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

For the Quarterly Period Ended ~~December~~March 31, ~~2025~~2026

☐ 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

(Exact Name of Registrant as Specified in its Charter)

Delaware		27-4576073
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

445 Park Avenue, 10th Floor, New York, NY		10022
(Address of Principal Executive Offices)		(Zip Code)

(212) 859-0390

(Registrant’s Telephone Number, Including Area Code)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	PFX	The NASDAQ Global Market
5.25% Notes due 2028	PFXNZ	The 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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 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 ☐ Non-accelerated filer ☒ 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 ☒

The Registrant had 1,~~998~~932,~~259~~ 600 shares of common stock, $0.001 par value, outstanding as of ~~February~~May 95, 2026.

PHENIXFIN CORPORATION

TABLE OF CONTENTS

		Page
PART I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Assets and Liabilities as of December 31, 2025 (unaudited) and September 30, 2025		1
Consolidated Statements of Assets and Liabilities as of March 31, 2026 (unaudited) and September 30, 2025		1
Consolidated Statements of Operations for the three months ended December 31, 2025 and 2024 (unaudited)		2
Consolidated Statements of Operations for the three and six months ended March 31, 2026 and 2025 (unaudited)		2
Consolidated Statements of Changes in Net Assets for the three months ended December 31, 2025 and 2024 (unaudited)		3
Consolidated Statements of Changes in Net Assets for the three and six months ended March 31, 2026 and 2025 (unaudited)		3
Consolidated Statements of Cash Flows for the three months ended December 31, 2025 and 2024 (unaudited)		4
Consolidated Statements of Cash Flows for the three and six months ended March 31, 2026 and 2025 (unaudited)		4
Consolidated Schedules of Investments as of December 31, 2025 (unaudited) and September 30, 2025		5
Consolidated Schedules of Investments as of March 31, 2026 (unaudited) and September 30, 2025		5
Notes to Consolidated Financial Statements (unaudited)		1720
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		4143
Item 3. Quantitative and Qualitative Disclosures About Market Risk		5456
Item 4. Controls and Procedures		5557
Part II. Other Information		5658
Item 1. Legal Proceedings		5658
Item 1A. Risk Factors		5658
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		5660
Item 3. Defaults Upon Senior Securities		5660
Item 4. Mine Safety Disclosures		5660
Item 5. Other Information		5660
Item 6. Exhibits		5761
SIGNATURES		6063

PHENIXFIN CORPORATION

Consolidated Statements of Assets and Liabilities

	December 31, 2025 (Unaudited)			September 30, 2025
	March 31, 2026 (Unaudited)			September 30, 2025
Assets:
Investments at fair value
Non-controlled, non-affiliated investments (amortized cost of $138,028,011 and $139,342,491, respectively)	$	139,235,510		$	145,280,169
Non-controlled, non-affiliated investments (amortized cost of $128,237,811 and $139,342,491, respectively)	$	130,033,295		$	145,280,169
Affiliated investments (amortized cost of $37,022,913 and $35,390,223, respectively)		36,675,568			35,381,405
Affiliated investments (amortized cost of $37,828,011 and $35,390,223, respectively)		36,776,004			35,381,405
Controlled investments (amortized cost of $149,859,961 and $149,656,451, respectively)		119,728,486			121,610,914
Controlled investments (amortized cost of $157,346,334 and $149,656,451, respectively)		129,001,392			121,610,914
Total Investments at fair value		295,~~639~~810,~~564~~691			302,272,488
Cash and cash equivalents		3,~~406~~074,~~847~~794			7,289,371
Receivables:
Interest receivable		1,~~036~~303,~~662~~922			1,203,404
Other receivable		-			44,971
Dividends receivable		~~229~~64,~~046~~800			42,950
Other assets		2,~~642~~537,~~679~~376			2,746,775
Deferred tax asset, net		~~852~~727,~~570~~925			1,234,847
Deferred financing costs		1,~~308~~232,~~020~~943			1,384,767
Due from Affiliate		~~301~~275,~~595~~173			572,331
Prepaid share repurchase		42115,~~076~~969			96,342
Receivable for investments sold		1431,~~922,102~~184			21,549
Total Assets	$	~~307~~305,~~381~~574,~~161~~777		$	316,909,795
Liabilities:
Credit facility and notes payable (net of debt issuance costs of $946,653 and $1,141,393, respectively)	$	146,544,966		$	148,011,724
Credit facility and notes payable (net of debt issuance costs of $864,414 and $1,141,393, respectively)	$	146,627,205		$	148,011,724
Accounts payable and accrued expenses		1,~~063~~329,~~658~~714			4,226,889
Other liabilities		2,~~481~~499,~~418~~673			2,439,405
Interest and fees payable		1,~~158~~131,~~816~~408			1,187,574
Taxes payable		~~178~~48,~~690~~137			137,538
Due to Affiliate		~~132~~126,~~365~~936			132,365
Total Liabilities		151,~~559~~763,~~913~~073			156,135,495
Commitments and Contingencies (see Note 8)
Net Assets:
Common Shares, $0.001 par value; 5,000,000 shares authorized; 2,723,709 shares issued; 1,999,634 and 2,003,769 common shares outstanding, respectively		2,000			2,004
Common Shares, $0.001 par value; 5,000,000 shares authorized; 2,723,709 shares issued;
Capital in excess of par value		704,457,776			704,640,648
1,933,238 and 2,003,769 common shares outstanding, respectively		1,933			2,004
Total distributable earnings (loss)		(548,638,528	)		(543,868,352	)
Capital in excess of par value		701,315,531			704,640,648
Total Net Assets		155,821,248			160,774,300
Total distributable earnings (loss)		(547,505,760	)		(543,868,352	)
Total Liabilities and Net Assets	$	307,381,161		$	316,909,795
Total Net Assets		153,811,704			160,774,300
Net Asset Value Per Common Share	$	77.92		$	80.24
Total Liabilities and Net Assets	$	305,574,777		$	316,909,795
Net Asset Value Per Common Share	$	79.56		$	80.24

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

PHENIXFIN CORPORATION

Consolidated Statements of Operations

(Unaudited)

	For the Three Months Ended December 31,
	For the Three Months Ended March 31,						For the Six Months Ended March 31,
	2025			2024
	2026			2025			2026			2025
Interest Income:
Interest from investments
Non-controlled, non-affiliated investments:
Cash	$	2,~~351~~242,~~244~~062		$	2,~~824~~957,~~594~~380		$	4,800,297		$	5,950,065
Payment in-kind		~~234~~250,~~383~~799			~~354~~263,~~681~~784			278,191			618,465
Affiliated investments:
Cash		~~838~~670,~~583~~874			-			1,302,466			-
Payment in-kind		-242,930			-			449,921			-
Controlled investments:
Cash		~~445~~725,~~684~~479			~~588~~626,~~195~~790			1,171,163			1,214,985
Payment in-kind		-			-			-			-
Total interest income		34,~~869~~132,~~894~~144			3,~~767~~847,~~470~~954			8,002,038			7,783,515
Dividend income
Non-controlled, non-affiliated investments		~~795~~428,~~867~~380			~~596~~378,~~298~~232			1,224,247			974,530
Affiliated investments		-268,540			~~142~~111,~~495~~736			268,540			254,231
Controlled investments		1156,~~751,275~~084			1,~~399~~580,~~350~~616			1,907,359			2,979,966
Total dividend income		2853,~~547,142~~004			2,~~138~~070,~~143~~584			3,400,146			4,208,727
Interest from cash and cash equivalents		5548,~~366~~871			~~227~~45,~~032~~812			104,237			104,753
Fee income (see Note 9)		~~187~~164,~~833~~374			1129,~~064~~673			352,207			40,737
Other income		-			7225,~~774~~000			-			97,774
Total Investment Income		65,~~660~~198,~~235~~393			6,~~216~~019,~~483~~023			11,858,628			12,235,506
Expenses:
Interest and financing expenses		2,~~432~~308,~~335~~578			2,~~545~~578,~~811~~963			4,740,913			5,124,774
Salaries and benefits		~~969~~1,~~173~~016,836			1,~~028~~185,~~617~~054			1,986,009			2,213,671
Professional fees, net		~~389~~410,~~940~~332			~~418~~577,~~013~~965			800,272			995,978
General and administrative expenses		~~360~~362,~~485~~493			~~221~~307,~~793~~739			722,978			529,532
Directors fees		~~204~~169,~~000~~428			204,000			373,428			408,000
Administrator expenses (see Note 6)		~~102~~109,~~061~~223			84112,~~355~~829			211,284			197,184
Insurance expenses		7573,~~634~~990			8886,~~421~~498			149,624			174,919
Total expenses		4,~~533~~450,~~628~~880			45,~~591~~053,~~010~~048			8,984,508			9,644,058
Net Investment Income		2747,~~126,607~~513			1965,~~625,473~~975			2,874,120			2,591,448
Realized and unrealized gains (losses) on investments
Net realized gains (losses):
Non-controlled, non-affiliated investments		~~692~~(1,~~220~~120,698	)		(1,~~168~~065,~~670~~013	)		(428,478	)		103,657
Affiliated investments		12,~~384~~112			-			3,496			-
Controlled investments		-			-			-			-
Total net realized gains (losses)		~~693~~(1,~~604~~118,586	)		(1,~~168~~065,~~670~~013	)		(424,982	)		103,657
Net change in unrealized gains (losses):
Non-controlled, non-affiliated investments		(4587,~~730,179~~985	)		~~808~~1,~~538~~183,172			(4,142,194	)		1,991,710
Affiliated investments		(~~338~~704,~~527~~662	)		(~~889~~92,~~186~~367	)		(1,043,189	)		(981,553	)
Controlled investments		(21,~~085~~786,~~938~~533	)		(~~249~~1,~~338~~558,264	)		(299,405	)		(1,807,602	)
Total net change in unrealized gains (losses)		(71,~~154~~669,~~644~~856	)		(~~329~~467,~~986~~459	)		(5,484,788	)		(797,445	)
Deferred tax benefit (expense)		(~~423~~166,~~429~~015	)		-(329,636	)		(589,444	)		(329,636	)
Loss on Extinguishment of Debt (see Note 5)		~~(12,314~~-	)		-			(12,314	)		-
Total realized and unrealized gains (losses)		(6385,~~896,783~~255	)		~~838~~(1,~~684~~862,108	)		(6,511,528	)		(1,023,424	)
Net Increase (Decrease) in Net Assets Resulting from Operations	$	(41,~~770~~132,~~176~~768	)	$	2(896,~~464,157~~133	)	$	(3,637,408	)	$	1,568,024
Weighted average basic and diluted earnings per common share	$	(20.3857	)	$	1(0.2244	)	$	(1.83	)	$	0.78
Weighted average common shares outstanding - basic and diluted (see Note 11)		21,~~001~~972,~~470~~943			2,019,778			1,987,363			2,019,778

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

PHENIXFIN CORPORATION

Consolidated Statements of Changes in Net Assets

(Unaudited)

	Common Stock									~~Total~~
	Shares			Par Amount			Capital in Excess of Par Value			Total Distributable Earnings/(Loss)			Total Net Assets
Balance at December 31, 2024		2,019,778		$	2,020		$	704,909,588		$	(542,139,678	)	$	162,771,930
OPERATIONS
Net investment income (loss)		-			-			-			965,975			965,975
Net realized gains (losses) on investments		-			-			-			(1,065,013	)		(1,065,013	)
Net change in unrealized appreciation (depreciation) on investments		-			-			-			(467,459	)		(467,459	)
Deferred tax benefit (expense)		-			-			-			(329,636	)		(329,636	)
CAPITAL SHARE TRANSACTIONS
Distributions declared		-			-			-			(2,888,283	)		(2,888,283	)
Total Increase (Decrease) in Net Assets		-			-			-			(3,784,416	)		(3,784,416	)
Balance at March 31, 2025		2,019,778		$	2,020		$	704,909,588		$	(545,924,094	)	$	158,987,514
Balance at December 31, 2025		1,999,634		$	2,000		$	704,457,776		$	(548,638,528	)	$	155,821,248
OPERATIONS
Net investment income (loss)		-			-			-			747,513			747,513
Net realized gains (losses) on investments		-			-			-			(1,118,586	)		(1,118,586	)
Net change in unrealized appreciation (depreciation) on investments		-			-			-			1,669,856			1,669,856
Deferred tax benefit (expense)		-			-			-			(166,015	)		(166,015	)
Loss on Extinguishment of Debt (see Note 5)		-			-			-			-			-
CAPITAL SHARE TRANSACTIONS
Distributions declared		-			-			-			-			-
Repurchase of common shares		(66,396	)		(67	)		(3,142,245	)		-			(3,142,312	)
Total Increase (Decrease) in Net Assets		(66,396	)		(67	)		(3,142,245	)		1,132,768			(2,009,544	)
Balance at March 31, 2026		1,933,238		$	1,933		$	701,315,531		$	(547,505,760	)	$	153,811,704
Balance at September 30, 2024		2,019,778		$	2,020		$	704,909,588		$	(544,603,835	)	$	160,307,773
OPERATIONS
Net investment income (loss)		-			-			-			12,~~625~~591,~~473~~448			12,~~625~~591,~~473~~448
Net realized gains (losses) on investments		-			-			-			1103,~~168,670~~657			1103,~~168,670~~657
Net change in unrealized appreciation (depreciation) on investments		-			-			-			(~~329~~797,~~986~~445	)		(~~329~~797,~~986~~445	)
Total Increase (Decrease) in Net Assets		-			-			-			2,464,157			2,464,157
Deferred tax benefit (expense)											(329,636	)		(329,636	)
Balance at December 31, 2024		2,019,778		$	2,020		$	704,909,588		$	(542,139,678	)	$	162,771,930
CAPITAL SHARE TRANSACTIONS
Distributions declared		-			-			-			(2,888,283	)		(2,888,283	)
Total Increase (Decrease) in Net Assets		-			-			-			(1,320,259	)		(1,320,259	)
Balance at March 31, 2025		2,019,778			2,020			704,909,588			(545,924,094	)		158,987,514
Balance at September 30, 2025		2,003,769		$	2,004		$	704,640,648		$	(543,868,352	)	$	160,774,300
OPERATIONS
Net investment income (loss)		-			-			-			2,~~126~~874,~~607~~120			2,~~126~~874,~~607~~120
Net realized gains (losses) on investments		-			-			-			~~693~~(424,~~604~~982	)		~~693~~(424,~~604~~982	)
Net change in unrealized appreciation (depreciation) on investments		-			-			-			(75,~~154~~484,~~644~~788	)		(75,~~154~~484,~~644~~788	)
Deferred tax benefit (expense)		-			-			-			(~~423~~589,~~429~~444	)		(~~423~~589,~~429~~444	)
Loss on Extinguishment of Debt (see Note 5)		-			-			-			(12,314	)		(12,314	)
CAPITAL SHARE TRANSACTIONS
Distributions declared		-			-			-			-			-
Repurchase of common shares		(470,~~135~~531	)		(471	)		(~~182~~3,~~872~~325,117	)		-			(~~182~~3,~~876~~325,188	)
Total Increase (Decrease) in Net Assets		(470,~~135~~531	)		(471	)		(~~182~~3,~~872~~325,117	)		(43,~~770~~637,~~176~~408	)		(46,~~953~~962,~~052~~596	)
Balance at December 31, 2025		1,999,634		$	2,000		$	704,457,776		$	(548,638,528	)	$	155,821,248
Balance at March 31, 2026		1,933,238		$	1,933		$	701,315,531		$	(547,505,760	)	$	153,811,704

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

PHENIXFIN CORPORATION

Consolidated Statements of Cash Flows

(Unaudited)

	For the Three Months Ended December 31,
	For the Six Months Ended March 31,
	2025			2024
	2026			2025
Cash Flows from Operating Activities:
Net increase (decrease) in net assets resulting from operations	$	(43,~~770~~637,~~176~~408	)	$	21,~~464~~568,~~157~~024
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		1930,~~626~~432,~~030~~416			2974,~~987~~044,~~278~~664
Purchases, originations and participations		(1828,~~994~~617,~~714~~405	)		(~~100~~132,~~920~~927,~~720~~926	)
Investment increases due to payment-in-kind interest		(~~234~~728,~~383~~112	)		(~~354~~618,~~681~~465	)
Net amortization of premium (discount) on investments		(~~225~~534,~~049~~872	)		(51119,~~729~~140	)
Amortization of debt issuance cost		~~194~~166,~~741~~304			92184,~~999~~269
Amortization of deferred financing cost		76151,~~746~~824			~~177~~383,~~426~~576
Net realized (gains) losses from investments		~~(693~~424,~~604~~982	)		(1103,~~168,670~~657	)
Net unrealized (gains) losses on investments		75,~~154~~484,~~644~~788			~~329~~797,~~986~~445
Loss on extinguishment of debt		12,314			-
(Increase) decrease in operating assets:
Interest receivable		~~166~~(100,~~742~~518	)		78253,039
Other receivable		44,971			49,198
Dividends receivable		(~~186~~21,~~096~~850	)		~~(82~~23,~~336~~468	)
Due from affiliate		~~270~~297,~~736~~158			(~~950~~167,~~012~~352	)
Other assets		~~104~~209,~~096~~399			~~551~~630,~~693~~706
Prepaid share repurchase		54(19,~~266~~627	)		-
Receivable for investments sold		(1409,~~900,553~~635	)		2627,~~913,878~~220
Provision for deferred taxes on unrealized appreciation/(depreciation) on investments		~~382~~506,~~277~~922			-329,636
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses		(32,~~163~~897,~~231~~175	)		(32,~~178~~632,~~720~~278	)
Interest and fees payable		(2856,~~758~~166	)		~~261~~310,~~291~~633
Other liabilities		4260,~~013~~268			(3770,~~637~~701	)
Due to Affiliate		-(5,429	)		(41,153	)
Payable for investments purchased		-			3,688,247
Taxes payable		(89,401	)		-
Taxes payable		41,152
Net cash provided by (used in) operating activities		673,748			(57,478,794	)
Net cash provided by (used in) operating activities		(2,038,150	)		(66,269,427	)
Cash Flows from Financing Activities:
Debt issuance		-			2129,527,047
Paydowns on debt		(1,~~661~~563,~~498~~137	)		(1528,~~600~~000,000	)
Deferred financing costs		-			(42,~~069~~068	)
Repurchase of common shares		(182,876	)		-
Distributions paid to shareholders		-			(2,888,283	)
Net cash provided by (used in) financing activities		(1,844,374	)		5,884,978
Repurchase of common shares		(3,325,188	)		-
Net increase (decrease) in cash and cash equivalents		(3,882,524	)		(60,384,449	)
Net cash provided by (used in) financing activities		(4,888,325	)		(1,403,304	)
Net increase (decrease) in cash and cash equivalents		(4,214,577	)		(58,882,098	)
Cash and cash equivalents, beginning of period		7,289,371			67,571,559
Cash and cash equivalents, end of period	$	3,~~406~~074,~~847~~794		$	78,~~187~~689,~~110~~461
Supplemental information:
Interest paid during the period	$	24,~~293~~472,~~860~~529		$	14,~~982~~200,~~478~~858
Non-cash purchase of investments	$	-		$	12,665,596
Non-cash sale of investments	$	-		$	12,665,596

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

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Company(1)	Industry	Type of Investment	Maturity		Par Amount/ Shares/Units(2)		~~Par Amount/ Shares/Units(2)~~		Amortized Cost(3)		~~Amortized Cost(3)~~		Fair Value(4)		~~Fair Value(4)~~		% of Net Assets(5)		~~% of Net Assets(5)~~
Non-Controlled/Non-Affiliated Investments:
Adamas Trust, Inc.(11)	Real Estate	Equity - ~~167~~140,~~876~~721 Class E Preferred Units(13)(24)				140,721		~~167,876~~	$	3,531,064	$	~~4,203,020~~	$	3,442,036	$	~~4,143,180~~		2.25	%	~~2.65~~	%
		Equity - 17,243 Class F Preferred Units(13)(18)				17,243		~~17,243~~		375,635		~~375,635~~		404,866		~~385,898~~		0.26	%	~~0.25~~	%
								185,119				4,578,655				4,529,078				2.90	%
						157,964				3,906,699				3,846,902				2.51	%
Altisource S.A.R.L.(11)	Services: Business	Senior Secured First Lien Term Loan B (SOFR + CSA + 6.50%)(14)(20)(24)(27)	4/30/2030	~~4/30/2030~~		8,012,982		~~8,026,850~~		8,769,200		~~8,616,683~~		8,213,307		~~8,307,790~~		5.34	%	~~5.33~~	%
		Equity - 547,180 Units(13)(21)						547,180				3,327,909				3,802,901				2.44	%
		Equity - 547,179 Units(13)(21)				547,179				3,327,903				3,485,530				2.27	%
		Warrants(13)(21)	4/2/2029	~~4/2/2029~~		111,343		~~111,343~~		647,105		~~647,105~~		42,310		~~45,651~~		0.03	%	~~0.03~~	%
		Warrants(13)(21)	4/30/2032	~~4/30/2032~~		111,343		~~111,343~~		622,110		~~622,110~~		22,269		~~36,743~~		0.01	%	~~0.02~~	%
								8,796,716				13,213,807				12,193,085				7.82	%
						8,782,847				13,366,318				11,763,416				7.65	%
Arora Engineers, LLC	Construction & Building	First Lien Term Loan (SOFR + 6.75%, 0.25% PIK, 3.00% Floor)(23)	12/30/2030	~~12/30/2030~~		9,689,062		~~9,750,000~~		9,495,281		~~9,555,000~~		9,398,391		~~9,555,000~~		6.11	%	~~6.13~~	%
Jacmel Arora, LLC		Equity - 3,150,000 Preferred Units(21)						3,150,000				3,055,500				3,055,500				1.96	%
		Warrants - 444,382 Units(21)				444,382				870,125				831,961				0.54	%
								12,900,000				12,610,500				12,610,500				8.09	%
Jacmel Arora, LLC		Equity - 3,150,000 Preferred Units(21)				3,150,000				2,185,375				2,311,949				1.50	%
Boostability Seotowncenter, Inc.	Services: Business	Equity - 833,152 Common Units(21)						833,152				66,475				-				0.00	%
						13,283,444				12,550,781				12,542,301				8.15	%
								833,152				66,475				-				0.00	%
Chimera Investment Corp.(11)	Real Estate	Equity - 22,829 Class C Preferred Units(13)(15)				22,829				525,748				450,188				0.29	%
Chimera Investment Corp.(11)	Real Estate	Equity - 151,710 Class C Preferred Units(13)(15)						151,710				3,635,972				3,235,974				2.08	%
						22,829				525,748				450,188				0.29	%
		Equity - 26,133 Class B Preferred Units(13)(24)						26,133				635,531				607,592				0.39	%
Compass Diversified Holdings(11)	Real Estate	Equity - 61,734 Series C Preferred Units(13)(28)				61,734				1,035,442				1,206,282				0.78	%
								177,843				4,271,503				3,843,566				2.47	%
						61,734				1,035,442				1,206,282				0.78	%
Compass Diversified Holdings(11)	Real Estate	Equity - 92,958 Series C Preferred Units(13)(28)						92,958				1,570,139				1,687,188				1.08	%
Copper Property CTL Pass Through Trust	Real Estate	Equity Certificates(13)				437,795				4,324,211				4,754,454				3.09	%
								92,958				1,570,139				1,687,188				1.08	%
						437,795				4,324,211				4,754,454				3.09	%
Copper Property CTL Pass Through Trust	Real Estate	Equity Certificates(13)						637,795				7,072,025				7,175,194				4.60	%
Innovate Corp.(11)	Construction & Building	10.50% Senior Secured Notes(14)(29)	2/1/2027			4,771,251				4,235,914				3,989,958				2.59	%
								637,795				7,072,025				7,175,194				4.60	%
						4,771,251				4,235,914				3,989,958				2.59	%
Innovate Corp.(11)	Construction & Building	10.50% Senior Secured Notes(14)(29)		2/1/2027				4,558,125				4,022,788				3,914,290				2.51	%
Invesco Mortgage Capital, Inc.(11)	Real Estate	Equity - 180,000 Common Units(13)				180,000				1,411,789				1,454,400				0.95	%
								4,558,125				4,022,788				3,914,290				2.51	%
						180,000				1,411,789				1,454,400				0.95	%
Invesco Mortgage Capital, Inc.(11)	Real Estate	Equity - 180,000 Common Units(13)						180,000				1,411,789				1,513,800				0.97	%
JFL-NGS-WCS Partners, LLC	Construction & Building	Equity - 10,000,000 Units(21)				10,000,000				10,000,000				13,300,000				8.65	%
								180,000				1,411,789				1,513,800				0.97	%
						10,000,000				10,000,000				13,300,000				8.65	%
Kemmerer Operations, LLC	Metals & Mining	Senior Secured First Lien Term Loan (SOFR + 5.00%)(24)	12/31/2028			6,762,782				6,762,782				6,762,782				4.40	%
						6,762,782				6,762,782				6,762,782				4.40	%

