.03   520,749 
March 2024  40,000  $45.00 - $45.00   1,801,205 
Total  703,219     $28,077,265 

During the six months ended March 31, 2024, 53,348 shares were transferred into treasury, including 125 shares that were repurchased during the year ended September 30, 2023 and transferred into treasury during the six months ended March 31, 2024. As of the share repurchases.March 31, 2024, there were 0 shares that were not yet transferred into treasury.


PHENIXFIN CORPORATION
Notes to Consolidated Financial Statements
March 31, 2024
(Unaudited)

Note 15. Subsequent Events

Management has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. ThereOn April 9, 2024, the Company acquired 84,000,000 shares of common stock in ECC Capital Corporation (“ECC”), representing 44% of the outstanding shares of ECC, for $0.05 per share. As part of this transaction, ECC acquired from the Company 100% of the membership units of Kemmerer Holdings, LLC (“Kemmerer”) and the Company provided Senior Secured Promissory Note (“Note”) to ECC as consideration for ECC’s acquisition of Kemmerer, with the Note maturing on December 31, 2031. Interest on this note is accrued at a variable rate per annum equal to the sum of applicable three-month term SOFR rate plus 500 basis points. Further, in connection with this transaction, the Company, ECC and its Chairman and CEO Steve Holder entered into an investor rights agreement, pursuant to which ECC’s board of directors will include one director designated by the Company, one director designated by Mr. Holder, and one director designated by mutual agreement of the Company and Mr. Holder. Mr. Lorber will join ECC’s board of directors.

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 financial terms of the note are substantially the same as the 2028 Notes.

On May 9, 2024, the Board of Directors declared a special dividend of $1.31 per share. This dividend is payable on June 10, 2024 to stockholders of record as of May 27, 2024.

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-Q or would be required to be recognized in the Consolidated Financial Statements as of and for the three and six months ended DecemberMarch 31, 2017, except as disclosed below.2024.

On January 30, 2018, the Company’s Board of Directors declared a quarterly dividend of $0.16 per share, payable on March 23, 2018 to stockholders of record at the close of business on February 21, 2018.

On January 26, 2018, the Company priced a debt offering in Israel of $121.1 million of its 5.05% Series A Notes (the “2024 Notes”). The 2024 Notes were issued pursuant to a deed of trust between the Company and Mishmeret Trust Company, Ltd. as trustee. The 2024 Notes are general, unsecured obligations and rank equal in right of payment with all of the Company’s existing and future unsecured indebtedness. The 2024 Notes will mature on February 27, 2024 and the principal will be payable in four annual installments, of which 25% will be payable on each February 27, 2021-2024.  The 2024 Notes are rated ilA+ by S&P Global Ratings Maalot Ltd. and will be listed on the Tel Aviv Stock Exchange (“TASE”). The 2024 Notes have not been and will not be registered under the Securities Act of 1933, and may not be offered or sold in the United States absent registration under the Securities Act or in transactions exempt from, or not subject to, such registration requirements. In connection with this offering, we have dual listed our common stock on TASE. On January 31, 2018, the Company used a majority of the net proceeds from this offering to repay outstanding indebtedness under the Term Loan Facility, effectively terminating the Term Loan Facility.




Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations


The following discussion and analysis should be read in conjunction with our financial statements and related notes and other financial information appearing elsewhere in this quarterly report on Form 10-Q.


Except as otherwise specified, references to “we,” “us,” “our,” or the “Company,” refer to Medley CapitalPhenixFIN Corporation.


Forward-Looking Statements


Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements, which relate to future events or our performance or financial condition. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties, including statements as to:


●the introduction, withdrawal, success and timing of business initiatives and strategies;
the introduction, withdrawal, success and timing of business initiatives and strategies;


●changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets, which could result in changes in the value of our assets;
changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets, which could result in changes in the value of our assets;


●the impact of increased competition;
the relative and absolute investment performance and operations of MCC Advisors;


●the impact of future acquisitions and divestitures;
the impact of increased competition;


●our business prospects and the prospects of our portfolio companies;
the impact of future acquisitions and divestitures;


●the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to us;
our business prospects and the prospects of our portfolio companies;


●our contractual arrangements and relationships with third parties;
the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to us or MCC Advisors;


●any future financings by us;
our contractual arrangements and relationships with third parties;


●fluctuations in foreign currency exchange rates;
any future financings by us;


●the impact of changes to tax legislation and, generally, our tax position;
the ability of MCC Advisors to attract and retain highly talented professionals;


●our ability to locate suitable investments for us and to monitor and administer our investments;
fluctuations in foreign currency exchange rates;


●our ability to attract and retain highly talented professionals;
the impact of changes to tax legislation and, generally, our tax position; and


●market conditions and our ability to access alternative debt markets and additional debt and equity capital;
the unfavorable resolution of legal proceedings.


●the unfavorable resolution of legal proceedings;

●uncertainties associated with the effect of pandemics and other future market disruptions on our business prospects and the operational and financial performance of our portfolio companies, including our and their ability to achieve their respective objectives; and the effect of disruptions on our ability to continue to effectively manage our business; and

●risks and uncertainties relating to the possibility that the Company may explore strategic alternatives, including, but are not limited to: the timing, benefits and outcome of any exploration of strategic alternatives by the Company; potential disruptions in the Company’s business and stock price as a result of our exploration of any strategic alternatives; the ability to realize anticipated efficiencies, or strategic or financial benefits; potential transaction costs and risks; and the risk that any exploration of strategic alternatives may have an adverse effect on our existing business arrangements or relationships, including our ability to retain or hire key personnel. There is no assurance that any exploration of strategic alternatives will result in a transaction or other strategic change or outcome.

Such forward-looking statements may include statements preceded by, followed by or that otherwise include the words “trend,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “potential,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may,” or similar expressions. The forward looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth as “Risk Factors” in our

annual report on Form 10-K filed with the SEC on December 7, 2017, and elsewhere in this quarterly report on Form 10-Q.


We have based the forward-looking statements included in this report on information available to us on the date of this report, and we assume no obligation to update any such forward-looking statements. Actual results could differ materially from those anticipated in our forward-looking statements, and future results could differ materially from historical performance. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the Securities and Exchange Commission (“SEC”), including annual reports on Form 10-K, registration statements on Form N-2, quarterly reports on Form 10-Q and current reports on Form 8-K.

Global Events and Market Volatility

Periods of market volatility have occurred and could continue to occur in response to pandemics or other events outside of our control, including terrorist attacks, acts of war, natural disasters, public health crises or similar events. These types of events have adversely affected and could continue to adversely affect operating results for us and for our portfolio companies.

In February 2022, Russia launched a large-scale invasion of Ukraine. The extent and duration of Russian military action in the Ukraine, resulting sanctions and resulting future market disruptions, including declines in stock markets in Russia and elsewhere and the value of the ruble against the U.S. dollar, are impossible to predict, but have been and could continue to be significant. Any such disruptions caused by Russian military or other actions (including cyberattacks and espionage) or resulting from actual or threatened responses to such actions have caused and could continue to cause disruptions to portfolio companies located in Europe or that have substantial business relationships with European or Russian companies. 

The recent outbreak of hostilities in the Middle East could also escalate to nearby areas.

The extent and duration of these military actions, conflicts and resulting market disruptions are impossible to predict, but have been and could continue to be substantial, and any such market disruptions could affect our portfolio companies’ operations. As a result, our portfolio investments could decline in value or our valuation of them could become uncertain.

We have evaluated subsequent events from March 31, 2024 through the filing date of this quarterly report on Form 10-Q. However, as the discussion in this Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations relates to the Company’s financial statements for the quarterly period ended March 31, 2024, the analysis contained herein may not fully account for market event impacts. As of March 31, 2024, the Company valued its portfolio investments in conformity with U.S. generally accepted accounting principles (“GAAP”) based on the facts and circumstances known by the Company at that time, or reasonably expected to be known at that time. Due to the overall volatility that market events may have caused during the months following our most recent valuation (as of March 31, 2024), any valuations conducted now or in the future in conformity with U.S. GAAP could result in a lower fair value of our portfolio.

Interest Rate Environment

In recent years, the Federal Reserve raised short-term interest rates and has indicated additional interest rate increases may come. Changing interest rates may have unpredictable effects on markets, may result in heightened market volatility and may detract from our performance to the extent we are exposed to such interest rates and/or volatility. In periods of rising interest rates, such as the current interest rate environment, to the extent we borrow money subject to a floating interest rate, our cost of funds would increase, which could reduce our net investment income. Further, rising interest rates could also adversely affect our performance if such increases cause our borrowing costs to rise at a rate in excess of the rate that our investments yield. Further, rising interest rates could also adversely affect our performance if we hold investments with floating interest rates, subject to specified minimum interest rates (such as a SOFR floor), while at the same time engaging in borrowings subject to floating interest rates not subject to such minimums. In such a scenario, rising interest rates may increase our interest expense, even though our interest income from investments is not increasing in a corresponding manner as a result of such minimum interest rates.

If general interest rates continue to rise, there is a risk that the portfolio companies in which we hold floating rate securities will be unable to pay escalating interest amounts, which could result in a default under their loan documents with us. Rising interest rates could also cause portfolio companies to shift cash from other productive uses to the payment of interest, which may have a material adverse effect on their business and operations and could, over time, lead to increased defaults. In addition, rising interest rates may increase pressure on us to provide fixed rate loans to our portfolio companies, which could adversely affect our net investment income, as increases in our cost of borrowed funds would not be accompanied by increased interest income from such fixed-rate investments

A change in the general level of interest rates can be expected to lead to a change in the interest rates we receive on many of our debt investments.


Overview


Overview

We are an externally-managed,internally-managed non-diversified closed-end management investment company that filed an electionhas elected to be regulated as a BDC under the 1940 Act. In addition, we have elected, and qualifiedintend to qualify annually, to be treated for U.S. federal income tax purposes as a RIC under Subchapter M of the Code. Through December 31, 2020, we were an externally managed company. Since January 1, 2021, we have operated under such internalized management structure.


We commenced operations and completed our initial public offering on January 20, 2011. Our investmentUnder our internalized management structure, our activities are managed by MCC Advisorsour senior professionals and are supervised by our board of directors, of which a majority of the members are independent of us.


Our

The Company’s investment objective is to generate current income and capital appreciation by lendingappreciation. The management team seeks to privately-held middle market companies,achieve this objective primarily through directly originated transactions,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 help these companies fund acquisitions, growth or refinancing. Ourachieve our investment objective, such as operating and managing an asset-based lending business. The portfolio generally consists of senior secured first lien term loans, and senior secured second lien term loans. In some of our investments,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 the 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.



As a BDC, we are required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of our total assets in “qualifying assets,” including securities of private or thinly traded public U.S. companies, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. In addition, we are only allowed to borrow money such that our asset coverage, as defined in the 1940 Act, equals at least 200% (or 150% if, pursuant to the 1940 Act, certain requirements are met) after such borrowing, with certain limited exceptions. To maintain our RIC status,tax treatment, we must meet specified source-of-income and asset diversification requirements. ToIn addition, to maintain our RIC tax treatment, under Subchapter M for U.S. federal income tax purposes, we must timely distribute at least 90% of our net ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, for the taxable year.


On December 21, 2020, the Company announced that it completed the application process for and was authorized to transfer the listing of its shares of common stock to the NASDAQ Global Market. The listing and trading of the common stock on the NYSE ceased at the close of trading on December 31, 2020. Since January 4, 2021, the common stock trades on the NASDAQ Global Market under the trading symbol “PFX.”

Revenues


We generate revenue in the form of interest income on the debt that we hold and capital gains, if any, on warrants or other equity interests that we may acquire in portfolio companies. We invest our assets primarily in privately held companies with enterprise or asset values between $25 million and $250 million and generally focus on investment sizes of $10 million to $50 million. We believe that pursuing opportunities of this size offers several benefits including reduced competition, a larger investment opportunity set and the ability to minimize the impact of financial intermediaries. We expect our debt investments to bear interest at either a fixed or floating rate. Interest on debt will be payable generally either monthly or quarterly. In some cases our debt investments may provide for a portion of the interest to be PIK. To the extent interest is PIK, it will be payable through the increase of the principal amount of the obligation by the amount of interest due on the then-outstanding aggregate principal amount of such obligation. The principal amount of the debt and any accrued but unpaid interest will generally become due at the maturity date. In addition, we may generate revenue in the form of commitment, origination, structuring or diligence fees, fees for providing managerial assistance or investment management services and possibly consulting fees. Any such fees will be generated in connection with our investments and recognized as earned.


Expenses

Expenses


Our

In periods prior to December 31, 2020, our primary operating expenses include the payment ofincluded management and incentive fees pursuant to the investment management agreement we havehad with MCC Advisors and overhead expenses, including our allocable portion of our administrator’s overhead under the administration agreement.agreement, which were paid during the quarter ended March 31, 2021. Our management and incentive fees compensatecompensated MCC Advisors for its work in identifying, evaluating, negotiating, closing and monitoring our investments. WeOn November 18, 2020, the board of directors adopted an internally managed structure, effective January 1, 2021, under which we bear all other costs and expenses of our operations and transactions, including those relating to:

●our organization and continued corporate existence;

●calculating our NAV (including the cost and expenses of any independent valuation firms);

●expenses, including travel expense, incurred by our professionals or payable to third parties performing due diligence on prospective portfolio companies, monitoring our investments and, if necessary, enforcing our rights;


our organization and continued corporate existence;


calculating our NAV (including the cost and expenses of any independent valuation firms);


●interest payable on debt, if any, incurred to finance our investments;
expenses incurred by MCC Advisors payable to third parties, including agents, consultants or other advisers, in monitoring our financial and legal affairs and in monitoring our investments and performing due diligence on our prospective portfolio companies;


interest payable on debt, if any, incurred to finance our investments;

●the costs of all offerings of common shares and other securities, if any;

●operating costs associated with employing investment professionals and other staff;

●distributions on our shares;

●administration fees payable under our administration agreement;

●custodial fees related to our assets

●amounts payable to third parties relating to, or associated with, making investments;

●transfer agent and custodial fees;

●all registration and listing fees;

●U.S. federal, state and local taxes;

●independent directors’ fees and expenses;

●costs of preparing and filing reports or other documents with the SEC or other regulators;

●the costs of any reports, proxy statements or other notices to our stockholders, including printing costs;

●our fidelity bond;

●directors and officers/errors and omissions liability insurance, and any other insurance premiums;

●the operating lease of our office space;

●indemnification payments; and

●direct costs and expenses of administration, including audit and legal costs.

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 other securities, if any;


objectives the base management fee and any incentive fee;

distributions on our shares;

administration fees payable under our administration agreement;

the allocated costs incurred by MCC Advisors in providing managerial assistance to those portfolio companies that request it;

amounts payable to third parties relating to, or associated with, making investments;

transfer agent and custodial fees;

registration fees and listing fees;

U.S. federal, state and local taxes;

independent director fees and expenses;

costs of preparing and filing reports or other documents with the SEC or other regulators;

the costs of any reports, proxy statements or other notices to our stockholders, including printing costs;

our fidelity bond;

directors and officers/errors and omissions liability insurance, and any other insurance premiums;

indemnification payments;

direct costs and expenses of administration, including audit and legal costs; and



all other expenses reasonably incurred by us or MCC AdvisorsCommittee considers relevant in connection with administering our business,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 asother terms and conditions of an award. Between threshold, target and maximum performance levels for each Performance Goal, the allocable portion of overhead under our administration agreement, including rentthat award attributed to the Performance Goals shall be interpolated in a linear progression.


In December 2022, pursuant to the CIP, the Compensation Committee approved awards for Mr. Lorber and other allocable portionsMs. 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 costtarget 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. 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 certaincash equal to a percentage of our officerstheir 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 their respective staffs (including travel expenses).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 $890,000 
Ellida McMillan, Chief Financial Officer  380,000 

During the three and six months ended March 31, 2024, the Company recorded an expense of $504,890 and $809,690, respectively, for these awards. During the three and six months ended March 31, 2023, the Company did not record an expense for these awards.

Portfolio and Investment Activity


As of DecemberMarch 31, 20172024 and September 30, 2017,2023, our portfolio had a fair market value of approximately $835.9$220.0 million and $837.0$226.5 million, respectively. The following table summarizes our portfolio and investment activity three

During the six months ended DecemberMarch 31, 20172024, we received proceeds from sale and 2016 (dollars in thousands):

settlements of investments of $45.6 million, including principal proceeds, net realized losses on investments of $1.6 million and invested $30.8 million.

During the six months ended March 31, 2023, we received proceeds from sale and settlements of investments of $26.9 million, including principal and dividend proceeds, realized net losses on investments of $0.8 million, and invested $26.0 million.

 For the three months ended December 31
 2017 2016
Investments made in new portfolio companies$68,496
 $26,476
Investments made in existing portfolio companies14,199
 14,874
Aggregate amount in exits and repayments(47,859) (40,118)
Net investment activity$34,836
 $1,232
    
Portfolio Companies, at beginning of period64
 58
Number of new portfolio companies6
 4
Number of exited portfolio companies(2) (2)
Portfolio companies, at end of period68
 60
    
Number of investments in existing portfolio companies10
 10


The following table summarizes the amortized cost and the fair value of our average portfolio company investment, including MCC Senior Loan Strategy JV I LLC (“MCC JV”), and largest portfolio company investment, excluding MCC JV, as of December 31, 2017 and September 30, 2017 (dollars in thousands):

  March 31, 2024  September 30, 2023 
  Amortized Cost  Fair Value  Amortized Cost  Fair Value 
Average portfolio company $6,083  $5,367  $6,310  $5,392 
Largest portfolio company by amortized cost and fair value, respectively  48,542   34,729   38,871   38,871 
 December 31, 2017 September 30, 2017
 Amortized Cost Fair Value Amortized Cost Fair Value
Average portfolio company investment$14,002
 $12,293
 $14,282
 $13,078
Largest portfolio company investment51,609
 51,609
 52,137
 50,667


The following table summarizes the amortized cost and the fair value of investments as of DecemberMarch 31, 20172024 (dollars in thousands):

 Amortized Cost Percentage Fair Value Percentage
Senior Secured First Lien Term Loans$594,793
 62.5% $532,308
 63.7%
Senior Secured Second Lien Term Loans135,801
 14.3
 106,304
 12.7
Senior Secured First Lien Notes26,771
 2.8
 27,420
 3.3
Unsecured Debt22,728
 2.4
 —
 —
MCC Senior Loan Strategy JV I LLC66,762
 7.0
 67,406
 8.0
Equity/Warrants105,302
 11.0
 102,465
 12.3
Total$952,157
 100.0% $835,903
 100.0%
  Amortized Cost  Percentage  Fair Value  Percentage 
Senior Secured First Lien Term Loans $119,674   48.0% $106,607   48.4%
Senior Secured Notes  12,495   5.0   12,372   5.6 
Fund Investment  1,027   0.4   783   0.4 
Equity/Warrants  116,217   46.6   100,287   45.6 
Total Investments $249,413   100.0% $220,049   100.0%


The following table summarizes the amortized cost and the fair value of investments as of September 30, 20172023 (dollars in thousands):

  Amortized Cost  Percentage  Fair Value  Percentage 
Senior Secured First Lien Term Loans $139,103   52.5% $103,004   45.6%
Senior Secured Notes  9,512   3.6   8,922   3.9 
Fund Investment  1,027   0.4   792   0.3 
Equity/Warrants  115,369   43.5   113,743   50.2 
Total Investments $265,011   100.0% $226,461   100.0%
 Amortized Cost Percentage Fair Value Percentage
Senior Secured First Lien Term Loans$559,461
 61.2% $537,163
 64.2%
Senior Secured Second Lien Term Loans161,885
 17.7
 135,826
 16.2
Senior Secured First Lien Notes26,768
 2.9
 27,545
 3.3
Unsecured Debt22,728
 2.5
 —
 —
MCC Senior Loan Strategy JV I LLC56,087
 6.1
 56,138
 6.7
Equity/Warrants87,124
 9.6
 80,319
 9.6
Total$914,053
 100.0% $836,991
 100.0%


As of DecemberMarch 31, 2017,2024, our income-bearing investment portfolio whichbased upon cost represented 78.9%84.0% of our total portfolio had a weighted average yieldof which 57.6% bore interest based on floating rates, such as SOFR or LIBOR, 16.8% bore interest at fixed rates, and 25.6% are income-producing equity investments. As of September 30, 2023, our income-bearing investment portfolio based upon cost represented 88.2% of our total portfolio investments of approximately 10.6%, and 83.7% of our income-bearing investment portfoliowhich 59.5% bore interest based on floating rates, such as LIBOR and 16.3%or SOFR, 13.9% bore interest at fixed rates.rates, and 26.6% are income-producing equity investments. As of DecemberMarch 31, 2017,2024, the Company had a weighted average yield based upon costof 13.6% on debt and other income producing investments. The weighted average yield of our total portfolio was approximately 7.6%.does not represent the total return to our stockholders.




