PhenixFIN Corp. 10-Q Summary: Quarter Ended December 31, 2025
Business Context and Reporting Period
PhenixFIN Corporation (PFX) is an internally-managed, non-diversified closed-end management investment company regulated as a Business Development Company (BDC) under the Investment Company Act of 1940. The company's investment objective is to generate current income and capital appreciation primarily through loans, private equity, and other investments in privately-held companies. This report covers the quarterly period ended December 31, 2025.
Key Financial Metrics
| Metric | Q4 2025 | Q4 2024 |
|---|---|---|
| Total Investment Income | $6.66 million | $6.22 million |
| Net Investment Income | $2.13 million | $1.63 million |
| Net Realized Gains | $0.69 million | $1.17 million |
| Net Unrealized Losses | $(7.15) million | $(0.33) million |
| Net Increase (Decrease) in Net Assets | $(4.77) million | $2.46 million |
| Earnings Per Share (Basic & Diluted) | $(2.38) | $1.22 |
| Net Asset Value (NAV) Per Share | $77.92 | $80.59 |
| Total Investments (Fair Value) | $295.64 million | $302.27 million |
| Total Debt Outstanding | $147.49 million | $149.15 million |
| Cash and Cash Equivalents | $3.41 million | $7.29 million |
| Asset Coverage Ratio | 205.6% | 207.8% |
Material Changes vs. Prior Period
- Net Loss vs. Net Gain: The company reported a net decrease in net assets of $4.77 million for Q4 2025, compared to a net increase of $2.46 million in Q4 2024. This reversal was driven primarily by significant unrealized losses.
- Unrealized Depreciation: Net unrealized losses increased substantially to $7.15 million in Q4 2025 from $0.33 million in Q4 2024. The decline was primarily attributed to unrealized losses on NVTN LLC ($5.0 million) and Altisource S.A.R.L. ($2.8 million).
- Realized Gains: Net realized gains decreased to $0.69 million in Q4 2025 from $1.17 million in Q4 2024.
- Portfolio Composition: Total investments at fair value decreased by approximately $6.6 million quarter-over-quarter. Equity and warrant investments represented 56.7% of the portfolio at fair value.
- Debt Redemption: The company redeemed its entire $1.66 million 2028 Promissory Note on December 8, 2025, incurring a loss on extinguishment of debt of $12,314.
Guidance, Outlook, and Risks
- Management Commentary: Management noted that the net unrealized depreciation resulted primarily from specific portfolio company performance issues (NVTN LLC and Altisource S.A.R.L.). Interest and financing expenses decreased slightly due to lower floating interest rates on the Credit Facility.
- Liquidity: Cash and cash equivalents declined to $3.41 million from $7.29 million. The company maintains a $100 million revolving credit facility with $90 million outstanding and $10 million available. Unfunded commitments to portfolio companies totaled $3.9 million.
- Share Repurchases: The company repurchased 4,135 shares for approximately $183,000 during the quarter. Approximately $5.9 million remains authorized under the share repurchase program.
- Risks and Contingencies:
- Non-Accrual Status: One investment (NVTN LLC) was on non-accrual status with a fair value of $0.0 million and a cost of $7.6 million.
- Market Volatility: The filing highlights risks related to global events, interest rate fluctuations, and the inherent uncertainty of valuing illiquid Level 3 assets.
- Board Changes: Following the passing of director Arthur S. Ainsberg, the Board size was reduced to four directors, with new appointments to the Audit and Nominating & Governance Committees in February 2026.
Key Facts for Investor Verification
- Valuation of NVTN LLC: Verify the specific reasons for the $5.0 million unrealized loss and the $0.0 fair value assigned to NVTN LLC, which represents a significant portion of the controlled investments.
- Asset Coverage Ratio: Confirm the company remains compliant with the 200% asset coverage requirement under the 1940 Act (currently at 205.6%).
- Cash Position: Monitor the decline in cash reserves to $3.41 million against unfunded commitments of $3.9 million and upcoming debt obligations.
- Deferred Tax Asset: Review the valuation allowance against the deferred tax asset, which decreased to $852,570 from $1.23 million.
- Non-Qualifying Assets: Note that non-qualifying assets represented 13.25% of total assets, requiring monitoring to ensure compliance with BDC diversification rules.