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

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Company(1)	Industry	Type of Investment	Maturity		Par Amount/ Shares/Units(2)		~~Par Amount/ Shares/Units(2)~~		Amortized Cost(3)		~~Amortized Cost(3)~~		Fair Value(4)		~~Fair Value(4)~~		% of Net Assets(5)		~~% of Net Assets(5)~~
NGS-WCS Group Holdings	Construction & Building	Senior Secured First Lien Term Loan B (SOFR + 4.75%, 0.50% Floor)(23)		5/31/2030				984,882				980,983				994,850				0.64	%
Lucky Bucks, LLC (dba Arc Gaming & Technologies LLC)	Consumer Discretionary	Priority Second Out Term Loan (SOFR + CSA + 7.50%, 5.00% PIK, 1.00% Floor)(20)(25)	10/2/2029			2,193,456			$	2,048,249			$	1,754,765				1.14	%
JFL-NGS-WCS Partners, LLC		Equity - 10,000,000 Units(21)						10,000,000				10,000,000				12,600,000				8.09	%
		Priority First Out Exit Term Loan (SOFR + CSA + 7.50%, 1.00% Floor)(20)(25)	10/2/2028			1,510,449				1,406,952				1,480,240				0.96	%
								10,984,882				10,980,983				13,594,850				8.73	%
LB NewHoldCo, LLC		Equity - 230,739 Membership Units(21)				230,739				449,393				-				0.00	%
Kemmerer Operations, LLC	Metals & Mining	Senior Secured First Lien Term Loan (SOFR + 5.00%)(24)		12/31/2028				6,762,782				6,762,782				6,762,782				4.34	%
						3,934,644				3,904,594				3,235,005				2.10	%
								6,762,782				6,762,782				6,762,782				4.34	%
MFA Financial, Inc.(11)	Real Estate	Equity - 39,493 Class C Preferred Units(13)(24)				39,493				971,472				836,067				0.54	%
Lucky Bucks, LLC (dba Arc Gaming & Technologies LLC)	Consumer Discretionary	Priority Second Out Term Loan (SOFR + CSA + 7.50%, 5.00% PIK, 1.00% Floor)(20)(25)		10/2/2029				2,165,782			$	2,020,575			$	2,014,177				1.29	%
		Equity - 120,000 Common Units(13)				120,000				1,175,317				1,149,600				0.75	%
		Priority First Out Exit Term Loan (SOFR + CSA + 7.50%, 1.00% Floor)(20)(25)		10/2/2028				1,510,449				1,406,952				1,510,449				0.97	%
						159,493				2,146,789				1,985,667				1.29	%
LB NewHoldCo, LLC		Equity - 230,739 Membership Units(21)						230,739				449,393				955,259				0.61	%
Onity Group Inc.(11)	Real Estate	Equity - 200,000 Preferred Units(28)				200,000				3,925,000				4,068,000				2.64	%
								3,906,970				3,876,920				4,479,885				2.87	%
						200,000				3,925,000				4,068,000				2.64	%
MFA Financial, Inc.(11)	Real Estate	Equity - 114,695 Class C Preferred Units(13)(24)						114,695				2,800,579				2,617,340				1.68	%
PHH Mortgage Corp.	Real Estate	9.875% Senior Secured Note(14)	11/1/2029			2,500,000				2,343,050				2,412,500				1.57	%
		Equity - 120,000 Common Units(13)						120,000				1,175,317				1,117,200				0.72	%
						2,500,000				2,343,050				2,412,500				1.57	%
								234,695				3,975,896				3,734,540				2.40	%
Power Stop LLC	Automotive	Senior Secured First Lien Term Loan (SOFR + CSA + 4.75%,0.50% Floor)(14)(20)(24)	1/26/2029			9,653,266				8,462,396				8,229,410				5.35	%
Onity Group Inc.(11)	Real Estate	Equity - 200,000 Preferred Units(28)						200,000				3,925,000				4,060,000				2.61	%
						9,653,266				8,462,396				8,229,410				5.35	%
								200,000				3,925,000				4,060,000				2.61	%
PREIT Associates	Real Estate	Senior Secured First Lien Term Loan (SOFR + 7.00%)(14)(23)	4/1/2029			56,201				55,077				57,466				0.04	%
PHH Mortgage Corp.	Real Estate	9.875% Senior Secured Note(14)		11/1/2029				2,500,000				2,343,050				2,581,250				1.66	%
		Senior Secured Revolving Note (SOFR + 5.50%)(8)(23)	12/31/2028			73,083				72,230				71,251				0.05	%
								2,500,000				2,343,050				2,581,250				1.66	%
						129,284				127,307				128,717				0.09	%
Power Stop LLC	Automotive	Senior Secured First Lien Term Loan (SOFR + CSA + 4.75%, 0.50% Floor)(14)(20)(24)		1/26/2029				9,678,741				8,483,567				8,033,355				5.16	%
PSB Group, LLC	Services: Consumer	Senior Secured First Lien Term Loan (SOFR + 6.50%, 1.00% Floor)(23)	4/17/2030			5,677,941				5,653,648				5,677,941				3.69	%
								9,678,741				8,483,567				8,033,355				5.16	%
		Senior Secured First Lien Revolver (SOFR + 6.50%, 1.00% Floor)(8)(12)(23)	4/17/2030			293,137				293,137				293,137				0.19	%
PREIT Associates	Real Estate	Senior Secured First Lien Term Loan (SOFR + 7.00%)(14)(23)		4/1/2029				56,201				55,077				56,763				0.04	%
						5,971,078				5,946,785				5,971,078				3.88	%
		Senior Secured Revolving Note (SOFR + 5.50%)(8)(23)		12/31/2028				73,083				72,230				71,982				0.05	%
								129,284				127,307				128,745				0.09	%
PSB Group, LLC	Services: Consumer	Senior Secured First Lien Term Loan (SOFR + 6.50%, 1.00% Floor)(23)		4/17/2030				5,692,279				5,666,821				5,692,279				3.65	%
		Senior Secured First Lien Revolver (SOFR + 6.50%, 1.00% Floor)(8)(12)(23)		4/17/2030				293,137				293,137				293,137				0.19	%
								5,985,416				5,959,958				5,985,416				3.84	%

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

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Company(1)	Industry	Type of Investment	Maturity		Par Amount/ Shares/Units(2)		~~Par Amount/ Shares/Units(2)~~		Amortized Cost(3)		~~Amortized Cost(3)~~		Fair Value(4)		~~Fair Value(4)~~		% of Net Assets(5)		~~% of Net Assets(5)~~
Redwood Trust Inc.(11)	Real Estate	Equity - 185,000 Common Units(13)				185,000		~~185,000~~		1,127,150		~~1,127,150~~		1,037,850		~~1,023,050~~		0.67	%	~~0.66~~	%
						185,000		~~185,000~~		1,127,150		~~1,127,150~~		1,037,850		~~1,023,050~~		0.67	%	~~0.66~~	%
Spotter Inc.	High Tech Industries	Equity - Series E-1 Preferred Stock(21)				51,786		~~51,786~~		750,005		~~750,005~~		792,844		~~804,237~~		0.52	%	~~0.52~~	%
		Equity – Series E-2-D Preferred Stock(21)						414,293				5,999,998				5,949,247				3.82	%
		Equity - Series E-2-D Preferred Stock(21)				414,293				5,999,998				5,862,246				3.81	%
						466,079		~~466,079~~		6,750,003		~~6,750,003~~		6,655,090		~~6,753,484~~		4.33	%	~~4.34~~	%
SS Acquisition, LLC (dba Soccer Shots Franchising)	Services: Consumer	Senior Secured First Lien Term Loan (SOFR + 5.75%, 1.00% Floor)(23)	12/20/2029	~~12/20/2029~~		13,401,786		~~13,435,714~~		13,342,528		~~13,373,281~~		13,401,786		~~13,435,714~~		8.71	%	~~8.62~~	%
		Senior Secured First Lien Revolver (SOFR + 5.75%, 1.00% Floor)(8)(12)(23)	12/20/2029	~~12/20/2029~~		400,000		~~400,000~~		400,000		~~400,000~~		400,000		~~400,000~~		0.26	%	~~0.26~~	%
								13,835,714				13,773,281				13,835,714				8.88	%
						13,801,786				13,742,528				13,801,786				8.97	%
Stancor (dba Industrial Flow Solutions Holdings, LLC)	Services: Business	Equity - 358,867 Class A Units(21)				358,867		~~358,867~~		345,491		~~345,491~~		314,132		~~314,132~~		0.20	%	~~0.20~~	%
						358,867		~~358,867~~		345,491		~~345,491~~		314,132		~~314,132~~		0.20	%	~~0.20~~	%
Tamarix Capital Partners II, L.P.(11)	Banking	Fund Investment(8)(~~21)(~~22)				N/A		~~N/A~~		2,138,134		~~2,194,384~~		2,319,823		~~2,227,463~~		1.51	%	~~1.43~~	%
						-		-		2,138,134		~~2,194,384~~		2,319,823		~~2,227,463~~		1.51	%	~~1.43~~	%
Thryv Holdings, Inc.(11)	Media: Broadcasting & Subscription	Senior Secured First Lien Term Loan (SOFR + 6.75%, 1.00% Floor)(14)(23)	5/1/2029	~~5/1/2029~~		2,025,000		~~2,025,000~~		2,011,129		~~2,010,248~~		1,984,500		~~2,009,813~~		1.29	%	~~1.29~~	%
						2,025,000		~~2,025,000~~		2,011,129		~~2,010,248~~		1,984,500		~~2,009,813~~		1.29	%	~~1.29~~	%
WHI Global, LLC	Aerospace & Defense	Senior Secured Revolving Note (SOFR + CSA + 8.75%, 3.00% Floor)(8)(12)(20)(23)		4/17/2029				1,010,346				991,015				1,001,254				0.64	%
		Senior Secured First Lien Term Loan (SOFR + CSA + 8.75%, 3.00% Floor)(20)(23)		4/17/2029				12,338,760				12,232,187				12,227,711				7.85	%
		Equity - 350 Common Shares(21)						350				700,000				434,746				0.28	%
								13,349,456				13,923,202				13,663,711				8.77	%

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

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Company(1)	Industry	Type of Investment	Maturity		Par Amount/ Shares/Units(2)		~~Par Amount/ Shares/Units(2)~~		Amortized Cost(3)		~~Amortized Cost(3)~~		Fair Value(4)		~~Fair Value(4)~~		% of Net Assets(5)		~~% of Net Assets(5)~~
XYZ Roofco, LLC (dba SMC Roofing Solutions LLC)	Services: Consumer	First Out Term Loan (SOFR + 3.50%, 2.00% Floor)(24)		10/16/2028				612,189				617,329				596,884				0.38	%
WHI Global, LLC	Aerospace & Defense	Senior Secured Revolving Note(SOFR + CSA + 8.75%, 3.00% Floor)(8)(12)(20)(23)	4/17/2029			1,452,373				1,593,293				1,468,349				0.95	%
		First Out Delayed Draw Term Loan (SOFR + 3.50%, 2.00% Floor)(24)		10/16/2028				30,950				31,933				30,176				0.02	%
		Senior Secured First Lien Term Loan (SOFR + CSA + 8.75%, 3.00% Floor)(20)(23)	4/17/2029			12,307,680				12,207,606				12,443,063				8.10	%
		Last Out Term Loan (SOFR + 6.25% + 2.75% First Out Skim, 2.00% Floor)(24)		10/16/2028				1,863,568				1,861,764				1,816,979				1.17	%
		Equity - 350 Common Shares(21)				350				700,000				1,344,833				0.87	%
		Last Out Delayed Draw Term Loan (SOFR + 6.25% + 2.75% First Out Skim, 2.00% Floor)(24)		10/16/2028				140,082				140,082				136,580				0.09	%
						13,760,403				14,500,899				15,256,245				9.92	%
								2,646,789				2,651,108				2,580,619				1.66	%
XYZ Roofco, LLC (dba SMC Roofing Solutions LLC)	Services: Consumer	First Out Term Loan (SOFR + 3.50%, 2.00% Floor)(24)	10/16/2028			605,831				611,209				589,170				0.38	%
Subtotal Non-Controlled/Non-Affiliated Investments								101,611,383			$	138,028,011			$	139,235,510				89.37	%
		First Out Delayed Draw Term Loan (SOFR + 3.50%, 2.00% Floor)(24)	10/16/2028			30,950				31,933				30,099				0.02	%
Affiliated Investments:(6)
		Last Out Term Loan (SOFR + 6.25% + 2.75% First Out Skim, 2.00% Floor)(24)	10/16/2028			1,863,568				1,863,648				1,807,661				1.18	%
Advocates for Disabled Vets, LLC (dba Reps for Vets)	Services: Consumer	12% Senior Secured First Lien Term Loan		3/7/2030				8,898,750			$	8,744,150			$	8,765,269				5.63	%
		Last Out Delayed Draw Term Loan (SOFR + 6.25% + 2.75% First Out Skim, 2.00% Floor)(24)	10/16/2028			140,082				140,082				135,879				0.09	%
		Equity - 3,375,000 Units(21)						3,375,000				3,375,000				3,173,475				2.04	%
						2,640,431				2,646,872				2,562,809				1.67	%
								12,273,750				12,119,150				11,938,744				7.67	%
Subtotal Non-Controlled/Non-Affiliated Investments						100,245,977			$	128,237,811			$	130,033,295				84.54	%
FST Holdings Parent, LLC	High Tech Industries	Equity - 625,548 Class A Units(17)						625,548				10,008,289				10,955,183				7.03	%
								625,548				10,008,289				10,955,183				7.03	%
MB Precision Investment Holdings LLC	Aerospace & Defense	Senior Secured First Lien Term Loan (SOFR + CSA + 8.00%, 4.00% Floor)(20)(24)(27)		9/30/2028				6,800,282				6,674,395				6,392,265				4.10	%
		Senior Secured Delayed Draw Term Loan (SOFR + CSA + 10.00%, 4.00% Floor)(8)(20)(24)(27)		10/1/2028				1,943,662				1,851,448				1,874,646				1.20	%
		Senior Secured First Lien Revolver (SOFR + CSA + 8.00%, 4.00% Floor)(8)(12)(20)(24)(27)		9/30/2028				2,193,797				2,164,305				2,062,170				1.32	%
		Equity - Class E Preferred Units(21)(27)						4,313,067				3,377,917				2,949,060				1.89	%
		Warrants - 2.28% of Outstanding Equity(21)						3,380,282				827,409				503,500				0.32	%
								18,631,090				14,895,474				13,781,641				8.83	%
Subtotal Affiliated Investments								31,530,388			$	37,022,913			$	36,675,568				23.53	%

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

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Company(1)	Industry	Type of Investment	Maturity		Par Amount/ Shares/Units(2)		~~Par Amount/ Shares/Units(2)~~		Amortized Cost(3)		~~Amortized Cost(3)~~		Fair Value(4)		~~Fair Value(4)~~		% of Net Assets(5)		~~% of Net Assets(5)~~
Controlled Investments:(7)
Affiliated Investments:(6)
ECC Capital Corp.	Real Estate	Equity - 84,000,000 Units(13)(21)						84,000,000			$	4,257,002			$	9,660,000				6.20	%
Advocates for Disabled Vets, LLC (dba Reps for Vets)	Services: Consumer	Senior Secured First Lien Term Loan (10.00% + 4.00% PIK)	3/7/2030			8,895,231				8,748,097				8,650,613				5.62	%
		Senior Secured Promissory Note (SOFR + 5.00%, 0.00% Floor)(24)		12/31/2031				6,997,012				6,997,012				6,997,012				4.49	%
		Equity - 3,375,000 Units(21)				3,375,000				3,375,000				2,798,324				1.82	%
								90,997,012				11,254,014				16,657,012				10.69	%
						12,270,231				12,123,097				11,448,937				7.44	%
FlexFIN, LLC	Services: Business	Equity Interest						36,434,271				36,434,271				36,434,271				23.38	%
FST Holdings Parent, LLC	High Tech Industries	Equity - 625,548 Class A Units(17)				625,548				10,008,289				12,185,404				7.93	%
								36,434,271				36,434,271				36,434,271				23.38	%
						625,548				10,008,289				12,185,404				7.93	%
NSG Captive, Inc.	Insurance	Equity - 100,000 Units(9)(21)						100,000				49,255,076				48,323,529				31.01	%
MB Precision Investment Holdings LLC	Aerospace & Defense	Senior Secured First Lien Term Loan(SOFR + CSA + 8.00%, 4.00% Floor)(20)(24)(27)	10/1/2028			6,757,183				6,653,243				6,123,697				3.98	%
								100,000				49,255,076				48,323,529				31.01	%
		Senior Secured Delayed Draw Term Loan (SOFR + CSA + 10.00%, 4.00% Floor)(8)(20)(24)(27)	10/1/2028			1,943,662				1,877,425				1,786,126				1.16	%
NVTN LLC	Hotel, Gaming & Leisure	Senior Secured First Lien Term Loan D (SOFR + 7.00%, 2.00% Floor)(24)		12/31/2029				9,850,000				9,979,539				9,800,750				6.29	%
		Senior Secured First Lien Revolver (SOFR + CSA + 8.00%, 4.00% Floor)(8)(12)(20)(24)(27)	10/1/2028			2,193,797				2,170,442				1,988,129				1.29	%
		Senior Secured First Lien Term Loan B (AFR)(26)		12/31/2029				17,552,420				13,916,082				8,512,924				5.46	%
		Senior Secured 6th Amendment Term Loan (SOFR + CSA + 10.00%, 4.00% Floor)(20)(24)	10/1/2028			591,549				573,803				550,880				0.36	%
		Senior Secured First Lien Term Loan C (SOFR + 12.00% PIK, 2.00% Floor)(10)		12/31/2029				11,506,159				7,570,055				-				0.00	%
		Equity - Class E Preferred Units(21)(27)				4,525,766				3,594,303				2,692,831				1.75	%
		Equity - 1,000 Class A Units(21)						1,000				21,450,924				-				0.00	%
		Warrants - 2.28% of Outstanding Equity(21)				3,380,282				827,409				-				0.00	%
								38,909,579				52,916,600				18,313,674				11.75	%
						19,392,239				15,696,625				13,141,663				8.54	%
Subtotal Control Investments								166,440,862			$	149,859,961			$	119,728,486				76.83	%
Subtotal Affiliated Investments						32,288,018			$	37,828,011			$	36,776,004				23.91	%
	Total Investments, December 31, 2025							299,582,633			$	324,910,885			$	295,639,564				189.73	%

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

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

(1)	Substantially all of our investments are domiciled in the United States. Certain investments also have international operations.
Company(1)		Industry	Type of Investment	Maturity	Par Amount/ Shares/Units(2)		Amortized Cost(3)		Fair Value(4)		% of Net Assets(5)
(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.
Controlled Investments:(7)
(3)	Net unrealized depreciation for U.S. federal income tax purposes totaled $(29,271,321).
ECC Capital Corp.		Real Estate	Equity - 84,000,000 Units(13)(21)			84,000,000	$	4,257,002	$	9,660,000		6.28	%
	The tax cost basis of investments is $324,910,885 as of December 31, 2025.
			Senior Secured Promissory Note (SOFR + 5.00%, 0.00% Floor)(24)	12/31/2031		6,997,012		6,997,012		6,997,012		4.55	%
	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.
						90,997,012		11,254,014		16,657,012		10.83	%
(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).
FlexFIN, LLC		Services: Business	Equity Interest			36,796,344		36,796,344		36,796,344		23.92	%
(5)	Percentage is based on net assets of $155,821,248 as of December 31, 2025.
						36,796,344		36,796,344		36,796,344		23.92	%
(6)	Affiliated Investments are defined by the 1940 Act as investments in companies in which the Company owns between 5% and 25% outstanding voting securities or is under common control with such portfolio company.
NSG Captive, Inc.		Insurance	Equity - 100,000 Units(9)(21)			100,000		55,729,376		55,355,693		36.00	%
(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.
						100,000		55,729,376		55,355,693		36.00	%
(8)	The investment has an unfunded commitment as of December 31, 2025 (see Note 8), and fair value includes the value of any unfunded commitments. The negative cost, if applicable, is the result of the capitalized discount being greater than the principal amount outstanding on the loan. The negative fair value, if applicable, is the result of the capitalized discount on the loan.
NVTN LLC		Hotel, Gaming & Leisure	Senior Secured First Lien Term Loan D (SOFR + 7.00%, 2.00% Floor)(24)	12/31/2029		9,850,000		9,979,539		9,800,750		6.37	%
(9)	NSG Captive, Inc. owns 80% of National Security Group Holdings Inc.
			Senior Secured First Lien Term Loan B (AFR)(26)	12/31/2029		17,552,420		13,916,082		9,741,593		6.33	%
(10)	The investment was on non-accrual status as of December 31, 2025.
			Senior Secured First Lien Term Loan C (SOFR + 12.00% PIK, 2.00% Floor)(10)	12/31/2029		11,506,159		7,570,055		-		0.00	%
(11)	The investment is not a qualifying asset as defined under Section 55(a) of the 1940 Act, in a whole, or in part. As of December 31, 2025, non-qualifying assets represented 13.25% of total assets.
			Senior Secured Revolving Note (SOFR + 7.00%, 2.00% Floor)(24)	12/31/2029		650,000		650,000		650,000		0.42	%
(12)	This investment earns 0.50% commitment fee on all unused commitments as of December 31, 2025, and is recorded as a component of interest income on the Consolidated Statements of Operations.
			Equity - 1,000 Class A Units(21)			1,000		21,450,924		-		0.00	%
(13)	This investment represents a Level 1 security in the ASC 820 table as of December 31, 2025 (see Note 4).
						39,559,579		53,566,600		20,192,343		13.12	%
(14)	This investment represents a Level 2 security in the ASC 820 table as of December 31, 2025 (see Note 4).
Subtotal Control Investments						167,452,935	$	157,346,334	$	129,001,392		83.87	%
(15)	The interest rate on this preferred equity is fixed-to-floating and shifted to 3 month SOFR plus a CSA of 0.262% plus a 4.743% spread on 9/30/2025.
		Total Investments, March 31, 2026				299,986,930	$	323,412,156	$	295,810,691		192.32	%
(16)	Not in use.
(17)	The investment is held through PhenixFIN Investment Holdings FST, LLC.
(18)	The interest rate on this preferred equity is fixed-to-floating and will shift to 3 month SOFR plus a CSA of 0.262% plus a 6.130% spread on 10/15/2026.
(19)	Not in use.
(20)	Credit Spread Adjustment (“CSA”).
(21)	Non-income producing security.
(22)	The investment is valued using NAV as a practical expedient.
(23)	The interest rate on these securities is subject to 1 month SOFR, which as of December 31, 2025 was 3.69%.
(24)	The interest rate on these securities is subject to 3 month SOFR, which as of December 31, 2025 was 3.65%.
(25)	The interest rate on these securities is subject to 6 month SOFR, which as of December 31, 2025 was 3.57%.
(26)	The interest rate on these securities is subject to the monthly Applicable Federal Rate (“AFR”), which as of December 31, 2025 was 3.60%.
(27)	The investment includes an exit fee that is receivable upon repayment of the loan. See Note 2 “Significant Accounting Policies.”
(28)	The interest rate on this preferred equity is 7.875%.
(29)	For this investment, the 10/1/2025 and 2/1/2026 interest payments are payment-in-kind (“PIK”).

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

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of ~~September~~March 3031, ~~2025~~2026

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:
Adamas Trust, Inc.(11)	Real Estate	Equity - 221,469 Class E Preferred Units(13)(24)			$	221,469	$	5,510,240	$	5,565,516		3.45	%
		Equity - 17,243 Class F Preferred Units(13)(18)				17,243		375,635		392,278		0.24	%
						238,712		5,885,875		5,957,794		3.69	%
Altisource S.A.R.L.(11)	Services: Business	Senior Secured First Lien Term Loan B (SOFR + CSA + 6.50%)(14)(20)(24)(27)		4/30/2030		8,040,718		8,460,009		8,322,143		5.18	%
		Equity - 547,180 Units(13)(21)				547,180		3,327,909		6,380,119		3.97	%
		Warrants(13)(21)		4/2/2029		111,343		647,105		77,940		0.05	%
		Warrants(13)(21)		4/30/2032		111,343		622,110		64,579		0.04	%
						8,810,584		13,057,133		14,844,781		9.24	%
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)	Real Estate	First Lien Term Loan (SOFR + CSA + 2.75%, 1.00% Floor)(14)(20)(23)(29)		11/1/2025		2,879,525		2,419,049		2,753,546		1.71	%
						2,879,525		2,419,049		2,753,546		1.71	%
Chimera Investment Corp.(11)	Real Estate	Equity - 151,710 Class C Preferred Units(13)(15)				151,710		3,635,972		3,504,501		2.18	%
		Equity - 26,133 Class B Preferred Units(13)(24)				26,133		635,531		629,544		0.39	%
						177,843		4,271,503		4,134,045		2.57	%
Compass Diversified Holdings(11)	Real Estate	Equity - 22,049 Series C Preferred Units(13)(28)				22,049		381,008		405,702		0.25	%
						22,049		381,008		405,702		0.25	%
Copper Property CTL Pass Through Trust	Real Estate	Equity Certificates(13)				637,795		7,200,434		7,915,036		4.92	%
						637,795		7,200,434		7,915,036		4.92	%
Franklin BSP Realty Trust, Inc.(11)	Real Estate	Equity - 50,000 Common Units(13)				50,000		498,155		543,000		0.34	%
						50,000		498,155		543,000		0.34	%
Innovate Corp.(11)	Construction & Building	10.50% Senior Secured Notes(14)		2/1/2027		4,558,125		4,022,788		4,033,941		2.51	%
						4,558,125		4,022,788		4,033,941		2.51	%

(Unaudited)

⁽¹⁾

Substantially 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 $(27,601,465).