MCC Advisors regularly assesses

We rate the risk profile of each of our investments and rates each of them based on the following categories, which we refer to as MCC Advisors’ investment credit rating:


categories:

Credit
Rating
 
RatingDefinition
   
1
 Investments that are performing above expectations.
2
 
2Investments that are performing within expectations, with risks that are neutral or favorable compared to risks at the time of origination.

All new loans are rated ‘2’.
3
 
3Investments that are performing below expectations and that require closer monitoring, but where no loss of interest, dividend or principal is expected.

Companies rated ‘3’ may be out of compliance with financial covenants, however, loan payments are generally not past due.
4
 
4Investments that are performing below expectations and for which risk has increased materially since origination.

Some loss of interest or dividend is expected but no loss of principal.

In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due (but generally not more than 180 days past due).
5
 
5Investments that are performing substantially below expectations and whose risks have increased substantially since origination.
Most or all of the debt covenants are out of compliance and payments are substantially delinquent.
Some loss of principal is expected.


The following table shows the distribution of our investments on the 1 to 5 investment performance rating scale at fair value as of DecemberMarch 31, 20172024 and September 30, 20172023 (dollars in thousands):

  March 31, 2024  September 30, 2023 
  Fair Value  Percentage  Fair Value  Percentage 
1 $-   0.0% $-   0.0%
2  186,869   84.9%  197,951   87.4%
3  14,493   6.6%  15,651   6.9%
4  350   0.2%  6,362   2.8%
5  18,337   8.3%  6,497   2.9%
Total $220,049   100.0% $226,461   100.0%
  December 31, 2017 September 30, 2017
Investment Performance Rating Fair Value Percentage Fair Value Percentage
1 $7,074
 0.9% $42,346
 5.1%
2 641,423
 76.7
 527,410
 63.0
3 103,723
 12.4
 139,481
 16.7
4 25,068
 3.0
 69,864
 8.3
5 58,615
 7.0
 57,890
 6.9
Total $835,903
 100.0% $836,991
 100.0%


Results of Operations

Operating results for the three and six months ended DecemberMarch 31, 20172024 and 20162023 are as follows (dollars in thousands):

  For the Three Months Ended
March 31,		  For the Six Months Ended
March 31,		 
  2024  2023  2024  2023 
Total investment income $4,659  $4,912  $10,381  $9,616 
Less: Net expenses  4,088   3,138   8,101   6,193 
Net investment income/(loss)  571   1,774   2,280   3,423 
Net realized gains (losses) on investments  (1,791)  (815)  (1,561)  (801)
Net change in unrealized gains (losses) on investments  6,592   5,749   9,187   8,038 
Net increase (decrease) in net assets resulting from operations $5,372  $6,708  $9,906  $10,660 


 For the three months ended December 31
 2017 2016
Total investment income$20,631
 $26,056
Total expenses, net13,318
 15,654
Net investment income before excise taxes7,313
 10,402
Excise tax expense(134) (267)
Net investment income7,179
 10,135
Net realized gains/(losses) from investments(21) (6,298)
Net unrealized appreciation/(depreciation) on investments(39,192) 2,489
Change in provision for deferred taxes on unrealized (appreciation)/depreciation on investments90
 —
Net increase in net assets resulting from operations$(31,944) $6,326

Investment Income

For the three months ended DecemberMarch 31, 2017,2024, investment income totaled $20.6$4.7 million, of which $18.8$2.7 million was attributable to portfolio interest, andapproximately $1.7 million was attributable to dividend income, and $1.8$0.1 million was attributable to fee income.and other income, and $0.2 million was attributable to interest on cash and cash equivalents. For the threesix months ended DecemberMarch 31, 2016,2024, investment income totaled $26.1$10.4 million, of which $24.7$6.4 million was attributable to portfolio interest, andapproximately $3.7 million was attributable to dividend income, and $1.4$0.1 million was attributable to fee income.and other income, and $0.2 million was attributable to interest on cash and cash equivalents. Dividend income was received from eight investments during the six months ended March 31, 2024.


For the three months ended March 31, 2023, investment income totaled $4.9 million, of which $2.7 million was attributable to portfolio interest, approximately $1.5 million was attributable to dividend income, $0.6 million was attributable to fee and other income, and $0.1 million was attributable to interest on cash and cash equivalents. For the six months ended March 31, 2023, investment income totaled $9.6 million, of which $5.3 million was attributable to portfolio interest, approximately $3.5 million was attributable to dividend income, $0.6 million was attributable to fee and other income, and $0.2 million was attributable to interest on cash and cash equivalents. Dividend income was received from three investments during the six months ended March 31, 2023.



Operating Expenses

Operating expenses for the three and six months ended DecemberMarch 31, 20172024 and 20162023 are as follows (dollars in thousands):

  For the Three Months Ended
March 31,		  For the Six Months Ended
March 31,		 
  2024  2023  2024  2023 
Interest and financing expenses $1,567  $1,382  $3,109  $2,615 
Salaries and benefits  1,524   802   2,950   1,660 
Professional fees, net  343   377   701   725 
General and administrative  311   201   636   421 
Directors fees  188   177   375   371 
Insurance  97   121   194   245 
Administrator expenses  58   78   135   156 
Total Expenses $4,088  $3,138  $8,100  $6,193 
 For the three months ended December 31
 2017 2016
Base management fees$4,068
 $4,515
Incentive fees—
 896
Interest and financing expenses6,759
 7,774
Administrator expenses868
 916
General and administrative757
 697
Professional fees586
 651
Directors fees147
 170
Insurance133
 99
Expenses before management and incentive fee waivers13,318
 15,718
Management fee waiver—
 (20)
Incentive fee waiver—
 (44)
Expenses, net of management and incentive fee waivers$13,318
 $15,654

For the three months ended DecemberMarch 31, 2017,2024, total operating expenses before management and incentive fee waivers decreasedincreased by $2.4$1.0 million, or 15.3%,30.3% compared to the three months ended DecemberMarch 31, 2016.2023. For the six months ended March 31, 2024, total operating expenses increased by $1.9 million, or 30.8% compared to the six months ended March 31, 2023.

Interest and Financing Expenses


Interest and financing expenses for the three months ended DecemberMarch 31, 2017 decreased2024 increased by $1.0$0.2 million, or 13.1%,13.4% compared to the three months ended DecemberMarch 31, 2016.2023. Interest and financing expenses for the six months ended March 31, 2024 increased by $0.5 million, or 18.9% compared to the six months ended March 31, 2023. The decreaseincrease in interest and financing expenses for the six months ended March 31, 2024 was primarily due to increased borrowings on the repayment of the 7.125% unsecured notes (the “2019 Notes”) in February 2017, the reduction of the Senior Secured Revolving Credit Facility (the “Revolving Credit Facility”) commitment to $200.0 million from $343.5 million, and the reduction of the Senior Secured Term Loan Credit Facility (the "Term Loan Facility" and, collectively with the Revolving Credit Facility, the "Facilities") commitment to $102.0 million from $174.0 million, partially offset by an increase in LIBOR rates and the issuance of an additional $39.4 million of 6.125% unsecured notes that mature on March 30, 2023 (the “2023 Notes,”).credit facility.


Base Management Fees and Incentive Fees

Base management fees for the three months ended December 31, 2017 decreased by $0.4 million, or 9.9%, compared to the three months ended December 31, 2016 due to the decline in the portfolio during the period. Incentives fees for the three months ended December 31, 2017 decreased by $0.9 million, or 100.0%, compared to the three months ended December 31, 2016 due to the decrease in pre-incentive fee net investment income.

Professional Fees and Other General and Administrative Expenses


Professional fees and general and administrative expenses for the three months ended DecemberMarch 31, 2017 decreased2024 increased by $42,773,$0.1 million, or 1.7%,13.1% compared to the three months ended DecemberMarch 31, 2016 primarily due to an decrease in directors expenses, audit expenses, administrator expenses, and valuation expenses, offset by an increase in legal expenses, insurance expenses,2023. Professional fees and general and administrative expenses.expenses for the six months ended March 31, 2024 increased by $0.2 million, or 16.7% compared to the six months ended March 31, 2023.


Net Realized Gains/Losses from Investments


We measure realized gains or losses by the difference between the net proceeds from the disposition and the amortized cost basis of an investment, without regard to unrealized gains or losses previously recognized.


During the three and six months ended DecemberMarch 31, 2017,2024, we recognized $21,476$1.8 million and $1.6 of realized lossloses, respectively on our portfolio investments. The realized loss waslosses were primarily due to the partial sale of one of our investments,1888 Industrial Services for $8.8 million offset by a realized gain from liquidation proceeds received on a realized investment.Maritime Wireless Holdings for $7.0 million.


During the three and six months ended DecemberMarch 31, 2016,2023, we recognized $6.3$0.8 million of realized losslosses on our portfolio investments. The realized loss waslosses were primarily due to the non-cash restructuring transactionswrite off of two investments.Walker Edison Furniture Company for $2.1 million and proceeds from Footprint for $1.2 million of a gain.


Net Unrealized Appreciation/Depreciation on Investments


Net change in unrealized appreciation or depreciation on investments reflects the net change in the fair value of our investment portfolio.

For the three months ended DecemberMarch 31, 2017,2024, we had $39.2 million of net unrealized depreciation on investments. For the three months ended December 31, 2016, we had $2.5$6.6 million of net unrealized appreciation on investments. The net unrealized appreciation resulted from the reversal of the realized loss on 1888 Industrial Services and unrealized appreciation primarily on Kemmerer Operations LLC, FST Holdings Parent LLC, and PHH Mortgage Corporation, offset by the reversal of the unrealized gain on Maritime Wireless Holdings.


For the six months ended March 31, 2024, we had $9.2 million of net unrealized appreciation on investments. The net unrealized appreciation resulted from the reversal of the realized loss on 1888 Industrial Services and unrealized appreciation primarily on Kemmerer Operations LLC, Chimera Investment Corporation, FST Holdings Parent LLC, NVTN LLC, and PHH Mortgage Corporation, offset by the reversal of the unrealized gain on Maritime Wireless Holdings.



For the three months ended March 31, 2023, we had $5.7 million of net unrealized appreciation on investments. The net unrealized appreciation resulted from fair market value appreciation primarily attributable to Kemmerer Operations, Maritime Wireless, the reversal of the realized loss on Walker Edison which was offset by the unrealized depreciation on Lucky Bucks.

For the six months ended March 31, 2023, we had $8.0 million of net unrealized appreciation on investments. The net unrealized appreciation resulted from fair market value appreciation primarily attributable to Level One asset along with Kemmerer Operations, Maritime Wireless, the reversal of the realized loss on Walker Edison which was offset by the unrealized depreciation on Lucky Bucks.

Provision for Deferred Taxes on Unrealized AppreciationDepreciation on Investments


Certain consolidated subsidiaries of ours are subject to U.S. federal and state income taxes. These taxable subsidiaries are not consolidated with the Company for income tax purposes, but are consolidated for GAAP purposes, and may generate income tax liabilities or assets from temporary differences in the recognition of items for financial reporting and income tax purposes at the subsidiaries. For the three and six months ended DecemberMarch 31, 2017,2024 and 2023, the change in provision for deferred taxes on the unrealized depreciation on investments was $0.1 million. For the three months ended December 31, 2016, there was noCompany did not record a change in provision for deferred taxes on the unrealized (appreciation)/depreciation on investments.

Changes in Net Assets from Operations


For the three months ended DecemberMarch 31, 2017,2024, we recorded a net decreaseincrease in net assets resulting from operations of $31.9$5.4 million compared to a net increase in net assets resulting from operations of $6.3$6.7 million for the three months ended DecemberMarch 31, 2016 as a result2023. Total Net Assets decreased from the last quarter due to share repurchases in the amount of the factors discussed above.$1.8 million. Based on 54,474,2112,048,622 and 2,095,193 weighted average common shares outstanding for three months ended December 31, 2017 and 2016, our per share net decrease in net assets resulting from operations was $0.59 for the three months ended DecemberMarch 31, 2017 compared to a2024 and 2023, respectively, our per share net increase in net assets resulting from operations of $0.12was $2.62 for the three months ended DecemberMarch 31, 2016.2024 and $3.20 for the three months ended March 31, 2023.

For the six months ended March 31, 2024, we recorded a net increase in net assets resulting from operations of $9.9 million compared to a net increase in net assets resulting from operations of $10.7 million for the six months ended March 31, 2023. Total Net Assets decreased from the last quarter due to share repurchases in the amount of $2.3 million. Based on 2,060,723 and 2,098,041 weighted average common shares outstanding for the six months ended March 31, 2024 and 2023, respectively, our per share net increase in net assets resulting from operations was $4.81 for the six months ended March 31, 2024 and $5.08 for the six months ended March 31, 2023.

Financial Condition, Liquidity and Capital Resources


As a RIC, we distribute substantially all of our net income to our stockholders and have an ongoing need to raise additional capital for investment purposes. To fund growth, we have a number of alternatives available to increase capital, including raising equity, increasing debt, and funding from operational cash flow.


Our liquidity and capital resources historically have been generated primarily from the net proceeds of public offerings of common stock, advances from the FacilitiesCredit Facility and net proceeds from the issuance of notes as well as cash flows from operations.


As of December 31, 2017, we had $50.0 million in cash and cash equivalents. In the future, we may generate cash from future offerings of securities, future borrowings and cash flows from operations, including interest earned from the temporary investment of cash in U.S. government securities and other high-quality debt investments that mature in one year or less. Our primary use of funds is investments in our targeted asset classes, cash distributions to our stockholders, and other general corporate purposes.

As of March 31, 2024 and September 30, 2023, we had $19.1 million and $6.0 million, respectively, in cash and cash equivalents.


In order to continue to qualify as amaintain our RIC tax treatment under the Code, we intend to distribute to our stockholders substantially all of our taxable income, but we may also elect to periodically spill over certain excess undistributed taxable income from one tax year into the next tax year. In addition, as a BDC, for each taxable year we generally are required to meet a coverage ratio of total assets to total senior securities, which include borrowings and any preferred stock we may issue in the future, of at least 200% (or 150% if, pursuant to the 1940 Act, certain requirements are met). This requirement limits the amount that we may borrow.


On January 11, 2021, the Company announced that its board of directors approved a share repurchase program. On February 9, 2022, the Board of Directors approved the expansion of the amount authorized for repurchase under the Company’s share repurchase program from $15 million to $25 million. On February 8, 2023, the Board of Directors approved the further expansion of the amount authorized for repurchase under the Company’s share repurchase program from $25 million to $35 million. Under the share repurchase program, the Company repurchased an aggregate of 703,219 shares of common stock through March 31, 2024, or 25.8 % of shares outstanding as of the program’s inception, with a total cost of $28.1 million. The total remaining amount authorized under the expanded share repurchase program at March 31, 2024 was approximately $6.9 million.

Credit Facility


On December 15, 2022, the Company and its wholly-owned subsidiaries executed a three-year, $50 million revolving credit facility (the “Credit Facility”) with WoodForest Bank, N.A. (“WoodForest”), Valley National Bank, and Axiom Bank, (collectively, the “Lenders”). WoodForest is the administrative agent, sole bookrunner and sole lead arranger. As of March 31, 2024, there was $28.4 million outstanding borrowings by the Company under the Credit Facility.

Outstanding loans under the Credit Facility bear a monthly interest rate at Term SOFR + 2.90%. The Company hasis also subject to a Term Loan Facility with ING Capital LLC, as administrative agent, in order to borrow funds to make additional investments.


The pricing incommitment fee of 0.25%, which shall accrue on the caseactual daily amount of the Term Loan Facility for LIBOR loans is LIBOR (with no minimum) plus 3.00%.undrawn portion of the revolving credit. The pricing on the Revolving Credit Facility is LIBOR (with no minimum) plus 2.75%. The pricing on the Facilities will decrease by an additional 25 basis points upon receiving an investment grade rating from Standard & Poor’s.

The Term Loan Facility’s bullet maturity is July 28, 2020 and the Revolving Credit Facility’s revolving period ends July 28, 2019, followed by a one-year amortization period and a final maturity on July 28, 2020.

On February 14, 2017, the Company elected to reduce the total commitment of the Revolving Credit Facility to $200.0 million from $343.5 million. The reduction was accounted for as a debt modification to a line-of-credit or revolving-debt arrangement in accordance with ASC 470-50, Modifications and Extinguishments, which attributed to an acceleration of debt issuance costs in the amount of $1.3 million and was recorded on the Consolidated Statements of Operations as a component of interest and financing expenses.

On September 1, 2017, the Company reduced the Term Loan Facility commitment to $102.0 million from $174.0 million. The reduction was accounted for as a debt extinguishment in accordance with ASC 470-50, Modifications and Extinguishments, which attributed to a realized loss of $0.6 million and recorded on the Consolidated Statements of Operations as a loss on extinguishment of debt.

Borrowings under the Facilities are subject to, among other things, a minimum borrowing/collateral base, and substantially all of the Company’s assets are pledged as collateral under the Facilities. In addition, the Facilities require the Company to, among other things (i) makecontains customary representations and warranties regarding the collateral as well the Company’s business and operations, (ii) agree to certain indemnification obligations and (iii) agree to comply with various affirmative and negative covenants. The documentationCredit Facility contains customary events of default for eachcredit facilities of this type, including (without limitation): nonpayment of principal, interest, fees or other amounts after a stated grace period; inaccuracy of material representations and warranties; change of control; violations of covenants, subject in certain cases to stated cure periods; and certain bankruptcies and liquidations. If an event of default occurs and is continuing, the Company may be required to repay all amounts outstanding under the Credit Facility.

On February 21, 2024 (the “Effective Date”), in order to increase the size of the Facilities also includes default provisions such asCredit Facility, the failure to make timely payments under the Facilities, the occurrence of a change in control and the failure by the Company to materially perform under the operative agreements governing the Facilities, which, if not complied with, could accelerate repayment under the Facilities, thereby materially and adversely affecting the Company’s liquidity, financial condition and results of operations.


As of December 31, 2017, total commitments under the Facilities are $302.0 million, comprised of $200.0 million committedparties to the Revolving Credit Facility and $102.0 million funded underamended the Term Loan Facility.



Unsecured Notes

2019 Notes

On March 21, 2012,terms of the Company issued $40.0 million in aggregateCredit Facility, effective as of the Effective Date (the “Amendment”). The Amendment increased the principal amount of the 2019 Notes. The 2019 Notes bore interest at a rate of 7.125% per year, and were payable quarterly on March 30, June 30, September 30 and December 30 of each year, beginning June 30, 2012. The 2019 Notes were listed on the NYSE and traded thereonloan available under the trading symbol “MCQ”. On February 22, 2017, the 2019 Notes were redeemed at par plus accrued and unpaid interest. The redemption was accounted for as a debt extinguishment in accordance with ASC 470-50, Modifications and Extinguishments, which attributedCredit Facility by $12.5 million to a realized loss of $0.5$62.5 million.

2021 Notes

On December 17, 2015, the Company issued $70.8 million in aggregate principal amount of 6.50% unsecured notes that mature on January 30, 2021 (the “2021 Notes”). On January 14, 2016, the Company closed an additional $3.25 million in aggregate principal amount All other material terms of the 2021Credit Facility remain unchanged.

Unsecured Notes pursuant to the partial exercise of the underwriters’ option to purchase additional notes. The 2021 Notes may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after January 30, 2019. The 2021 Notes bear interest at a rate of 6.50% per year, payable quarterly on January 30, April 30, July 30 and October 30 of each year, beginning January 30, 2016. The 2021 Notes are listed on the NYSE and trade thereon under the trading symbol ‘‘MCX’’.


2023 Notes


On March 18, 2013, the Company issued $60.0 million in aggregate principal amount of 2023 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'sCompany’s option. On March 26, 2013, the Company closed an additional $3.5 million in aggregate principal amount of 2023 Notes, pursuant to the partial exercise of the underwriters’ option to purchase additional notes. The 2023 Notes bearbore 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. The 2023 Notes are listed on the NYSE and trade thereon under the trading symbol “MCV”.


On December 12, 2016, the Company entered into an ATM“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, since inception ofthrough the ATM debt distribution agreement.


SBA Debentures

On March 26, 2013, our wholly-owned subsidiary, Medley SBIC LP (“SBIC LP”) received a Small Business Investment10, 2018, the Company (“SBIC”) license from the Small Business Administration (“SBA”) under Section 301(c) of the Small Business Investment Company Act of 1958, as amended.