The tax cost basis of investments is $323,412,156 as of March 31, 2026.

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

⁽⁴⁾

Unless otherwise indicated, all securities are valued using significant unobservable inputs, which are categorized as Level 3 assets under the definition of ASC 820 fair value hierarchy (see Note 4).

⁽⁵⁾

Percentage is based on net assets of $153,811,704 as of March 31, 2026.

⁽⁶⁾

Affiliated Investments are defined by the 1940 Act as investments in companies in which the Company owns between 5% and 25% outstanding voting securities or is under common control with such portfolio company.

⁽⁷⁾

Control Investments are defined by the Investment Company Act of 1940, as amended (the “1940 Act”), as investments in companies in which the Company owns more than 25% of the voting securities or maintains greater than 50% of the board representation.

⁽⁸⁾

The investment has an unfunded commitment as of March 31, 2026 (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.

⁽⁹⁾

NSG Captive, Inc. owns approximately 86.7% of National Security Group Holdings Inc.

⁽¹⁰⁾

The investment was on non-accrual status as of March 31, 2026.

⁽¹¹⁾

The investment is not a qualifying asset as defined under Section 55(a) of the 1940 Act, in whole, or in part. As of March 31, 2026, non-qualifying assets represented 11.16% of total assets.

⁽¹²⁾

This investment earns 0.50% commitment fee on all unused commitments as of March 31, 2026, 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, 2026 (see Note 4).

⁽¹⁴⁾

This investment represents a Level 2 security in the ASC 820 table as of March 31, 2026 (see Note 4).

⁽¹⁵⁾

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

⁽¹⁶⁾

Not in use.

⁽¹⁷⁾

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

⁽¹⁸⁾

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

⁽¹⁹⁾

Not in use.

⁽²⁰⁾

Credit Spread Adjustment (“CSA”).

⁽²¹⁾

Non-income producing security.

⁽²²⁾

The investment is valued using NAV as a practical expedient.

⁽²³⁾

The interest rate on these securities is subject to 1 month SOFR, which as of March 31, 2026 was 3.66%.

⁽²⁴⁾

The interest rate on these securities is subject to 3 month SOFR, which as of March 31, 2026 was 3.68%.

⁽²⁵⁾

The interest rate on these securities is subject to 6 month SOFR, which as of March 31, 2026 was 3.70%.

⁽²⁶⁾

The interest rate on these securities is subject to the quarterly Applicable Federal Rate, (“AFR”), which as of March 31, 2026 was 3.54%.

⁽²⁷⁾

The investment includes an exit fee that is receivable upon repayment of the loan. See Note 2 “Significant Accounting Policies.”

⁽²⁸⁾

The interest rate on this preferred equity is 7.875%.

⁽²⁹⁾

For this investment, the 8/1/2025 and 2/1/2026 interest payments are payment-in-kind (“PIK”).

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

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of September 30, 2025

Company(1)	Industry	Type of Investment	Maturity		Par Amount/Shares/Units(2)		~~Par Amount/ Shares/Units(2)~~		Amortized Cost(3)		~~Amortized Cost(3)~~		Fair Value(4)		~~Fair Value(4)~~		% of Net Assets(5)		~~% of Net Assets(5)~~
Invesco Mortgage Capital, Inc.(11)	Real Estate	Equity - 180,000 Common Units(13)						180,000				1,411,789				1,360,800				0.85	%
Non-Controlled/Non-Affiliated Investments:
								180,000				1,411,789				1,360,800				0.85	%
Adamas Trust, Inc.(11)	Real Estate	Equity - 221,469 Class E Preferred Units(13)(24)			$	221,469			$	5,510,240			$	5,565,516				3.45	%
NGS-WCS Group Holdings	Construction & Building	Senior Secured First Lien Term Loan B (SOFR + 4.75%, 0.50% Floor)(23)		5/31/2030				987,500				983,422				997,375				0.62	%
		Equity - 17,243 Class F Preferred Units(13)(18)				17,243				375,635				392,278				0.24	%
JFL-NGS-WCS Partners, LLC		Equity - 10,000,000 Units(21)						10,000,000				10,000,000				13,100,000				8.15	%
						238,712				5,885,875				5,957,794				3.69	%
								10,987,500				10,983,422				14,097,375				8.77	%
Altisource S.A.R.L.(11)	Services: Business	Senior Secured First Lien Term Loan B (SOFR + CSA + 6.50%)(14)(20)(24)(27)	4/30/2030			8,040,718				8,460,009				8,322,143				5.18	%
Kemmerer Operations, LLC	Metals & Mining	Senior Secured First Lien Term Loan (SOFR + 5.00%)(24)		12/31/2028				8,762,782				8,762,782				8,762,782				5.45	%
		Equity - 547,180 Units(13)(21)				547,180				3,327,909				6,380,119				3.97	%
								8,762,782				8,762,782				8,762,782				5.45	%
		Warrants(13)(21)	4/2/2029			111,343				647,105				77,940				0.05	%
Lucky Bucks, LLC (dba Arc Gaming & Technologies LLC)	Consumer Discretionary	Priority Second Out Term Loan (SOFR + CSA + 7.50%, 5.00% PIK, 1.00% Floor)(20)(25)		10/2/2029			$	2,143,683			$	1,998,121			$	1,993,625				1.24	%
		Warrants(13)(21)	4/30/2032			111,343				622,110				64,579				0.04	%
		Priority First Out Exit Term Loan (SOFR + CSA + 7.50%, 1.00% Floor)(20)(25)		10/2/2028				1,514,302				1,410,541				1,514,302				0.94	%
						8,810,584				13,057,133				14,844,781				9.24	%
LB NewHoldCo, LLC		Equity - 230,739 Membership Units(21)						230,739				449,393				994,485				0.62	%
Boostability Seotowncenter, Inc.	Services: Business	Equity - 833,152 Common Units(21)				833,152				66,475				-				0.00	%
								3,888,724				3,858,055				4,502,412				2.80	%
						833,152				66,475				-				0.00	%
MFA Financial, Inc.(11)	Real Estate	Equity - 114,695 Class C Preferred Units(13)(24)						114,695				2,800,579				2,737,770				1.70	%
CB&L Associates Holdco I, LLC(11)	Real Estate	First Lien Term Loan (SOFR + CSA + 2.75%, 1.00% Floor)(14)(20)(23)(29)	11/1/2025			2,879,525				2,419,049				2,753,546				1.71	%
		Equity - 70,000 Common Units(13)						70,000				714,994				643,300				0.40	%
						2,879,525				2,419,049				2,753,546				1.71	%
								184,695				3,515,573				3,381,070				2.10	%
Chimera Investment Corp.(11)	Real Estate	Equity - 151,710 Class C Preferred Units(13)(15)				151,710				3,635,972				3,504,501				2.18	%
Neptune Bidco US, Inc. (dba Nielsen)	Media: Broadcasting & Subscription	First Lien Term Loan (SOFR + CSA + 5.00%, 0.50% Floor)(14)(20)(24)		4/11/2029				2,967,133				2,786,574				2,822,486				1.76	%
		Equity - 26,133 Class B Preferred Units(13)(24)				26,133				635,531				629,544				0.39	%
		9.29% Senior Secured Note(14)		4/15/2029				4,000,000				3,676,250				3,910,000				2.43	%
						177,843				4,271,503				4,134,045				2.57	%
								6,967,133				6,462,824				6,732,486				4.19	%
Onity Group Inc.(11)	Real Estate	Equity - 200,000 Preferred Units(28)						200,000				3,925,000				3,948,000				2.46	%
								200,000				3,925,000				3,948,000				2.46	%
PHH Mortgage Corp.	Real Estate	9.875% Senior Secured Note(14)		11/1/2029				2,500,000				2,343,050				2,515,625				1.56	%
								2,500,000				2,343,050				2,515,625				1.56	%
Power Stop LLC	Automotive	Senior Secured First Lien Term Loan (SOFR + CSA + 4.75%, 0.50% Floor)(14)(20)(24)		1/26/2029				9,704,216				8,504,727				7,860,415				4.89	%
								9,704,216				8,504,727				7,860,415				4.89	%

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

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of September 30, 2025

Company(1)	Industry	Type of Investment	Maturity		Par Amount/ Shares/Units(2)		~~Par Amount/ Shares/Units(2)~~		Amortized Cost(3)		~~Amortized Cost(3)~~		Fair Value(4)		~~Fair Value(4)~~		% of Net Assets(5)		~~% of Net Assets(5)~~
PREIT Associates	Real Estate	Senior Secured First Lien Term Loan (SOFR + 7.00%)(14)(23)		4/1/2029				56,201				55,077				57,606				0.04	%
Compass Diversified Holdings(11)	Real Estate	Equity - 22,049 Series C Preferred Units(13)(28)				22,049				381,008				405,702				0.25	%
		Senior Secured Revolving Note (SOFR + 5.50%)(8)(23)		12/31/2028				73,083				72,230				71,251				0.04	%
						22,049				381,008				405,702				0.25	%
								129,284				127,307				128,857				0.08	%
Copper Property CTL Pass Through Trust	Real Estate	Equity Certificates(13)				637,795				7,200,434				7,915,036				4.92	%
PSB Group, LLC	Services: Consumer	Senior Secured First Lien Term Loan (SOFR + 6.50%, 1.00% Floor)(23)		4/17/2030				5,706,618				5,679,996				5,706,618				3.55	%
						637,795				7,200,434				7,915,036				4.92	%
		Senior Secured First Lien Revolver (SOFR + 6.50%, 1.00% Floor)(8)(12)(23)		4/17/2030				293,137				293,137				293,137				0.18	%
Franklin BSP Realty Trust, Inc.(11)	Real Estate	Equity - 50,000 Common Units(13)				50,000				498,155				543,000				0.34	%
								5,999,755				5,973,133				5,999,755				3.73	%
						50,000				498,155				543,000				0.34	%
Redwood Trust Inc.(11)	Real Estate	Equity - 165,000 Common Units(13)						165,000				1,012,942				955,350				0.59	%
Innovate Corp.(11)	Construction & Building	10.50% Senior Secured Notes(14)	2/1/2027			4,558,125				4,022,788				4,033,941				2.51	%
								165,000				1,012,942				955,350				0.59	%
						4,558,125				4,022,788				4,033,941				2.51	%
SS Acquisition, LLC (dba Soccer Shots Franchising)	Services: Consumer	Senior Secured First Lien Term Loan (SOFR + 5.75%, 1.00% Floor)(23)		12/20/2029				13,469,643				13,404,028				13,469,643				8.38	%
Invesco Mortgage Capital, Inc.(11)	Real Estate	Equity - 180,000 Common Units(13)				180,000				1,411,789				1,360,800				0.85	%
		Senior Secured First Lien Revolver (SOFR + 5.75%, 1.00% Floor)(8)(12)(23)		12/20/2029				400,000				400,000				400,000				0.25	%
						180,000				1,411,789				1,360,800				0.85	%
								13,869,643				13,804,028				13,869,643				8.63	%
NGS-WCS Group Holdings	Construction & Building	Senior Secured First Lien Term Loan B (SOFR + 4.75%, 0.50% Floor)(23)	5/31/2030			987,500				983,422				997,375				0.62	%
Stancor (dba Industrial Flow Solutions Holdings, LLC)	Services: Business	Equity - 358,867 Class A Units(21)						358,867				345,491				314,132				0.20	%
JFL-NGS-WCS Partners, LLC		Equity - 10,000,000 Units(21)				10,000,000				10,000,000				13,100,000				8.15	%
								358,867				345,491				314,132				0.20	%
						10,987,500				10,983,422				14,097,375				8.77	%
Spotter Inc.	High Tech Industries	Equity - Series D-1 Preferred Stock(21)						414,293				5,999,998				5,999,998				3.73	%
Kemmerer Operations, LLC	Metals & Mining	Senior Secured First Lien Term Loan (SOFR + 5.00%)(24)	12/31/2028			8,762,782				8,762,782				8,762,782				5.45	%
								414,293				5,999,998				5,999,998				3.73	%
						8,762,782				8,762,782				8,762,782				5.45	%
Staples, Inc.	Services: Consumer	First Lien Term Loan (SOFR + 5.75%, 0.50% Floor)(14)(24)		9/1/2029				3,960,000				3,830,925				3,742,200				2.33	%
								3,960,000				3,830,925				3,742,200				2.33	%
Tamarix Capital Partners II, L.P.(11)	Banking	Fund Investment(8)(21)						N/A				2,194,384				2,227,463				1.39	%
								-				2,194,384				2,227,463				1.39	%
Thryv Holdings, Inc.(11)	Media: Broadcasting & Subscription	Senior Secured First Lien Term Loan (SOFR + 6.75%, 1.00% Floor)(14)(23)		5/1/2029				2,025,000				2,009,375				2,027,531				1.26	%
								2,025,000				2,009,375				2,027,531				1.26	%

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

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of September 30, 2025

Company(1)	Industry	Type of Investment	Maturity		Par Amount/ Shares/Units(2)		~~Par Amount/ Shares/Units(2)~~		Amortized Cost(3)		~~Amortized Cost(3)~~		Fair Value(4)		~~Fair Value(4)~~		% of Net Assets(5)		~~% of Net Assets(5)~~
WHI Global, LLC	Aerospace & Defense	Senior Secured Revolving Note(SOFR + CSA + 8.75%, 3.00% Floor)(8)(12)(20)(23)		4/17/2029				884,053				863,075				876,097				0.54	%
Lucky Bucks, LLC (dba Arc Gaming & Technologies LLC)	Consumer Discretionary	Priority Second Out Term Loan (SOFR + CSA + 7.50%, 5.00% PIK, 1.00% Floor)(20)(25)	10/2/2029		$	2,143,683			$	1,998,121			$	1,993,625				1.24	%
		Senior Secured First Lien Term Loan(SOFR + CSA + 8.75%, 3.00% Floor)(20)(23)		4/17/2029				12,369,840				12,256,814				12,258,511				7.62	%
		Priority First Out Exit Term Loan (SOFR + CSA + 7.50%, 1.00% Floor)(20)(25)	10/2/2028			1,514,302				1,410,541				1,514,302				0.94	%
		Equity - 350 Common Shares(21)						350				700,000				483,284				0.30	%
LB NewHoldCo, LLC		Equity - 230,739 Membership Units(21)				230,739				449,393				994,485				0.62	%
								13,254,243				13,819,889				13,617,892				8.46	%
						3,888,724				3,858,055				4,502,412				2.80	%
XYZ Roofco, LLC (dba SMC Roofing Solutions LLC)	Services: Consumer	First Out Term Loan (SOFR + 3.50%, 2.00% Floor)(24)		10/16/2028				618,546				623,442				618,546				0.38	%
MFA Financial, Inc.(11)	Real Estate	Equity - 114,695 Class C Preferred Units(13)(24)				114,695				2,800,579				2,737,770				1.70	%
		First Out Delayed Draw Term Loan (SOFR + 3.50%, 2.00% Floor)(24)		10/16/2028				30,950				31,933				31,128				0.02	%
		Equity - 70,000 Common Units(13)				70,000				714,994				643,300				0.40	%
		Last Out Term Loan (SOFR + 6.25% + 2.75% First Out Skim, 2.00% Floor)(24)		10/16/2028				1,863,568				1,859,920				1,858,909				1.16	%
						184,695				3,515,573				3,381,070				2.10	%
		Last Out Delayed Draw Term Loan (SOFR + 6.25% + 2.75% First Out Skim, 2.00% Floor)(24)		10/16/2028				140,082				140,082				139,955				0.09	%
Neptune Bidco US, Inc. (dba Nielsen)	Media: Broadcasting & Subscription	First Lien Term Loan (SOFR + CSA + 5.00%, 0.50% Floor)(14)(20)(24)	4/11/2029			2,967,133				2,786,574				2,822,486				1.76	%
								2,653,146				2,655,377				2,648,538				1.65	%
		9.29% Senior Secured Note(14)	4/15/2029			4,000,000				3,676,250				3,910,000				2.43	%
Subtotal Non-Controlled/Non-Affiliated Investments								104,412,066			$	139,342,491			$	145,280,169				90.35	%
						6,967,133				6,462,824				6,732,486				4.19	%
Affiliated Investments:(6)
Onity Group Inc.(11)	Real Estate	Equity - 200,000 Preferred Units(28)				200,000				3,925,000				3,948,000				2.46	%
Advocates for Disabled Vets, LLC (dba Reps for Vets)	Services: Consumer	12% Senior Secured First Lien Term Loan		3/7/2030				8,932,500				8,770,471				8,798,513				5.47	%
						200,000				3,925,000				3,948,000				2.46	%
		Equity - 3,375,000 Units(21)						3,375,000				3,375,000				3,359,511				2.09	%
PHH Mortgage Corp.	Real Estate	9.875% Senior Secured Note(14)	11/1/2029			2,500,000				2,343,050				2,515,625				1.56	%
								12,307,500				12,145,471				12,158,024				7.56	%
						2,500,000				2,343,050				2,515,625				1.56	%
FST Holdings Parent, LLC	High Tech Industries	Equity - 625,548 Class A Units(17)						625,548				10,008,289				10,960,741				6.82	%
Power Stop LLC	Automotive	Senior Secured First Lien Term Loan (SOFR + CSA + 4.75%, 0.50% Floor)(14)(20)(24)	1/26/2029			9,704,216				8,504,727				7,860,415				4.89	%
								625,548				10,008,289				10,960,741				6.82	%
						9,704,216				8,504,727				7,860,415				4.89	%
MB Precision Investment Holdings LLC	Aerospace & Defense	Senior Secured First Lien Term Loan(SOFR + CSA + 8.00%, 4.00% Floor)(20)(24)(27)		9/30/2028				6,843,380				6,696,228				6,398,561				3.98	%
PREIT Associates	Real Estate	Senior Secured First Lien Term Loan (SOFR + 7.00%)(14)(23)	4/1/2029			56,201				55,077				57,606				0.04	%
		Senior Secured Revolving Note (SOFR + 5.50%)(8)(23)	12/31/2028			73,083				72,230				71,251				0.04	%
						129,284				127,307				128,857				0.08	%

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

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of September 30, 2025

Company(1)	Industry	Type of Investment	Maturity		Par Amount/ Shares/Units(2)		~~Par Amount/ Shares/Units(2)~~		Amortized Cost(3)		~~Amortized Cost(3)~~		Fair Value(4)		~~Fair Value(4)~~		% of Net Assets(5)		~~% of Net Assets(5)~~
		Senior Secured Delayed Draw Term Loan(SOFR + CSA + 10.00%, 4.00% Floor)(8)(20)(24)(27)		10/1/2028				505,470				468,621				490,306				0.30	%
PSB Group, LLC	Services: Consumer	Senior Secured First Lien Term Loan (SOFR + 6.50%, 1.00% Floor)(23)	4/17/2030			5,706,618				5,679,996				5,706,618				3.55	%
		Senior Secured First Lien Revolver(SOFR + CSA + 8.00%, 4.00% Floor)(8)(12)(20)(24)(27)		9/30/2028				2,112,671				2,077,048				1,975,347				1.23	%
		Senior Secured First Lien Revolver (SOFR + 6.50%, 1.00% Floor)(8)(12)(23)	4/17/2030			293,137				293,137				293,137				0.18	%
		Equity - Class E Preferred Units(21)(27)						4,106,076				3,167,157				2,725,408				1.70	%
						5,999,755				5,973,133				5,999,755				3.73	%
		Warrants - 2.28% of Outstanding Equity(21)						3,380,282				827,409				673,018				0.42	%
Redwood Trust Inc.(11)	Real Estate	Equity - 165,000 Common Units(13)				165,000				1,012,942				955,350				0.59	%
								16,947,879				13,236,463				12,262,640				7.63	%
						165,000				1,012,942				955,350				0.59	%
Subtotal Affiliated Investments								29,880,927			$	35,390,223			$	35,381,405				22.01	%
SS Acquisition, LLC (dba Soccer Shots Franchising)	Services: Consumer	Senior Secured First Lien Term Loan (SOFR + 5.75%, 1.00% Floor)(23)	12/20/2029			13,469,643				13,404,028				13,469,643				8.38	%
Controlled Investments:(7)
		Senior Secured First Lien Revolver (SOFR + 5.75%, 1.00% Floor)(8)(12)(23)	12/20/2029			400,000				400,000				400,000				0.25	%
ECC Capital Corp.	Real Estate	Equity - 84,000,000 Units(13)(21)						84,000,000			$	4,257,002			$	6,636,000				4.13	%
						13,869,643				13,804,028				13,869,643				8.63	%
		Senior Secured Promissory Note (SOFR + 5.00%, 0.00% Floor)(24)		12/31/2031				6,997,012				6,997,012				6,997,012				4.35	%
Stancor (dba Industrial Flow Solutions Holdings, LLC)	Services: Business	Equity - 358,867 Class A Units(21)				358,867				345,491				314,132				0.20	%
								90,997,012				11,254,014				13,633,012				8.48	%
						358,867				345,491				314,132				0.20	%
FlexFIN, LLC	Services: Business	Equity Interest						37,180,761				37,180,761				37,180,761				23.13	%
Spotter Inc.	High Tech Industries	Equity - Series D-1 Preferred Stock(21)				414,293				5,999,998				5,999,998				3.73	%
								37,180,761				37,180,761				37,180,761				23.13	%
						414,293				5,999,998				5,999,998				3.73	%
NSG Captive, Inc.	Insurance	Equity - 100,000 Units(9)(21)						100,000				49,255,076				48,469,540				30.15	%
Staples, Inc.	Services: Consumer	First Lien Term Loan (SOFR + 5.75%, 0.50% Floor)(14)(24)	9/1/2029			3,960,000				3,830,925				3,742,200				2.33	%
								100,000				49,255,076				48,469,540				30.15	%
						3,960,000				3,830,925				3,742,200				2.33	%
NVTN LLC	Hotel, Gaming & Leisure	Senior Secured Revolving Note (SOFR + 7.00%, 2.00% Floor)(23)		12/31/2026				8,900,000				9,029,539				8,900,000				5.54	%
Tamarix Capital Partners II, L.P.(11)	Banking	Fund Investment(8)(21)				N/A				2,194,384				2,227,463				1.39	%
		Senior Secured First Lien Term Loan B (AFR)(26)		12/31/2026				17,552,420				13,916,082				13,427,601				8.35	%
						-				2,194,384				2,227,463				1.39	%
		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	%
Thryv Holdings, Inc.(11)	Media: Broadcasting & Subscription	Senior Secured First Lien Term Loan (SOFR + 6.75%, 1.00% Floor)(14)(23)	5/1/2029			2,025,000				2,009,375				2,027,531				1.26	%
		Equity - 1,000 Class A Units(21)						1,000				21,450,924				-				0.00	%
						2,025,000				2,009,375				2,027,531				1.26	%
								37,959,579				51,966,600				22,327,601				13.89	%
Subtotal Control Investments								166,237,352			$	149,656,451			$	121,610,914				75.65	%
	Total Investments, September 30, 2025							300,530,345			$	324,389,165			$	302,272,488				188.01	%