The SBIC license allows the SBIC LP to obtain leverage by issuing SBA-guaranteed debentures ("SBA Debentures"), subject to the issuance of a capital commitment by the SBA and other customary procedures. SBA Debentures are non-recourse, interest only debentures with interest payable semi-annually and have a ten year maturity. Theredeemed $13.0 million in aggregate principal amount of SBA Debentures is not requiredthe 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 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 $0.2 million and was recorded on the Consolidated Statements of Operations as a loss on extinguishment of debt.

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. The 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 trade on the NASDAQ Global Market under the trading symbol “PFXNL.”


On November 15, 2021, the Company caused notices to be paid priorissued to maturity but maythe 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. 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 prepaid at any time without penalty. The interest rateissued to the holders of SBA Debentures is fixed on a semi-annual basisits 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 market-driven spread over U.S. Treasuryprice 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 10-year maturities.loans obtained under the Credit Facility, as described earlier in this section.

2028 Notes

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 named in Exhibit A thereto, 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 due 2028 (the “2028 Notes”). The SBA, as a creditor, will have a superior claimOffering occurred on November 15, 2021, pursuant to the SBIC LP’s assets over our stockholders inCompany’s effective shelf registration statement on Form N-2 previously filed with the event we liquidateSEC, as supplemented by a preliminary prospectus supplement dated November 8, 2021, the SBIC LP orpricing term sheet dated November 9, 2021 and a final prospectus supplement dated November 9, 2021. Effective November 16, 2021, the SBA exercises its remedies2028 Notes began trading on the NASDAQ Global Market under the SBA Debentures issued by the SBIC LP upon an event of default.trading symbol “PFXNZ.”


SBA regulations currently limit the amount that the SBIC LP may borrow to a maximum of $150.0 million when it has at least $75.0 million in regulatory capital, receives a capital commitment from the SBA and has been through an examination by the SBA subsequent to licensing.

On November 16,15, 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, we obtained an exemptive order frombetween the SECCompany and the Trustee. The Fourth Supplemental Indenture relates to permit us to exclude the debtOffering of the SBIC LP guaranteed by the SBA from our 200% asset coverage test under the 1940 Act. The exemptive order provides us with increased flexibility under the 200% asset coverage test by permitting SBIC LP to borrow up to $150.0 million more than it would otherwise be able to absent the receipt of this exemptive order.2028 Notes.


As of December 31, 2017, SBIC LP had $75.0 million in regulatory capital and had $150.0 million SBA Debentures outstanding.

Contractual Obligations and Off-Balance Sheet Arrangements

The Company has a guarantee to issue up to $7.0 million in standby letters of credit through a financial intermediary on behalf of a certain portfolio company. Under this arrangement, if the standby letters of credit were to be issued, the Company would be required to make payments to third parties if the portfolio company was to default on its related payment obligations.

As of DecemberMarch 31, 2017, the Company had not issued any standby letters of credit under the commitment on behalf of the portfolio company. The guarantee will renew annually until cancellation.


As of December 31, 20172024 and September 30, 2017,2023, we had commitments under loan and financing agreements to fund up to $34.0$3.1 million to 17three portfolio companies and $23.7$3.4 million to 15four portfolio companies, respectively. These commitments are primarily composed of senior secured term loans and revolvers, and an analysisthe determination of their fair value is included in the Consolidated Schedule 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 DecemberMarch 31, 20172024 and September 30, 20172023 is shown in the table below (dollars in thousands):


  March 31,
2024		  September 30,
2023		 
Secure Acquisition Inc. (dba Paragon Films) - Senior Secured First Lien Delayed Draw Term Loan $-  $517 
NVTN LLC - Senior Secured First Lien Delayed Draw Term Loan  -   220 
SMC Roofing - First Out Delayed Draw Term Loan  89   - 
SMC Roofing - Last Out Delayed Draw Term Loan  386   - 
Deer Management Systems LLC - Senior Secured First Lien Delayed Draw Term Loan  600   600 
Tamarix Capital Partners II, L.P. - Fund Investment  2,038   2,038 
Total unfunded commitments $3,113  $3,375 
 December 31, 2017 September 30, 2017
Path Medical, LLC - Delayed Draw Term Loan B$7,125
 $—
SMART Financial Operations, LLC - Delayed Draw Term Loan4,725
 4,725
Barry's Bootcamp Holdings, LLC - Revolver4,400
 4,400
Accupac, Inc. - Delayed Draw Term Loan2,612
 2,612
RMS Holding Company, LLC - Revolver2,327
 —
Alpine SG, LLC - Delayed Draw Term Loan1,857
 —
SFP Holding, Inc. - Delayed Draw Term Loan1,778
 1,778
Manna Pro Products, LLC - Delayed Draw Term Loan1,600
 —
Barry's Bootcamp Holdings, LLC - Delayed Draw Term Loan1,271
 1,271
AAR Intermediate Holdings, LLC - Revolver1,258
 1,797
Trans-Fast Remittance LLC - Delayed Draw Term Loan1,057
 1,057
Alpine SG, LLC - Revolver1,000
 —
Black Angus Steakhouses, LLC - Delayed Draw Term Loan893
 893
Impact Sales, LLC - Delayed Draw Term Loan755
 755
Black Angus Steakhouses, LLC - Revolver535
 516
Brook & Whittle Holdings Corp. - Delayed Draw Term Loan310
 —
Central States Dermatology Services, LLC - Delayed Draw Term Loan200
 254
SavATree, LLC - Delayed Draw Term Loan167
 167
Access Media Holdings, LLC - Series AAA Preferred Equity107
 277
Engineered Machinery Holdings, Inc. - Delayed Draw Term Loan29
 159
CP OPCO, LLC - Revolver—
 1,973
Brantley Transportation LLC - Delayed Draw Term Loan—
 788
NVTN LLC - Delayed Draw Term Loan—
 250
Total$34,006
 $23,672


We have certain contracts under which we have material future commitments. We have entered into an investment management agreement with MCC Advisors in accordance with

In December 2023, the 1940 Act.Company established a subsidiary to serve as a regulated insurance company. The investment management agreement became effective uponCompany purchased 100,000 shares of the pricingsubsidiary’s common stock for a purchase price of our initial public offering. Under the investment management agreement, MCC Advisors has agreed to provide us with investment advisory and management services. For these services, we have agreed to pay a base management fee equal to a percentage of our gross assets and an incentive fee based$1.00 per share on our performance.

We haveFebruary 8, 2024. This subsidiary also entered into an administrationa merger agreement with MCC Advisors as our administrator. The administration agreement became effective upon the pricing of our initial public offering. Under the administration agreement, MCC Advisors haspursuant to which it agreed to furnish us with office facilitiesacquire a controlling interest in VR Insurance SPV, LLC, a company primarily engaged in the insurance business through its subsidiaries (“VR”), and equipment, provide us clerical, bookkeeping and record keeping services at such facilities and provide us with other administrative services necessary to conduct our day-to-day operations. MCC Advisors will also provide on our behalf significant managerial assistance to those portfolio companies to which we are required to provide additional capital to such assistance. company. The Company’s total investment in the insurance subsidiary and VR is expected to approximate $49 million. The merger transaction is presently expected to close in the first half of 2024, subject to various closing conditions, including insurance regulatory approvals.


The following table shows our payment obligations for repayment of debt and other contractual obligations at DecemberMarch 31, 20172024 (dollars in thousands):

  Payments Due by Period 
  2024  2025  2026  2027  Thereafter  Total 
Revolving Credit Facility $-  $(28,441,941) $-  $-  $-  $(28,441,941)
2028 Notes  -   -   -   -   (57,500,000)  (57,500,000)
Operating Lease Obligation(1)  (78,239)  (156,971)  (161,680)  (27,417)  -   (424,307)
Total contractual obligations $(78,239) $(28,598,912) $(161,680) $(27,417) $(57,500,000) $(86,366,248)
 Payment Due by Period
 Total Less than 1 year 1 - 3 years 3 - 5 years 
More than 5
years
Revolving Facility$47,000
 $—
 $47,000
 $—
 $—
Term Loan Facility102,000
 —
 102,000
 —
 —
2021 Notes74,013
 —
 —
 74,013
 —
2023 Notes102,847
 —
 —
 —
 102,847
SBA Debenture150,000
 —
 —
 —
 150,000
Total contractual obligations$475,860
 $—
 $149,000
 $74,013
 $252,847

If any of the contractual obligations discussed above are terminated, our costs under any new agreements that we enter into may increase. In addition, we would likely incur significant time and expense in locating alternative parties to provide the services we expect to receive under our investment management agreement and our administration agreement. Any new investment management agreement would also be subject to approval by our stockholders.
(1)Operating Lease Obligation means a rent payment obligation under a lease classified as an operating lease and disclosed pursuant to ASC 842, as may be modified or supplemented.

On March 27, 2015, the Company and Great American Life Insurance Company (“GALIC”) entered into a limited liability company operating agreement to co-manage MCC Senior Loan Strategy JV I LLC (“MCC JV”). The Company and GALIC have committed to provide $100 million of equity to MCC JV, with the Company providing $87.5 million and GALIC providing $12.5 million. MCC JV commenced operations on July 15, 2015. On August 4, 2015, MCC JV entered into a senior secured revolving credit facility (the “JV Facility”) led by Credit Suisse, AG with commitments of $100 million. On March 30, 2017, the Company amended the JV Facility previously administered by CS and facilitated the assignment of all rights and obligations of CS under the JV Facility to Deutsche Bank AG, New York Branch, (“DB”) and increased the total loan commitments to $200 million. As of December 31, 2017, MCC JV has drawn approximately $153.4 million on the JV Facility. As of December 31, 2017, MCC JV had total investments at fair value of $210.4 million. As of December 31, 2017, MCC JV’s portfolio was comprised of senior secured first lien term loans to 50 different borrowers. As of December 31, 2017, certain investments in one portfolio company were on non-accrual status.

Distributions




The Company has determined that MCC JV is an investment company under ASC 946, however in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a wholly owned investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company does not consolidate its interest in MCC JV.
Distributions

We have elected, and qualifiedintend to continue to qualify annually, to be treated for U.S. federal income tax purposes as a RIC under Subchapter M of the Code. As a RIC, in any taxable year with respect to which we timely distribute at least 90 percent of the sum of our (i) investment company taxable income (which is generally our net ordinary income plus the excess of realized net short-term capital gains over realized net long-term capital losses) determined without regard to the deduction for dividends paid and (ii) net tax exempt interest income (which is the excess of our gross tax exempt interest income over certain disallowed deductions), we (but not our stockholders) generally will not be subject to U.S. federal income tax on investment company taxable income and net capital gains that we distribute to our stockholders. We intend to distribute annually all or substantially all of such income, but we may also elect to periodically spill over certain excess undistributed taxable income from one tax year to the next tax year. To the extent that we retain our net capital gains or any investment company taxable income, we will be subject to U.S. federal income tax. We may choose to retain our net capital gains or any investment company taxable income, and pay the associated federal corporate income tax including the federalor excise tax, described below.

Amounts not distributed on a timely basis in accordance with a calendar year distribution requirement are subject to a nondeductible 4% U.S. federal excise tax payable by us. To avoid this tax, we must distribute (or be deemed to have distributed) during each calendar year an amount equal to the sum of:


1)at least 98.0 percent98.0% of our ordinary income (not taking into account any capital gains or losses) for the calendar year;

2)at least 98.2 percent98.2% of the amount by which our capital gains exceed our capital losses (adjusted for certain ordinary losses) for a one-year period ending on October 31st of the calendar year; and

3)income realized, but not distributed, in preceding years and on which we did not pay federal income tax.

While we intend to distribute any income and capital gains in the manner necessary to minimize imposition of the 4% U.S. federal excise tax, sufficient amounts of our taxable income and capital gains may not be distributed to avoid entirely the imposition of the tax. In that event, we will be liable for the tax only on the amount by which we do not meet the foregoing distribution requirement.

We intend to pay quarterly dividends to our stockholders out of assets legally available for distribution. We cannot assure you that we will achieve investment results that will allow us to pay a specified level of dividends or year-to-year increases in dividends. In addition, the inability to satisfy the asset coverage test applicable to us as a BDC could limit our ability to pay dividends. All dividends will be paid at the discretion of our board of directors and will depend on our earnings, our financial condition, maintenance of our RIC status,tax treatment, compliance with applicable BDC regulations and such other factors as our board of directors may deem relevant from time to time. We cannot assure you that we will pay dividends to our stockholders in the future.

To the extent our taxable earnings fall below the total amount of our distributions for a taxable year, a portion of those distributions may be deemed a return of capital to our stockholders for U.S. federal income tax purposes. Stockholders should read any written disclosure accompanying a distribution carefully and should not assume that the source of any distribution is our ordinary income or gains.

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 their 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.

The following table summarizes the dividend distributionsCompany did not declare any distribution payments during the three and six months ended DecemberMarch 31, 2017: 

2024 and 2023.

On May 9, 2024, the Board of Directors declared a special dividend of $1.31 per share. This dividend is payable on June 10, 2024 to stockholders of record as of May 27, 2024.

Date Declared Record Date Payment Date Amount Per Share
10/31/2017 11/22/2017 12/22/2017 $0.16
      $0.16


Stock Repurchase Program

On February 5, 2015, our board of directors approved a share repurchase program pursuant to which we could purchase up to an aggregate amount of $30.0 million of our common stock between the period of the approval date and February 5, 2016. On December 4, 2015, the board of directors extended the duration of the share repurchase program through December 31, 2016, and increased the aggregate amount to $50.0 million. On December 7, 2016, the board of directors extended the duration of the share repurchase program through December 31, 2017. Any stock repurchases will be made through the open market at times, and in such amounts, as management deems appropriate. As of December 31, 2017, the Company has repurchased an aggregate of 4,259,073 shares of common stock at an average price of $8.00 per share with a total cost of approximately $34.1 million. Since the inception of the program, the Company's net asset value per share was increased by approximately $0.23 as a result of the share repurchases.




Related Party Transactions


Concurrent with the pricing of our IPO, we entered into a number of business relationships with affiliated or related parties, including the following:

We entered into an investment management agreement with MCC Advisors. Mr. Brook Taube, our Chairman and Chief Executive Officer, is a managing partner and senior portfolio manager of MCC Advisors, and Mr. Seth Taube, one of our directors, is a managing partner of MCC Advisors.


MCC Advisors provides us with the office facilities and administrative services necessary to conduct day-to-day operations pursuant to our administration agreement. We reimburse MCC Advisors for the allocable portion (subject to the review and approval of our board of directors) of overhead and other expenses incurred by it in performing its obligations under the administration agreement, including rent, the fees and expenses associated with performing compliance functions, and our allocable portion of the cost of our Chief Financial Officer and Chief Compliance Officer and their respective staffs.

We have entered into a license agreement with Medley Capital LLC, pursuant to which Medley Capital LLC has granted us a non-exclusive, royalty-free license to use the name “Medley.”

Certain affiliates of MCC Advisors, Medley Capital LLC, their respective affiliates and some of their employees purchased in the IPO an aggregate of 833,333 shares of common stock at the IPO price per share of $12.00. We received the full proceeds from the sale of these shares, and no underwriting discounts or commissions were paid in respect of these shares.

MCC Advisors and its affiliates may in the future manage other accounts that have investment mandates that are similar, in whole and in part, with ours. MCC Advisors and its affiliates may determine that an investment is appropriate for us and for one or more of those other accounts. In such event, depending on the availability of such investment and other appropriate factors, and pursuant to MCC Advisors’ allocation policy, MCC Advisors or its affiliates may determine that we should invest side-by-side with one or more other accounts. We will not make any investments if they are not permitted by applicable law and interpretive positions of the SEC and its staff, the exemptive order granted by the SEC, or if they are inconsistent with MCC Advisors’ allocation procedures. Further, any investments made by related parties will be made in accordance with MCC Advisors’ related party transaction procedures.

The Company obtained an exemptive order from the SEC on November 25, 2013 (the “Prior Exemptive Order”). On March 29, 2017, the Company, MCC Advisors and certain other affiliated funds and investment advisers received an exemptive order (the “Exemptive Order”) that supersedes the Prior Exemptive Order and allows affiliated registered investment companies to participate in co-investment transactions with us that would otherwise have been prohibited under Section 17(d) and 57(a)(4) of the 1940 Act and Rule 17d-1 thereunder. On October 4, 2017, the Company, MCC Advisors and certain of our affiliates received an exemptive order that supersedes the Exemptive Order (the “New Exemptive Order”) and allows, in addition to the entities already covered by the Exemptive Order, Medley LLC and its subsidiary, Medley Capital LLC, to the extent they hold financial assets in a principal capacity, and any direct or indirect, wholly- or majority-owned subsidiary of Medley LLC that is formed in the future, to participate in co-investment transactions with us that would otherwise be prohibited by either or both of Sections 17(d) and 57(a)(4) of the 1940 Act. The terms of the New Exemptive Order are otherwise substantially similar to the Exemptive Order. Co-investment under the Exemptive Order is subject to certain conditions, including the condition that, in the case of each co-investment transaction, our board of directors determines that it would to be in our best interest to participate in the transaction. However, neither we nor the affiliated funds are obligated to invest or co-invest when investment opportunities are referred to us or them.  

In addition, we have adopted a formal business code of conduct and ethics that governs the conduct of our CEO, CFO, chief accounting officer (which role is currently fulfilled by our CFO) and MCC Advisors’ officers, directors and employees.controller (Covered Officers). Our officers and directors also remain subject to the duties imposed by both the 1940 Act and the Delaware General Corporation Law.

Investment Management Agreement

Under the terms Our Code of our investment management agreement, MCC Advisors:

determines the composition of our portfolio, the natureBusiness Conduct and timing of the changes to our portfolioEthics requires that all Covered Officers promote honest and the manner of implementing such changes;

identifies, evaluates and negotiates the structure of the investments we make (including performing due diligence on our prospective portfolio companies); and

executes, closes, monitors and administers the investments we make,ethical conduct, including the exerciseethical handling of any votingactual or consent rights.

MCC Advisors’ services under the investment management agreement are not exclusive,apparent conflicts of interest between an individual’s personal and it is free to furnish similar services to other entities so long as its services to us are not impaired.

professional relationships. Pursuant to our investment management agreement, we pay MCC Advisors a fee for investment advisoryCode of Business Conduct and management services consisting of a base management fee and a two-part incentive fee.

On December 3, 2015, MCC Advisors recommended and, in consultation with the Board, agreed to reduce fees under the investment management agreement. Beginning January 1, 2016, the base management fee was reduced to 1.50% on gross assets above $1 billion. In addition, MCC Advisors reduced its incentive fee from 20% on pre-incentive fee net investment income over an 8% hurdle, to 17.5% on pre-incentive fee net investment income over a 6% hurdle. Moreover, the revised incentive fee includes a netting mechanism and is subject to a rolling three-year look back from January 1, 2016 forward. Under no circumstances will the new fee structure result in higher fees to MCC Advisors than fees under the prior investment management agreement.


The following discussion of our base management fee and two-part incentive fee reflects the terms of the fee waiver agreement executed by MCC Advisors on February 8, 2016 (the “Fee Waiver Agreement”). The terms of the Fee Waiver Agreement are effective as of January 1, 2016, and are a permanent reduction in the base management fee and incentive fee on net investment income payable to MCC Advisors for the investment advisory and management services it provides under the investment management agreement. The Fee Waiver Agreement does not change the second component of the incentive fee, which is the incentive fee on capital gains.

Base Management Fee

For providing investment advisory and management services to us, MCC Advisors receives a base management fee. The base management fee is calculated at an annual rate of 1.75% (0.4375% per quarter) of up to $1.0 billion of the Company’s gross assets and 1.50% (0.375% per quarter) of any amounts over $1.0 billion of the Company’s gross assets, and is payable quarterly in arrears. The base management fee will be calculated based on the average value of the Company’s gross assets at the end of the two most recently completed calendar quarters and will be appropriately pro-rated for any partial quarter.

Incentive Fee

The incentive fee has two components, as follows:

Incentive Fee Based on Income

The first component of the incentive fee is payable quarterly in arrears and is based on our pre-incentive fee net investment income earned during the calendar quarter for which the incentive fee is being calculated. MCC Advisors is entitled to receive the incentive fee on net investment income from us if our Ordinary Income (as defined below) exceeds a quarterly “hurdle rate” of 1.5%. The hurdle amount is calculated after making appropriate adjustmentsEthics, each Covered Officer must disclose to the Company’s netCCO any conflicts of interest, or actions or relationships that might give rise to a conflict. Any approvals or waivers under our Code of Business Conduct and Ethics must be considered by the disinterested directors.

Pledge and Security Agreement

In connection with the Credit Facility discussed in Note 5, the Company has entered into a Pledge and Security Agreement with the Lenders pursuant to which the Company and its wholly owned subsidiaries have pledged all their assets, including the cash and securities held in the Company’s custodial account with Computershare Trust Company, N.A., as determined as of the beginning of each applicable calendar quarter, in order to accountcollateral for any capital raising or other capital actions as a result of any issuancesborrowings made by the Company of its common stock (including issuances pursuant to our dividend reinvestment plan), any repurchase by the CompanyCredit Agreement. The Lenders have the typical rights and remedies of its own common stock, and any dividends paid bya secured lender under the Company, each as may have occurred duringUniform Commercial Code, including the relevant quarter.


Beginning with the calendar quarter that commenced on January 1, 2016, the incentive fee on net investment income is determined and paid quarterly in arrears at the end of each calendar quarter by referenceright to our aggregate net investment income, as adjusted as described below, from the calendar quarter then ending and the eleven preceding calendar quarters (or if shorter, the number of quarters that have occurred since January 1, 2016). We refer to such period as the “Trailing Twelve Quarters.”

The hurdle amount for the incentive fee on net investment income is determined on a quarterly basis, and is equal to 1.5% multiplied by the Company’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The hurdle amount is calculated after making appropriate adjustments to the Company’s net assets, as determined as of the beginning of each applicable calendar quarter, in order to account for any capital raising or other capital actions as a result of any issuances by the Company of its common stock (including issuances pursuant to our dividend reinvestment plan), any repurchase by the Company of its own common stock, and any dividends paid by the Company, each as may have occurred during the relevant quarter. The incentive fee for any partial period will be appropriately prorated. Any incentive fee on net investment income will be paid to MCC Advisors on a quarterly basis, and will be basedforeclose on the amount by which (A) aggregate net investment income (“Ordinary Income”) in respect of the relevant Trailing Twelve Quarters exceeds (B) the hurdle amount for such Trailing Twelve Quarters. The amount of the excess of (A) over (B) described in this paragraph for such Trailing Twelve Quarters is referred to as the “Excess Income Amount.” For the avoidance of doubt, Ordinary Income is net of all fees and expenses, including the reduced base management fee but excluding any incentive fee on Pre-Incentive Fee net investment income or on the Company’s capital gains.

Quarterly Incentive Fee Based on Income

The incentive fee on net investment income for each quarter is determined as follows:

No incentive fee on net investment income is payable to MCC Advisors for any calendar quarter for which there is no Excess Income Amount;

100% of the Ordinary Income, if any, that exceeds the hurdle amount, but is less than or equal to an amount, which we refer to as the “Catch-up Amount,” determined as the sum of 1.8182% multiplied by the Company’s net assets at the beginning of each applicable calendar quarter, as adjusted as noted above, comprising the relevant Trailing Twelve Quarters is included in the calculation of the incentive fee on net investment income; and

17.5% of the Ordinary Income that exceeds the Catch-up Amount is included in the calculation of the incentive fee on net investment income.

The amount of the incentive fee on net investment income that will be paid to MCC Advisors for a particular quarter will equal the excess of the incentive fee so calculated minus the aggregate incentive fees on net investment income that were paid in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant Trailing Twelve Quarters but not in excess of the Incentive Fee Cap (as described below).

The incentive fee on net investment income that is paid to MCC Advisors for a particular quarter is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap for any quarter is an amount equal to (a) 17.5% of the Cumulative Net Return (as defined below) during the relevant Trailing Twelve Quarters minus (b) the aggregate incentive fees on net investment income that were paid in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant Trailing Twelve Quarters.

“Cumulative Net Return” means (x) the Ordinary Income in respect of the relevant Trailing Twelve Quarters minus (y) any Net Capital Loss (as described below), if any, in respect of the relevant Trailing Twelve Quarters. If, in any quarter, the Incentive Fee Cap is zero or a negative value, the Company will pay no incentive fee on net investment income to MCC Advisors for such quarter. If, in any quarter, the Incentive Fee Cap for such quarter is a positive


value but is less than the incentive fee on net investment income that is payable to MCC Advisors for such quarter (before giving effect to the Incentive Fee Cap) calculated as described above, the Company will pay an incentive fee on net investment income to MCC Advisors equal to the Incentive Fee Cap for such quarter. If, in any quarter, the Incentive Fee Cap for such quarter is equal to or greater than the incentive fee on net investment income that is payable to MCC Advisors for such quarter (before giving effect to the Incentive Fee Cap) calculated as described above, the Company will pay an incentive fee on net investment income to MCC Advisors, calculated as described above, for such quarter without regard to the Incentive Fee Cap.

“Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, and dilution to the Company’s net assets due to capital raising or capital actions, in such period and (ii) aggregate capital gains, whether realized or unrealized and accretion to the Company’s net assets due to capital raising or capital action, in such period.

Dilution to the Company’s net assets due to capital raising is calculated, in the case of issuances of common stock, as the amount by which the net asset value per share was adjusted over the transaction price per share, multiplied by the number of shares issued. Accretion to the Company’s net assets due to capital raising is calculated, in the case of issuances of common stock (including issuances pursuant to our dividend reinvestment plan), as the excess of the transaction price per share over the amount by which the net asset value per share was adjusted, multiplied by the number of shares issued. Accretion to the Company’s net assets due to other capital action is calculated, in the case of repurchases by the Company of its own common stock, as the excess of the amount by which the net asset value per share was adjusted over the transaction price per share multiplied by the number of shares repurchasedcollateral pledged by the Company.


For the avoidance of doubt, the purpose of the new incentive fee calculation under the Fee Waiver Agreement is to permanently reduce aggregate fees payable to MCC Advisors by the Company, effective as of January 1, 2016. In order to ensure that the Company will pay MCC Advisors lesser aggregate fees on a cumulative basis, as calculated beginning January 1, 2016, we will, at the end of each quarter, also calculate the base management fee and incentive fee on net investment income owed by the Company to MCC Advisors based on the formula in place prior to January 1, 2016. If, at any time beginning January 1, 2016, the aggregate fees on a cumulative basis, as calculated based on the formula in place after January 1, 2016, would be greater than the aggregate fees on a cumulative basis, as calculated based on the formula in place prior to January 1, 2016, MCC Advisors shall only be entitled to the lesser of those two amounts.

The second component of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the investment management agreement as of the termination date) and equals 20.0% of our cumulative aggregate realized capital gains less cumulative realized capital losses, unrealized capital depreciation (unrealized depreciation on a gross investment-by-investment basis at the end of each calendar year) and all capital gains upon which prior performance-based capital gains incentive fee payments were previously made to the investment adviser.

Under GAAP, the Company calculates the second component of the incentive fee as if the Company had realized all assets at their fair values as of the reporting date. Accordingly, the Company accrues a provisional capital gains incentive fee taking into account any unrealized gains or losses. As the provisional capital gains incentive fee is subject to the performance of investments until there is a realization event, the amount of the provisional capital gains incentive fee accrued at a reporting date may vary from the capital gains incentive that is ultimately realized and the differences could be material.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following items as critical accounting policies.

Valuation of Portfolio Investments

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 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.

We value investments for which market quotations are readily available at their 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 quotes, 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, a readily available market value is not expected to exist for many of the investments in our portfolio, and we value these portfolio investments at fair value as determined in good faith by our board of directors under our valuation policy and process. We may seek pricing information with respect to certain of our investments from pricing services or brokers or dealers in order to value such investments.

Valuation methods may include comparisons of financial ratios of the portfolio companies that issued such private equity securities to peer companies that are public, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flows, the markets in which the portfolio company does business, and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we will consider the pricing indicated by the external event to corroborate the private equity valuation. 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 the investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.


Our

In December 2020, the SEC adopted Rule 2a-5 under the 1940 Act, which permits a BDC’s board of directors is ultimately and solely responsible for determiningto designate its executive officer(s) as a valuation designee to determine the fair value of its investment portfolio, subject to the investments in our portfolio that are not publicly traded, whose market prices are not readily available on a quarterly basis or any other situation where portfolio investments require a fair value determination.oversight of the board. The Board has approved policies and procedures pursuant to Rule 2a-5 and has designated Ellida McMillan, the Company’s CFO, to serve as the Board’s valuation designee (“Valuation Designee”), subject to the Board’s oversight, effective September 8, 2022.

With respect to investments for which market quotations are not readily available, our board of directors will undertakeoversees and our Valuation Designee undertakes a multi-step valuation process each quarter, as described below:


●our quarterly valuation process generally begins with each portfolio investment being initially valued by a Valuation Firm;
Our quarterly valuation process begins with each investment being initially valued by the investment professionals responsible for monitoring the portfolio investment.


●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 senior management.


●Preliminary valuation conclusions are then documented and discussed with the Fair Value Personnel.
Independent third-party valuation firms are also employed for all of our investments for which there is not a readily available market value. At least twice annually, including at year end, the valuation for each portfolio investment is reviewed by an independent valuation firm.


●

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.
The audit committee of our board of directors reviews the preliminary valuations of the investment professionals, senior management and independent valuation firms.


Our audit committee reviews and the board of directors approves the valuations and determines the fair value of each investment in our portfolio in good faith based on the input of MCC Advisors, the respective independent valuation firms and the audit committee.

In following these approaches, the types of factors that are taken into account in fair value pricing investments include available current market data, including relevant and applicable market trading and transaction comparables; applicable market yields and multiples; security covenants; call protection provisions; information rights; the nature and realizable value of any collateral; the portfolio company’s ability to make payments; the portfolio company’s earnings and discounted cash flows; the markets in which the portfolio company does business; comparisons of financial ratios of peer companies that are public; comparable merger and acquisition transactions; and the principal market and enterprise values.


Determination of fair values involves subjective judgments and estimates made by management. The notes to our consolidated financial statements refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our consolidated financial statements.

Revenue Recognition

Our revenue recognition policies are as follows:

Investments and Related Investment IncomeIncome: We account for investment transactions on a trade-date basis and interest income, adjusted for amortization of premiums and accretion of discounts, is recorded on an accrual basis. For investments with contractual PIK interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, we will not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not collectible. Origination, closing and/or commitment fees associated with investments in portfolio companies are recognized as income when the investment transaction closes. Other fees are capitalized as deferred revenue and recorded into income over the respective period. Prepayment penalties received by the Company for debt instruments paid back to the Company prior to the maturity date are recorded as income upon receipt. 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, without regard to unrealized gains or losses previously recognized. We report changes in the fair value of investments that are measured at fair value as a component of the net change in unrealized appreciation/(depreciation) on investments in our Consolidated Statements of Operations.

Non-accrual

Non-accrual: We place loans on non-accrual status when principal and interest payments are past due by 90 days or more, or when there is reasonable doubt that we will collect principal or interest. Accrued interest is generally reversed when a loan is placed on non-accrual. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in our management’s judgment, are likely to remain current. At DecemberMarch 31, 2017,2024, certain investments in eightthree portfolio companies held by the Company were on non-accrual status with a combined fair value of approximately $65.2$21.1 million, or 7.8%9.6% of the fair value of our portfolio. At September 30, 2017,2023, certain investments in sixfour portfolio companies held by the Company were on non-accrual status with a combined fair value of approximately $72.5$6.5 million, or 8.7%2.9% of the fair value of our portfolio.


Federal Income Taxes

The Company has elected, and qualifiedintends to continue to qualify annually, to be treated for U.S. federal income tax purposes as a RIC under Subchapter M of the Code commencing with its first taxable year as a corporation, and it intends to operate in a manner so as to maintain its RIC tax treatment. As a RIC,To do so, among other things, the Company is required to meet certain source of income and asset diversification requirements. Once qualified as a RIC, the Companyrequirements and must timely distribute to its stockholders at least 90% of the sum of investment company taxable income (“ICTI”) including PIK, as defined by the Code, and net tax exempt interest income (which is the excess of our gross tax exempt interest income over certain disallowed deductions) for each taxable year in order to be eligible for tax treatment under Subchapter M of the Code.year. The Company will be subject to a nondeductible U.S. federal excise tax of 4% on undistributed income if it does not distribute at least 98% of its net ordinary income for any calendar year and 98.2% of its capital gain net income for each one-year period ending on October 31 of such calendar year and any income realized, but not distributed, in preceding years and on which weit did not pay federal income tax. 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 and pay a 4% excise tax on such income, as required. To the extent that the Company determines that its estimated current year annual taxable income will be in excess of estimated current year dividend distributions for excise tax purposes, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned. 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.

Because federal income tax regulationsrequirements differ from GAAP, distributions in accordance with tax regulationsrequirements may differ from net investment income and realized gains recognized for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the consolidated financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.

Recent Developments

On January 30, 2018,April 9, 2024, the Company’sCompany acquired 84,000,000 shares of common stock in ECC Capital Corporation (“ECC”), representing 44% of the outstanding shares of ECC, for $0.05 per share. As part of this transaction, ECC acquired from the Company 100% of the membership units of Kemmerer Holdings, LLC (“Kemmerer”) and the Company provided Senior Secured Promissory Note (“Note”) to ECC as consideration for ECC’s acquisition of Kemmerer, with the Note maturing on December 31, 2031. Interest on this note is accrued at a variable rate per annum equal to the sum of applicable three-month term SOFR rate plus 500 basis points. Further, in connection with this transaction, the Company, ECC and its Chairman and CEO Steve Holder entered into an investor rights agreement, pursuant to which ECC’s board of directors will include one director designated by the Company, one director designated by Mr. Holder, and one director designated by mutual agreement of the Company and Mr. Holder. Mr. Lorber will join ECC’s board of directors.

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 financial terms of the note are substantially the same as the 2028 Notes.

On May 9, 2024, the Board of Directors declared a quarterlyspecial dividend of $0.16$1.31 per share,share. This dividend is payable on March 23, 2018June 10, 2024 to stockholders of record at the closeas of business on February 21, 2018.May 27, 2024.




On January 26, 2018, the Company priced a debt offering in Israel of $121.1 million of its 5.05% Series A Notes (the “2024 Notes”). The 2024 Notes were issued pursuant to a deed of trust between the Company and Mishmeret Trust Company, Ltd. as trustee. The 2024 Notes are general, unsecured obligations and rank equal in right of payment with all of the Company’s existing and future unsecured indebtedness. The 2024 Notes will mature on February 27, 2024 and the principal will be payable in four annual installments, of which 25% will be payable on each February 27, 2021-2024.  The 2024 Notes are rated ilA+ by S&P Global Ratings Maalot Ltd. and will be listed on the Tel Aviv Stock Exchange (“TASE”). The 2024 Notes have not been and will not be registered under the Securities Act of 1933, and may not be offered or sold in the United States absent registration under the Securities Act or in transactions exempt from, or not subject to, such registration requirements. In connection with this offering, we have dual listed our common stock on TASE. On January 31, 2018, the Company used a majority of the net proceeds from this offering to repay outstanding indebtedness under the Term Loan Facility, effectively terminating the Term Loan Facility.


Item 3. Quantitative and Qualitative Disclosures About Market Risk


We are subject to financial market risks, including changes in interest rates. Changes in interest rates may affect both our cost of funding and our interest income from portfolio investments and cash and cash equivalents. Our investment income will be affected by changes in various interest rates, including LIBOR,SOFR, to the extent our debt investments include floating interest rates. In the future, we expect other loans in our portfolio will have floating interest rates. In 2023, the Federal Reserve raised short-term interest rates and has indicated additional interest rate increases may come. In addition, U.S. and global capital markets and credit markets have experienced a higher level of stress due to the higher interest rate environment, pandemics, and other market events, which has resulted in an increase in the level of volatility across such markets. We may hedge against interest rate fluctuations by using standard hedging instruments such as futures, options and forward contracts subject to the requirements of the 1940 Act. For the three and six months ended DecemberMarch 31, 2017,2024 and the year ended September 30, 2023, we did not engage in hedging activities.


As of DecemberMarch 31, 2017, 83.7%2024, 55.2% of our income-bearing investment portfolio bore interest based on floating rates based upon fair value. 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 March 31, 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 rates. In contrast, a rise in the general level of interest rates can be expected to lead to higher interest rates applicable to any variable rate investments we hold and to declines in the value of any fixed rate investments we hold. 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. The composition of our floating rate debt investments by cash interest rate LIBOR floor as of DecemberMarch 31, 20172024 was as follows (dollars in thousands):

  March 31, 2024 
LIBOR and SOFR Floor Fair Value  % of Floating
Rate Portfolio		 
Under 1% $22,030   20.4%
1% to under 2%  28,695   26.5 
2% to under 3%  28,850   26.7 
3% to under 4%  10,042   9.3 
No Floor  18,497   17.1 
Total $108,114   100.0%
  December 31, 2017
LIBOR Floor Fair Value 
% of Floating
Rate Portfolio
Under 1% $81,937
 14.8%
1% to under 2% 452,368
 82.0
2% to under 3% 14,967
 2.7
3% 2,633
 0.5
Total $551,905
 100.0%


Based on our Consolidated Statements of Assets and Liabilities as of DecemberMarch 31, 2017,2024, the following table (dollars in thousands) shows the approximate increase/(decrease) in components of net assets resulting from operations of hypothetical LIBOR and SOFR base rate changes in interest rates, assuming no changes in our investment and capital structure.  

Basis point increase 
Interest Income(1)
 Interest Expense 
Net Increase/
(Decrease)
100 $5,200
 $1,500
 $3,700
200 10,500
 3,000
 7,500
300 15,900
 4,500
 11,400
400 21,300
 6,000
 15,300
500 26,700
 7,500
 19,200

As of September 30, 2017, 83.5% of our income-bearing investment portfolio bore interest based on floating rates. The composition of our floating rate debt investments by cash LIBOR interest rate floor as of September 30, 2017 was as follows (dollars in thousands): 

  September 30, 2017
LIBOR Floor Fair Value 
% of Floating
Rate Portfolio
Under 1% $84,166
 14.9%
1% to under 2% 425,749
 75.3
2% to under 3% 50,245
 8.9
3% 4,916
 0.9
Total $565,076
 100.0%

Based on our Consolidated Statements of Assets and Liabilities as of September 30, 2017, the following table (dollars in thousands) shows the approximate increase/(decrease) in components of net assets resulting from operations of hypothetical LIBOR base rate changes in interest rates, assuming no changes in our investment and capital structure.

Change in Interest Rates Interest
Income(1)		  Interest Expense  Net Increase/
(Decrease)		 
Up 300 basis points $6,200  $(900) $5,300 
Up 200 basis points  4,100   (600)  3,500 
Up 100 basis points  2,100   (300)  1,800 
Down 100 basis points  (2,100)  300   (1,800)
Down 200 basis points  (4,100)  600   (3,500)
Down 300 basis points  (6,200)  900   (5,300)

Basis point increase 
Interest Income(1)
 Interest Expense 
Net Increase/
(Decrease)
100 $5,300
 $1,700
 $3,600
200 11,200
 3,400
 7,800
300 17,100
 5,100
 12,000
400 23,000
 6,800
 16,200
500 28,900
 8,500
 20,400

(1)
(1)Assumes no defaults or prepayments by portfolio companies over the next twelve months.



Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures


Our management, underwith the supervisionparticipation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of DecemberMarch 31, 2017.2024. The term “disclosure controls and procedures” is defined under Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 as amended (the “Exchange Act”)., as amended. Based on the evaluation of our disclosure controls and procedures as of DecemberMarch 31, 2017,2024, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective. It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.


Changes in Internal ControlControls Over Financial Reporting


There has not been any changewere no changes in our internal controlcontrols over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the periodquarter covered by this report that hashave materially affected, or isare reasonably likely to materially affect, our internal controlcontrols over financial reporting.




PART II

PART II

Item 1.Legal Proceedings

From time to time, we are involved in various legal proceedings, lawsuits and claims incidental to the conduct of our business. Our businesses are also subject to extensive regulation, which may result in regulatory proceedings against us. Except as described below, weWe are not currently party to any material legal proceedings.