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

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of September 30, 2025

(1)	Substantially all of our investments are domiciled in the United States. Certain investments also have international operations.
Company(1)		Industry	Type of Investment	Maturity	Par Amount/ Shares/Units(2)		Amortized Cost(3)		Fair Value(4)		% of Net Assets(5)
(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.
WHI Global, LLC		Aerospace & Defense	Senior Secured Revolving Note(SOFR + CSA + 8.75%, 3.00% Floor)(8)(12)(20)(23)	4/17/2029		884,053		863,075		876,097		0.54	%
(3)	Net unrealized depreciation for U.S. federal income tax purposes totaled $(22,116,677).
			Senior Secured First Lien Term Loan(SOFR + CSA + 8.75%, 3.00% Floor)(20)(23)	4/17/2029		12,369,840		12,256,814		12,258,511		7.62	%
	The tax cost basis of investments is $324,389,165 as of September 30, 2025.
			Equity - 350 Common Shares(21)			350		700,000		483,284		0.30	%
	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.
						13,254,243		13,819,889		13,617,892		8.46	%
(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).
XYZ Roofco, LLC (dba SMC Roofing Solutions LLC)		Services: Consumer	First Out Term Loan (SOFR + 3.50%, 2.00% Floor)(24)	10/16/2028		618,546		623,442		618,546		0.38	%
(5)	Percentage is based on net assets of $160,774,300 as of September 30, 2025.
			First Out Delayed Draw Term Loan (SOFR + 3.50%, 2.00% Floor)(24)	10/16/2028		30,950		31,933		31,128		0.02	%
(6)	Affiliated Investments are defined by the 1940 Act as investments in companies in which the Company owns between 5% and 25% outstanding voting securities or is under common control with such portfolio company.
			Last Out Term Loan (SOFR + 6.25% + 2.75% First Out Skim, 2.00% Floor)(24)	10/16/2028		1,863,568		1,859,920		1,858,909		1.16	%
(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.
			Last Out Delayed Draw Term Loan (SOFR + 6.25% + 2.75% First Out Skim, 2.00% Floor)(24)	10/16/2028		140,082		140,082		139,955		0.09	%
(8)	The investment has an unfunded commitment as of September 30, 2025 (see Note 8), and fair value includes the value of any unfunded commitments. The negative cost, if applicable, is the result of the capitalized discount being greater than the principal amount outstanding on the loan. The negative fair value, if applicable, is the result of the capitalized discount on the loan.
						2,653,146		2,655,377		2,648,538		1.65	%
(9)	NSG Captive, Inc. owns 80% of National Security Group Holdings Inc.
Subtotal Non-Controlled/Non-Affiliated Investments						104,412,066	$	139,342,491	$	145,280,169		90.35	%
(10)	The investment was on non-accrual status as of September 30, 2025.
(11)	The investment is not a qualifying asset as defined under Section 55(a) of the 1940 Act, in a whole, or in part. As of September 30, 2025, non-qualifying assets represented 14.70% of total assets.
(12)	This investment earns 0.50% commitment fee on all unused commitment as of September 30, 2025, and is recorded as a component of interest income on the Consolidated Statements of Operations.
(13)	This investment represents a Level 1 security in the ASC 820 table as of September 30, 2025 (see Note 4).
(14)	This investment represents a Level 2 security in the ASC 820 table as of September 30, 2025 (see Note 4).
(15)	The interest rate on this preferred equity is fixed-to-floating and shifted to 3 month SOFR plus a CSA of 0.262% plus a 4.743% spread on 9/30/2025.
(16)	The interest rate on this preferred equity is fixed-to-floating and will shift to 3 month SOFR plus a CSA of 0.262% plus a 5.29% spread on 9/27/2027.
(17)	The investment is held through PhenixFIN Investment Holdings FST, LLC.
(18)	The interest rate on this preferred equity is fixed-to-floating and will shift to 3 month SOFR plus a CSA of 0.262% plus a 6.130% spread on 10/15/2026.
(19)	The interest rate on this preferred equity is fixed-to-floating and will shift to a rate equal to the five-year US Treasury Rate plus a 6.278% spread on 4/15/2028
(20)	Credit Spread Adjustment (“CSA”).
(21)	Non-income producing security.
(22)	The investment is valued using NAV as a practical expedient.
(23)	The interest rate on these securities is subject to 1 month SOFR, which as of September 30, 2025 was 4.13%.
(24)	The interest rate on these securities is subject to 3 month SOFR, which as of September 30, 2025 was 3.98%.
(25)	The interest rate on these securities is subject to 6 month SOFR, which as of September 30, 2025 was 3.85%.
(26)	The interest rate on these securities is subject to the monthly Applicable Federal Rate, which as of September 30, 2025 was 3.93%.
(27)	The investment includes an exit fee that is receivable upon repayment of the loan. See Note 2 “Significant Accounting Policies.”
(28)	The interest rate on this preferred equity is 7.875%.
(29)	On November 1, 2025, the maturity date of this investment was extended to 11/1/2026.

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

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of September 30, 2025

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⁾
Advocates for Disabled Vets, LLC (dba Reps for Vets)	Services: Consumer	12% Senior Secured First Lien Term Loan	3/7/2030		8,932,500		8,770,471		8,798,513		5.47	%
		Equity - 3,375,000 Units(21)			3,375,000		3,375,000		3,359,511		2.09	%
					12,307,500		12,145,471		12,158,024		7.56	%

FST Holdings Parent, LLC	High Tech Industries	Equity - 625,548 Class A Units(17)			625,548		10,008,289		10,960,741		6.82	%
					625,548		10,008,289		10,960,741		6.82	%

MB Precision Investment Holdings LLC	Aerospace & Defense	Senior Secured First Lien Term Loan(SOFR + CSA + 8.00%, 4.00% Floor)(20)(24)(27)	9/30/2028		6,843,380		6,696,228		6,398,561		3.98	%
		Senior Secured Delayed Draw Term Loan(SOFR + CSA + 10.00%, 4.00% Floor)(8)(20)(24)(27)	10/1/2028		505,470		468,621		490,306		0.30	%
		Senior Secured First Lien Revolver(SOFR + CSA + 8.00%, 4.00% Floor)(8)(12)(20)(24)(27)	9/30/2028		2,112,671		2,077,048		1,975,347		1.23	%
		Equity - Class E Preferred Units(21)(27)			4,106,076		3,167,157		2,725,408		1.70	%
		Warrants - 2.28% of Outstanding Equity(21)			3,380,282		827,409		673,018		0.42	%
					16,947,879		13,236,463		12,262,640		7.63	%

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

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

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of September 30, 2025

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)
ECC Capital Corp.	Real Estate	Equity - 84,000,000 Units(13)(21)		84,000,000	$	4,257,002	$	6,636,000	4.13	%
		Senior Secured Promissory Note (SOFR + 5.00%, 0.00% Floor)(24)	12/31/2031	6,997,012		6,997,012		6,997,012	4.35	%
				90,997,012		11,254,014		13,633,012	8.48	%

FlexFIN, LLC	Services: Business	Equity Interest		37,180,761		37,180,761		37,180,761	23.13	%
				37,180,761		37,180,761		37,180,761	23.13	%

NSG Captive, Inc.	Insurance	Equity - 100,000 Units(9)(21)		100,000		49,255,076		48,469,540	30.15	%
				100,000		49,255,076		48,469,540	30.15	%

NVTN LLC	Hotel, Gaming & Leisure	Senior Secured Revolving Note (SOFR + 7.00%, 2.00% Floor)(23)	12/31/2026	8,900,000		9,029,539		8,900,000	5.54	%
		Senior Secured First Lien Term Loan B (AFR)(26)	12/31/2026	17,552,420		13,916,082		13,427,601	8.35	%
		Senior Secured First Lien Term Loan C (SOFR + 12.00% PIK, 2.00% Floor)(10)	12/31/2026	11,506,159		7,570,055		-	0.00	%
		Equity - 1,000 Class A Units(21)		1,000		21,450,924		-	0.00	%
				37,959,579		51,966,600		22,327,601	13.89	%

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

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

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

PHENIXFIN CORPORATION

Consolidated Schedule of Investments

As of September 30, 2025

⁽¹⁾	Substantially all of our investments are domiciled in the United States. Certain investments also have international operations.

⁽²⁾

⁽³⁾

Net unrealized depreciation for U.S. federal income tax purposes totaled $(22,116,677).

The tax cost basis of investments is $324,389,165 as of September 30, 2025.

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

⁽⁴⁾

Unless otherwise indicated, all securities are valued using significant unobservable inputs, which are categorized as Level 3 assets under the definition of ASC 820 fair value hierarchy (see Note 4).

⁽⁵⁾

Percentage is based on net assets of $160,774,300 as of September 30, 2025.

⁽⁶⁾

⁽⁷⁾

⁽⁸⁾

The investment has an unfunded commitment as of September 30, 2025 (see Note 8), and fair value includes the value of any unfunded commitments. The negative cost, if applicable, is the result of the capitalized discount being greater than the principal amount outstanding on the loan. The negative fair value, if applicable, is the result of the capitalized discount on the loan.

⁽⁹⁾

NSG Captive, Inc. owns 80% of National Security Group Holdings Inc.

⁽¹⁰⁾

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

⁽¹¹⁾

The investment is not a qualifying asset as defined under Section 55(a) of the 1940 Act, in whole, or in part. As of September 30, 2025, non-qualifying assets represented 14.70% of total assets.

⁽¹²⁾

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

⁽¹³⁾

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

⁽¹⁴⁾

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

⁽¹⁵⁾

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

⁽¹⁶⁾

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

⁽¹⁷⁾

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

⁽¹⁸⁾

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

⁽¹⁹⁾

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

⁽²⁰⁾

Credit Spread Adjustment (“CSA”).

⁽²¹⁾

Non-income producing security.

⁽²²⁾

The investment is valued using NAV as a practical expedient.

⁽²³⁾

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

⁽²⁴⁾

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

⁽²⁵⁾

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

⁽²⁶⁾

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

⁽²⁷⁾

The investment includes an exit fee that is receivable upon repayment of the loan. See Note 2 “Significant Accounting Policies.”

⁽²⁸⁾

The interest rate on this preferred equity is 7.875%.

⁽²⁹⁾

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

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

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Note 1. Organization

PhenixFIN Corporation (“PhenixFIN,” the “Company,” “we” and “us”) is an internally-managed non-diversified closed-end management investment company incorporated in Delaware that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). We completed our initial public offering (“IPO”) and commenced operations on January 20, 2011. The Company has elected, and intends to qualify annually, to be treated, for U.S. federal income tax purposes, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). Through December 31, 2020, we were an externally managed company. Since January 1, 2021, we have operated under our present internalized management structure.

The Company has formed and expects to continue to form certain taxable subsidiaries (the “Taxable Subsidiaries”), which are taxed as corporations for federal income tax 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. The management team seeks to achieve this objective primarily through making loans, private equity or other investments in privately-held companies. The Company may also make debt, equity or other investments in publicly-traded companies. (These investments may also include investments in other BDCs, closed-end funds or REITs.) We may also pursue other strategic opportunities and invest in other assets or operate other businesses to achieve our investment objective, such as operating and managing an asset-based (gems) lending business and overseeing an insurance business. The portfolio generally consists of senior secured first lien term loans, senior secured second lien term loans, senior secured bonds, preferred equity and common equity. Occasionally, we will receive warrants or other equity participation features which we believe will have the potential to increase total investment returns. Our loan and other debt investments are primarily rated below investment grade or are unrated. Investments in below investment grade securities are considered predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal when due.

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

Note 2. Significant Accounting Policies

Basis of Presentation

The Company is an investment company following the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 946 (“ASC 946”), Financial Services – Investment Companies. The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles (“GAAP”) and include the consolidated accounts of the Company and its wholly owned subsidiaries PhenixFIN Small Business Fund, LP, PhenixFIN SLF Funding I LLC, PhenixFIN Investment Holdings, LLC, PhenixFIN Investment Holdings Omnivere, LLC, PhenixFIN Investment Holdings AAR, LLC, and PhenixFIN Investment Holdings Amvestar, LLC. All references made to the “Company,” “we,” and “us” herein include PhenixFIN Corporation and its consolidated subsidiaries, except as stated otherwise. Additionally, the accompanying consolidated financial statements of the Company and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X of the Securities Act of 1933. Therefore, this Form 10-Q should be read in conjunction with the Company’s annual report on Form 10-K for the year ended September 30, 2025. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the fiscal year ending September 30, 2026.

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.

1720

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(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 three months or less. Cash and cash equivalents include deposits in a money market account. The Company deposits its cash in financial institutions and, at times, such balances may be in excess of the Federal Deposit Insurance Corporation insurance limits. As of ~~December~~March 31, ~~2025~~2026 and September 30, 2025, we had $3.41 million and $7.3 million in cash and cash equivalents, respectively, none of which is restricted.

Debt Issuance Costs and Deferred Financing Costs

Debt issuance costs, incurred in connection with unsecured notes (see Note 5), are deferred and amortized over the life of the respective instrument. Deferred financing costs related to the issuance of revolving debt obligations (see Note 5) are deferred and amortized over the life of the respective obligation. Debt issuance costs related to any unsecured notes are presented net against the outstanding debt balance on the Consolidated Statements of Assets and Liabilities. Deferred financing costs related to any credit facilities are presented on the Consolidated Statements of Assets and Liabilities.

Indemnification

In the normal course of business, the Company enters into contractual agreements that provide general indemnifications against losses, costs, claims and liabilities arising from the performance of individual obligations under such agreements. The Company has had no material claims or payments pursuant to such agreements. The Company’s individual maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. However, based on management’s experience, the Company expects the risk of loss to be remote.

Revenue Recognition

Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Discounts and premiums to par value on investments purchased are accreted and amortized into interest income over the life of the respective investment. Loan origination fees, exit fees, original issue discount (“OID”) and market discounts or premiums are capitalized and amortized into interest income using the effective interest method or straight-line method, as applicable.

The Company holds debt investments in its portfolio that contain a payment-in-kind (“PIK”) interest provision. PIK interest, which represents contractually deferred interest added to the investment balance that is generally due at maturity, is recorded on the accrual basis to the extent such amounts are expected to be collected. PIK interest is not accrued if the Company does not expect the issuer to be able to pay all principal and interest when due. For the three and six months ended ~~December~~March 31, ~~2025~~2026, the Company earned approximately $0.5 million and ~~2024~~$0.7 million in PIK interest, respectively. For the three and six months ended March 31, 2025, the Company earned approximately $0.2 3 million and $0.4 7 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. Other income includes fees for providing managerial assistance to our portfolio companies and is recognized as revenue when earned. For the three and six months ended ~~December~~March 31, ~~2025~~2026, fee income was approximately $164.4 thousand and ~~2024~~approximately $352.2 thousand, respectively (see Note 9). For the three and six months ended March 31, 2025, fee income was approximately $~~187~~29.8 7 thousand and approximately $1140.1 7 thousand, 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. No realized gains or losses relating to restructuring transactions occurred during the three and six months ended ~~December~~March 31, ~~2025~~2026. The Company recognized a realized gain related to restructuring transactions of $0.3 million for the three and ~~2024~~six months ended March 31, 2025. The Company reports changes in fair value of investments as net unrealized appreciation/(depreciation) on investments in the Consolidated Statements of Operations.

Management reviews all loans that become 90 days or more past due on principal or interest or when there is reasonable doubt that principal or interest will be collected for possible placement on management’s designation of non-accrual status. Interest receivable is analyzed regularly and may be reserved against when deemed not collectible. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current, although we may make exceptions to this general rule if the loan has sufficient collateral value and is in the process of collection. At ~~December~~March 31, ~~2025~~ 2026, a certain investment in one portfolio company held by the Company was on non-accrual status with a fair value of approximately $0.0 million, or 0.0% of the fair value of our portfolio, and a cost of $7.6 million. At September 30, 2025, a certain investment in one portfolio company held by the Company was on non-accrual status with a combined fair value of approximately $0.0 million, or 0.0% of the fair value of our portfolio, and a cost of $7.6 million.

1821

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Note 2. Significant Accounting Policies (continued)

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 a market participant rather than an entity specific measure. Therefore, when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at the measurement date.

Investments for which market quotations are readily available are valued at such market quotations, which are generally obtained from an independent pricing service or multiple broker-dealers or market makers. We weight the use of third-party broker quotations, if any, in determining fair value based on our understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer. However, debt investments with remaining maturities within 60 days that are not credit impaired are valued at cost plus accreted discount, or minus amortized premium, which approximates fair value. Investments for which market quotations are not readily available are valued at fair value as determined by our Chief Financial Officer, the Company’s Valuation Designee, based upon input from management and third-party valuation firms. Because these investments are illiquid and because there may not be any directly comparable companies whose financial instruments have observable market values, these loans are valued using a fundamental valuation methodology, consistent with traditional asset pricing standards, that is objective and consistently applied across all loans and through time.

Investments in investment funds are valued at fair value. Fair values are generally determined utilizing the NAV supplied by, or on behalf of, management of each investment fund, which is net of management and incentive fees or allocations charged by the investment fund and is in accordance with the “practical expedient”, as defined by FASB Accounting Standards Update (“ASU”) 2009-12, Investments in Certain Entities that Calculate Net Asset Value per Share. NAVs received by, or on behalf of, management of each investment fund are based on the fair value of the investment funds’ underlying investments in accordance with policies established by management of each investment fund, as described in each of their financial statements and offering memorandum. If the Company is in the process of the sale of an investment fund, fair value will be determined by actual or estimated sale proceeds.

The methodologies utilized by the Company in estimating the fair value of its investments categorized as Level 3 generally fall into the following two categories:

●

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

●

The “Income Approach” converts future amounts (for example, cash flows or income and expenses) to a single current (that is, discounted) amount. When the Income Approach is used, the fair value measurement reflects current market expectations about those future amounts.

The Company has engaged third-party valuation firms (the “Valuation Firms”) to assist it and its Valuation Designee (the Chief Financial Officer) in the valuation of its portfolio investments. The valuation reports generated by the Valuation Firms consider the evaluation of financing and sale transactions with third parties, expected cash flows and market-based information, including comparable transactions, performance multiples, and movement in yields of debt instruments, among other factors. The Company uses a market yield analysis under the Income Approach or an enterprise model of valuation under the Market Approach, or a combination thereof. In applying the market yield analysis, the value of the Company’s loans are determined based upon inputs such as the coupon rate, current market yield, interest rate spreads of similar securities, the stated value of the loan, and the length to maturity. In applying the enterprise model, the Company uses a waterfall analysis, which takes into account the specific capital structure of the borrower and the related seniority of the instruments within the borrower’s capital 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.

1922

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Note 2. Significant Accounting Policies (continued)

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

●

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

●

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

●

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

●

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

●

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

For non-performing investments, we may estimate the liquidation or collateral value of the portfolio company’s assets and liabilities using an expected recovery model (Market Approach - Expected Recovery Analysis or Estimated Liquidation Proceeds).

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

● Our quarterly valuation process generally begins with each portfolio investment being initially valued by a Valuation Firm; ● Available third-party market data will be reviewed by Company personnel designated by the Valuation Designee (“Fair Value Personnel”) and the Valuation Firm.

● Available 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 by the Valuation Firm 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, tariffs, or other events on financial markets), portfolio company performance, and other events may occur over the lives of the investments that may cause the gains or losses ultimately realized on these investments to be materially different than the valuations currently assigned.

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.

2023

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Note 2. Significant Accounting Policies (continued)

Recent Accounting Pronouncements

The Company considers the applicability and impact of all accounting standard updates (“ASU”) issued by the FASB. ASUs not listed were assessed by the Company and either determined to be not applicable or expected to have minimal impact on its Consolidated Financial Statements.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”),” which enhances disclosure requirements about significant segment expenses that are regularly provided to the chief operating decision maker (the “CODM”). ASU 2023-07, among other things, (i) requires a single segment public entity to provide all of the disclosures as required by Topic 280, (ii) requires a public entity to disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources and (iii) provides the ability for a public entity to elect more than one performance measure. ASU 2023-07 is effective for the fiscal years beginning after September 30, 2024, and interim periods beginning after September 30, 2025 for the Company. Early adoption is permitted and retrospective adoption is required for all prior periods presented. The Company adopted the guidance during the year ended September 30, 2025 and its adoption did not have a material impact on the Company’s financial statements. See “Note 15 – Segment Reporting” for more information.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”),” which intends to improve the transparency of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and is to be adopted on a prospective basis with the option to apply retrospectively. The Company is currently assessing the impact of this guidance, however, the Company does not expect a material impact to its Consolidated Financial Statements.

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (“ASU 2024-03”)”, which requires disaggregated disclosure of certain costs and expenses, including purchases of inventory, employee compensation, depreciation, amortization and depletion for oil and gas companies, within relevant income statement captions. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, as clarified by ASU 2025-01, which was released by the FASB in January 2025. Early adoption and retrospective application is permitted. The Company is currently assessing the impact of this guidance, however, the Company does not expect a material impact on its consolidated financial statements.

Other than the aforementioned guidance, the Company’s management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying Consolidated Financial Statements.

Federal Income Taxes

The Company has elected, and intends to continue to qualify annually, to be treated as a RIC under Subchapter M of the Code. In order to continue to qualify as a RIC and be eligible for tax treatment under Subchapter M of the Code, among other things, the Company is required to meet certain source of income and asset diversification requirements and timely distribute to its stockholders at least 90% of the sum of investment company taxable income (“ICTI”), as defined by the Code, including PIK interest, and net tax exempt interest income (which is the excess of gross tax exempt interest income over certain disallowed deductions) for each taxable year. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year dividend distributions into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated 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 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 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. There was no provision for federal excise tax at ~~December~~ March 31, ~~2025~~2026 and September 30, 2025. On December 13, 2024, the Company identified that it did not distribute at least 90% of its investment company taxable income for the tax year ended September 30, 2023. The Company filed Form 8927 on December 16, 2024 notifying the IRS.

The Company’s Taxable Subsidiaries accrue income taxes payable based on the applicable corporate rates on the unrealized gains generated by the investments held by the Taxable Subsidiaries. As of ~~December~~March 31, ~~2025~~2026 and September 30, 2025, the Company recorded a net deferred tax asset of $~~852~~727,~~570~~ 925 and $1,234,847 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 the Consolidated Statements of Operations. For the three and six months ended ~~December~~March 31, 2026 ~~2025~~the Company recorded a change in provision for deferred taxes of $(166,015) and ~~2024~~$(589,444), respectively, on the ~~Company~~unrealized (appreciation)/depreciation on investments. For the three and six months ended March 31, 2025 the Company recorded a change in provision for deferred taxes of $(~~423~~329,~~429~~636) ~~and~~ and $0(329, 636), respectively, on the unrealized (appreciation)/depreciation on investments.

As of December 31, 2025 and September 30, 2025, the Company had a deferred tax asset of $13.8 million and $14.4 million, respectively, consisting primarily of net operating losses and net unrealized losses on the investments held within its Taxable Subsidiaries. As of December 31, 2025 and September 30, 2025, the Company has booked a valuation allowance of $12.9 million and $13.2 million, respectively, against its deferred tax asset.24

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Note 2. Significant Accounting Policies (continued)

As of March 31, 2026 and September 30, 2025, the Company had a deferred tax asset of $13.5 million and $14.4 million, respectively, consisting primarily of net operating losses and net unrealized losses on the investments held within its Taxable Subsidiaries. As of March 31, 2026 and September 30, 2025, the Company has booked a valuation allowance of $12.7 million and $13.2 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~~ tax benefits as income tax expense in the Consolidated Statements of Operations. There were no material uncertain income tax positions at ~~December~~at March 31, ~~2025~~2026. 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 four fiscal years remain open, subject to examination by the Internal Revenue Service and applicable state tax authorities.

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

The Company has broad discretion in making investments. Its debt or equity investments 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.

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.

~~Note 3. Investments~~25

The composition of our investments as of December 31, 2025 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	$	126,472		38.9	%	$	112,356		37.9	%
Senior Secured Notes		13,363		4.1			13,493		4.6
Fund Investment		2,194		0.7			2,227		0.8
Equity/Warrants		182,882		56.3			167,564		56.7
Total Investments	$	324,911		100.0	%	$	295,640		100.0	%

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Note 3. Investments ~~(continued)~~

The composition of our investments as of March 31, 2026 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	$	127,359		39.3	%	$	113,491		38.4	%
Senior Secured Notes		13,576		4.2			13,399		4.5
Fund Investment		2,138		0.7			2,320		0.8
Equity/Warrants		180,339		55.8			166,601		56.3
Total Investments	$	313,412		100.0	%	$	295,811		100.0	%

The composition of our investments as of September 30, 2025 as a percentage of our total portfolio, at amortized cost and fair value were as follows (dollars in thousands):

	Amortized Cost		Percentage			Fair Value		Percentage
Senior Secured First Lien Term Loans	$	125,373		38.6	%	$	116,567		38.6	%
Senior Secured Notes		17,039		5.3			17,457		5.8
Fund Investment		2,194		0.7			2,227		0.7
Equity/Warrants		179,783		55.4			166,021		54.9
Total Investments	$	324,389		100.0	%	$	302,272		100.0	%

In connection with certain of the Company’s investments, the Company receives warrants that are obtained for the objective of increasing the total investment returns and are not held for hedging purposes. At ~~December~~March 31, ~~2025~~2026 and September 30, 2025, the total fair value of warrants was $~~585~~896.9 5 thousand and $815.5 thousand, respectively, and were included in investments at fair value on the Consolidated Statements of Assets and Liabilities. During the three and six months ended ~~December~~March 31, ~~2025 and 2024~~2026, the Company ~~did~~acquired ~~not~~warrants ~~acquire~~in ~~any~~one ~~additional~~existing portfolio company. During the three and six months ended March 31, 2025, the Company acquired warrants in ~~any~~one existing portfolio ~~companies~~company.