MCC Advisors LLC was named as a defendant in a lawsuit on May 29, 2015, by Moshe Barkat and Modern VideoFilm Holdings, LLC (“MVF Holdings”) against MCC, MOF II, MCC Advisors LLC, Deloitte Transactions and Business Analytics LLP A/K/A Deloitte ERG (“Deloitte”), Scott Avila (“Avila”), Charles Sweet, and Modern VideoFilm, Inc. (“MVF”). The lawsuit is pending in the California Superior Court, Los Angeles County, Central District, as Case No. BC 583437. The lawsuit was filed after MCC, as agent for the lender group, exercised remedies following a series of defaults by MVF and MVF Holdings on a secured loan with an outstanding balance at the time in excess of $65 million. The lawsuit sought damages in excess of $100 million. Deloitte and Avila have settled the claims against them in exchange for payment of $1.5 million. Following a separate lawsuit by Mr. Barkat against MVF's D&O insurance carrier, the carrier, Charles Sweet and MVF have settled the claims against them. On June 6, 2016, the court granted the defendants' demurrers on several counts and dismissed Mr. Barkat's claims except with respect to his claim for intentional interference with contract. MCC and the other defendants continue to dispute the remaining allegations and are vigorously defending the lawsuit while pursuing affirmative counterclaims against Mr. Barkat and MVF Holdings. On August 29, 2016, MVF Holdings filed another lawsuit in the California Superior Court, Los Angeles County, Central District, as Case No. BC 631888 (the “Derivative Action”), naming Medley as a defendant, among others. In the Derivative Action, MVF Holdings reasserts substantially the same claims that were previously asserted in each of their three prior complaints. MVF Holdings claims for breach of fiduciary duty and related causes of action have already been dismissed by the California Superior Court on several occasions, most recently, on June 6, 2016, when the Court dismissed those claims with prejudice. Medley and the other defendants believe the outstanding claims for alleged interference with Mr. Barkat's employment contract, and the other causes of action asserted in the Derivative Action are without merit and all defendants intend to continue to assert a vigorous defense.

Medley LLC, the Company, and Medley Opportunity Fund II LP were served on January 2, 2018 with a complaint naming them as defendants, along with other various parties, in a putative class action lawsuit. The case is captioned as Solomon v. American Web Loan, et al. Royce Solomon, Jodi Belleci, Michael Littlejohn, and Giulianna Lomaglio v. American Web Loan, Inc., AWL, Inc., Mark Curry, MacFarlane Group, Inc., The MacFarlane Group, LLC, Sol Partners, Medley Opportunity Fund, II, LP, Medley LLC, Medley Capital Corp., Oakmont Funding, Inc., Dinero Investments, Inc., Chieftain Funding, Inc., Dant Holdings, Inc., DHI Computing Service, Inc., Smith Haynes & Watson, LLC, Middlemarch Partners, and John Does 1-100, and was filed on December 15, 2017, in the United States District Court for the Eastern District of Virginia, Newport News Division, as Case No. 4:17cv145. The plaintiffs filed this putative class action alleging claims under the Racketeer Influenced and Corrupt Organizations Act and the Truth in Lending Act, and various other claims arising out of the alleged payday lending activities of American Web Loan. The claims against Medley Opportunity Fund II LP, Medley LLC, and the Company allege that the Medley defendants exercised control over American Web Loan’s payday lending activities as a result of a $22.9 million loan to American Web Loan. The loan was made by Medley Opportunity Fund II LP in 2011. American Web Loan repaid the loan from Medley Opportunity Fund II LP in full in February of 2015, more than ten months prior to any of the loans allegedly made by American Web Loan to the alleged class plaintiff representatives. The Company and Medley LLC never made any loans or provided financing to, or had any other relationship with, American Web Loan. The Medley defendants are seeking indemnification from American Web Loan, various affiliates and other parties with respect to these claims. The Medley defendants believe the alleged claims are without merit and they intend to defend this lawsuit vigorously.

Item 1A.Risk Factors


In addition to other information set forth in this report, you should carefully consider the “Risk Factors” discussed in our annual report on Form 10-K for the fiscal year ended September��September 30, 2017,2023, filed with the SEC on December 7, 2017,22, 2023, which could materially affect our business, financial condition and/or operating results. Other than the itemitems disclosed below, there have been no material changes during the three and six months ended DecemberMarch 31, 20172024 to the risk factors discussed in “Item 1A. Risk Factors” of our annual report on Form 10-K. Additional risks or uncertainties not currently known to us or that we currently deem to be immaterial also may materially affect our business, financial condition and/or operating results.

Risks Related to Our Business

We have internalized our operating structure, including our management and investment functions, with the expectation that we will be able to operate more efficiently with lower costs, but this may not be the case.

On November 18, 2020, the board of directors approved adoption of an internalized management structure, which we have operated under effective January 1, 2021. There can be no assurances that internalizing our management structure will be and remain beneficial to us and our stockholders, as we may incur the costs and experience the risks discussed below, and we may not be able to effectively replicate the services previously provided to us by our former investment adviser and administrator.

While we no longer bear the costs of the various fees and expenses we previously paid under the investment management and administration agreements with our previous adviser and administrator, we have other significant direct expenses. These include general and administrative costs, legal, accounting and other governance expenses and costs and expenses related to managing our portfolio. Certain of these costs may be greater during the early stages of the transition process. We also incur the compensation and benefits costs of our officers and other employees and consultants. In addition, we may be subject to potential liabilities commonly faced by employers, such as workers disability and compensation claims, potential labor disputes and other employee-related liabilities and grievances.

We may also experience operational disruptions resulting from the transition from external to internal management, and we could fail to effectively manage our internalization over the longer term, all of which could adversely affect our performance.

If the expenses we incur as an internally-managed company are higher than the expenses we would have paid and/or reimbursed under the externally-managed structure, our earnings per share may be lower and our share value could suffer.


As an internally managed BDC, we are dependent upon our management team and other professionals, and if we are not able to hire and retain qualified personnel, we will not realize the anticipated benefits of the internalization.

Our ability to achieve our investment objectives and to make distributions to our stockholders depends upon the performance of our management team and professionals. We may experience difficulty identifying, engaging and retaining management, investment and general and administrative personnel with the necessary expertise and credit-related investment experience. As an internally managed BDC, our ability to offer more competitive and flexible compensation structures, such as offering both a profit-sharing plan and an equity incentive plan, is subject to the limitations imposed by the 1940 Act, which could limit our ability to attract and retain talented investment management professionals.

If we are unable to attract and retain highly talented professionals for the internal management of our Company, we will not realize the anticipated benefits of the internalization, and the results of our operation could deteriorate.

We may suffer credit and capital losses.

Private debt in the form of secured loans to corporate and asset-based borrowers is highly speculative and involves a high degree of risk of credit loss, and therefore an investment in our securities may not be suitable for someone with a low tolerance for risk. These risks are likely to increase during an economic recession, such as the economic recession or downturn that the United States and many other countries have recently experienced or are experiencing.

Because we use borrowed funds to make investments or fund our business operations, we are exposed to risks typically associated with leverage which increase the risk of investing in us.

We have borrowed funds, including through the issuance of $57.5 million in aggregate principal amount of 5.25% unsecured notes due November 1, 2028 (the “Notes” or the “2028 Notes”) to leverage our capital structure, which is generally considered a speculative investment technique. In addition, on December 15, 2022, the Company entered into a 3-year $50.0 million revolving credit facility (the “Credit Facility”) with Woodforest Bank, N.A. (“Woodforest”), Valley National Bank, and Axiom Bank, (collectively, the “Lenders”), which was amended on February 21, 2024 to increase the principal amount of loan available under the Credit Facility by $12.5 million to $62.5 million. As a result:

●our common stock may be exposed to an increased risk of loss because a decrease in the value of our investments may have a greater negative impact on the value of our common stock than if we did not use leverage;
●if we do not appropriately match the assets and liabilities of our business, adverse changes in interest rates could reduce or eliminate the incremental income we make with the proceeds of any leverage;
●our ability to pay distributions on our common stock may be restricted if our asset coverage ratio with respect to each of our outstanding senior securities representing indebtedness and our outstanding preferred shares, as defined by the 1940 Act, is not at least 200% and any amounts used to service indebtedness or preferred stock would not be available for such distributions;
●any credit facility to which we became a party may be subject to periodic renewal by our lenders, whose continued participation cannot be guaranteed;
●any credit facility to which we became a party may contain covenants restricting our operating flexibility;
●we, and indirectly our stockholders, bear the cost of issuing and paying interest or dividends on such securities; and
●any convertible or exchangeable securities that we issue may have rights, preferences and privileges more favorable than those of our common shares.

Under the provisions of the 1940 Act, we are permitted, as a BDC, to issue debt securities or preferred stock and/or borrow money from banks and other financial institutions, which we collectively refer to as “senior securities”, only in amounts such that our asset coverage ratio equals at least 200% (or 150% if, pursuant to the 1940 Act, certain requirements are met) after each issuance of senior securities.


For a discussion of the terms of the Notes, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Financial Condition, Liquidity and Capital Resources.”

As of March 31, 2024, the Company’s asset coverage was 279.5% after giving effect to leverage and therefore the Company’s asset coverage is above 200%, the minimum asset coverage requirement under the 1940 Act.

The lack of liquidity in our investments may adversely affect our business.

We anticipate that our investments generally will be made in private companies. Substantially all of these securities will be subject to legal and other restrictions on resale or will be otherwise less liquid than publicly traded securities. The illiquidity of our investments may make it difficult for us to sell such investments if the need arises. In addition, if we are required to liquidate all or a portion of our portfolio quickly, we may realize significantly less than the value at which we had previously recorded our investments. In addition, we may face other restrictions on our ability to liquidate an investment in a portfolio company to the extent that we have material non-public information regarding such portfolio company.

A substantial portion of our portfolio investments will be recorded at fair value as determined in good faith by our valuation designee under the oversight of our board of directors and, as a result, there may be uncertainty regarding the value of our portfolio investments.

The debt and equity securities in which we invest for which market quotations are not readily available will be valued at fair value as determined in good faith by our Chief Financial Officer, the Company’s valuation designee, under the oversight of our board of directors. Most of our investments (other than cash and cash equivalents) will be classified as Level 3 under Accounting Standards Codification Topic 820 - Fair Value Measurements and Disclosures. This means that our portfolio valuations will be based on unobservable inputs and our own assumptions about how market participants would price the asset or liability in question. We expect that inputs into the determination of fair value of our portfolio investments will require significant management judgment or estimation. Even if observable market data are available, such information may be the result of consensus pricing information or broker quotes, which include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimers materially reduces the reliability of such information. We have retained the services of independent valuation firms to review the valuation of various loans and securities. The types of factors that we may take into account in determining the fair value of our investments generally include, as appropriate, comparison to publicly traded securities including such factors as yield, maturity and measures of credit quality, the enterprise value of a portfolio company, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business and other relevant factors. Because such valuations, and particularly valuations of private securities and private companies, are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, our determinations of fair value may differ materially from the values that would have been used if a ready market for these loans and securities existed. Our NAV could be adversely affected if our determinations regarding the fair value of our investments were materially higher or lower than the values that we ultimately realize upon the disposal of such loans and securities.

We are a non-diversified investment company within the meaning of the 1940 Act, and therefore we are not limited with respect to the proportion of our assets that may be invested in securities of a single issuer.

We are classified as a non-diversified investment company within the meaning of the 1940 Act, which means that we are not limited by the 1940 Act with respect to the proportion of our assets that we may invest in securities of a single issuer. We also have not adopted any policy restricting the percentage of our assets that may be invested in a single portfolio company. To the extent that we assume large positions in the securities of a small number of issuers, our NAV may fluctuate to a greater extent than that of a diversified investment company as a result of changes in the financial condition or the market’s assessment of the issuer. We may also be more susceptible to any single economic or regulatory occurrence than a diversified investment company. Beyond our income tax diversification requirements under Subchapter M of the Code, we do not have fixed guidelines for diversification, and our investments could be concentrated in relatively few portfolio companies. (Note our significant investment in our affiliate FlexFIN – see Risks Related to our Investments).

We are exposed to risks associated with changes in interest rates.

Interest rate fluctuations may have a substantial negative impact on our investments, the value of our common stock and our rate of return on invested capital. A reduction in the interest rates on new investments relative to interest rates on current investments could also have an adverse impact on our net interest income. Further increases in interest rates could decrease the value of any investments we hold which earn fixed interest rates and also could increase our interest expense, thereby decreasing our net income. Also, an increase in interest rates available to investors could make investment in our common stock less attractive if we are not able to increase our dividend rate, which could reduce the value of our common stock.


Loans under our Credit Facility and the financial credit we extend to our portfolio companies bear interest based on SOFR, but experience with SOFR based loans is limited.

Loans under our current Credit Facility bear interest at a rate based upon the Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. Also, the secured terms loans that we make to our portfolio companies and the secured notes of our portfolio companies in which we invest bear interest at SOFR based rates. Previously, our credit facilities and our debt investments in portfolio companies bore interest at U.S dollar London Interbank Overnight (USD LIBOR) rates. ICE Benchmark Administration, the authorized and regulated administrator of LIBOR, ended publication of the one-week and two-month USD LIBOR tenors on December 31, 2021, and ended publication of the remaining USD LIBOR tenors on June 30, 2023. The Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”) was enacted in March 2022 to permit financing agreements that contain a LIBOR-based benchmark without adequate “fallback provisions” to be automatically replaced by a benchmark recommended by the Federal Reserve. In January 2023, the Federal Reserve adopted a final rule implementing the LIBOR Act that, among other things, identifies the applicable SOFR-based benchmark replacements under the LIBOR Act.

SOFR is considered to be a risk-free rate, and USD LIBOR was a risk weighted rate. Thus, SOFR tends to be a lower rate than USD LIBOR, because SOFR does not contain a risk component. This difference may negatively impact our net interest margin of our investments. Also, the use of SOFR based rates is relatively new, and experience with SOFR based rate loans is limited. There could be unanticipated difficulties or disruptions with the calculation and publication of SOFR based rates. This could result in increased borrowing costs for the Company or could adversely impact the interest income we receive from our portfolio companies or the market value of the financial obligations that are due to us from our portfolio companies.

Because we use debt to finance various investments, changes in interest rates will affect our cost of capital and net investment income.

Because we borrow money to make investments, our net investment income will depend, in part, upon the difference between the rate at which we borrow funds and the rate at which we invest those funds. As a result, we can offer no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income in the event we use our existing debt to finance our investments. In periods of rising interest rates, such as the current period we are in, our cost of funds will increase to the extent we access any credit facility with a floating interest rate, which could reduce our net investment income to the extent any debt investments have fixed interest rates. We expect that our long-term fixed-rate investments will be financed primarily with issuances of equity and long-term debt securities. We may use interest rate risk management techniques in an effort to limit our exposure to interest rate fluctuations. Such techniques may include various interest rate hedging activities to the extent permitted by the 1940 Act.

You should also be aware that, to the extent we make floating debt investments, a rise in the general level of interest rates typically leads to higher interest rates applicable to our debt investments.

If our investments are not managed effectively, we may be unable to achieve our investment objective.

Our ability to achieve our investment objective will depend on our ability to manage our business, which will depend on the internalized management team. Accomplishing this result is largely a function of the internalized management team’s ability to provide quality and efficient services to us. They may also be required to provide managerial assistance to our portfolio companies. These demands on their time may distract them or slow our rate of investment. Any failure to manage our business effectively could have a material adverse effect on our business, financial condition and results of operations.

We may experience fluctuations in our periodic operating results.

We could experience fluctuations in our periodic operating results due to a number of factors, including the interest rates payable on the debt securities we acquire, the default rate on such securities, the performance of our portfolio companies, the level of our expenses (including the interest rates payable on our borrowings), the dividend rates payable on preferred stock we issue, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our markets and general economic conditions. As a result of these factors, results for any period should not be relied upon as being indicative of performance in future periods.

Any failure on our part to maintain our status as a BDC could reduce our operating flexibility.

If we fail to maintain our status as a BDC, we might be regulated as a closed-end investment company under the 1940 Act, which would subject us to substantially more onerous regulatory restrictions under the 1940 Act and correspondingly decrease our operating flexibility.


We may have difficulty paying required distributions if we recognize income before or without receiving cash representing such income.

For U.S. federal income tax purposes, we may include in income certain amounts that we have not yet received in cash, such as original issue discount, which may arise if we receive warrants in connection with the making of a loan or possibly in other circumstances, such as PIK interest, which represents contractual interest added to the loan balance and due at the end of the loan term. Such original issue discount, which could be significant relative to our overall investment activities, or increases in loan balances as a result of PIK arrangements are included in income before we receive any corresponding cash payments. We also may be required to include in income certain other amounts that we do not receive in cash.

Since in certain cases we may recognize income before or without receiving cash representing such income, we may have difficulty meeting the tax requirement to distribute at least 90% of our net ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, to maintain our tax treatment as a RIC. Accordingly, we may have to sell some of our investments at times we would not consider advantageous, raise additional debt or equity capital or reduce new investment originations to meet these distribution requirements. If we are not able to raise cash from other sources, we may fail to qualify and maintain our tax treatment as a RIC and thus become subject to corporate-level U.S. federal income tax. See “Taxation as a RIC” and “Failure to Qualify as a RIC”.

We may not be able to pay distributions to our shareholders.

We cannot assure that we will achieve investment results that will allow us to pay cash distributions. Our ability to pay distributions might be adversely affected by, among other things, the impact of one or more of the risk factors described herein. In addition, the inability to satisfy the asset coverage test applicable to us as a BDC could limit our ability to pay distributions. As of March 31, 2024, the Company’s asset coverage was 279.5% after giving effect to leverage and therefore the Company’s asset coverage is above 200%, the minimum asset coverage requirement under the 1940 Act. All distributions will be paid at the discretion of our board of directors and will depend on our earnings, our financial condition, maintenance of our RIC tax treatment, compliance with applicable BDC regulations, and such other factors as our board of directors may deem relevant from time to time. We cannot assure you that we will pay distributions to our stockholders in the future.

The highly competitive market in which we operate may limit our investment opportunities.

A number of entities compete with us to make the types of investments that we make. We compete with other BDCs and investment funds (including public and private funds, commercial and investment banks, commercial financing companies, SBICs and, to the extent they provide an alternative form of financing, private equity funds). Additionally, because competition for investment opportunities generally has increased among alternative investment vehicles, such as hedge funds, those entities have begun to invest in areas in which they have not traditionally invested. As a result of these new entrants, competition for investment opportunities has intensified in recent years and may intensify further in the future. Some of our existing and potential competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do. For example, some competitors may have a lower cost of funds and access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, many of our competitors are not subject to the regulatory restrictions and valuation requirements that the 1940 Act imposes on us as a BDC and the tax consequences of qualifying as a RIC. We cannot assure you that the competitive pressures we face will not have a material adverse effect on our business, financial condition and results of operations. Also, as a result of this existing and potentially increasing competition, we may not be able to take advantage of attractive investment opportunities from time to time, and we can offer no assurance that we will be able to identify and make investments that are consistent with our investment objective.

We do not seek to compete primarily based on the interest rates we offer, and we believe that some of our competitors make loans with interest rates that are comparable to or lower than the rates we offer. We may lose investment opportunities if we do not match our competitors’ pricing, terms and structure. If we match our competitors’ pricing, terms and structure, we may experience decreased net interest income and increased risk of credit loss. A significant part of our competitive advantage stems from the fact that the market for investments in mid-sized companies is underserved by traditional commercial banks and other financial institutions. A significant increase in the number and/or size of our competitors in this target market could force us to accept less attractive investment terms. Furthermore, many of our competitors have greater experience operating under the regulatory restrictions of the 1940 Act and under an internalized management structure.


In the event we make distributions, we would need additional capital to finance our growth and such capital may not be available on favorable terms or at all.

We have elected and intend to qualify annually to be taxed for U.S. federal income tax purposes as a RIC under Subchapter M of the Code. As a RIC, we must meet certain requirements, including source-of-income, asset diversification and distribution requirements in order to not have to pay corporate-level U.S. on income we distribute to our stockholders as distributions, which allows us to substantially reduce or eliminate our corporate-level U.S. federal income tax liability. As a BDC, we are generally required to meet a coverage ratio of total assets to total senior securities, which includes all of our borrowings and any preferred stock we may issue in the future, of at least 200% (or 150% if, pursuant to the 1940 Act, certain requirements are met) at the time we issue any debt or preferred stock. This requirement limits the amount of our leverage. Because we will continue to need capital to grow our investment portfolio, this limitation may prevent us from incurring debt or issuing preferred stock and require us to raise additional equity at a time when it may be disadvantageous to do so. We cannot assure you that debt and equity financing will be available to us on favorable terms, or at all, and debt financings may be restricted by the terms of any of our outstanding borrowings. In addition, as a BDC, we are generally not permitted to issue common stock priced below NAV without stockholder approval. If additional funds are not available to us, we could be forced to curtail or cease new lending and investment activities, and our NAV could decline.

Our board of directors may change our investment objective, operating policies and strategies without prior notice or stockholder approval.

Our board of directors has the authority to modify or waive certain of our operating policies and strategies without prior notice and without stockholder approval. However, absent stockholder approval, we may not change the nature of our business so as to cease to be, or withdraw our election as, a BDC. We cannot predict the effect any changes to our current operating policies and strategies would have on our business, operating results or value of our stock. Nevertheless, the effects could adversely affect our business and impact our ability to make distributions and cause you to lose all or part of your investment.

Because we borrow money, the potential for loss on amounts invested in us will be magnified and may increase the risk of investing in us.