Total change in unrealized appreciation/(depreciation) related to warrants for the three and six months ended ~~December~~March 31, ~~2025~~2026 was $(559.5) thousand and ~~2024~~$(789.1) thousand, respectively, and was recorded on the Consolidated Statements of Operations as net change in unrealized appreciation/(depreciation) on investments. Total change in unrealized appreciation/(depreciation) related to warrants for the three and six months ended March 31, 2025 was $(~~229~~228.67) thousand and $~~265~~(493.0 7) thousand, respectively, and was recorded on the Consolidated Statements of Operations as net change in unrealized appreciation/(depreciation) on investments. The warrants are received in connection with individual investments and are not subject to master netting arrangements.

The following table shows the portfolio composition by industry grouping at fair value at ~~December~~March 31, ~~2025~~2026 (dollars in thousands):

	Fair Value		Percentage
Services: Business	$	48,941		16.6	%
Insurance	$	55,356		18.7	%
Insurance		48,325		16.2
Services: Business		48,874		16.5
Real Estate		4638,~~933~~002		1512.98
Services: Consumer		3433,~~340~~785		11.64
Construction & Building		3029,~~120~~832		10.21
Aerospace & Defense		2728,~~445~~398		9.36
Hotel, Gaming & Leisure		1820,~~314~~192		6.28
High Tech Industries		1718,~~709~~840		6.04
Automotive		8,~~033~~229		2.78
Metals & Mining		6,763		2.3
Consumer Discretionary		43,~~480~~235		1.51
Banking		2,~~227~~320		0.8
Media: Broadcasting & Subscription		21,~~010~~985		0.7
Total	$	295,~~640~~811		100.0	%

2326

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Note 3. Investments (continued)

The following table shows the portfolio composition by industry grouping at fair value at September 30, 2025 (dollars in thousands):

	Fair Value		Percentage

Services: Business	$	56,249		18.6	%
Insurance		48,470		16.0
Real Estate		47,632		15.8
Services: Consumer		38,418		12.7
Aerospace & Defense		25,881		8.6
Hotel, Gaming & Leisure		22,328		7.4
Construction & Building		18,131		6.0
High Tech Industries		16,961		5.6
Metals & Mining		8,763		2.9
Automotive		7,860		2.6
Media: Broadcasting & Subscription		4,850		1.6
Consumer Discretionary		4,502		1.5
Banking		2,227		0.7
Total	$	302,272		100.0	%

The Company invests in portfolio companies principally located in the United States. The geographic composition is determined by the location of the corporate headquarters of the portfolio company, which may not be indicative of the primary source of the portfolio company’s business.

The following table shows the portfolio composition by geographic location at fair value at ~~December~~March 31, ~~2025~~2026 (dollars in thousands):

	Fair Value		Percentage
Northeast	$	~~116~~109,~~453~~560		3937.40	%
Southeast		98102,~~240~~843		3334.28
West		3536,~~389~~535		12.04
Midwest		17,~~377~~555		5.9
Southwest		1517,~~674~~241		5.38
Mid-Atlantic		314		0.1
International		1211,~~193~~763		4.10
Total	$	295,~~640~~811		100.0	%

The following table shows the portfolio composition by geographic location at fair value at September 30, 2025 (dollars in thousands):

	Fair Value		Percentage
Northeast	$	114,610		37.9	%
Southeast		106,037		35.1
West		31,549		10.4
Midwest		19,272		6.4
Southwest		15,645		5.2
Mid-Atlantic		314		0.1
International		14,845		4.9
Total	$	302,272		100.0	%

2427

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Note 3. Investments (continued)

Transactions With Affiliated/Controlled Companies

The Company had investments in portfolio companies designated as Affiliated Investments and Controlled Investments under the 1940 Act. Transactions with Affiliated Investments and Controlled Investments during the ~~three~~six months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025 were as follows:

Name of Investment(1)(2)	Type of Investment	Fair Value at September 30, 2025		Purchases/ (Sales) of or Advances/ (Distributions)			Transfers In/(Out) of ~~Affiliates~~Affiliated		Unrealized Gain/(Loss)			Realized Gain/(Loss)		Fair Value at ~~December~~March 31, ~~2025~~2026		Earned Income		Fee/Other Income
Affiliated Investments
Advocates for Disabled Vets, LLC (dba Reps for Vets)	Senior Secured First Lien Term Loan	$	8,798,513	$	(2623,~~907~~545	)	$	-	$	(6125,~~923~~526	)	$	~~586~~1,171	$	8,~~765~~650,~~269~~613	$	~~267~~545,~~241~~661	$	-
	Equity		3,359,511		-			-		(~~186~~561,~~036~~187	)		-		32,~~173~~798,~~475~~324		-		-
FST Holdings Parent, LLC	Equity		10,960,741		-			-		(51,~~558~~224,663	)		-		1012,~~955~~185,~~183~~404		-268,540		-
MB Precision Investment Holdings LLC	Senior Secured First Lien Term Loan		6,398,561		(2245,~~631~~310	)		-		15(231,~~537~~879	)		~~798~~2,325		6,~~392~~123,~~265~~697		~~225~~485,~~374~~033		-
	Senior Secured Delayed Draw Term Loan		490,306		1,~~382~~408,~~827~~804			-		1(112,~~513~~984	)		-		1,~~874~~786,~~646~~126		35106,~~566~~789		-
	Senior Secured First Lien Revolver		1,975,347		8793,~~257~~394			-		(~~434~~80,612	)		-		21,~~062~~988,~~170~~129		99187,~~642~~758		-
	Equity		2,725,408		210,760			-		12,892			-		2,949,060		210,760		-
	Senior Secured 6th Amendment Term Loan		-		573,803			-		(22,923	)		-		550,880		-		-
	Warrants		673,018		-			-		(169,518	)		-		503,500		-		-
	Equity		2,725,408		427,146			-		(459,723	)		-		2,692,831		427,146		-
Total Affiliated Investments		$	35,381,405	$	1,631,306		$	-	$	(338,527	)	$	1,384	$	36,675,568	$	838,583	$	-
	Warrants		673,018		-			-		(673,018	)		-		-		-		-
Total Affiliated Investments		$	35,381,405	$	2,434,292		$	-	$	(1,043,189	)	$	3,496	$	36,776,004	$	2,020,927	$	-

Name of Investment⁽¹⁾⁽²⁾	Type of Investment	Fair Value at September 30, 2025		Purchases/ (Sales) of or Advances/ (Distributions)			Transfers In/(Out) of Controlled		Unrealized Gain/(Loss)			Realized Gain/(Loss)		Fair Value at March 31, 2026		Earned Income		Fee/Other Income
Controlled Investments
ECC Capital Corp.	Senior Secured First Lien Term Loan	$	6,997,012	$	-		$	-	$	-		$	-	$	6,997,012	$	324,446	$	-
	Equity		6,636,000		-			-		3,024,000			-		9,660,000		-		79,831
FlexFIN, LLC	Equity Interest		37,180,761		(384,417	)		-		-			-		36,796,344		1,907,359		-
NSG Captive, Inc.	Equity		48,469,540		6,474,300			-		411,853			-		55,355,693		-		250,000
NVTN LLC	Senior Secured First Lien Delayed Draw Term Loan		8,900,000		950,000			-		(49,250	)		-		9,800,750		518,544		-
	Senior Secured First Lien Term Loan B		13,427,601		-			-		(3,686,008	)		-		9,741,593		315,797		-
	Senior Secured First Lien Term Loan C		-		-			-		-			-		-		-		-
	Senior Secured Revolving Note		-		650,000			-		-			-		650,000		12,376		-
Total Controlled Investments		$	121,610,914	$	7,689,883		$	-	$	(299,405	)	$	-	$	129,001,392	$	3,078,522	$	329,831

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Note 3. Investments (continued)

Name of Investment(1)(2)	Type of Investment	Fair Value at September 30, ~~2025~~2024		Purchases/ (Sales) of or Advances/ (Distributions)			Transfers In/(Out) of ~~Controlled~~Affiliated		Unrealized Gain/(Loss)			Realized Gain/(Loss)		Fair Value at ~~December~~March 31, 2025		Earned Income		Fee/Other Income
Controlled Investments
Affiliated Investments
ECC Capital Corp.	Senior Secured First Lien Term Loan	$	6,997,012	$	-		$	-	$	-		$	-	$	6,997,012	$	166,332	$	-
Black Angus Steakhouses, LLC	Senior Secured First Lien Delayed Draw Term Loan	$	751,207	$	-		$	-	$	(302,288	)	$	-	$	448,919	$	-	$	-
	Equity		6,636,000		-			-		3,024,000			-		9,660,000		-		40,457
	Senior Secured First Lien Super Priority DDTL		1,647,776		-			-		(663,070	)		-		984,706		-		-
FlexFIN, LLC	Equity Interest		37,180,761		(746,490	)		-		-			-		36,434,271		1,751,275		-
FST Holdings Parent, LLC	Equity		12,351,802		8,289			-		(16,195	)		-		12,343,896		254,231		-
NSG Captive, Inc.	Equity		48,469,540		-			-		(146,011	)		-		48,323,529		-		125,000
Total Affiliated Investments		$	14,750,785	$	8,289		$	-	$	(981,553	)	$	-	$	13,777,521	$	254,231	$	-
NVTN LLC	Senior Secured First Lien Delayed Draw Term Loan		8,900,000		950,000			-		(49,250	)		-		9,800,750		107,362		-
	Senior Secured First Lien Term Loan B		13,427,601		-			-		(4,914,677	)		-		8,512,924		171,990		-
Total Controlled Investments		$	121,610,914	$	203,510		$	-	$	(2,085,938	)	$	-	$	119,728,486	$	2,196,959	$	165,457

Name of Investment⁽¹⁾⁽²⁾	Type of Investment	Fair Value at September 30, 2024		Purchases/ (Sales) of or Advances/ (Distributions)		Transfers In/(Out) of Controlled		Unrealized Gain/(Loss)			Realized Gain/(Loss)		Fair Value at March 31, 2025		Earned Income		Fee/Other Income
Controlled Investments
ECC Capital Corp.	Senior Secured First Lien Term Loan	$	7,422,012	$	-	$	-	$	-		$	-	$	7,422,012	$	391,510	$	-
	Equity		4,872,000		-		-		159,600			-		5,031,600		-		-
FlexFIN, LLC	Equity Interest		36,683,045		92,290		-		-			-		36,775,335		2,979,966		-
NSG Captive, Inc.	Equity		101,000		49,145,255		-		(849,113	)		-		48,397,142		-		-
NVTN LLC	Senior Secured First Lien Delayed Draw Term Loan		5,500,000		4,300,000		-		-			-		9,800,000		294,649		-
	Senior Secured First Lien Term Loan B		16,353,590		-		-		(1,118,089	)		-		15,235,501		528,826		-
Total Controlled Investments		$	70,931,647	$	53,537,545	$	-	$	(1,807,602	)	$	-	$	122,661,590	$	4,194,951	$	-

(1)

The par amount and additional detail are shown in the Consolidated Schedules of Investments.

(2)

Securities with a zero value at the beginning and end of the period, and those that had no transaction activity were excluded from the roll forward.

Purchases/(sales) of or advances to/(distributions) from Affiliated Investments and Controlled Investments represent the proceeds from sales and settlements of investments, purchases, originations and participations, investment increases due to PIK interest as well as net amortization of premium/(discount) on investments and are included in the purchases and sales presented on the Consolidated Statements of Cash Flows for the ~~three~~six months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~ 2025. Transfers in/(out) of Affiliated Investments and Controlled Investments represent the fair value for the quarter an investment became or was removed as an Affiliated Investment or a Controlled Investment. Income received from Affiliated Investments and Controlled Investments is included in total investment income on the Consolidated Statements of Operations for the three and six months ended ~~December~~March 31, ~~2025~~ 2026 and ~~2024~~2025.

Unconsolidated Significant Subsidiaries

We must determine which, if any, of our unconsolidated controlled portfolio companies is a “significant subsidiary” within the meaning of Regulation S-X. We have evaluated and determined that, as of ~~December~~ March 31, ~~2025~~2026, two portfolio companies, FlexFIN LLC and NVTN LLC, triggered at least one of the significance tests, and as of ~~December~~ March 31, ~~2024~~2025, one portfolio company, FlexFIN LLC, triggered at least one of the significance tests. Below is certain selected key financial data from FlexFIN LLC’s and NVTN LLC’s income statements for the periods in which our investment exceeded the threshold for at least one of the tests (dollars in thousands):

Income Statement	For the Three Months Ended March 31, 2026		For the Six Months Ended March 31, 2026			For the Three Months Ended March 31, 2025		For the Six Months Ended March 31, 2025
Total Income	$	10,285	$	19,643		$	1,997	$	3,592
Total Expenses		10,170		19,680			463		899
Net Income	$	115	$	(37	)	$	1,534	$	2,693

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Note 3. Investments (continued)

Income Statement	For the Three Months Ended December 31, 2025			For the Three Months Ended December 31, 2024
Total Income	$	9,358		$	1,595
Total Expenses		9,510			436
Net Income	$	(152	)	$	1,159

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. Investments which are valued using NAV as a practical expedient are excluded from this hierarchy, and certain prior period amounts have been reclassified to conform to the current period presentation. The three levels are defined below:

●

Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities at the measurement date.

●

Level 2 - Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

●

Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

In addition to using the above inputs in investment valuations, the Company continues to employ a valuation policy approved by the board of directors that is consistent with ASC 820 (see 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.

The following table presents the fair value measurements of our investments, by major class according to the fair value hierarchy, as of ~~December~~ March 31, ~~2025~~2026 (dollars in thousands):

Fair Value Hierarchy as of December 31, 2025

Fair Value Hierarchy as of March 31, 2026

Investments:

Level 1

Level 2

Level 3

Total

Senior Secured First Lien Term Loans

18,~~408~~485

9395,~~948~~006

~~112~~113,~~356~~491

Senior Secured Notes

6,~~496~~402

6,997

13,~~493~~399

Equity/Warrants

3727,~~051~~946

~~130~~138,~~513~~655

~~167~~166,~~564~~601

Total

3727,~~051~~946

24,~~904~~887

~~231~~240,~~458~~658

293,~~413~~491

Investments measured at net asset value(1)

2,~~227~~320

Total Investments, at fair value

295,~~640~~811

(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.

2730

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(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 September 30, 2025 (dollars in thousands):

	Fair Value Hierarchy as of September 30, 2025
Investments:	Level 1		Level 2		Level 3		Total
Senior Secured First Lien Term Loans	$	-	$	27,586	$	88,981	$	116,567
Senior Secured Notes		-		10,460		6,997		17,457
Equity/Warrants		37,812		-		128,209		166,021
Total	$	37,812	$	38,046	$	224,187	$	300,045
Investments measured at net asset value⁽¹⁾								2,227
Total Investments, at fair value							$	302,272

(1)

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the ~~three~~ six months ended ~~December~~March 31, ~~2025~~2026 (dollars in thousands):

	Senior Secured First Lien Term Loans			Senior Secured Notes		Equities/ Warrants			Total
Balance as of September 30, 2025	$	88,981		$	6,997	$	128,209		$	224,187
Purchases and other adjustments to cost		1214,~~343~~574			-		512,~~177~~989			1727,~~520~~509
Sales (including repayments or maturities)		(23,~~345~~835	)		-		(12,~~906~~666	)		(46,~~251~~501	)
Net realized gains/(losses) from investments		216			-		-(66	)		2(50	)
Net unrealized gains/(losses)		(54,~~033~~730	)		-		~~(967~~189	)		(64,~~000~~487	)
Transfer in/(out)		-			-		-			-
Balance as of December 31, 2025	$	93,948		$	6,997	$	130,513		$	231,458
Balance as of March 31, 2026	$	95,006		$	6,997	$	138,655		$	240,658

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the ~~three~~six months ended ~~December~~ March 31, ~~2024~~2025 (dollars in thousands):

	Senior Secured First Lien Term Loans			Senior Secured Notes		Equities/ Warrants			Total
Balance as of September 30, 2024	$	68,987		$	7,422	$	63,881		$	140,290
Purchases and other adjustments to cost		2646,~~271~~455			-		6975,~~484~~473			95121,~~755~~928
Sales (including repayments or maturities)		(1019,~~166~~625	)		-		(611,~~238~~467	)		(1631,~~404~~092	)
Net realized gains/(losses) from investments		84(1,388	)		-		-			84(1,388	)
Net unrealized gains/(losses)		~~(789~~1,410	)		-		41(1,736	)		(~~748~~326	)
Transfer in/(out)		-			-		-			-
Balance as of December 31, 2024	$	84,387		$	7,422	$	127,168		$	218,977
Balance as of March 31, 2025	$	95,839		$	7,422	$	126,151		$	229,412

28Net change in unrealized gain (loss) for the six months ended March 31, 2026 and 2025 included in earnings related to Level 3 investments still held as of March 31, 2026 and 2025 was approximately $(4.4) million and $(0.1) million, respectively.

Purchases and other adjustments to cost include purchases of new investments at cost, effects of refinancing/restructuring, accretion/amortization of income from discount/premium on debt securities, and PIK.

Sales represent net proceeds received from investments sold, including any repayments or maturities.

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 six months ended March 31, 2026 and March 31, 2025, no investments were transferred in or out of Level 3.

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Note 4. Fair Value Measurements (continued)

~~Net change~~The infollowing ~~unrealized~~table ~~gain~~presents ~~(loss) for~~ the ~~three~~quantitative information ~~months~~about ~~ended~~Level ~~December~~3 ~~31,~~fair ~~2025~~value ~~and~~measurements ~~2024~~of ~~included~~our ~~in earnings related to Level 3~~ investments ~~still~~, ~~held~~ as of ~~December~~March 31, ~~2025~~2026 ~~and 2024 was approximately $~~(~~6.0)~~dollars ~~million~~in ~~and $(0.6~~thousands) ~~million, respectively.~~:

Fair Value

Valuation
Methodology

Unobservable
Input

Range
(Weighted Average)

Impact to
Valuation From
An Increase In
Input

Senior Secured First Lien Term Loans

85,193

Income Approach

Market Yield

4.5% - 21.0% (11.3%)

Decrease

Senior Secured First Lien Term Loans

9,742

Market Approach

EBITDA Multiple

2.8x - 3.8x (3.3x)

Increase

Senior Secured First Lien Term Loans

Recent Transaction

Purchase Price

N/A

Senior Secured Notes

6,997

Cost Approach

Collateral Value

N/A

Equity/Warrants

85,199

Market Approach

EBITDA Multiple

1.1x - 14.0x (4.5x)

Increase

Equity/Warrants

36,796

Cost Approach

Replacement Cost

N/A

Equity/Warrants

6,655

Market Approach

Revenue Multiple

4.0x-5.0x (4.5x)

Increase

Equity/Warrants

9,905

Income Approach

Market Yield

7.6%-28.8% (16.5%)

Decrease

Equity/Warrants

100

Cost Approach

Collateral Value

N/A

Total

240,658

Sales represent net proceeds received from investments 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 three months ended December 31, 2025, no investments were transferred in or out of Level 3. During the three months ended December 31, 2024, 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 December 31, 2025 (dollars in thousands):

Fair Value

Valuation Methodology

Unobservable Input

Range (Weighted Average)

Impact to Valuation From An Increase In Input

Senior Secured First Lien Term Loans

74,813

Income Approach

Market Yield

3.3% - 14.5% (10.0%)

Decrease

Senior Secured First Lien Term Loans

8,513

Market Approach

EBITDA Multiple

1.8x - 2.8x (2.3x)

Increase

Senior Secured First Lien Term Loans

995

Market Approach

Market Spread

4.8% - 5.5% (5.1%)

Increase

Senior Secured First Lien Term Loans

9,627

Recent Transaction

Purchase Price

N/A

Senior Secured Notes

6,997

Cost Approach

Collateral Value

N/A

Equity/Warrants

77,161

Market Approach

EBITDA Multiple

1.3x - 13.0x (11.0x)

Increase

Equity/Warrants

36,434

Cost Approach

Replacement Cost

N/A

Equity/Warrants

6,753

Market Approach

Revenue Multiple

2.5x-3.0x (2.8x)

Increase

Equity/Warrants

7,009

Income Approach

Market Yield

28.3%-28.8% (28.5%)

Decrease

Equity/Warrants

100

Cost Approach

Collateral Value

N/A

Equity/Warrants

3,056

Recent Transaction

Purchase Price

N/A

Total

231,458

The following table presents the quantitative information about Level 3 fair value measurements of our investments, as of September 30, 2025 (dollars in thousands):

Fair Value

Valuation
Methodology

Unobservable
Input

Range
(Weighted Average)

Impact to
Valuation From
An Increase In
Input

Senior Secured First Lien Term Loans

74,485

Income Approach

Market Yield

3.3% - 14.5% (10.0%)

Decrease

Senior Secured First Lien Term Loans

13,428

Market Approach

EBITDA Multiple

1.8x - 2.8x (2.3x)

Increase

Senior Secured First Lien Term Loans

997

Market Approach

Market Spread

4.8% - 5.5% (5.1%)

Increase

Senior Secured First Lien Term Loans

Recent Transaction

Purchase Price

N/A

Senior Secured Notes

6,997

Cost Approach

Collateral Value

N/A

Equity/Warrants

78,255

Market Approach

EBITDA Multiple

1.3x - 13.0x (11.0x)

Increase

Equity/Warrants

37,181

Cost Approach

Replacement Cost

N/A

Equity/Warrants

3,948

Market Approach

Market Quote

N/A

Equity/Warrants

6,000

Market Approach

Revenue Multiple

2.5x-3.0x (2.8x)

Increase

Equity/Warrants

2,725

Income Approach

Market Yield

28.3% - 28.8% (28.5%)

Decrease

Equity/Warrants

100

Cost Approach

Collateral Value

N/A

Total

224,187

29The significant unobservable inputs used in the fair value measurement of the Company’s debt and derivative investments are market yields. Increases in market yields would result in lower fair value measurements.

The significant unobservable inputs used in the fair value measurement of the Company’s equity/warrants investments are comparable company multiples of revenue or EBITDA for the latest twelve months (“LTM”), next twelve months (“NTM”) or a reasonable period a market participant would consider. Increases in EBITDA multiples in isolation would result in higher fair value measurement.

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Note 4. Fair Value Measurements (continued)

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.

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.

However, in March 2018, the Small Business Credit Availability Act (“SBCAA”) modified the 1940 Act by allowing a BDC to increase the maximum amount of leverage it may incur from 200% to 150% of asset coverage, if certain requirements under the 1940 Act are met (“Modified Asset Coverage Requirements”). Under the 1940 Act, we are allowed to increase our leverage capacity if stockholders representing at least a majority of the votes cast, when a quorum is present, approve a proposal to do so. If we receive stockholder approval, we would be allowed to increase our leverage capacity on the first day after such approval. Alternatively, the 1940 Act allows the majority of our independent directors to approve an increase in our leverage capacity, and such approval would become effective after the one-year anniversary of such approval. InOn ~~either~~May ~~case~~4, we2026, ~~would~~the board beof ~~required~~directors, toincluding ~~make certain~~a ~~disclosures~~“required onmajority” ~~our~~(as ~~website~~such ~~and~~term is defined in ~~SEC~~Section ~~filings~~57(o) ~~regarding,~~of ~~among~~the ~~other~~1940 ~~things,~~Act) of the ~~receipt~~ board of ~~approval~~directors, toapproved ~~increase~~the ~~our~~application ~~leverage, our~~of ~~leverage~~the ~~capacity~~Modified ~~and~~Asset ~~usage,~~Coverage ~~and~~Requirements ~~risks~~set ~~related~~forth toin ~~leverage~~the 1940 Act. NoAs ~~approval~~a ~~was~~result, ~~requested~~the orasset ~~obtained~~coverage ratio ~~and~~test applicable to the Company iswill ~~still~~be ~~subject to~~decreased ~~the~~from 200% to ~~requirement~~150%, effective May 4, 2027.

As of ~~December~~March 31, ~~2025~~2026 and September 30, 2025, the Company’s asset coverage was ~~205~~204.63% and 207.8%, 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 ~~December~~March 31, ~~2025~~2026 and September 30, 2025 were as follows (dollars in thousands):

	December 31, 2025								September 30, 2025
	March 31, 2026								September 30, 2025
	Aggregate Principal Available (1)		Principal Amount Outstanding		Carrying Value		Fair Value		Aggregate Principal Available (1)		Principal Amount Outstanding		Carrying Value		Fair Value
	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	$	56,~~553~~635	$	54,~~533~~556	$	57,500	$	57,500	$	56,477	$	55,154
2028 Promissory Note		-		-		-		-		1,661		1,661		1,543		1,594
Revolving Credit Facility		10,008		89,992		89,992		89,992		10,008		89,992		89,992		89,992
Total debt	$	67,508	$	147,492	$	146,~~545~~627	$	144,~~525~~548	$	69,169	$	149,153	$	148,012	$	146,740

(1)

For the 2028 Notes and 2028 Promissory Note, this represents the total principal amount and for the Revolving Credit Facility, this represents the undrawn principal amount.

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of December 31, 2025

(Unaudited)

Note 5. Borrowings (continued)

Credit Facility

On December 15, 2022, the Company entered into a 3 year $50.0 million revolving credit facility (the “Credit Facility”) with Woodforest National Bank (“Woodforest”). Woodforest was the administrative agent, sole bookrunner and sole lead arranger. The Credit Facility had an original maturity date of December 15, 2025.

On January 17, 2023, the Company borrowed $23.2 million under the Credit Facility and used these proceeds to redeem $22.6 million in aggregate principal amount of the issued and outstanding 2023 Notes, comprising all issued and outstanding 2023 Notes. The 2023 Notes were redeemed at 100% of their principal amount, plus accrued and unpaid interest thereon from September 30, 2022 through, but excluding January 17, 2023 (the “Redemption Date”).

On February 21, 2024 (the “First Amendment Effective Date”), in order to increase the size of the Credit Facility, the parties to the Credit Facility amended the terms of the Credit Facility, effective as of the First Amendment Effective Date (the “First Amendment”). The First Amendment increased the principal amount of loan available under the Credit Facility by $12.5 million to $62.5 million. All other material terms of the Credit Facility remain unchanged.

On August 5, 2024 (the “Second Amendment Effective Date”), in order to increase the size of the Credit Facility, the parties to the Credit Facility amended the Credit Facility, effective as of the Second Amendment Effective Date (the “Second Amendment”). The Second Amendment increased the principal amount of loan available under the Credit Facility by $25 million to $87.5 million. All other material terms of the Credit Facility remain unchanged.

On April 17, 2025 (the “Third Amendment Effective Date”), in order to extend the term and increase the size of the Credit Facility, the parties to the Credit Facility amended the terms of the Credit Facility, effective as of the Third Amendment Effective Date (the “Third Amendment”). The Third Amendment increased the principal amount of the loan available under the Credit Facility by $12.5 million to $100.0 million (with potential access to up to an additional $50.0 million pursuant to an uncommitted accordion provision) and appointed BankUnited, N.A. to assume all agency and syndication responsibilities from the prior agent and lenders. Outstanding loans under the terms of the Amendment bear a monthly interest rate ranging from ABR + 1.35% to ABR + 1.75% for any alternative base rate loans and from Term SOFR + 2.35% to Term SOFR + 2.75% for any term benchmark loans based on the total debt to tangible net worth ratio. The Amendment also extended the term of the credit facility to April 17, 2030, five years from the Third Amendment Effective Date. Other material terms remain substantially unchanged.

Under the Credit Facility, the Company is required to comply with various covenants, reporting requirements and other customary requirements for similar revolving credit facilities, including, without limitation, covenants related to: (a) limitations on the incurrence of additional indebtedness and liens, (b) limitations on certain investments, (c) limitations on certain restricted payments, (d) maintaining a certain minimum stockholders’ equity, (e) maintaining a ratio of total assets to total indebtedness of the Company and its consolidated subsidiaries (subject to certain exceptions) of not less than 2.0:1.0, (f) limitations on pledging certain unencumbered assets, and (g) limitations on the creation or existence of agreements that prohibit liens on certain properties of the Company and certain of its subsidiaries. These covenants are subject to important limitations and exceptions that are described in the documents governing the Credit Facility. Amounts available to borrow under the Credit Facility (and the incurrence of certain other permitted debt) are also subject to compliance with a borrowing base that applies different advance rates to different types of assets (based on their value as determined pursuant to the Credit Facility) that are pledged as collateral. As of December 31, 2025, the Company was in compliance in all respects with the terms of the Credit Facility. 33

As of December 31, 2025 and September 30, 2025, there was $90.0 million and $90.0 million outstanding, respectively, under the Credit Facility.

Outstanding loans under the Credit Facility bear a monthly interest rate at Term SOFR + 2.50%. The Company is also subject to a commitment fee of 0.25%, which shall accrue on the actual daily amount of the undrawn portion of the revolving credit.

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Note 5. Borrowings (continued)

As of March 31, 2026 and September 30, 2025, there was $90.0 million and $90.0 million outstanding, respectively, under the Credit Facility.

Unsecured Notes

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.

2028 Promissory Note

On May 2, 2024, the Company issued a 5.25% note due November 1, 2028 in the principal amount of $1,661,498 to National Security Insurance Company (the “2028 Promissory Note”). The financial terms of the note are substantially the same as the 2028 Notes.

On December 8, 2025, the Company redeemed in aggregate its principal amount of the issued and outstanding 2028 Promissory Note, comprising all issued and outstanding 2028 Promissory Notes, at a price equal to the closing market price of the 2028 Notes on December 5, 2025, plus accrued and unpaid interest thereon from November 1, 2025, through, but excluding, December 8, 2025 in accordance with the terms of the indenture governing the 2028 Promissory Note. The redemption was completed on December 8, 2025.

Fair Value of Debt Obligations

The fair values of our debt obligations are determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of the 2028 Notes, which are publicly traded, is based upon closing market quotes as of the measurement date. As of ~~December~~ March 31, ~~2025~~2026 and September 30, 2025, the Notes are deemed to be Level 1 in the fair value hierarchy, as defined in Note 4. As of ~~December~~ March 31, ~~2025~~2026 and September 30, 2025, the Credit Facility is deemed to be Level 3 in the fair value hierarchy, as defined in Note 4.

32Debt issuance costs related to the 2028 Notes are reported on the Consolidated Statements of Assets and Liabilities as a direct deduction from the face amount of the 2028 Notes. As of March 31, 2026 and September 30, 2025, debt issuance costs related to the 2028 Notes were as follows (dollars in thousands):

	For the six months ended						For the year ended
	March 31, 2026						September 30, 2025
	2028 Notes		2028 Promissory Note		Total		2028 Notes		2028 Promissory Note		Total
Total debt issuance costs at beginning of period	$	1,023	$	118	$	1,141	$	1,357	$	154	$	1,511
Debt issuance costs during the period		-		-		-		-		-		-
Amortized debt issuance costs		159		118		277		334		36		370
Unamortized debt issuance costs	$	864	$	-	$	864	$	1,023	$	118	$	1,141

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Note 5. Borrowings (continued)

~~Debt issuance~~For ~~costs~~the ~~related~~three toand ~~the~~six ~~2028~~months ~~Notes~~ended ~~are~~March ~~reported~~31, on2026 and 2025, the ~~Consolidated~~components ~~Statements~~ of ~~Assets~~interest ~~and~~expense, ~~Liabilities~~amortized asdebt aissuance ~~direct~~costs, ~~deduction from~~amortized ~~the~~deferred ~~face~~financing ~~amount~~costs, ofweighted ~~the~~average ~~2028~~stated interest ~~Notes.~~rate Asand ofweighted ~~December~~average ~~31,~~outstanding ~~2025~~debt ~~and~~balance ~~September~~for ~~30,~~the ~~2025~~2028 Notes, ~~debt~~2028 ~~issuance~~Promissory ~~costs~~Note ~~related~~and toCredit ~~the~~Facility ~~2028 Notes~~ were as follows (dollars in thousands):

	For the three months ended									For the year ended
	For the Three Months Ended March 31,						For the Six Months Ended March 31,
	December 31, 2025									September 30, 2025
	2026			2025			2026			2025
	2028 Notes			2028 Promissory Note			Total			2028 Notes			2028 Promissory Note		Total
2028 Notes Interest	$	754		$	763			1,509			1,510
Total debt issuance costs at beginning of period	$	1,023		$	118		$	1,141		$	1,357		$	154	$	1,511
2028 Promissory Note Interest		-			22			16			44
Debt issuance costs during the period		-			-			-			-			-		-
Credit facility interest		1,391			1,493			2,885			2,994
Amortized debt issuance costs		76			118			194			334			36		370
Commitment fees		7			2			13			9
Unamortized debt issuance costs	$	947		$	-		$	947		$	1,023		$	118	$	1,141
Amortization of deferred financing costs		75			207			152			384
Amortization of debt issuance costs		82			92			166			184
Other		-			-			-			-
Total	$	2,309		$	2,579		$	4,741		$	5,125
Weighted average stated interest rate		5.9	%		6.4	%		6.0	%		6.6	%
Weighted average debt outstanding	$	147,492		$	142,324		$	148,112		$	139,254

For the three months ended December 31, 2025 and 2024, 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 2028 Notes, 2028 Promissory Note and Credit Facility were as follows (dollars in thousands):

	For the Three Months Ended December 31,
	2025			2024
2028 Notes Interest	$	755		$	747
2028 Promissory Note		16			22
Credit facility interest		1,494			1,501
Commitment fees		6			7
Amortization of deferred financing costs		77			177
Amortization of debt issuance costs		84			92
Total	$	2,432		$	2,546
Weighted average stated interest rate		6.0	%		6.6	%
Weighted average debt outstanding	$	148,720		$	136,250

Note 6. Agreements

Administration Agreement

SS&C Technologies, Inc. (“SS&C”) serves as the administrator of the Company and provides the Company with fund accounting and financial reporting services pursuant to the services agreement with the Company since August 9, 2022. Effective September 12, 2022, Computershare Trust Company, N.A. (“Computershare”) ~~serves~~ serves as custodian for the Company pursuant to its Loan Administration and Custodial Agreement with the Company. For the three and six months ended ~~December~~ March 31, ~~2025~~2026 ~~and 2024~~ we incurred approximately $0.1 million and $0.2 million in administrator expenses, respectively. For the three and six months ended March 31, 2025 we incurred approximately $0.1 million and $0.2 million in administrator expenses, respectively.

As of ~~December~~March 31, ~~2025~~2026 and September 30, 2025, $0.0 million and $0.0 million was included in “administrator expenses payable” in the accompanying Consolidated Statements of Assets and Liabilities.

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of December 31, 2025

(Unaudited)

Note 6. Agreements (continued)

Long-Term Cash Incentive Plan

On May 9, 2022, the board of directors of the Company adopted the PhenixFIN 2022 Long-Term Cash Incentive Plan (the “CIP”) pursuant to the recommendation by the Compensation Committee of the board of directors. The CIP provides for performance-based cash awards to key employees of the Company, as approved by the Compensation Committee, based on the achievement of pre-established financial goals for the approved performance period. The performance goals may be expressed as one or a combination of net asset value of the Company, net asset value per share of the Company’s common stock, changes in the market price of shares of the Company’s common stock, individual performance metrics and/or such other goals and objectives the Committee considers relevant in connection with accomplishing the purposes of the CIP.

In December 2022, pursuant to the CIP, the Compensation Committee approved awards for Mr. Lorber and Ms. McMillan for the three-year performance period commencing on October 1, 2022 and ending on September 30, 2025 (the “2023 LTIP Plan”). Each participant is eligible to receive an amount of cash equal to a percentage of their target award amount 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 cash equal to a percentage of their target award amount based on the factors described above. The Compensation Committee, in approving the awards, evaluated each performance goal separately.

In December 2024, pursuant to the CIP, the Compensation Committee approved awards for Mr. Lorber and Ms. McMillan for the three-year performance period commencing on October 1, 2024 and ending on September 30, 2027 (the “2025 LTIP Plan”). Each participant is eligible to receive an amount of cash equal to a percentage of their target award amount based on the factors described above. The threshold, target, and maximum performance levels are structured similar to those of the ~~2022 LTIP Plan~~CIP. The Compensation Committee, in approving the awards, evaluated each performance goal separately.

In December 2025, 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, 2025 and ending on September 30, 2028 (the “2026 LTIP Plan”). Each participant is eligible to receive an amount of cash equal to a percentage of their target award amount based on the factors described above. The threshold, target, and maximum performance levels are structured similar to those of the ~~2022 LTIP Plan~~CIP. The Compensation Committee, in approving the awards, evaluated each performance goal separately.

~~The Target Performance Award for each executive officer for the 2023 LTIP Plan, the 2024 LTIP Plan, the 2025 LTIP Plan, and the 2026 LTIP Plan is set forth in the table below:~~35

Name and Title	2023 LTIP Dollar Value of Target Award		2024 LTIP Dollar Value of Target Award		2025 LTIP Dollar Value of Target Award		2026 LTIP Dollar Value of Target Award
David Lorber, Chairman of the Board and Chief Executive Officer	$	890,000	$	890,000	$	1,000,000	$	1,000,000
Ellida McMillan, Chief Financial Officer		380,000		380,000		425,000		425,000

During the three months ended December 31, 2025 and 2024, the Company recorded an expense of $66,875 and $326,320, respectively, for these awards. During the three months ended December 31, 2025 and December 31, 2024, the Company paid out $2.4 million and $2.0 million, respectively, for these awards.

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Note 6. Agreements (continued)

The Target Performance Award for each executive officer for the 2023 LTIP Plan, the 2024 LTIP Plan, the 2025 LTIP Plan and the 2026 LTIP Plan is set forth in the table below:

Name and Title	2023 LTIP Dollar Value of Target Award		2024 LTIP Dollar Value of Target Award		2025 LTIP Dollar Value of Target Award		2026 LTIP Dollar Value of Target Award
David Lorber, Chairman of the Board and Chief Executive Officer	$	890,000	$	890,000	$	1,000,000	$	1,000,000
Ellida McMillan, Chief Financial Officer		380,000		380,000		425,000		425,000

During the three and six months ended March 31, 2026, the Company recorded an expense of $66,875 and $133,750, respectively, for these awards. During the three and six months ended March 31, 2025, the Company recorded an expense of $303,848 and $630,168, respectively, for these awards.

Note 7. Related Party Transactions

The Company has entered into contracts with its affiliated portfolio companies, The National Security Group (and certain of its affiliates) and ECC Capital Corporation, pursuant to which the Company (and/or certain of its subsidiaries) provide such affiliated portfolio companies certain services, including managing a portion of their assets. During the three and six months ended ~~December~~March 31, ~~2025 and 2024~~2026, the Company recognized $0.2 million and $0.3 million of income, respectively, related to these contracts. During the three and six months ended March 31, 2025, the Company recognized $0.12 million and $0.3 million of income, respectively, related to these contracts.

Due from/to Affiliates

Due from affiliates at ~~December~~March 31, ~~2025~~2026 and September 30, 2025 consists of certain legal and general and administrative expenses paid by the Company on behalf of certain of its affiliates. Due to affiliates at ~~December~~March 31, ~~2025~~2026 and September 30, 2025 consists of certain expenses payable by the Company to certain of its affiliates.

Note 8. Commitments

Unfunded commitments

As of ~~December~~March 31, ~~2025~~2026 and September 30, 2025, we had commitments under loan and financing agreements to fund up to $3.9 4 million to six portfolio companies and $5.5 million to six portfolio companies, respectively. These commitments are primarily composed of senior secured delayed draw term loans and revolvers, and the determination of their fair value is included in the Consolidated Schedules of Investments. The commitments are generally subject to the borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. The terms of the borrowings and financings subject to commitment are comparable to the terms of other loan and equity securities in our portfolio. The Company maintains adequate liquidity to fund its unfunded commitments. A summary of the composition of the unfunded commitments as of March ~~December~~ 31, ~~2025~~2026 and September 30, 2025 is shown in the table below (dollars in thousands):

	December 31, 2025		September 30, 2025
	March 31, 2026		September 30, 2025
MB Precision Investment Holdings LLC - Senior Secured First Lien Revolver	$	3	$	85
MB Precision Investment Holdings LLC - Senior Secured Delayed Draw Term Loan		85		1,521
PREIT Associates - Revolver		61		61
PSB Group, LLC - Revolver		472		472
SS Acquisition, LLC (dba Soccer Shots Franchising) - Revolver		1,029		1,029
Tamarix Capital Partners II, L.P. - Fund Investment		865		865
WHI Global, LLC - Revolver		~~1,358~~916		1,484
Total unfunded commitments	$	3,~~873~~431	$	5,517

35Lease obligations

The Company evaluates its leases to determine whether they should be classified as operating or finance leases. PhenixFIN identified one operating lease for its office space. The lease commenced on September 5, 2021. On December 18, 2024, the Company amended the terms of the lease, contingent on certain events, extending the lease term until August 31, 2035, with a right to terminate on the 36th and 60th month anniversaries of September 5, 2025, as well as any time on or after the 84th month anniversary of September 5, 2025.

Upon entering into the lease on September 5, 2021, PhenixFIN recorded a right-of-use asset and a lease liability as of that date.

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Note 8. Commitments (continued)

~~Lease~~As of March 31, 2026 and September 30, 2025, the ~~obligations~~asset related to the operating lease was $2.4 million and $2.5 million, respectively, and is included in the Other assets balance on the Consolidated Balance Sheet. As of March 31, 2026 and September 30, 2025, the lease liability was $2.5 million and $2.4 million, respectively, and is included in the Other liabilities balance on the Consolidated Statements of Assets and Liabilities. As of March 31, 2026 and September 30, 2025, the remaining lease term was approximately ten years, and the implied borrowing rate was 6.85%.

The ~~Company~~following ~~evaluates~~table ~~its~~shows ~~leases~~future tominimum ~~determine~~payments ~~whether~~under ~~they should be classified as operating or financing leases.~~ PhenixFIN’s ~~identified one~~ operating lease ~~for~~as ~~its office space. The lease commenced on September 5, 2021. On December 18, 2024, the Company amended the terms~~ of ~~the~~March ~~lease, contingent on certain events, extending the lease term until August~~ 31, ~~2035, with a right to terminate on the 36th and 60th month anniversaries of September 5, 2025, as well as any time on or after the 84th month anniversary of September 5, 2025.~~2026:

Upon entering into the lease on September 5, 2021, PhenixFIN recorded a right-of-use asset and a lease liability as of that date.

For the Years Ended September 30,	Amount
2026	$	158,288
2027		325,261
2028		335,019
2029		345,070
2030		355,422
Thereafter		1,908,314
		3,427,374
Difference between undiscounted and discounted cash flows		(929,618	)
	$	2,497,756

As of December 31, 2025 and September 30, 2025, the asset related to the operating lease was $2.4 million and $2.5 million, respectively, and is included in the Other assets balance on the Consolidated Balance Sheet. As of December 31, 2025 and September 30, 2025, the lease liability was $2.5 million and $2.4 million, respectively, and is included in the Other liabilities balance on the Consolidated Statements of Assets and Liabilities. As of December 31, 2025 and September 30, 2025, the remaining lease term was approximately ten years and the implied borrowing rate was 6.85%.

The following table shows future minimum payments under PhenixFIN’s operating lease as of December 31, 2025:

For the Years Ended September 30,	Amount
2026	$	184,538
2027		325,261
2028		335,019
2029		345,070
2030		355,422
Thereafter		1,908,314
		3,453,624
Difference between undiscounted and discounted cash flows		(972,206	)
	$	2,481,418

Note 9. Fee Income

Fee income consists of amendment fees, prepayment penalty and other fees which are non-recurring in nature, as well as administrative agent fees and management fees, which are recurring in nature. The following table summarizes the Company’s fee income for the three and six months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025 (dollars in thousands):

	For the Three Months Ended December 31,
	For the Three Months Ended March 31,				For the Six Months Ended March 31,
	2025		2024
	2026		2025		2026		2025
Prepayment fee	$	-	$	-15			$	15
Administrative agent fee		5-		5-		5
Amendment fee		-		-		-		5
Management fee		15		-		30
Other fees		~~168~~149		615	$	317		21
Fee income	$	~~188~~164	$	1130	$	352	$	41

3637

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Note 10. Directors Fees

From May 1, 2023 to September 30, 2024, the Company’s independent directors received an annual fee of $150,000. In addition, the lead independent director received an annual retainer of $30,000; the chair of the Audit Committee received an annual retainer of $25,000, and each of its other members received an annual retainer of $12,500; and the chairs of the Nominating and Corporate Governance Committee and of the Compensation Committee each received an annual retainer of $15,000 and each of the other members of these committees received annual retainers of $8,000. The Company’s independent directors no longer receive fees for each board and committee meeting that they attend.

Effective October 1, 2024, the structure was modified such that each of the Company’s independent directors receives an annual fee of $165,000. In addition, the lead independent director receives an annual retainer of $30,000; the chair of the Audit Committee receives an annual retainer of $19,000 and each of its other members receives an annual retainer of $12,500; the chair of the Nominating and Corporate Governance Committee receives an annual retainer of $12,000 and each of its other members receives an annual retainer of $11,000; and the chair of the Compensation Committee receives an annual retainer of $15,000 and each of its other members receives an annual retainer of $11,000.

No board service compensation is paid to directors who are “interested persons” of the Company (as such term is defined in the 1940 Act). For the three and six months ended ~~December~~ March 31, ~~2025 and 2024~~2026, the Company recognized $0.2 million and $0.4 million for directors’ fees expense, respectively. For the three and six months ended March 31, 2025, 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 stockholders by the weighted average number of shares outstanding during the period. Other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. The Company does not have any potentially dilutive common shares as of ~~December~~March 31, ~~2025~~ 2026.

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 ~~months~~and six months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025 (amounts in thousands, except shares and per share amounts):

	For the Three Months Ended December 31,
	For the Three Months Ended March 31,						For the Six Months Ended March 31,
	2025			2024
	2026			2025			2026			2025
Basic and diluted:
Net increase (decrease) in net assets resulting from operations	$	(41,~~770~~133	)	$	~~2,464~~(896	)	$	(3,637	)	$	1,568
Weighted average shares of common stock outstanding - basic and diluted		21,~~001~~972,~~470~~943			2,019,778			1,987,363			2,019,778
Earnings (loss) per share of common stock - basic and diluted	$	(20.3857	)	$	1(0.2244	)	$	(1.83	)	$	0.78

3738

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Note 12. Financial Highlights

The following is a schedule of financial highlights for the ~~three~~six months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025:

	For the Three Months Ended December 31,
	For the Six Months Ended March 31,
	2025			2024
	2026			2025
Per share data
Net Asset Value per share at Beginning of Period	$	80.24		$	79.37
Results of Operations:
Net Investment Income/(Loss)(1)		1.0645			01.8028
Net Realized Gain/(Loss) on Investments		(0.3521	)		0.5805
Net Unrealized Gain/(Loss) on Investments		(32.5876	)		(0.1639	)
Net loss on extinguishment of debt		-(0.01	)		-
Deferred tax benefit (expense)		(0.2130	)		-(0.16	)
Net Increase (Decrease) in Net Assets Resulting from Operations		(21.3883	)		10.2278
Capital Share Transactions
Distributions declared		-			-(1.43	)
Repurchase of common stock under stock repurchase program(2)		01.0615			-
Net Increase (Decrease) Resulting from Capital Share Transactions		01.0615			-(1.43	)
Net Asset Value per share at End of Period	$	7779.9256		$	8078.5972
Net Assets at End of Period	$	~~155~~153,~~821~~811,~~248~~704		$	~~162~~158,~~771~~987,~~930~~514
Shares Outstanding at End of Period		1,~~999~~933,~~634~~238			2,019,778
Per share market value at end of period	$	4439.1806		$	5054.6400
Total return based on market value(3)		(717.2499	)%		616.3945	%
Total return based on net asset value(4)		(34.0833	)%		10.5498	%
Portfolio turnover rate		69.3561	%		1329.2719	%
Ratios:
Ratio of net investment/(loss) income to average net assets after waivers, discounts and reimbursements(5)		53.3468	%		43.2627	%
Ratio of total expenses to average net assets(5)		11.38	%		11.83	%
Ratio of total expenses to average net assets		11.49	%		12.16	%
Supplemental Data:
Percentage of non-recurring fee income(6)		2.8297	%		0.1833	%
Average debt outstanding(7)	$	148,~~719~~112,~~683~~398		$	~~136~~139,~~250~~253,~~229~~604
Average debt outstanding per weighted average common share	$	74.3153		$	6768.4695
Asset coverage ratio per unit(8)	$	2,~~056~~043		$	2,~~137~~146
Senior Securities Outstanding(9)
2023 Notes	$	-		$	-
2028 Notes	$	57,500,000		$	57,500,000
2028 Promissory Note	$	-		$	1,661,498
Credit Facility	$	89,991,619		$	8479,~~000~~600,000
Average market value per unit:
2028 Notes	$	22.7485		$	22.5157

(1)	Net investment income/(loss) excluding management and incentive fee waivers, discounts and reimbursements based on total weighted average common stock outstanding equals $1.06 and $0.80 per share for the three months ended December 31, 2025 and 2024, respectively.
(2)	The amount shown at this caption is the balancing amount derived from the other figures in the schedule. The amount shown at this caption for a share outstanding throughout the period may not agree with the repurchase of common stock because of the timing of repurchase of the Company’s shares.
(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)	Total return is historical and assumes changes in NAV, reinvestments of all dividends at prices obtained under the Company’s dividend reinvestment plan, and no sales charges for the period. Calculation is not annualized.
(5)	Ratios are annualized during interim periods.
(6)	Represents the impact of the non-recurring fees as a percentage of total investment income.
(7)	Based on daily weighted average carrying value of debt outstanding during the period.
(8)	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. As of December 31, 2025, the Company’s asset coverage was 205.6% after giving effect to leverage and therefore the Company’s asset coverage was above 200%, the minimum asset coverage requirement under the 1940 Act.
(9)	Total amount of each class of senior securities outstanding at the end of the period excluding debt issuance costs.