Borrowings, also known as leverage, magnify the potential for loss on invested equity capital. If we use leverage to partially finance our investments, which we have done historically, you will experience increased risks of investing in our securities. We issued the Notes, entered into the Credit Facility, and may issue other debt securities or enter into other types of borrowing arrangements in the future. If the value of our assets decreases, leveraging would cause our NAV to decline more sharply than it otherwise would have had we not leveraged. Similarly, any decrease in our income would cause net income to decline more sharply than it would have had we not borrowed. Such a decline could negatively affect our ability to make common stock distributions or scheduled debt payments. Leverage is generally considered a speculative investment technique and we only intend to use leverage if expected returns will exceed the cost of borrowing.

As of March 31, 2024, there was $85.9 million of outstanding borrowings. The weighted average interest rate charged on our borrowings as of March 31, 2024 was 6.3% (exclusive of debt issuance costs). We will need to generate sufficient cash flow to make these required interest payments. If we are unable to meet the financial obligations under the Notes, the holders thereof will have the right to declare the principal amount and accrued and unpaid interest on the outstanding Notes to be due and payable immediately. If we are unable to meet the financial obligations under the Credit Facility or any other credit facility we enter into, the lenders thereunder would likely have a superior claim to our assets over our stockholders.

We are dependent on information systems and systems failures could significantly disrupt our business, which may, in turn, negatively affect the market price of our common stock and our ability to pay distributions.

Our business is dependent on our and third parties’ communications and information systems. Any failure or interruption of those systems, including as a result of the termination of an agreement with any third-party service providers, could cause delays or other problems in our activities. Our financial, accounting, data processing, backup or other operating systems and facilities may fail to operate properly or become disabled or damaged as a result of a number of factors including events that are wholly or partially beyond our control and adversely affect our business. There could be:

●sudden electrical or telecommunications outages;
●natural disasters such as earthquakes, tornadoes and hurricanes;

●disease pandemics (including the COVID-19 outbreak);
●events arising from local or larger scale political or social matters, including terrorist acts; and
●cyber-attacks.

These events, in turn, could have a material adverse effect on our operating results and negatively affect the market price of our common stock and our ability to pay distributions to our stockholders.


A failure of cybersecurity systems, as well as the occurrence of events unanticipated in our disaster recovery systems and management continuity planning could impair our ability to conduct business effectively.

The occurrence of a disaster, such as a cyber-attack against us or against a third-party that has access to our data or networks, a natural catastrophe, an industrial accident, failure of our disaster recovery systems, or consequential employee error, could have an adverse effect on our ability to communicate or conduct business, negatively impacting our operations and financial condition. This adverse effect can become particularly acute if those events affect our electronic data processing, transmission, storage, and retrieval systems, or impact the availability, integrity, or confidentiality of our data.

We depend heavily upon computer systems to perform necessary business functions. Despite our implementation of a variety of security measures, our computer systems, networks, and data, like those of other companies, could be subject to cyber-attacks and unauthorized access, use, alteration, or destruction, such as from physical and electronic break-ins or unauthorized tampering, malware and computer virus attacks, or system failures and disruptions. If one or more of these events occurs, it could potentially jeopardize the confidential, proprietary, and other information processed, stored in, and transmitted through our computer systems and networks. Such an attack could cause interruptions or malfunctions in our operations, which could result in financial losses, litigation, regulatory penalties, client dissatisfaction or loss, reputational damage, and increased costs associated with mitigation of damages and remediation.

Third parties with which we do business may also be sources of cybersecurity or other technological risks. We outsource certain functions and these relationships allow for the storage and processing of our information, as well as customer, counterparty, employee and borrower information. Cybersecurity failures or breaches our service providers (including, but not limited to, accountants, custodians, transfer agents and administrators), and the issuers of securities in which we invest, also have the ability to cause disruptions and impact business operations, potentially resulting in financial losses, interference with our ability to calculate its net asset value, impediments to trading, the inability of our stockholders to transact business, violations of applicable privacy and other laws, regulatory fines, penalties, reputation damages, reimbursement of other compensation costs, or additional compliance costs. While we engage in actions to reduce our exposure resulting from outsourcing, ongoing threats may result in unauthorized access, loss, exposure or destruction of data, or other cybersecurity incidents, with increased costs and other consequences, including those described above. In addition, substantial costs may be incurred in order to prevent any cyber incidents in the future.

Privacy and information security laws and regulation changes, and compliance with those changes, may result in cost increases due to system changes and the development of new administrative processes. In addition, we may be required to expend significant additional resources to modify our protective measures and to investigate and remediate vulnerabilities or other exposures arising from operational and security risks. We currently do not maintain insurance coverage relating to cybersecurity risks, and we may be required to expend significant additional resources to modify our protective measures or to investigate and remediate vulnerabilities or other exposures, and we may be subject to litigation and financial losses that are not fully insured.

Risks Related to Our Investments

We may not realize gains from our equity investments.

When we make a debt investment, we may acquire warrants or other equity securities as well. In addition, we may invest directly in the equity securities of portfolio companies. Our goal is ultimately to dispose of such equity interests and realize gains upon our disposition of such interests. However, the equity interests we receive may not appreciate in value and, in fact, may decline in value. Accordingly, we may not be able to realize gains from our equity interests, and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we experience.

Our investments are very risky and highly speculative.

We have invested primarily in senior secured first lien term loans and senior secured second lien term loans issued by private companies.

Senior Secured Loans There is a risk that the collateral securing our loans may decrease in value over time, may be difficult to sell in a timely manner, may be difficult to appraise and may fluctuate in value based upon the success of the business and market conditions, including as a result of the inability of the portfolio company to raise additional capital, and, in some circumstances, our lien could be subordinated to claims of other creditors. In addition, deterioration in a portfolio company’s financial condition and prospects, including its inability to raise additional capital, may be accompanied by deterioration in the value of the collateral for the loan. Consequently, the fact that a loan is secured does not guarantee that we will receive principal and interest payments according to the loan’s terms, or at all, or that we will be able to collect on the loan should we be forced to enforce our remedies.


Equity Investments When we invest in senior secured first lien term loans or senior secured second lien term loans, we may receive warrants or other equity securities as well. In addition, we may invest directly in the equity securities of portfolio companies. The warrants or equity interests we receive may not appreciate in value and, in fact, may decline in value. Accordingly, we may not be able to realize gains from our warrants or equity interests, and any gains that we do realize on the disposition of any warrants or equity interests may not be sufficient to offset any other losses we experience.

In addition, investing in private companies involves a number of significant risks. See “Our investments in private portfolio companies may be risky, and you could lose all or part of your investment” below.

Our investments in private portfolio companies may be risky, and you could lose all or part of your investment.

Investments in private companies involve a number of significant risks. Generally, little public information exists about these companies, and we are required to rely on the ability of our investment professionals to obtain adequate information to evaluate the potential returns from investing in these companies. If we are unable to uncover all material information about these companies, we may not make a fully informed investment decision, and we may lose money on our investments. Private companies may have limited financial resources and may be unable to meet their obligations under their debt securities that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of our realizing any guarantees we may have obtained in connection with our investment. In addition, they typically have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic downturns. Additionally, private companies are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on our portfolio company and, in turn, on us. Private companies also generally have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position. In addition, our executive officers and directors may, in the ordinary course of business, be named as defendants in litigation arising from our investments in these types of companies.

We have invested primarily in secured debt issued by our portfolio companies. In the case of our senior secured first lien term loans, the portfolio companies usually have, or may be permitted to incur, other debt that ranks equally with the debt securities in which we invest. With respect to our senior secured second lien term loans, the portfolio companies usually have, or may be permitted to incur, other debt that ranks above or equally with the debt securities in which we invest. In the case of debt ranking above the senior secured second lien term loans in which we invest, we would be subordinate to such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company and therefore the holders of debt instruments ranking senior to our investment in that portfolio company would typically be entitled to receive payment in full before we receive any distribution. In the case of debt ranking equally with debt securities in which we invest, we would have to share any distributions on an equal and ratable basis with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.

Additionally, certain loans that we make to portfolio companies may be secured on a second priority basis by the same collateral securing senior secured debt of such companies. The first priority liens on the collateral will secure the portfolio company’s obligations under any outstanding senior debt and may secure certain other future debt that may be permitted to be incurred by the portfolio company under the agreements governing the loans. The holders of obligations secured by the first priority liens on the collateral will generally control the liquidation of, and be entitled to receive proceeds from, any realization of the collateral to repay their obligations in full before us. In addition, the value of the collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. There can be no assurance that the proceeds, if any, from the sale or sales of all of the collateral would be sufficient to satisfy the loan obligations secured by the second priority liens after payment in full of all obligations secured by the first priority liens on the collateral. If such proceeds are not sufficient to repay amounts outstanding under the loan obligations secured by the second priority liens, then we, to the extent not repaid from the proceeds of the sale of the collateral, will only have an unsecured claim against the portfolio company’s remaining assets, if any.

The rights we may have with respect to the collateral securing the loans we make to our portfolio companies with senior debt outstanding may also be limited pursuant to the terms of one or more intercreditor agreements that we enter into with the holders of senior debt. Under such an intercreditor agreement, at any time that obligations that have the benefit of the first priority liens are outstanding, any of the following actions that may be taken in respect of the collateral will be at the direction of the holders of the obligations secured by the first priority liens: (1) the ability to cause the commencement of enforcement proceedings against the collateral; (2) the ability to control the conduct of such proceedings; (3) the approval of amendments to collateral documents; (4) releases of liens on the collateral; and (5) waivers of past defaults under collateral documents. We may not have the ability to control or direct such actions, even if our rights are adversely affected.

Our portfolio companies may prepay loans, which prepayment may reduce stated yields if capital returned cannot be invested in transactions with equal or greater expected yields.

Our loans to portfolio companies are prepayable at any time, and most of them at no premium to par. It is uncertain as to when each loan may be prepaid. Whether a loan is prepaid will depend both on the continued positive performance of the portfolio company and the existence of favorable financing market conditions that allow such company the ability to replace existing financing with less expensive capital. As market conditions change frequently, it is unknown when, and if, this may be possible for each portfolio company. In the case of some of these loans, having the loan prepaid early may reduce the achievable yield for us below the stated yield to maturity contained herein if the capital returned cannot be invested in transactions with equal or greater expected yields.


Our failure to make follow-on investments in our portfolio companies could impair the value of our portfolio and our ability to make follow-on investments in certain portfolio companies may be restricted.

Following an initial investment in a portfolio company, provided that there are no restrictions imposed by the 1940 Act, we may make additional investments in that portfolio company as “follow-on” investments in order to: (1) increase or maintain in whole or in part our equity ownership percentage; (2) exercise warrants, options or convertible securities that were acquired in the original or subsequent financing; or (3) attempt to preserve or enhance the value of our initial investment.

We have the discretion to make any follow-on investments, subject to the availability of capital resources. We may elect not to make follow-on investments or otherwise lack sufficient funds to make those investments. Our failure to make follow-on investments may, in some circumstances, jeopardize the continued viability of a portfolio company and our initial investment, or may result in a missed opportunity for us to increase our participation in a successful operation. Even if we have sufficient capital to make a desired follow-on investment, we may elect not to make such follow-on investment because we may not want to increase our concentration of risk, because we prefer other opportunities, because we are inhibited by compliance with BDC requirements or because we might lose our RIC tax treatment. We also may be restricted from making follow-on investments in certain portfolio companies to the extent that affiliates of ours hold interests in such companies.

As of March 31, 2024, 14.0% of our total assets were invested in FlexFin, our affiliate’s asset-based lending business.

This significant exposure subjects our Company to various risks associated with such business (which are identified below) to a much greater extent than companies not similarly concentrated.

Client borrowers, particularly with respect to asset-based lending activities, may lack the operating history, cash flows or balance sheet necessary to support other financing options and may expose us to additional risk.

A portion of our loan portfolio consists, through FlexFIN, of asset-based lending involving gemstones. Some of these products arise out of relationships with clients who lack the operating history, cash flows or balance sheet necessary to qualify for other financing options. This could increase our risk of loss.

14.0% of the Company’s total assets (as of March 31, 2024) are invested in our affiliate’s asset-based lending business and its activities are influenced by volatility in prices of gemstones and jewelry.

Our affiliate’s asset-based lending business is impacted by volatility in gemstone and jewelry prices. Among the factors that can impact the price of gemstones and jewelry are supply and demand of gemstones; political, economic, and global financial events; movement of the U.S. dollar versus other currencies; and the activity of large speculators and other participants. A significant decline in market prices of gemstones could result in reduced collateral value and losses, (i.e., a lower balance of asset-based loans outstanding for the Company’s affiliate.)

The gemstones and jewelry business is subject to the risk of fraud and counterfeiting.

The gemstones business is exposed to the risk of loss as a result of fraud in its various forms. We seek to minimize our exposure to fraud through a number of means, including third-party authentication and verification and the establishment of procedures designed to detect fraud. However, there can be no assurance that we will be successful in preventing or identifying fraud, or in obtaining redress in the event such fraud is detected.

We may be subject to risks associated with our investments in unitranche loans.

Unitranche loans provide leverage levels comparable to a combination of first lien and second lien or subordinated loans, and may rank junior to other debt instruments issued by the portfolio company. Unitranche loans generally allow the borrower to make a large lump sum payment of principal at the end of the loan term, and there is a heightened risk of loss if the borrower is unable to pay the lump sum or refinance the amount owed at maturity. From the perspective of a lender, in addition to making a single loan, a unitranche loan may allow the lender to choose to participate in the “first out” tranche, which will generally receive priority with respect to payments of principal, interest and any other amounts due, or to choose to participate only in the “last out” tranche, which is generally paid only after the first out tranche is paid. We may participate in “first out” and “last out” tranches of unitranche loans and make single unitranche loans, and we may suffer losses on such loans if the borrower is unable to make required payments when due.


Covenant-Lite Loans may expose us to different risks, including with respect to liquidity, price volatility, ability to restructure loans, credit risks and less protective loan documentation, than is the case with loans that contain financial maintenance covenants.

A significant number of high yield loans in the market, may consist of covenant-lite loans, or “Covenant-Lite Loans.” A significant portion of the loans in which we may invest or get exposure to through our investments may be deemed to be Covenant-Lite Loans. Such loans do not require the borrower to maintain debt service or other financial ratios and do not include terms which allow the lender to monitor the performance of the borrower and declare a default if certain criteria are breached. Ownership of Covenant-Lite Loans may expose us to different risks, including with respect to liquidity, price volatility, ability to restructure loans, credit risks and less protective loan documentation, than is the case with loans that contain financial maintenance covenants.

As a BDC, our ability to invest in public companies and foreign companies is limited by the 1940 Act.

To maintain our tax treatment as a BDC, we are not permitted to acquire any assets other than “qualifying assets” specified in the 1940 Act unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions). Subject to certain exceptions for follow-on investments and distressed companies, an investment in an issuer that has outstanding securities listed on a national securities exchange may be treated as qualifying assets only if such issuer has a market capitalization that is less than $250 million at the time of such investment. In addition, we may invest up to 30% of our portfolio in opportunistic investments which will be intended to diversify or complement the remainder of our portfolio and to enhance our returns to stockholders. These investments may include private equity investments, securities of public companies that are broadly traded and securities of non-U.S. companies. We expect that these public companies generally will have debt securities that are non-investment grade.

Our investments in foreign securities may involve significant risks in addition to the risks inherent in U.S. investments.

Our investment strategy contemplates that a portion of our investments may be in securities of foreign companies. Investing in foreign companies may expose us to additional risks not typically associated with investing in U.S. companies. These risks include changes in exchange control regulations, political and social instability, expropriation, imposition of foreign taxes, less liquid markets and less available information than is generally the case in the United States, higher transaction costs, less government supervision of exchanges, brokers and issuers, less developed bankruptcy laws, difficulty in enforcing contractual obligations, lack of uniform accounting and auditing standards and greater price volatility.

Although it is anticipated that most of our investments will be denominated in U.S. dollars, our investments that are denominated in a foreign currency will be subject to the risk that the value of a particular currency may change in relation to the U.S. dollar. Among the factors that may affect currency values are trade balances, the level of short-term interest rates, differences in relative values of similar assets in different currencies, long-term opportunities for investment and capital appreciation and political developments. We may employ hedging techniques to minimize these risks, but we can offer no assurance that we will, in fact, hedge currency risk or, that if we do, such strategies will be effective. As a result, a change in currency exchange rates may adversely affect our profitability.

Hedging transactions may expose us to additional risks.

We may engage in currency or interest rate hedging transactions. If we engage in hedging transactions, we may expose ourselves to risks associated with such transactions. We may utilize instruments such as forward contracts, currency options and interest rate swaps, caps, collars and floors to seek to hedge against fluctuations in the relative values of our portfolio positions from changes in currency exchange rates and market interest rates. Hedging against a decline in the values of our portfolio positions does not eliminate the possibility of fluctuations in the values of such positions or prevent losses if the values of such positions decline. However, such hedging can establish other positions designed to gain from those same developments, thereby offsetting the decline in the value of such portfolio positions. Such hedging transaction may also limit the opportunity for gain if the values of the underlying portfolio positions should increase. Moreover, it may not be possible to hedge against an exchange rate or interest rate fluctuation that is so generally anticipated that we are not able to enter into a hedging transaction at an acceptable price.

While we may enter into transactions to seek to reduce currency exchange rate and interest rate risks, unanticipated changes in currency exchange rates or interest rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions being hedged may vary. Moreover, for a variety of reasons, we may not seek or be able to establish a perfect correlation between such hedging instruments and the portfolio holdings being hedged. Any such imperfect correlation may prevent us from achieving the intended hedge and expose us to risk of loss. In addition, it may not be possible to hedge fully or perfectly against currency fluctuations affecting the value of securities denominated in non-U.S. currencies because the value of those securities is likely to fluctuate as a result of factors not related to currency fluctuations.


The disposition of our investments may result in contingent liabilities.

We currently expect that a significant portion of our investments will involve lending directly to private companies. In connection with the disposition of an investment in private securities, we may be required to make representations about the business and financial affairs of the portfolio company typical of those made in connection with the sale of a business. We may also be required to indemnify the purchasers of such investment to the extent that any such representations turn out to be inaccurate or with respect to certain potential liabilities. These arrangements may result in contingent liabilities that ultimately yield funding obligations that must be satisfied through our return of certain distributions previously made to us.

If we invest in the securities and obligations of distressed and bankrupt issuers, we might not receive interest or other payments.

We may invest in the securities and obligations of distressed and bankrupt issuers, including debt obligations that are in covenant or payment default. Such investments generally are considered speculative. The repayment of defaulted obligations is subject to significant uncertainties. Defaulted obligations might be repaid only after lengthy workout or bankruptcy proceedings, during which the issuer of those obligations might not make any interest or other payments. We may not realize gains from our equity investments.

We are subject to risks associated with significant investments in one or more economic sectors and/or industries, including the business services sector, which includes our investment in our affiliate’s asset-based lending business.

At times, the Company may have a significant portion of its assets invested in securities of companies conducting business within one or more economic sectors and/or industries, including the Services: Business sector, which includes our investment in an asset-based lending business. Companies in the same sector or industry may be similarly affected by economic, regulatory, political or market events or conditions, which may make the Company more vulnerable to unfavorable developments in that sector or industry than companies that invest more broadly. Generally, the more broadly the Company invests, the more it spreads risk and potentially reduces the risks of loss and volatility.

As of March 31, 2024, investments in our affiliate’s asset-based lending business constituted 14.0% of our total assets. See above, under Item 1A for risk factors related to our investment in that business.

Risks Related to Our Operations as a BDC and a RIC

Regulations governing our operation as a BDC may limit our ability to, and the way in which we raise additional capital, which could have a material adverse impact on our liquidity, financial condition and results of operations.

Our business requires a substantial amount of capital to operate and grow. We may acquire additional capital from the issuance of senior securities (including debt and preferred stock), the issuance of additional shares of our common stock or from securitization transactions. However, we may not be able to raise additional capital in the future on favorable terms or at all. Additionally, we may only issue senior securities up to the maximum amount permitted by the 1940 Act. The 1940 Act permits us to issue senior securities only in amounts such that our asset coverage, as defined in the 1940 Act, equals at least 200% (or 150% if, pursuant to the 1940 Act, certain requirements are met) after such issuance or incurrence. If our assets decline in value and we fail to satisfy this test, we may be required to liquidate a portion of our investments and repay a portion of our indebtedness at a time when such sales or repayment may be disadvantageous, which could have a material adverse impact on our liquidity, financial condition and results of operations. As of March 31, 2024, the Company’s asset coverage was 279.5% after giving effect to leverage and therefore the Company’s asset coverage is above 200%, the minimum asset coverage requirement under the 1940 Act.

Changes in the laws or regulations governing our business, or changes in the interpretations thereof, and any failure by us to comply with these laws or regulations, could have a material adverse effect on our business, results of operations or financial condition.

Changes in the laws or regulations or the interpretations of the laws and regulations that govern BDCs, RICs or non-depository commercial lenders could significantly affect our operations and our cost of doing business. We are subject to federal, state and local laws and regulations and are subject to judicial and administrative decisions that affect our operations, including our loan originations, maximum interest rates, fees and other charges, disclosures to portfolio companies, the terms of secured transactions, collection and foreclosure procedures and other trade practices. If these laws, regulations or decisions change, or if we expand our business into jurisdictions that have adopted more stringent requirements than those in which we currently conduct business, we may have to incur significant expenses in order to comply, or we might have to restrict our operations. In addition, if we do not comply with applicable laws, regulations and decisions, we may lose licenses needed for the conduct of our business and may be subject to civil fines and criminal penalties.


As an internally managed BDC, we are subject to certain restrictions that may adversely affect our ability to offer certain compensation structures.

As an internally managed BDC, our ability to offer more competitive and flexible compensation structures, such as offering both a profit-sharing plan and an equity incentive plan, is subject to the limitations imposed by the 1940 Act, which limits our ability to attract and retain talented investment management professionals. As such, these limitations could inhibit our ability to grow, pursue our business plan and attract and retain professional talent, any or all of which may have a negative impact on our business, financial condition and results of operations.

As an internally managed BDC, we are dependent upon our management team and investment professionals for their time availability and for our future success, and if we are not able to hire and retain qualified personnel, or if we lose key members of our senior management team, our ability to implement our business strategy could be significantly harmed.

As an internally managed BDC, our ability to achieve our investment objectives and to make distributions to our stockholders depends upon the performance of our management team and investment professionals. We depend upon the members of our management and our investment professionals for the identification, final selection, structuring, closing and monitoring of our investments. These employees have critical industry experience and relationships on which we rely to implement our business plan. If we lose the services of key members of our senior management team, we may not be able to operate the business as we expect, and our ability to compete could be harmed, which could cause our operating results to suffer. We believe our future success will depend, in part, on our ability to identify, attract and retain sufficient numbers of highly skilled employees. If we do not succeed in identifying, attracting and retaining such personnel, we may not be able to operate our business as we expect. As an internally managed BDC, our compensation structure is determined and set by our Board of Directors and its Compensation Committee. This structure currently includes salary, bonus and incentive compensation. We are subject to limitations by the 1940 Act on our ability to employ an incentive compensation structure that directly ties performance of our investment portfolio and results of operations to incentive compensation. Members of our senior management team may receive offers of more flexible and attractive compensation arrangements from other companies, particularly from investment advisers to externally managed BDCs that are not subject to the same limitations on incentive-based compensation that we are subject to as an internally managed BDC. A departure by one or more members of our senior management team could have a negative impact on our business, financial condition and results of operations.

We have internalized our operating structure, including our management and investment functions; as a result, we may incur significant costs and face significant risks associated with being self-managed, including adverse effects on our business and financial condition.

Effective January 1, 2021, we operate under an internalized operating structure, including our management and investment functions. There can be no assurances that internalizing our operating structure will be beneficial to us and our stockholders, as we may incur the costs and risks discussed below and may not be able to effectively replicate or improve upon the services previously provided to us by our former investment adviser and administrator, MCC Advisors.

While we will no longer bear the costs of the various fees and expenses we previously paid to MCC Advisors under the Investment Advisory Agreement, our direct expenses will generally include general and administrative costs, including legal, accounting, and other expenses related to corporate governance, SEC reporting and compliance, as well as costs and expenses related to making and managing our investments. We will also now incur the compensation and benefits costs of our officers and other employees and consultants, and, subject to adherence to applicable law, we may issue equity or other incentive-based awards to our officers, employees and consultants, which awards may decrease net income and funds from our operations and may dilute our stockholders. We may also be subject to potential liabilities commonly faced by employers, such as workers disability and compensation claims, potential labor disputes and other employee-related liabilities and grievances.

In addition, if the expenses we assume as a result of our internalization are higher than the expenses we would have paid and/or reimbursed to MCC Advisors, our earnings per share may be lower as a result of our internalization than they otherwise would have been, potentially decreasing the amount of funds available to distribute to our stockholders and the value of our shares.

Further, an inability to effectively manage our internalization could result in our incurring excess costs and operating inefficiencies, and may divert our management’s attention from managing our investments.

All of these factors could have a material adverse effect on our results of operations, financial condition, and ability to pay distributions.

The impact of financial reform legislation on us is uncertain.

The Dodd-Frank Reform Act became effective on July 21, 2010. Many provisions of the Dodd-Frank Reform Act have delayed effective dates or have required extensive rulemaking by regulatory authorities. The upcoming presidential and congressional elections may cause uncertainty regarding the implementation of the Dodd-Frank Reform Act and other financial reform rulemaking. Given the uncertainty associated with the manner in which and whether the provisions of the Dodd-Frank Act will be implemented, repealed, amended, or replaced, the full impact such requirements will have on our business, results of operations or financial condition is unclear. The changes resulting from the Dodd-Frank Act or any changes to the regulations already implemented thereunder may require us to invest significant management attention and resources to evaluate and make necessary changes in order to comply with new statutory and regulatory requirements. Failure to comply with any such laws, regulations or principles, or changes thereto, may negatively impact our business, results of operations or financial condition. While we cannot predict what effect any changes in the laws or regulations or their interpretations would have on us as a result of recent financial reform legislation, these changes could be materially adverse to us and our stockholders.


We cannot predict how tax reform legislation will affect us, our investments, or our stockholders, and any such legislation could adversely affect our business.


Legislative or other actions relating to taxes could have a negative effect on us.us, our investments, or our stockholders. The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Treasury Department. The U.S. HouseDepartment of Representatives and U.S. Senate recently passed tax reform legislation, which the President recently signed into law. Such legislation has made many changes to the Code, including significant changes to the taxation of business entities, the deductibility of interest expense, and the tax treatment of capital investment.Treasury. We cannot predict with certainty how any changes in the tax laws might affect us, our stockholders, or our portfolio investments. New legislation and any U.S. Treasury regulations, administrative interpretations or court decisions interpreting such legislation could significantly and negatively affect our ability to qualify for tax treatment as a RIC or the U.S. federal income tax consequences to us and our stockholders of such qualification, or could have other adverse consequences. Stockholders are urged to consult with their tax advisors regarding tax legislative, regulatory, or administrative developments and proposals and their potential effect on an investment in our securities.

Legislation that became effective in 2018 may allow the Company to incur additional leverage, which could increase the risk of investing in the Company.

The 1940 Act generally prohibits the Company from incurring indebtedness unless immediately after such borrowing we have an asset coverage for total borrowings of at least 200% (i.e., the amount of debt may not exceed 50% of the value of our assets). However, in March 2018, the SBCA was signed into law, which included various changes to regulations under the federal securities laws that impact BDCs. The SBCA included changes to the 1940 Act to allow BDCs to decrease their asset coverage requirement from 200% to 150%, if certain requirements are met. Under the 1940 Act, the Company is allowed to increase its leverage capacity if our 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 Acts 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 proposal. 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.

Leverage is generally considered a speculative investment technique and increases the risk of investing in our securities. Leverage magnifies the potential for loss on investments in our indebtedness and on invested equity capital. As we use leverage to partially finance our investments, our stockholders will experience increased risks of investing in our securities. If the value of our assets increases, then leveraging would cause the NAV attributable to our common stock to increase more sharply than it would have had we not leveraged. Conversely, if the value of our assets decreases, leveraging would cause NAV to decline more sharply than it otherwise would have had we not leveraged our business. Similarly, any increase in our income in excess of interest payable on the borrowed funds would cause our net investment income to increase more than it would without the leverage, while any decrease in our income would cause net investment income to decline more sharply than it would have had we not borrowed. Such a decline could negatively affect the Company’s ability to pay common stock dividends, scheduled debt payments or other payments related to our securities.

If we do not invest a sufficient portion of our assets in qualifying assets, we could fail to qualify as a BDC, which would have a material adverse effect on our business, financial condition and results of operations.

As a BDC, we may not acquire any assets other than “qualifying assets” unless, at the time of and after giving effect to such acquisition, at least 70% of our total assets are qualifying assets. See “Regulation”. Our intent is that a substantial portion of the investments that we acquire will constitute qualifying assets. However, we may be precluded from investing in what we believe are attractive investments if such investments are not qualifying assets for purposes of the 1940 Act. If we do not invest a sufficient portion of our assets in qualifying assets, we could be found to be in violation of the 1940 Act provisions applicable to BDCs and possibly lose our tax treatment as a BDC, which would have a material adverse effect on our business, financial condition and results of operations.

We would become subject to corporate-level U.S. federal income tax if we are unable to maintain our qualification as a RIC under Subchapter M of the Code or satisfy RIC distribution requirements.

We have elected, and intend to qualify annually, to be treated as a RIC under Subchapter M of the Code. No assurance can be given that we will be able to maintain our qualification as a RIC. To maintain RIC tax treatment under the Code, we must meet the following annual distribution, income source and asset diversification requirements.

●The annual distribution requirement for a RIC is satisfied if we timely distribute to our stockholders on an annual basis at least 90% of our net ordinary income and realized short-term capital gains in excess of realized net long-term capital losses. Depending on the level of taxable income earned in a tax year, we may choose to carry forward taxable income in excess of current year distributions into the next year and pay a 4% U.S. federal excise tax on such income. Any such carryover taxable income must be distributed through a dividend declared prior to filing the final tax return related to the year that generated such taxable income.


●The source of income requirement is satisfied if we obtain at least 90% of our gross income for each taxable year from dividends, interest, payments with respect to certain securities loans, gains from the sale or other disposition of stock or other securities or foreign currencies or other income derived with respect to our business of investing in such stock, securities or currencies and net income derived from an interest in a “qualified publicly traded partnership” (as defined in the Code).
●The asset diversification requirement is satisfied if we meet certain asset diversification requirements at the end of each quarter of our taxable year. To satisfy this requirement, at least 50% of the value of our assets must consist of cash, cash equivalents, U.S Government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer (which for these purposes includes the equity securities of a “qualified publicly traded partnership”). In addition, no more than 25% of the value of our assets can be invested in the securities, other than U.S Government securities or securities of other RICs, (1) of one issuer (2) of two or more issuers that are controlled, as determined under applicable tax rules, by us and that are engaged in the same or similar or related trades or businesses or (3) of one or more “qualified publicly traded partnerships”.

If we fail to qualify for RIC tax treatment for any reason or are subject to corporate-level U.S. federal income tax, the resulting corporate-level taxes could substantially reduce our net assets, the amount of income available for distribution and the amount of our distributions. In addition, to the extent we had unrealized gains, we would have to establish deferred tax liabilities for taxes, which would reduce our NAV accordingly. In addition, our stockholders would lose the tax credit realized if we, as a RIC, decide to retain the net realized capital gain and make deemed distributions of net realized capital gains, and pay taxes on behalf of our stockholders at the end of the tax year. The loss of this pass-through tax treatment could have a material adverse effect on the total return of an investment in our common stock.

Risks Relating to an Investment in Our Securities

Investing in our securities may involve an above average degree of risk.

The investments we make in accordance with our investment objective may result in a higher amount of risk than alternative investment options and a higher risk of volatility or loss of principal. Our investments in portfolio companies involve higher levels of risk and, therefore, an investment in our securities may not be suitable for someone with lower risk tolerance.

Shares of closed-end investment companies, including business development companies, may, at times, trade at a discount to their NAV and the Company’s shares have not traded at or above NAV since the first quarter of 2015.

Shares of closed-end investment companies, including business development companies, may, at times, trade at a discount from NAV. This characteristic of closed-end investment companies and business development companies is separate and distinct from the risk that our NAV per share may decline. Our common stock has not traded at or above NAV since the first quarter of 2015, and we cannot predict whether our common stock will trade at, above or below NAV in the future.

The market price of our common stock fluctuates.

The market price and liquidity of the market for shares of our common stock fluctuates and may be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance.

These factors include:

●significant volatility in the market price and trading volume of securities of business development companies or other companies in our sector, which are not necessarily related to the operating performance of the companies;
●changes in regulatory policies, accounting pronouncements or tax guidelines, particularly with respect to BDCs or RICs;
●loss of our qualification as a RIC or BDC;
●changes in earnings or variations in operating results;


●changes in the value of our portfolio of investments;
●changes in accounting guidelines governing valuation of our investments;
●any shortfall in revenue or net income or any increase in losses from levels expected by investors or securities analysts;
●departure of our key personnel;
●operating performance of companies comparable to us;
●general economic trends and other external factors; and
●loss of a major funding source.

Certain provisions of the Delaware General Corporation Law and our certificate of incorporation and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock.

The Delaware General Corporation Law, our certificate of incorporation and our bylaws contain provisions that may have the effect of discouraging a third party from making an acquisition proposal for us. These anti-takeover provisions may inhibit a change in control in circumstances that could give the holders of our common stock the opportunity to realize a premium over the market price of our common stock.

The NAV per share of our common stock may be diluted if we sell shares of our common stock in one or more offerings at prices below the then current NAV per share of our common stock or securities to subscribe for or convertible into shares of our common stock.

While we currently do not have the requisite stockholder approval to sell shares of our common stock at a price or prices below our then current NAV per share, we may seek such approval in the future. In addition, at our 2012 Annual Meeting of Stockholders, we received approval from our stockholders to authorize the Company, with the approval of our board of directors, to issue securities to, subscribe to, convert to, or purchase shares of the Company’s common stock in one or more offerings, subject to certain conditions as set forth in the proxy statement. Such authorization has no expiration.

Any decision to sell shares of our common stock below its then current NAV per share or issue securities to subscribe for or convertible into shares of our common stock would be subject to the determination by our board of directors that such issuance is in our and our stockholders’ best interests.

If we were to sell shares of our common stock below its then current NAV per share, such sales would result in an immediate dilution to the NAV per share of our common stock. This dilution would occur as a result of the sale of shares at a price below the then current NAV per share of our common stock and a proportionately greater decrease in the stockholders’ interest in our earnings and assets and their voting interest in us than the increase in our assets resulting from such issuance. Because the number of shares of common stock that could be so issued and the timing of any issuance is not currently known, the actual dilutive effect cannot be predicted.

If we issue warrants or securities to subscribe for or convertible into shares of our common stock, subject to certain limitations, the exercise or conversion price per share could be less than NAV per share at the time of exercise or conversion (including through the operation of anti-dilution protections). Because we would incur expenses in connection with any issuance of such securities, such issuance could result in a dilution of the NAV per share at the time of exercise or conversion. This dilution would include reduction in NAV per share as a result of the proportionately greater decrease in the stockholders’ interest in our earnings and assets and their voting interest than the increase in our assets resulting from such issuance.

Further, if our current stockholders do not purchase any shares to maintain their percentage interest, regardless of whether such offering is above or below the then current NAV per share, their voting power will be diluted. For example, if we sell an additional 10% of our shares of common stock at a 5% discount from NAV, a stockholder who does not participate in that offering for its proportionate interest will suffer NAV dilution of up to 0.5% or $5 per $1,000 of NAV.

The terms of the Credit Facility place restrictions on our and/or our subsidiaries activities.

The terms of the Credit Facility place restrictions on our and/or our subsidiaries’ ability to, among other things, issue securities or otherwise incur additional indebtedness or other obligations, and in certain cases we may need the approval of WoodForest, as the Administrative Agent, in order to incur further indebtedness. In addition, the Credit Facility contains customary events of default for credit facilities of this type, including (without limitation): nonpayment of principal, interest, fees or other amounts after a stated grace period; inaccuracy of material representations and warranties; change of control; violations of covenants, subject in certain cases to stated cure periods; and certain bankruptcies and liquidations. If an event of default occurs and is continuing, the Company may be required to repay all amounts outstanding under the Credit Facility, which would adversely affect our liquidity position and, in turn, could force us to dispose of investments at inopportune times at reduced prices. Repayment could also adversely affect our ability to implement our investment strategy and achieve our investment objectives.


If we issue preferred stock, the NAV and market value of our common stock may become more volatile.

If we issue preferred stock, we cannot assure you that such issuance would result in a higher yield or return to the holders of our common stock. The issuance of preferred stock would likely cause the NAV and market value of our common stock to become more volatile. If the dividend rate on the preferred stock were to approach the net rate of return on our investment portfolio, the benefit of leverage to the holders of our common stock would be reduced. If the dividend rate on the preferred stock were to exceed the net rate of return on our portfolio, the leverage would result in a lower rate of return to the holders of our common stock than if we had not issued preferred stock. Any decline in the NAV of our investments would be borne entirely by the holders of our common stock. Therefore, if the market value of our portfolio were to decline, the leverage would result in a greater decrease in NAV to the holders of our common stock than if we were not leveraged through the issuance of preferred stock. This greater NAV decrease would also tend to cause a greater decline in the market price for our common stock. We might be in danger of failing to maintain the required asset coverage of the preferred stock or of losing our ratings on the preferred stock or, in an extreme case, our current investment income might not be sufficient to meet the dividend requirements on the preferred stock. In order to counteract such an event, we might need to liquidate investments in order to fund a redemption of some or all of the preferred stock. In addition, we would pay (and the holders of our common stock would bear) all costs and expenses relating to the issuance and ongoing maintenance of the preferred stock, including higher advisory fees if our total return exceeds the dividend rate on the preferred stock. Holders of preferred stock may have different interests than holders of our common stock and may at times have disproportionate influence over our affairs.

Holders of any preferred stock we might issue would have the right to elect members of the board of directors and class voting rights on certain matters.

Holders of any preferred stock we might issue, voting separately as a single class, would have the right to elect two members of the board of directors at all times and in the event dividends become two full years in arrears, would have the right to elect a majority of our directors until such arrearage is completely eliminated. In addition, preferred stockholders would have class voting rights on certain matters, including changes in fundamental investment restrictions and conversion to open-end status, and accordingly would be able to veto any such changes. Restrictions imposed on the declarations and payment of dividends or other distributions to the holders of our common stock and preferred stock, both by the 1940 Act and by requirements imposed by rating agencies or the terms of any credit facility to which the Company is a party, might impair our ability to maintain our qualification as a RIC for U.S. federal income tax purposes. While we would intend to redeem our preferred stock to the extent necessary to enable us to distribute our income as required to maintain our qualification as a RIC, there can be no assurance that such actions could be effected in time to meet the tax requirements.

Our business and operations could be negatively affected if we become subject to any securities class actions and derivative lawsuits, which could cause us to incur significant expense, hinder execution of investment strategy and impact our stock price.

In the past, following periods of volatility in the market price of a company’s securities, securities class-action litigation has often been brought against that company. Stockholder activism, which could take many forms or arise in a variety of situations, has been increasing in the BDC space recently. Securities litigation and stockholder activism, including potential proxy contests, could result in substantial costs and divert management’s and our board of directors’ attention and resources from our business. Additionally, such securities litigation and stockholder activism could give rise to perceived uncertainties as to our future, adversely affect our relationships with service providers and make it more difficult to attract and retain qualified personnel. Also, we may be required to incur significant legal fees and other expenses related to any securities litigation and activist stockholder matters. Further, our stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and stockholder activism.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds


None.

On February 5, 2015, our board of directors approved a share repurchase program pursuant to which we could purchase up to an aggregate amount of $30.0 million of our common stock between the period of the approval date and February 5, 2016. On December 4, 2015, the board of directors extended the duration of the share repurchase program through December 31, 2016, and increased the aggregate amount to $50.0 million. On December 7, 2016, the board of directors extended the duration of the share repurchase program through December 31, 2017. Any stock repurchases will be made through the open market at times, and in such amounts, as management deems appropriate. The Company did not repurchase any shares for the three months ended December 31, 2017.




Item 3. Defaults Upon Senior Securities


None.

None.


Item 4.Mine Safety Disclosures

None.

Not applicable.


Item 5. Other Information

None.

None.


Item 6. Exhibits

3.1
3.1
Certificate of Incorporation (Incorporated by reference to Exhibit 99.A.3 to the Registrant’s Pre-effective Amendment No. 3 to the Registration Statement on Form N-2 (File No. 333-166491), filed on November 22,23, 2010).
  
3.2
Certificate of Amendment to the Certificate of Incorporation (Incorporated by reference to the Current Report on Form 8-K filed on July 13, 2020).
3.3Certificate of Amendment to Certificate of Incorporation (Incorporated by reference to the Current Report on Form 8-K filed December 28, 2020).
3.4Form of Bylaws (Incorporated by reference to Exhibit 99.B.3 to the Registrant’s Pre-effective Amendment No. 3 to the Registration Statement on Form N-2 (File No. 333-166491), filed on November 22,23, 2010).
  