(1)	Net investment income/(loss) excluding management and incentive fee waivers, discounts and reimbursements based on total weighted average common stock outstanding equals $1.45 and $1.28 per share for the six months ended March 31, 2026 and 2025, respectively.

38(2) The amount shown at this caption is the balancing amount derived from the other figures in the schedule. The amount shown at this caption for a share outstanding throughout the period may not agree with the repurchase of common stock because of the timing of repurchase of the Company’s shares.

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Note 12. Financial Highlights (continued)

(3)	Total return is historical and assumes changes in share price, reinvestments of all dividends and distributions at prices obtained under the Company’s dividend reinvestment plan, and no sales charge for the period. Calculation is not annualized.
(4)	Total return is historical and assumes changes in NAV, reinvestments of all dividends at prices obtained under the Company’s dividend reinvestment plan, and no sales charges for the period. Calculation is not annualized.
(5)	Ratios are annualized during interim periods.
(6)	Represents the impact of the non-recurring fees as a percentage of total investment income.
(7)	Based on daily weighted average carrying value of debt outstanding during the period.
(8)	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. As of March 31, 2026, the Company’s asset coverage was 204.3% after giving effect to leverage and therefore the Company’s asset coverage was above 200%, the minimum asset coverage requirement under the 1940 Act.
(9)	Total amount of each class of senior securities outstanding at the end of the period excluding debt issuance costs.

Note 13. Dividends

Any dividends and distributions to common stockholders are recorded on the ex-dividend date. Any amounts to be paid out as a dividend are determined by our board of directors.

We have adopted an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a cash dividend or other distribution, each stockholder that has not “opted out” of our dividend reinvestment plan will have its dividends automatically reinvested in additional shares of our common stock rather than receiving cash dividends. Stockholders who receive distributions in the form of shares of common stock will be subject to the same federal, state and local tax consequences as if they received cash distributions.

The Company did not declare any distribution payments during the ~~three~~six months ended ~~December~~March 31, 2026. On February 6, 2025, ~~and~~the ~~2024~~Board of Directors declared a special dividend of $1.43 per share. This dividend was paid on February 19, 2025 to stockholders of record as of February 17, 2025. The dividends declared during the six months ended March 31, 2025 were derived from net investment income, determined on a tax basis.

Note 14. Share Transactions

On February 8, 2023, the Board of Directors approved the expansion of the amount authorized for repurchase under the Company’s share repurchase program from $25 million to $35 million. Since announcing this share repurchase program on January 11, 2021, the Company has repurchased an aggregate of ~~724~~787,~~075~~ 425 shares of common stock through ~~December~~March 31, ~~2025~~2026 with a total cost of approximately $2932.1 2 million, or 2628.69% of shares outstanding as of the program’s inception. The total remaining amount authorized under the expanded share repurchase program is approximately $52.9 8 million.

~~The following table sets forth the number of shares of common stock repurchased by the Company at an average price of $~~40~~.18 per share under its share repurchase program from February 10, 2021 through December 31, 2025:~~

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 - $37.79		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	$45.03 - $45.03		1,801,205
April 2024		700	$43.76 - $43.76		30,637
May 2024		12	$44.82 - $44.82		543
June 2025		15,909	$50.03 - $50.03		795,932
September 2025		100	$47.68 - $47.68		4,773
December 2025		4,135	$41.68 - $47.38		182,876
Total		724,075		$	29,092,026

During the three months ended December 31, 2025, there were 729 shares that were not yet transferred into treasury.

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of ~~December~~March 31, ~~2025~~2026

(Unaudited)

Note 14. Share Transactions (continued)

The following table sets forth the number of shares of common stock repurchased by the Company at an average price of $40.94 per share under its share repurchase program from February 10, 2021 through March 31, 2026:

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 - $37.79		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		$45.03 - $45.03		1,801,205
April 2024		700		$43.76 - $43.76		30,637
May 2024		12		$44.82 - $44.82		543
June 2025		15,909		$50.03 - $50.03		795,932
September 2025		100		$47.68 - $47.68		4,773
December 2025		4,135		$41.68 - $47.38		182,876
January 2026		1,375		$43.09 - $45.62		60,872
February 2026		60,600		$42.41 - $47.77		2,893,547
March 2026		1,375		$40.04 - $44.40		187,893
Total		787,425			$	32,234,338

As of March 31, 2026, there were zero shares that were not yet transferred into treasury.

PHENIXFIN CORPORATION

Notes to Consolidated Financial Statements

As of March 31, 2026

(Unaudited)

Note 15. Segment Reporting

The Company has determined that it has a single operating segment in accordance with Topic 280, Segment Reporting (“ASC 280”). The Company’s Chief Operating Decision Maker (“CODM”) are the Chief Executive Officer and the Chief Financial Officer. While the Company derives income and capital appreciation by providing investments to companies across various industries, the Company and the CODM evaluate and monitor performance of the business on a consolidated basis. Further, each investment is evaluated and managed using similar processes and shared operations support functions such as deal origination, underwriting, and loan servicing as well as the administrative functions of human resources, legal, finance, and information technology.

The CODM uses consolidated net investment income and net increase (decrease) in net assets resulting from operations when allocating resources and assessing the Company’s performance. Net investment income is comprised of consolidated total investment income (“segment revenues”) and consolidated total net operating expenses (“significant segment expenses”). The net increase (decrease) in net assets resulting from operations is comprised of consolidated net investment income, consolidated net realized gains (losses) from investments, and consolidated net change in unrealized gains (losses) from investments. These performance metrics are considered the key segment measures of profit or loss reviewed by the CODM. As the Company’s operations comprise a single reporting segment, the segment assets are reflected on the accompanying Consolidated Statements of Assets and Liabilities as Total Assets, investments held on the Consolidated Schedule of Investments, and the significant segment expenses are listed on the accompanying Consolidated Statements of Operations.

Note 16. Subsequent Events

~~Management has~~ ~~evaluated~~The ~~subsequent~~Board ~~events through the date~~ of ~~issuance~~Directors ofdeclared ~~the~~a ~~consolidated~~special ~~financial statements included herein. Other than the~~dividend ~~items~~effective ~~disclosed~~May ~~herein~~5, ~~there~~2026 ~~have~~of ~~been~~$0.07 per noshare. ~~subsequent~~This ~~events~~dividend ~~that~~will ~~occurred~~be ~~during~~paid ~~such~~on ~~period~~May ~~that~~28, ~~would~~2026 ~~require disclosure in this Form 10-Q or would be required~~ to bestockholders ~~recognized~~of inrecord ~~the Consolidated Financial Statements~~ as of ~~and~~May ~~for the three months ended December 31~~18, ~~2025~~ 2026.

40Management has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. Other than the items disclosed herein, there have been no subsequent events that occurred during such period that would require disclosure in this Form 10-Q or would be required to be recognized in the Consolidated Financial Statements as of and for the three and six months ended March 31, 2026.

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 PhenixFIN 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;

● 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 new or increased tariffs on various goods;

● the impact of increased competition;

● the impact of future acquisitions and divestitures;

● our business prospects and the prospects of our portfolio companies;

● the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to us;

● our contractual arrangements and relationships with third parties;

● any future financings by us;

● fluctuations in foreign currency exchange rates;

● the impact of changes to tax legislation and, generally, our tax position;

● our ability to locate suitable investments for us and to monitor and administer our investments;

● our ability to attract and retain highly talented professionals;

● market conditions and our ability to access alternative debt markets and additional debt and equity capital;

● 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” 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, significant tariffs, 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.

The large-scale invasion of Ukraine by Russia in February 2022 resulted in sanctions and market disruptions, including declines in regional and global stock markets, unusual volatility in global commodity markets and significant devaluations of Russian currency. The extent and duration of the military action are impossible to predict but could be significant. Market disruption caused by the Russian military action, and any counter measures or responses thereto (including international sanctions, a downgrade in a country’s credit rating, purchasing and financing restrictions, boycotts, tariffs, changes in consumer or purchaser preferences, cyberattacks and espionage) could continue to have severe adverse impacts on regional and/or global securities and commodities markets, including markets for oil and natural gas. These impacts may include reduced market liquidity, distress in credit markets, further disruption of global supply chains, increased risk of inflation, and limited access to investments in certain international markets and/or issuers. In addition, the conflicts in the Middle East and terrorist acts may cause significant volatility in the markets and/or market disruptions.

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 December 31, 2025, 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 December 31, 2025, the analysis contained herein may not fully account for market event impacts. As of December 31, 2025, 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 December 31, 2025), 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 2023, the Federal Reserve raised short-term interest rates. 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~~Item interest rates 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 us2. ~~Rising~~Management’s ~~interest~~Discussion ~~rates~~and ~~could~~Analysis ~~also cause portfolio companies to shift cash from other productive uses to the payment~~ of ~~interest,~~Financial ~~which~~Condition ~~may have a material adverse effect on their business~~ and ~~operations~~Results 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.~~ Operations

~~A change~~The infollowing ~~the~~discussion ~~general~~and ~~level~~analysis ofshould ~~interest~~be read ~~rates~~in ~~can~~conjunction bewith ~~expected~~our tofinancial ~~lead~~statements toand arelated ~~change~~notes inand ~~the~~other ~~interest~~financial ~~rates~~information weappearing ~~receive~~elsewhere onin ~~many~~this ofquarterly report ~~our~~on ~~debt investments~~Form 10-Q.

~~Overview~~Except as otherwise specified, references to “we,” “us,” “our,” or the “Company,” refer to PhenixFIN Corporation.

~~We are an internally~~Forward-~~managed~~Looking non-diversified closed-end management investment company that has elected to be regulated as a BDC under the 1940 Act. In addition, we have elected, and intend 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 our present internalized management structure.Statements

~~We commenced~~Some ~~operations~~of ~~and~~the ~~completed~~statements ~~our~~in ~~initial~~this ~~public~~quarterly ~~offering~~ report on ~~January~~Form ~~20,~~10-Q ~~2011.~~constitute ~~Under~~forward-looking ~~our~~statements, ~~internalized~~which ~~management~~relate ~~structure,~~to ~~our activities~~future ~~are~~events ~~managed~~or by our ~~senior~~performance ~~professionals~~or ~~and~~financial ~~are~~condition. ~~supervised~~The byforward-looking statements ~~our~~contained ~~board~~in ofthis ~~directors,~~quarterly ofreport ~~which~~on aForm ~~majority~~10-Q ofinvolve ~~the~~risks ~~members~~and ~~are independent~~uncertainties, ofincluding ~~us.~~statements as to:

~~The Company’s~~● ~~investment~~the ~~objective is to generate current income and capital appreciation. The management team seeks to achieve this objective primarily through making loans~~introduction, ~~private equity or other investments in privately-held companies. The Company may also make debt~~withdrawal, ~~equity~~success ~~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~~timing inof ~~other assets or operate other businesses to achieve our investment objective, such as operating and managing an asset-based lending~~ business ~~and~~initiatives ~~an insurance business. The portfolio generally consists of senior secured first lien term loans, senior secured second lien term loans, senior secured bonds, preferred equity~~ and common equity. Occasionally, we will receive warrants or other equity participation features which we believe will have the potential to increase total investment returns. Our loan and other debt investments are primarily rated below investment grade or are unrated. Investments in below investment grade securities are considered predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal when due.strategies;

~~As a~~● ~~BDC,~~changes ~~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~~political,” ~~including~~economic ~~securities of private~~ or ~~thinly~~industry ~~traded public U.S. companies~~conditions, 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~~interest ~~Act,~~rate ~~equals~~environment ~~at least 200% (~~or ~~150%~~conditions ~~if,~~affecting ~~pursuant to~~ the ~~1940~~financial ~~Act, certain requirements are met) after such borrowing, with certain limited exceptions. To maintain our RIC tax treatment, we must meet specified source-of-income~~ and ~~asset~~capital ~~diversification requirements. In addition~~markets, towhich ~~maintain~~could ~~our~~result ~~RIC~~in ~~tax~~changes ~~treatment,~~in wethe ~~must~~value ~~timely distribute at least 90%~~ of our ~~net~~ ~~ordinary~~assets; ~~income~~● ~~and~~the ~~realized~~impact ~~net short-term capital gains in excess~~ of ~~realized~~new ~~net~~or ~~long-term~~increased ~~capital~~tariffs ~~losses,~~on ifvarious ~~any, for the taxable year.~~goods;

~~Revenues~~● the impact of increased competition;

~~We generate~~● ~~revenue in~~ the form of interest income on the debt that we hold and dividends and capital gains, if any, on our equity investments 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~~future ~~intermediaries.~~acquisitions 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 recognized as earned. divestitures;

43● our business prospects and the prospects of our portfolio companies;

~~Expenses~~● the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to us;

~~Under~~● our ~~internally~~ ~~managed~~contractual ~~structure,~~arrangements ~~we bear all costs~~ and ~~expenses~~relationships ofwith ~~our~~third ~~operations and transactions, including those relating to:~~parties;

● ~~our~~any ~~organization~~future ~~and~~financings ~~continued~~by ~~corporate existence~~us;

● ~~calculating~~fluctuations ~~our~~in ~~net~~foreign ~~asset~~currency ~~value~~exchange ~~(“NAV”) (including the cost and expenses of any independent valuation firms)~~rates;

● ~~expenses,~~the ~~including~~impact ~~travel~~of ~~expense,~~changes ~~incurred by our professionals or payable~~ to ~~third~~tax ~~parties~~legislation ~~performing due diligence on prospective portfolio companies, monitoring our investments~~ and, ~~if necessary~~generally, ~~enforcing~~ our ~~rights~~tax position;

● ~~interest~~our ~~payable~~ability onto ~~debt~~locate ~~incurred~~suitable investments for us and to ~~finance~~monitor and administer our investments;

● ~~the~~our ~~costs~~ability ofto ~~all~~attract ~~offerings~~and ofretain ~~common~~highly ~~shares~~talented ~~and other securities~~professionals;

● ~~operating~~market ~~costs~~conditions ~~associated~~and ~~with~~our ~~employing~~ability ~~investment~~to ~~professionals~~access alternative debt markets and ~~other~~additional ~~staff~~debt and equity capital;

● ~~distributions~~the onunfavorable ~~our~~resolution ~~shares~~of legal proceedings;

● ~~administration~~uncertainties ~~fees~~associated ~~payable~~with ~~under~~the effect of pandemics and other future market disruptions on our ~~administration~~business ~~agreement~~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

● ~~custodial~~risks ~~fees~~and ~~related~~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 ~~assets~~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.

~~● amounts payable to third parties relating to, or associated with, making investments;~~43

●Such ~~transfer~~forward-looking ~~agent~~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 ~~custodial~~similar expressions, ~~fees;~~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” and elsewhere in this quarterly report on Form 10-Q.

●We ~~all~~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 ~~listing~~current ~~fees;~~reports on Form 8-K.

●Global ~~U.S.~~Events ~~federal, state~~ and ~~local~~Market ~~taxes;~~Volatility

●Periods ~~independent~~of ~~directors’~~market ~~fees~~volatility have occurred and could ~~expenses;~~continue to occur in response to pandemics or other events outside of our control, including terrorist attacks, acts of war, natural disasters, significant tariffs, 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.

●The ~~costs~~large-scale invasion of ~~preparing~~Ukraine by Russia in February 2022 resulted in sanctions and ~~filing~~market ~~reports~~disruptions, orincluding ~~other~~declines ~~documents~~in ~~with~~regional and global stock markets, unusual volatility in global commodity markets and significant devaluations of Russian currency. The extent and duration of the ~~SEC~~military action are impossible to predict but could be significant. Market disruption caused by the Russian military action, and any counter measures or ~~other~~responses ~~regulators;~~thereto (including international sanctions, a downgrade in a country’s credit rating, purchasing and financing restrictions, boycotts, tariffs, changes in consumer or purchaser preferences, cyberattacks and espionage) could continue to have severe adverse impacts on regional and/or global securities and commodities markets, including markets for oil and natural gas. These impacts may include reduced market liquidity, distress in credit markets, further disruption of global supply chains, increased risk of inflation, and limited access to investments in certain international markets and/or issuers.

●Separately, ongoing instability and conflict in the ~~costs~~Middle East, including tensions involving Iran, present additional risks to global markets. Heightened geopolitical tensions in the region may lead to disruptions in critical energy infrastructure and shipping routes, including key chokepoints such as the Strait of Hormuz, ~~any~~through ~~reports~~which a significant portion of global oil supply transits. Any escalation involving Iran—whether through direct military confrontation, proxy ~~statements~~conflicts, or ~~other~~expanded ~~notices~~sanctions—could materially affect global oil production, transportation, and pricing, contributing to ~~our~~increased ~~stockholders~~volatility in energy markets and broader financial markets. In addition, ~~including~~terrorist ~~printing~~activities or regional conflicts may further exacerbate uncertainty, potentially resulting in supply chain interruptions, increased defense and security costs;, and shifts in investor sentiment and capital flows. These developments could have cascading effects across global economies and financial systems, amplifying existing market disruptions and contributing to sustained periods of volatility and risk aversion.

●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 ~~fidelity~~portfolio ~~bond;~~companies’ operations. As a result, our portfolio investments could decline in value or our valuation of them could become uncertain.

●We ~~directors~~have evaluated subsequent events from March 31, 2026, through the filing date of this quarterly report on Form 10-Q. However, as the discussion in this Item 2. Management’s Discussion and ~~officers/errors~~Analysis of Financial Condition and ~~omissions~~Results ~~liability~~of ~~insurance~~Operations relates to the Company’s financial statements for the quarterly period ended March 31, 2026, the analysis contained herein may not fully account for market event impacts. As of March 31, 2026, 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, 2026), any ~~other~~valuations ~~insurance~~conducted now ~~premiums;~~or in the future in conformity with U.S. GAAP could result in a lower fair value of our portfolio.

~~● the operating lease of our office space;~~44

●Interest ~~indemnification~~Rate ~~payments; and~~Environment

●In ~~direct~~2023, ~~costs~~the Federal Reserve raised short-term interest rates. Additional interest rate increases may come. Changing interest rates may have unpredictable effects on markets, may result in heightened market volatility and ~~expenses~~may detract from our performance to the extent we are exposed to such interest rates and/or volatility. In periods of ~~administration~~rising interest rates, ~~including~~such ~~audit~~as ~~and~~the ~~legal~~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.

~~Long-Term~~If general interest rates rise, there is a risk ~~Cash~~that ~~Incentive~~the ~~Plan~~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.

~~On May~~A 9,change ~~2022,~~in the ~~board~~general oflevel ~~directors~~ of ~~the~~interest ~~Company~~rates can ~~adopted~~be ~~the~~expected ~~PhenixFIN 2022 Long-Term Cash Incentive Plan (the “CIP”) pursuant~~ to ~~the~~lead ~~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~~change ~~of net asset value of the Company, net asset value per share of the Company’s common stock, changes~~ in the ~~market~~interest ~~price~~rates ofwe ~~shares~~receive ofon ~~the~~many ~~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~~our ~~CIP~~debt investments.

In December 2022, pursuant to the CIP, the Compensation Committee approved awards for Mr. Lorber and Ms. McMillan for the three-year performance period commencing on October 1, 2022 and ending on September 30, 2025 (the “2023 LTIP Plan”). Each participant is eligible to receive an amount of cash equal to a percentage of the target award amount based on the factors described above. The Compensation Committee, in approving the awards, evaluated each performance goal separately.Overview

44We are an internally-managed non-diversified closed-end management investment company that has elected to be regulated as a BDC under the 1940 Act. In addition, we have elected, and intend 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 our present internalized management structure.

InWe ~~December~~commenced ~~2023,~~operations ~~pursuant~~and tocompleted ~~the~~our ~~CIP, the Compensation~~initial ~~Committee~~public ~~approved~~offering ~~awards~~on ~~for~~January ~~Mr.~~20, ~~Lorber and Ms~~2011. ~~McMillan~~Under ~~for~~our ~~the~~internalized ~~three-year~~management ~~performance~~structure, ~~period~~our ~~commencing~~activities onare ~~October~~managed 1,by ~~2023~~our ~~and~~senior ~~ending~~professionals onand ~~September~~are ~~30,~~supervised ~~2026~~by ~~(the~~our ~~“2024~~board ~~LTIP~~of ~~Plan”).~~directors, ~~Each participant is eligible to receive an amount~~ of ~~cash~~which ~~equal to~~ a ~~percentage~~ majority of ~~their target award amount based on~~ the ~~factors~~members ~~described~~are ~~above.~~independent ~~The~~of ~~Compensation Committee, in approving the awards, evaluated each performance goal separately~~us.

InThe ~~December~~Company’s ~~2024,~~investment ~~pursuant~~objective is to generate ~~the~~current ~~CIP,~~income ~~the~~and ~~Compensation Committee~~capital ~~approved~~appreciation. ~~awards~~The ~~for~~management ~~Mr.~~team ~~Lorber~~seeks ~~and~~to ~~Ms.~~achieve ~~McMillan~~this ~~for~~objective ~~the~~primarily ~~three~~through making loans, private equity or other investments in privately-~~year~~held ~~performance~~companies. ~~period~~The ~~commencing~~Company onmay ~~October~~also 1make debt, ~~2024~~equity ~~and~~or ~~ending~~other investments in publicly-traded oncompanies. ~~September~~These ~~30,~~investments ~~2027~~may ~~(the~~also ~~“2025~~include ~~LTIP~~investments ~~Plan”)~~in other BDCs, closed-end funds or REITs. ~~Each~~We ~~participant~~may isalso ~~eligible~~pursue toother ~~receive~~strategic opportunities anand ~~amount~~invest ofin ~~cash~~other ~~equal~~assets or operate other businesses to aachieve ~~percentage of~~our ~~their~~investment ~~target~~objective, ~~award~~such ~~amount~~as operating and managing an asset-based onlending ~~the~~business ~~factors~~and ~~described~~an ~~above~~insurance business. The ~~threshold~~portfolio generally consists of senior secured first lien term loans, ~~target~~senior secured second lien term loans, senior secured bonds, preferred equity and ~~maximum~~common ~~performance~~equity. ~~levels~~Occasionally, ~~are~~we ~~structured~~will receive warrants or other ~~similar~~equity toparticipation ~~those~~features ofwhich we believe will have the ~~2022~~potential ~~LTIP~~to ~~Plan~~increase total investment returns. ~~The~~Our ~~Compensation~~loan ~~Committee,~~and other debt investments are primarily rated below investment grade or are unrated. Investments in ~~approving~~below investment grade securities are considered predominantly speculative with respect to the ~~awards,~~issuer’s ~~evaluated~~capacity ~~each~~to ~~performance~~pay ~~goal~~interest ~~separately~~and repay principal when due.

InAs ~~December~~a ~~2025~~BDC, ~~pursuant~~we are required to ~~the~~comply ~~CIP~~with certain regulatory requirements. For instance, ~~the~~we ~~Compensation~~generally ~~Committee~~have ~~approved~~to invest at least 70% of our total assets in “qualifying assets,” ~~awards~~including ~~for~~securities Mrof private or thinly traded public U.S. ~~Lorber~~companies, ~~and~~cash, Mscash equivalents, U.S. ~~McMillan~~government ~~for~~securities ~~the~~and ~~three~~high-~~year~~quality debt ~~performance~~investments ~~period~~that ~~commencing~~mature onin ~~October~~one 1year or less. In addition, ~~2025~~we ~~and~~are ~~ending~~only onallowed ~~September~~to 30borrow money such that our asset coverage, as defined ~~2028~~in the 1940 Act, equals at least 200% (or 150% if, pursuant to the ~~“2026~~1940 ~~LTIP~~Act, ~~Plan”~~certain requirements are met). ~~Each~~after ~~participant~~such isborrowing, ~~eligible~~with certain tolimited ~~receive~~exceptions. anTo ~~amount~~maintain ofour ~~cash~~RIC ~~equal~~tax totreatment, awe ~~percentage~~must meet specified source-of-income ~~their~~and ~~target award~~asset ~~amount~~diversification ~~based~~requirements. In onaddition, ~~the~~to ~~factors~~maintain ~~described~~our ~~above.~~RIC ~~The~~tax ~~threshold~~treatment, ~~target,~~we ~~and~~must ~~maximum~~timely ~~performance~~distribute ~~levels~~at ~~are~~least ~~structured~~90% ~~similar~~of toour ~~those of~~net ~~the~~ordinary ~~2022~~income ~~LTIP~~and ~~Plan.~~realized ~~The~~net ~~Compensation~~short-term capital ~~Committee,~~gains in ~~approving~~excess ~~the~~of ~~awards~~realized net long-term capital losses, ~~evaluated~~if ~~each~~any, ~~performance~~for ~~goal~~the ~~separately~~taxable year.