4.13.5
Amendment No. 1 to Bylaws (Incorporated by reference to the Current Report on Form 8-K filed February 7, 2019).
3.6Amendment No. 2 to Bylaws (Incorporated by reference to the Current Report on Form 8-K filed December 28, 2020).
3.7Amendment No. 3 to the Bylaws (Incorporated by reference to the Current Report on Form 8-K filed February 16, 2021).
4.1Form of Stock Certificate (Incorporated by reference to Exhibit 99.D to the Registrant’s Pre-effective Amendment No. 3 to the Registration Statement on Form N-2 (File No. 333-166491), filed on November 22,23, 2010).
  
4.2
Indenture, dated February 7, 2012, between Medley Capital Corporation and U.S. Bank National Association, as Trustee (Incorporated by reference to Exhibit 99.D.2 to the Registrant’s Pre-Effective Amendment No. 1 to the Registration Statement on Form N-2 (File No. 333-179237), filed on February 13, 2012).
  
4.3
First Supplemental Indenture, dated March 21, 2012, between Medley Capital Corporation and U.S. Bank National Association, as Trustee (Incorporated by reference to Exhibit 99.D.4 to the Registrant’s Post-Effective Amendment No. 2 to the Registration Statement on Form N-2 (File No. 333-179237), filed on March 21, 2012).
  
4.4
Second Supplemental Indenture, dated March 18, 2013, between Medley Capital Corporation and U.S. Bank National Association, as Trustee (Incorporated by reference to Exhibit 99.D.4 to the Registrant’s Post-Effective Amendment No. 7 to the Registration Statement on Form N-2 (File No. 333-179237), filed on March 15, 2013).
  
4.5
Third Supplemental Indenture, dated December 17, 2015, between Medley Capital Corporation and U.S. Bank National Association, as Trustee (Incorporated by reference to Exhibit 99.D.6 to the Registrant’s Post-Effective Amendment No. 11 to the Registration Statement on Form N-2 (File No. 333-187324), filed on December 17, 2015).

  
4.6
Statement of Eligibility ofFourth Supplemental Indenture, dated November 15, 2021, between PhenixFIN Corporation and U.S. Bank National Association, as Trustee on Form T-1 (Incorporated by reference to Exhibit d.5 to the Registrant’s Registration StatementCurrent Report on Form N-2,8-K filed on MarchNovember 15, 2013).2021)
  
10.14.7
FormDescription of Amended and Restated Investment Management Agreement between Registrant and MCC Advisors LLCPhenixFIN Corporation’s securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 (Incorporated by reference to Exhibit 99.G to Registrant’s Post-Effective Amendment No. 3 to the Registration Statement on N-2, filed on December 10, 2013).
10.2
Letter from MCC Advisors LLC re: Waiver of Base Management Fee and Incentive Fee on Net Investment Income, dated February 8, 2016 (Incorporated by reference to Exhibit 99.K.5 to Registrant’s Pre-Effective Amendment No. 1 to the Registration Statement on Form N-2 (File No. 333-208746)333-258913), filed on March 25, 2016).October 15, 2021.
  
10.310.1
Form of Custody Agreement (Incorporated by reference to Exhibit 99.J.1 to the Registrant’s Pre-effective Amendment No. 3 to the Registration Statement on Form N-2 filed on November 22, 2010).
10.4
Form of Administration Agreement (Incorporated by reference to Exhibit 99.K.2 to the Registrant’s Pre-effective Amendment No. 1 to the Registration Statement on Form N-2, filed on June 9, 2010).
10.5
Form of Sub-Administration Agreement (Incorporated by reference to Exhibit 99.K.4 to the Registrant’s Pre-effective Amendment No. 3 to the Registration Statement on Form N-2 (File No. 333-166491), filed on November 22,23, 2010).

10.2 
10.6
Trademark License Agreement (Incorporated by reference to Exhibit 99.K.3 to the Registrant’s Pre-effective Amendment No. 1 to the Registration Statement on Form N-2, filed on June 9, 2010).
10.7
Form of Dividend Reinvestment Plan (Incorporated by reference to Exhibit 99.E to the Registrant’s Pre-effective Amendment No. 3 to the Registration Statement on Form N-2 (File No. 333-166491), filed on November 22,23, 2010).
  
10.810.3
Senior Secured Revolving Credit AgreementSettlement Term Sheet, dated April 15, 2019 (Incorporated by reference to the Current Report on Form 8-K, filed on April 17, 2019).


10.4Stipulation of Settlement, dated July 29, 2019, by and among Medley Capital Corporation, as borrower,Brook Taube, Seth Taube, Jeff Tonkel, Mark Lerdal, Karin Hirtler-Garvey, John E. Mack, Arthur S. Ainsberg, Medley Management Inc., MCC Advisors LLC, Medley LLC and Medley Group LLC, on the Lenders party thereto,one hand, and INGFrontFour Capital Group LLC as Administrative Agent, dated August 4, 2011and FrontFour Master Fund, Ltd., on behalf of themselves and a class of similarly situated stockholders of Medley Capital Corporation, on the other hand, in connection with the action styled In re Medley Capital Corporation Stockholder Litigation, Cons. C.A. No. 2019-0100-KSJM (Incorporated by reference to the Current Report on Form 8-K, filed on August 9, 2011)2, 2019).


  
10.910.5
Guarantee, PledgeGovernance Agreement, dated July 29, 2019, by and Security Agreement among, Medley Capital Corporation, on the Company,one hand, and FrontFour Capital Group LLC, FrontFour Master Fund, Ltd., FrontFour Capital Corp., FrontFour Opportunity Fund, David A. Lorber, Stephen E. Loukas and Zachary R. George, on the Subsidiary Guarantors party thereto, ING Capital LLC, as Administrative Agent, each Financial Agent and Designated Indebtedness Holder party thereto and ING Capital LLC, as Collateral Agent, dated August 4, 2011other hand (Incorporated by reference to the Current Report on Form 8-K, filed on August 9, 2011)2, 2019).
  
10.1010.6
Amendment No. 1, dated as of August 31, 2012, to the Senior Secured Revolving CreditStandstill Agreement, dated as of August 4, 2011, among19, 2020, by and between the Medley Capital Corporation as borrower,and Howard Amster and the Lenders party thereto,other persons and ING Capital LLC, as Administrative Agententities identified therein (Incorporated by reference to the Current Report on Form 8-K filed on September 6, 2012)August 21, 2020).
  
10.1110.7
Amendment No. 2, dated as of December 7, 2012, to the Senior Secured Revolving CreditFund Accounting Servicing Agreement, dated as of August 4, 2011, amongNovember 19, 2020, by and between Medley Capital Corporation as borrower, the Lenders party thereto, and ING CapitalU.S. Bancorp Fund Services, LLC as Administrative Agent, as amended by Amendment No. 1 to the Senior Secured Revolving Credit Agreement, dated as of August 31, 2012 (Incorporated by reference to the Current Report on Form 8-K filed on December 13, 2012).
10.12
Amendment No. 3, dated as of March 28, 2013, to the Senior Secured Revolving Credit Agreement dated as of August 4, 2011, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, as amended by Amendment Nos. 1 and 2 to the Senior Secured Revolving Credit Agreement, dated as of August 31, 2012 and December 7, 2012, respectively (Incorporated by reference to the Current Report on Form 8-K filed on April 2, 2013).
10.13
Senior Secured Term Loan Credit Agreement, dated as of August 31, 2012, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent (Incorporated by reference to the Current Report on Form 8-K filed on September 6, 2012).
10.14
Amendment No. 1, dated as of December 7, 2012, to the Senior Secured Term Loan Credit Agreement dated as of August 31, 2012, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent (Incorporated by reference to the Current Report on Form 8-K filed on December 13, 2012).
10.15
Amendment No. 2, dated as of January 23, 2013, to the Senior Secured Term Loan Credit Agreement dated as of August 31, 2012, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, as amended by Amendment No. 1 to the Senior Secured Term Loan Credit Agreement, dated as of January 23, 2013 (Incorporated by reference to the Current Report on Form 8-K filed on January 29, 2013).
10.16
Amendment No. 3, dated as of March 28, 2013, to the Senior Secured Term Loan Credit Agreement, dated as of August 31, 2012, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, as amended by Amendment Nos. 1 and 2 to the Senior Secured Term Loan Credit Agreement, dated as of December 7, 2012 and January 23, 2013, respectively (Incorporated by reference to the Current Report on Form 8-K filed on April 2, 2013).
10.17
Amendment No. 4, dated as of May 1, 2013, to the Senior Secured Revolving Credit Agreement, dated as of August 4, 2011, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, as amended by Amendment Nos. 1, 2 and 3 to the Senior Secured Revolving Credit Agreement, dated as of August 31, 2012, December 7, 2012 and March 28, 2013, respectively (Incorporated by reference to the Current Report on Form 8-K filed on May 7, 2013).
10.18
Amendment No. 4, dated as of May 1, 2013, to the Senior Secured Term Loan Credit Agreement, dated as of August 31, 2012, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, as amended by Amendment Nos. 1, 2 and 3 to the Senior Secured Term Loan Credit Agreement, dated as of December 7, 2012, January 23, 2013 and March 28, 2013, respectively (Incorporated by reference to the Current Report on Form 8-K filed on May 7, 2013).
10.19
Amendment No. 5, dated as of June 2, 2014, to the Senior Secured Revolving Credit Agreement, dated as of August 4, 2011, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, as amended by Amendment Nos. 1, 2, 3 and 4 to the Senior Secured Revolving Credit Agreement, dated as of August 31, 2012, December 7, 2012, March 28, 2013 and May 1, 2013, respectively (Incorporated by reference to the Current Report on Form 8-K filed on June 3, 2014).
10.20
Amendment No. 5, dated as of June 2, 2014, to the Senior Secured Term Loan Credit Agreement, dated as of August 31, 2012, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, as amended by Amendment Nos. 1, 2, 3 and 4 to the Senior Secured Term Loan Credit Agreement, dated as of December 7, 2012, January 23, 2013, March 28, 2013 and May 1, 2013, respectively (Incorporated by reference to the Current Report on Form 8-K filed on June 3, 2014).
10.21
Amendment No. 6, dated as of February 2, 2015, to the Senior Secured Revolving Credit Agreement, dated as of August 4, 2011, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, as amended by Amendment Nos. 1, 2, 3, 4 and 5 to the Senior Secured Revolving Credit Agreement, dated as of August 31, 2012, December 7, 2012, March 28, 2013, May 1, 2013 and June 2, 2014, respectively (Incorporated by reference to Exhibit 10.110.16 to the Registrant’sAnnual Report on Form 10-K filed on December 11, 2020).
10.8Administration Servicing Agreement, dated November 19, 2020, by and between Medley Capital Corporation and U.S. Bancorp Fund Services, LLC (Incorporated by reference to Exhibit 10.17 to the Annual Report on Form 10-K filed on December 11, 2020).
10.9PhenixFIN Long Term Cash Incentive Plan (Incorporated by reference to Exhibit 10.9 to the Quarterly Report on Form 10-Q filed on May 9, 2022).
10.10First Amendment to the PhenixFIN Long Term Cash Incentive Plan. (Incorporated by reference to Exhibit 10.10 to the Quarterly Report on Form 10-Q filed on February 9, 2015)2023).
  
10.2210.11
Amendment No. 6 to the Senior Secured Term Loan Credit Agreement, dated asForm of August 31, 2012, among Medley Capital Corporation as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, as amended by Amendment Nos. 1, 2, 3, 4 and 5 to the Senior Secured Term Loan CreditAward Agreement dated as of December 7, 2012, January 23, 2013, March 28, 2013, May 1, 2013 and June 2, 2014, respectively (Incorporated by reference to Exhibit 10.210.10 to the Quarterly Report on Form 10-Q filed on May 9, 2022).
10.12Credit Agreement, dated December 15, 2022, between PhenixFIN Corporation and Woodforest National Bank, as Administrative Agent. (Incorporated by reference to Exhibit 10.11 to the Annual Report on Form 10-K filed December 16, 2022).
10.13*First Amendment to Credit Agreement and Consent, dated February 21, 2024, between PhenixFIN Corporation and Woodforest National Bank, as Administrative Agent.
10.14Loan Administration and Custodial Agreement, dated September 12, 2022 by and between PhenixFIN Corp. and Computershare Trust Company, N.A. (Incorporated by reference to Exhibit 10.10 to the Annual Report on Form 10-K filed on December 16, 2022).
10.15Pledge and Security Agreement, dated December 15, 2022 by and between PhenixFIN Corporation and Woodforest National Bank (Incorporated by reference to Exhibit 10.12 to the Annual Report on Form 10-K filed on December 16, 2022).
14.1Code of Ethics & Insider Trading Policy of the Registrant (Incorporated by reference to Exhibit 99.R to the Registrant’s Registration Statement on Form N-2 (File No. 333-258913), filed on August 19, 2021.
21.1List of Subsidiaries (Incorporated by reference to Exhibit 21.1 of the Quarterly Report on Form 10-Q filed on February 9, 2015)10, 2022).
  
10.23
Amended and Restated Senior Secured Revolving Credit Agreement, dated as of July 28, 2015, by and among the Company as borrower, each of the subsidiary guarantors party thereto, the Lenders party thereto and ING Capital LLC, as Administrative Agent (Incorporated by reference to the Current Report on Form 8-K filed on July 30, 2015).


 
10.2431.1
Amendment No. 1 to Amended and Restated Senior Secured Revolving Credit Agreement, dated as of September 16, 2016, by and among the Company as borrower, MCC Investment Holdings LLC, MCC Investment Holdings Sendero LLC, MCC Investment Holdings RT1 LLC, MCC Investment Holdings Omnivere LLC, MCC Investment Holdings Amvestar, LLC, and MCC Investment Holdings AAR, LLC, as subsidiary guarantors, the Lenders party thereto and ING Capital LLC, as Administrative Agent (Incorporated by reference to the Current Report on Form 8-K filed on September 22, 2016).
 
10.25
Amendment No. 2 to Amended and Restated Senior Secured Revolving Credit Agreement, dated as of February 8, 2017, by and among the Company as borrower, MCC Investment Holdings LLC, MCC Investment Holdings Sendero LLC, MCC Investment Holdings RT1 LLC, MCC Investment Holdings Omnivere LLC, MCC Investment Holdings Amvestar, LLC, and MCC Investment Holdings AAR, LLC, as subsidiary guarantors, the Lenders party thereto and ING Capital LLC, as Administrative Agent (Incorporated by reference to the Current Report on Form 8-K filed on February 10, 2017).
10.26
Amendment No. 3 to Amended and Restated Senior Secured Revolving Credit Agreement, dated as of September 1, 2017, by and among the Company as borrower, MCC Investment Holdings LLC, MCC Investment Holdings Sendero LLC, MCC Investment Holdings RT1 LLC, MCC Investment Holdings Omnivere LLC, MCC Investment Holdings Amvestar, LLC, and MCC Investment Holdings AAR, LLC, as subsidiary guarantors, the Lenders party thereto and ING Capital LLC, as Administrative Agent (Incorporated by reference to the Current Report on Form 8-K filed on September 8, 2017).
10.27
Amended and Restated Senior Secured Term Loan Credit Agreement dated as of July 28, 2015, by and among the Company as borrower, each of the subsidiary guarantors party thereto, the Lenders party thereto and ING Capital LLC, as Administrative Agent (Incorporated by reference to the Current Report on Form 8-K filed on July 30, 2015).
10.28
Amendment No. 1 to Amended and Restated Senior Secured Term Loan Credit Agreement dated as of September 16, 2016, by and among the Company as borrower, MCC Investment Holdings LLC, MCC Investment Holdings Sendero LLC, MCC Investment Holdings RT1 LLC, MCC Investment Holdings Omnivere LLC, MCC Investment Holdings Amvestar, LLC, and MCC Investment Holdings AAR, LLC, as subsidiary guarantors, the Lenders party thereto and ING Capital LLC, as Administrative Agent (Incorporated by reference to the Current Report on Form 8-K filed on September 22, 2016).
10.29
Amendment No. 2 to Amended and Restated Senior Secured Term Loan Credit Agreement dated as of February 8, 2017, by and among the Company as borrower, MCC Investment Holdings LLC, MCC Investment Holdings Sendero LLC, MCC Investment Holdings RT1 LLC, MCC Investment Holdings Omnivere LLC, MCC Investment Holdings Amvestar, LLC, and MCC Investment Holdings AAR, LLC, as subsidiary guarantors, the Lenders party thereto and ING Capital LLC, as Administrative Agent (Incorporated by reference to the Current Report on Form 8-K filed on February 10, 2017).
10.30
Amendment No. 3 to Amended and Restated Senior Secured Term Loan Credit Agreement dated as of September 1, 2017, by and among the Company as borrower, MCC Investment Holdings LLC, MCC Investment Holdings Sendero LLC, MCC Investment Holdings RT1 LLC, MCC Investment Holdings Omnivere LLC, MCC Investment Holdings Amvestar, LLC, and MCC Investment Holdings AAR, LLC, as subsidiary guarantors, the Lenders party thereto and ING Capital LLC, as Administrative Agent (Incorporated by reference to the Current Report on Form 8-K filed on September 8, 2017).
10.31
Incremental Assumption Agreement, dated as of February 10, 2012, made by Credit Suisse AG, Cayman Islands Branch, as Assuming Lender, relating to the Senior Secured Revolving Credit Agreement dated as of August 4, 2011, among Medley Capital Corporation, as Borrower, the Several Lenders and Agents from Time to Time Parties Thereto, and ING Capital LLC, as Administrative Agent and Collateral Agent (Incorporated by reference to the Current Report on Form 8-K filed on February 10, 2012).
10.32
Incremental Assumption Agreement dated as of March 30, 2012, made by Onewest Bank, FSB, as Assuming Lender, relating to the Senior Secured Revolving Credit Agreement dated as of August 4, 2011, among Medley Capital Corporation, as Borrower, the Several Lenders and Agents from Time to Time Parties Thereto, and ING Capital LLC, as Administrative Agent and Collateral Agent (Incorporated by reference to the Current Report on Form 8-K filed on April 4, 2012).
10.33
Incremental Assumption Agreement dated as of May 3, 2012, made by Doral Bank, as Assuming Lender, relating to the Senior Secured Revolving Credit Agreement dated as of August 4, 2011, among Medley Capital Corporation, as Borrower, the Several Lenders and Agents from Time to Time Parties Thereto, and ING Capital LLC, as Administrative Agent and Collateral Agent (Incorporated by reference to the Current Report on Form 8-K filed on May 3, 2012).
10.34
Incremental Assumption Agreement dated as of September 25, 2012, made by Stamford First Bank, a division of the Bank of New Canaan, as Assuming Lender, relating to the Senior Secured Revolving Credit Agreement dated as of August 4, 2011, as amended by Amendment No. 1, dated as of August 31, 2012, among Medley Capital Corporation, as Borrower, the Several Lenders and Agents from Time to Time Parties Thereto, and ING Capital LLC, as Administrative Agent and Collateral Agent (Incorporated by reference to the Current Report on Form 8-K filed on September 28, 2012).
10.35
Limited Liability Company Operating Agreement of MCC Senior Loan Strategy JV I LLC, a Delaware Limited Liability Company, dated as of March 27, 2015 (Incorporated by reference to the Current Report on Form 8-K filed on March 30, 2015).
14.1
Code of Business Conduct and Ethics of the Registrant (Incorporated by reference to Exhibit 14.1 to the Registrant’s 10-Q for the period ended June 30, 2011, filed on August 4, 2011).
14.2
Code of Business Ethics of MCC Advisors (Incorporated by reference to Exhibit 99.R.2 to the Registrant’s Pre-effective Amendment No. 1 to the Registration Statement on Form N-2, filed on June 9, 2010).


21.1
List of Subsidiaries*
24.0
Power of attorney (included on the signature page hereto).
31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.**
  
31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.**
  
32.1
Certification of Chief Executive Officer and Chief Financial Officer pursuant to section 906 of The Sarbanes-Oxley Act of 2002.**
  
*101.INS*
Inline XBRL Instance Document
101.SCH*Inline XBRL Taxonomy Extension Schema Document
101.CAL*Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101)

*Filed herewith.



SIGNATURES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated:Medley Capital Corporation
February 6, 2018 May 10, 2024 
  
 By/s/ Brook Taube
Brook Taube
Chief Executive Officer
(Principal Executive Officer)PhenixFIN Corporation
   
 By/s/ Richard T. Allorto, Jr.David Lorber
  Richard T. Allorto, Jr.David Lorber
  Chief FinancialExecutive Officer
  (Principal Executive Officer)
By /s/ Ellida McMillan
Ellida McMillan
Chief Financial Officer
(Principal Accounting and Financial Officer)



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