~~The Target Performance Award for each executive officer for the 2023 LTIP Plan, the 2024 LTIP Plan, the 2025 LTIP Plan, and the 2026 LTIP Plan is set forth in the table below:~~Revenues

Name and Title	2023 LTIP Dollar Value of Target Award		2024 LTIP Dollar Value of Target Award		2025 LTIP Dollar Value of Target Award		2026 LTIP Dollar Value of Target Award
David Lorber, Chairman of the Board and Chief Executive Officer	$	890,000	$	890,000	$	1,000,000	$	1,000,000
Ellida McMillan, Chief Financial Officer		380,000		380,000		425,000		425,000

We generate revenue in the form of interest income on the debt that we hold and dividends and capital gains, if any, on our equity investments 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 recognized as earned.

During the three months ended December 31, 2025 and 2024, the Company recorded an expense of $66,875 and $326,320 respectively, for these awards. During the three months ended December 31, 2025 and December 31, 2024, the Company paid out $2.4 million and $2.0 million, respectively, for these awards.45

~~Portfolio and Investment Activity~~Expenses

~~As of~~Under ~~December~~our ~~31,~~internally ~~2025~~managed ~~and September 30~~structure, ~~2025,~~we ~~our~~bear ~~portfolio~~all ~~had~~costs aand ~~fair~~expenses of ~~market~~our ~~value~~operations ofand ~~approximately~~transactions, ~~$295.6~~including ~~million~~those ~~and~~relating ~~$302.3 million, respectively.~~to:

~~During the~~● ~~three~~our ~~months~~organization ~~ended December 31, 2025, we received proceeds from sale~~ and ~~settlements~~continued ofcorporate ~~investments of $19.6 million, including principal proceeds, net realized gains on investments of $0.7 million and invested $19.0 million.~~existence;

~~During the~~● ~~three~~calculating ~~months~~our ~~ended~~net ~~December~~asset ~~31,~~value ~~2024,~~(“NAV”) we(including ~~received~~the ~~proceeds~~cost ~~from sale~~ and ~~settlements~~expenses of ~~investments~~any ofindependent ~~$30.0~~valuation ~~million, including principal and dividend proceeds, realized net gains on investments of $1.2 million, and invested $100.9 million.~~firms);

~~The following~~● ~~table~~expenses, ~~summarizes~~including ~~the~~travel ~~amortized~~expense, ~~cost~~incurred ~~and~~by ~~the~~our ~~fair~~professionals ~~value~~or ofpayable ~~our~~to ~~average~~third parties performing due diligence on prospective portfolio ~~company~~companies, ~~(dollars~~monitoring inour ~~thousands):~~investments and, if necessary, enforcing our rights;

	December 31, 2025				September 30, 2025
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Average portfolio company	$	9,846	$	8,959	$	9,011	$	8,396
Largest portfolio company by amortized cost and fair value, respectively		52,917		48,324		51,967		48,470

●

interest payable on debt, incurred to finance our investments;

~~The following~~● ~~table summarizes~~ the ~~amortized~~costs ~~cost and the fair value~~ of ~~investments~~all asofferings of ~~December~~common ~~31,~~shares ~~2025~~and ~~(dollars~~other ~~in thousands):~~securities;

	Amortized Cost		Percentage			Fair Value		Percentage
Senior Secured First Lien Term Loans	$	126,472		38.9	%	$	112,356		37.9	%
Senior Secured Notes		13,363		4.1			13,493		4.6
Fund Investment		2,194		0.7			2,227		0.8
Equity/Warrants		182,882		56.3			167,564		56.7
Total Investments	$	324,911		100.0	%	$	295,640		100.0	%

●

operating costs associated with employing investment professionals and other staff;

45● distributions on our shares;

~~The following~~● ~~table~~administration ~~summarizes~~fees ~~the~~payable ~~amortized~~under ~~cost~~our ~~and~~administration ~~the fair value of investments as of September 30, 2025 (dollars in thousands):~~agreement;

	Amortized Cost		Percentage			Fair Value		Percentage
Senior Secured First Lien Term Loans	$	125,373		38.6	%	$	116,567		38.6	%
Senior Secured Notes		17,039		5.3			17,457		5.8
Fund Investment		2,194		0.7			2,227		0.7
Equity/Warrants		179,783		55.4			166,021		54.9
Total Investments	$	324,389		100.0	%	$	302,272		100.0	%

●

custodial fees related to our assets

~~As of~~● ~~December~~amounts ~~31,~~payable ~~2025,~~to ~~our~~third ~~income-bearing~~parties ~~investment~~relating ~~portfolio based upon cost represented 63.1% of our total portfolio of which 60.8% bore interest based on floating rates~~to, ~~such~~or ~~as SOFR,~~associated ~~12.9% bore interest at fixed rates~~with, ~~and~~making ~~26.3% are income-producing equity~~ investments. As of September 30, 2025, our income-bearing investment portfolio based upon cost represented 64.8% of our total portfolio of which 58.8% bore interest based on floating rates, such as SOFR, 14.9% bore interest at fixed rates, and 26.3% are income-producing equity investments. As of December 31, 2025, the Company had a weighted average yield of 12.5% on debt and other income producing investments. As of September 30, 2025, the Company had a weighted average yield of 12.8% on debt and other income producing investments. The weighted average yield of our total portfolio does not represent the total return to our stockholders.;

~~We rate~~● ~~the~~transfer ~~risk~~agent ~~profile~~and ofcustodial ~~each of our investments based on the following categories:~~fees;

Credit
Rating		Definition
1		Investments that are performing above expectations.
2		Investments that are performing within expectations, with risks that are neutral or favorable compared to risks at the time of origination. All new investments are rated ‘2’.
3		Investments 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		Investments 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		Investments 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.

●

all registration and listing fees;

~~The following~~● ~~table~~U.S. ~~shows the distribution of our investments on the 1 to 5 investment performance rating scale at fair value as of December 31~~federal, ~~2025~~state and ~~September~~local ~~30, 2025 (dollars in thousands):~~taxes;

	December 31, 2025					September 30, 2025
	Fair Value		Percentage			Fair Value		Percentage
1	$	-		0.0	%	$	-		0.0	%
2		273,345		92.5	%		276,582		91.5	%
3		22,295		7.5	%		25,690		8.5	%
4		-		0.0	%		-		0.0	%
5		-		0.0	%		-		0.0	%
Total	$	295,640		100.0	%	$	302,272		100.0	%

●

independent directors’ fees and expenses;

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

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

~~Operating results~~● ~~for~~our ~~three~~fidelity ~~months ended December 31, 2025 and 2024 are as follows (dollars in thousands):~~bond;

	For the Three Months Ended December 31,
	2025			2024
Total investment income	$	6,660		$	6,216
Less: Net expenses		4,534			4,591
Net investment income/(loss)		2,126			1,625
Net realized gains (losses) on investments		694			1,169
Net change in unrealized gains (losses) on investments		(7,155	)		(330	)
Deferred tax benefit (expense)		(423	)		-
Loss on extinguishment of debt (See Note 5)		(12	)		-
Net increase (decrease) in net assets resulting from operations	$	(4,770	)	$	2,464

●

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

~~Investment Income~~● the operating lease of our office space;

~~For the~~● ~~three~~indemnification ~~months~~payments; ended December 31, 2025, investment income totaled $6.7 million, of which $3.9 million was attributable to portfolio interest, approximately $2.5 million was attributable to dividend income, $0.2 million was attributable to fee and ~~other income, and $0.1 million was attributable to interest on cash and cash equivalents. Dividend income was received from eight investments during the three months ended December 31, 2025.~~

~~For the~~● ~~three~~direct ~~months~~costs ~~ended~~and ~~December~~expenses ~~31, 2024, investment income totaled $6.2 million,~~ of ~~which $3.8 million was attributable to portfolio interest~~administration, ~~approximately~~including ~~$2.1~~audit ~~million was attributable to dividend income, $0.1 million was attributable to fee~~ and ~~other~~legal ~~income, and $0~~costs.~~2 million was attributable to interest on cash and cash equivalents. Dividend income was received from eight investments during the three months ended December 31, 2024.~~

~~Operating Expenses~~Long-Term Cash Incentive Plan

~~Operating~~On May 9, 2022, the board of directors of the ~~expenses~~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 ~~three~~Company, ~~months~~as ~~ended~~approved ~~December~~by the 31Compensation Committee, ~~2025~~based ~~and~~on ~~2024~~the ~~are~~achievement of pre-established financial goals for the approved performance period. The performance goals may be expressed as ~~follows~~one ~~(dollars~~or a combination of net asset value of the Company, net asset value per share of the Company’s common stock, changes in ~~thousands):~~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.

	For the Three Months Ended December 31,
	2025		2024
Interest and financing expenses	$	2,433	$	2,546
Salaries and benefits		969		1,029
Professional fees, net		390		418
General and administrative		360		222
Directors fees		204		204
Administrator expenses		102		84
Insurance expenses		76		88
Total Expenses	$	4,534	$	4,591

In December 2022, pursuant to the CIP, the Compensation Committee, approved awards for Mr. Lorber and Ms. McMillan for the three-year performance period commencing on October 1, 2022 and ending on September 30, 2025 (the “2023 LTIP Plan”). Each participant is eligible to receive an amount of cash equal to a percentage of the target award amount based on the factors described above. The Compensation Committee, in approving the awards, evaluated each performance goal separately.

~~For the three months ended December 31, 2025, total operating expenses decreased by $(0.1) million, or (1.2)% compared to the three months ended December 31, 2024.~~46

~~Interest~~In December 2023, pursuant to the CIP, the Compensation Committee approved awards for Mr. Lorber and ~~Financing~~Ms. ~~Expenses~~McMillan for the three-year performance period commencing on October 1, 2023 and ending on September 30, 2026 (the “2024 LTIP Plan”). Each participant is eligible to receive an amount of cash equal to a percentage of their target award amount based on the factors described above. The Compensation Committee, in approving the awards, evaluated each performance goal separately.

~~Interest~~In December 2024, pursuant to the CIP, the Compensation Committee approved awards for Mr. Lorber and ~~financing~~Ms. ~~expenses~~McMillan for the three-year ~~months~~performance ~~ended~~period ~~December~~commencing 31on October 1, ~~2025~~2024 ~~decreased~~and byending on ~~$(0.1)~~September ~~million~~30, or2027 (~~4.4~~the “2025 LTIP Plan”)%. ~~compared~~Each participant is eligible to ~~the~~receive ~~three~~an ~~months ended~~amount ~~December~~of ~~31,~~cash ~~2024.~~equal ~~The~~to ~~decrease~~a inpercentage of ~~interest~~their ~~and~~target ~~financing~~award ~~expenses~~amount ~~for~~based on the ~~three~~factors ~~months~~described ~~ended~~above. ~~December~~The 31threshold, ~~2025~~target, ~~was~~and ~~primarily~~maximum ~~due~~performance levels are structured similar to ~~lower~~those ~~floating~~of ~~interest~~the ~~rates~~CIP. onThe Compensation Committee, in approving the ~~Credit~~awards, ~~Facility~~evaluated each performance goal separately.

~~Professional~~In December 2025, pursuant to the CIP, the Compensation ~~Fees~~Committee approved awards for Mr. Lorber and ~~General~~Ms. McMillan for the three-year performance period commencing on October 1, 2025 and ~~Administrative~~ending on ~~Expenses~~September 30, 2028 (the “2026 LTIP Plan”). Each participant is eligible to receive an amount of cash equal to a percentage of their target award amount based on the factors described above. The threshold, target, and maximum performance levels are structured similar to those of the CIP. The Compensation Committee, in approving the awards, evaluated each performance goal separately.

~~Professional fees~~The ~~and~~Target ~~general~~Performance ~~and~~Award ~~administrative~~for ~~expenses~~each executive officer for the ~~three~~2023 ~~months~~LTIP ~~ended~~Plan, ~~December~~the 312024 LTIP Plan, the 2025 ~~increased~~LTIP byPlan, ~~$0.1~~and ~~million,~~the or2026 ~~17.2%~~LTIP ~~compared to~~Plan ~~the~~is ~~three~~set ~~months~~forth ~~ended~~in ~~December~~the ~~31,~~table ~~2024.~~below:

Name and Title	2023 LTIP Dollar Value of Target Award		2024 LTIP Dollar Value of Target Award		2025 LTIP Dollar Value of Target Award		2026 LTIP Dollar Value of Target Award
David Lorber, Chairman of the Board and Chief Executive Officer	$	890,000	$	890,000	$	1,000,000	$	1,000,000
Ellida McMillan, Chief Financial Officer		380,000		380,000		425,000		425,000

~~Net~~During the three and six months ended March 31, ~~Realized~~2026, ~~Gains/Losses~~the ~~from~~Company ~~Investments~~recorded an expense of $66,875 and $133,750, respectively, for these awards. During the three and six months ended March 31, 2025, the Company recorded an expense of $303,848 and $630,168, respectively, for these awards.

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

~~During the~~As ~~three~~of ~~months~~March ~~ended December~~ 31, ~~2025,~~2026 weand ~~recognized~~September ~~$0.7~~30, ~~million~~2025, ~~of realized gains on~~ our portfolio ~~investments.~~had ~~The~~a ~~realized~~fair ~~gains were~~market ~~primarily~~value ~~due~~of toapproximately ~~realized~~$295.8 ~~gains~~million ~~on CBL & Associates~~ and ~~Neptune~~$302.3 ~~Bidco~~million, ~~Inc~~respectively.

During the ~~three~~six months ended ~~December~~March 31, ~~2024~~2026, we received ~~recognized~~proceeds ~~$1.2~~from ~~million~~sale ofand ~~realized~~settlements ~~gains~~of oninvestments ~~our~~of ~~portfolio investments~~$30.4 ~~The~~million, ~~realized~~including ~~gains~~principal ~~were~~proceeds, ~~primarily~~net ~~due to a~~ realized ~~gain~~gains on investments ~~PHH~~of ~~Mortgage Corp. for~~ $0.84 million and ainvested ~~realized gain on Chimera Investment Corp. for~~ $028.36 million.

~~Net~~During the six months ended March 31, 2025, we ~~Unrealized~~received ~~Appreciation/Depreciation~~proceeds from sale and settlements of investments of $74.0 million, including principal proceeds, net realized gains on ~~Investments~~investments of $0.1 million and invested $132.9 million.

~~Net change~~The infollowing ~~unrealized~~table ~~appreciation~~summarizes ~~or depreciation on investments reflects~~ the ~~net~~amortized ~~change~~cost and in the fair value of our ~~investment~~average portfolio. company (dollars in thousands):

For the three months ended December 31, 2025, we had $7.2 million of net unrealized depreciation on investments. The net unrealized depreciation resulted primarily from unrealized losses on NVTN LLC for $5.0 million and Altisource S.A.R.L. for $2.8 million.

	March 31, 2026				September 30, 2025
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Average portfolio company	$	10,107	$	9,244	$	9,011	$	8,396
Largest portfolio company by amortized cost and fair value, respectively		55,729		55,356		51,967		48,470

~~For the~~The ~~three~~following ~~months~~table ~~ended~~summarizes ~~December~~the ~~31,~~amortized ~~2024,~~cost and wethe ~~had~~fair ~~$0.3~~value ~~million~~ of ~~net unrealized depreciation on~~ investments. ~~The~~as ~~net unrealized depreciation resulted from the reversal~~ of ~~the~~March ~~unrealized gain on PHH Mortgage Corp. for $0.7 million~~31, ~~unrealized~~2026 ~~depreciation~~(dollars onin ~~Black Angus Steakhouses for $0.9 million, offset by unrealized appreciation on JFL-NGS-WGS Partners, LLC for $1.0 million.~~thousands):

Provision for Deferred Taxes

	Amortized Cost		Percentage			Fair Value		Percentage
Senior Secured First Lien Term Loans	$	127,359		39.3	%	$	113,491		38.4
Senior Secured Notes		13,576		4.2			13,399		4.5
Fund Investment		2,138		0.7			2,320		0.8
Equity/Warrants		180,339		55.8			166,601		56.3
Total Investments	$	323,412		100.0	%	$	295,811		100.0	%

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 months ended December 31, 2025 and 2024, the Company recorded a change in provision for deferred taxes of $(423,429) and $0, respectively.47

~~Changes~~The following table summarizes the amortized cost inand ~~Net~~the ~~Assets~~fair ~~from~~value ~~Operations~~of investments as of September 30, 2025 (dollars in thousands):

For the three months ended December 31, 2025, we recorded a net decrease in net assets resulting from operations of $(4.8) million compared to a net increase in net assets resulting from operations of $2.5 million for the three months ended December 31, 2024. Based on 2,001,470 and 2,019,778 weighted average common shares outstanding for the three months ended December 31, 2025 and 2024, respectively, our per share net increase (decrease) in net assets resulting from operations was $(2.38) for the three months ended December 31, 2025 and $1.22 for the three months ended December 31, 2024.

	Amortized Cost		Percentage			Fair Value		Percentage
Senior Secured First Lien Term Loans	$	125,373		38.6	%	$	116,567		38.6	%
Senior Secured Notes		17,039		5.3			17,457		5.8
Fund Investment		2,194		0.7			2,227		0.7
Equity/Warrants		179,783		55.4			166,021		54.9
Total Investments	$	324,389		100.0	%	$	302,272		100.0	%

~~Financial~~As of March 31, 2026, our income-bearing investment ~~Condition~~portfolio based upon cost represented 61.1% of our total portfolio of which 63.6% bore interest based on floating rates, ~~Liquidity~~such as SOFR, 10.3% bore interest at fixed rates, and ~~Capital~~26.1% ~~Resources~~are income-producing equity investments. As of September 30, 2025, our income-bearing investment portfolio based upon cost represented 64.8% of our total portfolio of which 58.8% bore interest based on floating rates, such as SOFR, 14.9% bore interest at fixed rates, and 26.3% are income-producing equity investments. As of March 31, 2026, the Company had a weighted average yield of 13.1% on debt and other income producing investments. As of September 30, 2025, the Company had a weighted average yield of 12.8% on debt and other income producing investments. The weighted average yield of our total portfolio does not represent the total return to our stockholders.

~~As a~~We ~~RIC,~~rate wethe ~~distribute~~risk ~~substantially~~profile ~~all~~ of ~~our~~each ~~taxable~~of ~~net income to~~ our ~~stockholders and have an ongoing need to raise additional capital~~investments ~~for~~based ~~investment~~on ~~purposes.~~the Tofollowing ~~fund growth, we have a number of alternatives available to increase capital, including raising equity, increasing debt, and funding from operational cash flow.~~categories:

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

Credit Rating		Definition

1		Investments that are performing above expectations.

2		Investments that are performing within expectations, with risks that are neutral or favorable compared to risks at the time of origination. All new investments are rated ‘2’.

3		Investments 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		Investments 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		Investments 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.

As The following table shows the distribution of our ~~December~~investments ~~31,~~on ~~2025~~the ~~and~~1 ~~September~~to ~~30,~~5 ~~2025,~~investment weperformance ~~had~~rating ~~$3.4~~scale ~~million~~at ~~and~~fair ~~$7.3~~value ~~million,~~as ~~respectively,~~of inMarch ~~cash~~31, 2026 and ~~cash~~September ~~equivalents.~~30, 2025 (dollars in thousands):

In order to maintain 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.

	March 31, 2026					September 30, 2025
	Fair Value		Percentage			Fair Value		Percentage
1	$	-		0.0	%	$	-		0.0	%
2		269,693		91.2	%		276,582		91.5	%
3		26,118		8.8	%		25,690		8.5	%
4		-		0.0	%		-		0.0	%
5		-		0.0	%		-		0.0	%
Total	$	295,811		100.0	%	$	302,272		100.0	%

~~On January~~Results ~~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 724,075 shares of common stock through December 31, 2025, or 26.6% of shares outstanding as of the program’s inception, with a total cost of $29.1 million. The total remaining amount authorized under the expanded share repurchase program at December 31, 2025 was approximately $5.9 million.Operations

~~Credit~~Operating results for three and six months ended ~~Facility~~March 31, 2026 and 2025 are as follows (dollars in thousands):

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 was the administrative agent, sole bookrunner and sole lead arranger. The Credit Facility had an original maturity date of December 15, 2025.

	For the Three Months Ended March 31,						For the Six Months Ended March 31,
	2026			2025			2026			2025
Total investment income	$	5,198		$	6,019		$	11,859		$	12,236
Less: Net expenses		4,451			5,053			8,985			9,644
Net investment income/(loss)		747			966			2,874			2,592
Net realized gains (losses) on investments		(1,119	)		(1,065	)		(425	)		104
Net change in unrealized gains (losses) on investments		1,671			(467	)		(5,485	)		(798	)
Deferred tax benefit (expense)		(166	)		(330	)		(589	)		(330	)
Loss on extinguishment of debt (See Note 5)		-			-			(12	)		-
Net increase (decrease) in net assets resulting from operations	$	1,133		$	(896	)	$	(3,637	)	$	1,568

~~Outstanding~~Investment loans under the Credit Facility bear interest at a monthly rate of Term SOFR + 2.90%. The Company is also subject to a commitment fee of 0.25%, which shall accrue on the actual daily amount of the undrawn portion of the revolving credit. The Credit Facility contains customary representations and warranties and affirmative and negative covenants. 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.Income

OnFor ~~February~~the ~~21,~~three ~~2024~~months ~~(the~~ended ~~“First~~March ~~Amendment Effective~~31, ~~Date”)~~2026, ininvestment income ~~order~~totaled to$5.2 ~~increase~~million, ~~the size~~ of ~~the~~which ~~Credit~~$4.1 ~~Facility,~~million ~~the~~was ~~parties~~attributable to ~~the~~portfolio ~~Credit~~interest, ~~Facility~~approximately ~~amended~~$0.9 ~~the~~million ~~terms~~was ofattributable ~~the~~to ~~Credit~~dividend ~~Facility~~income, ~~effective~~$0.2 asmillion ofwas ~~the~~attributable ~~First~~to ~~Amendment~~fee ~~Effective~~and ~~Date~~other ~~(the~~income, ~~“First~~and ~~Amendment”)~~$0.0 ~~The~~million ~~First~~was ~~Amendment~~attributable ~~increased~~to interest on cash and cash equivalents. For the ~~principal~~six ~~amount~~months ofended ~~the~~March ~~loan~~31, ~~available~~2026, ~~under~~investment ~~the~~income ~~Credit~~totaled ~~Facility~~$11.9 bymillion, of which $128.50 million was attributable to portfolio interest, approximately $623.54 million was attributable to dividend income, $0.4 ~~All~~million was attributable to fee and other income, ~~material~~and ~~terms~~$0.1 ofmillion ~~the~~was attributable to interest on cash and cash equivalents. Dividend income was received from nine investments ~~Credit~~during ~~Facility~~the ~~remain~~six ~~unchanged~~months ended March 31, 2026.

OnFor ~~August~~the 5,three ~~2024~~months ~~(the~~ended ~~“Second~~March ~~Amendment~~31, 2025, investment ~~Effective~~income ~~Date”)~~totaled $6.0 million, inof ~~order~~which $3.9 million was attributable to ~~increase~~portfolio ~~the~~interest, ~~size~~approximately of$2.1 ~~the~~million ~~Credit~~was ~~Facility~~attributable to dividend income, ~~the~~$0.0 ~~parties~~million was attributable to ~~the~~fee ~~Credit~~and ~~Facility~~other ~~amended~~income, ~~the~~and ~~Credit~~$0.0 ~~Facility, effective~~million aswas ofattributable ~~the~~to ~~Second~~interest ~~Amendment~~on ~~Effective~~cash ~~Date~~and (cash equivalents. For the ~~“Second~~six ~~Amendment”)~~months ended March 31, 2025, investment income totaled $12.2 ~~The~~million, ~~Second~~of ~~Amendment~~which ~~increased~~$7.8 ~~the~~million ~~principal~~was attributable ~~amount~~to ofportfolio ~~the~~interest, ~~loan~~approximately ~~available~~$4.2 ~~under~~million ~~the~~was ~~Credit~~attributable ~~Facility~~to bydividend income, $250.1 million was attributable to fee and other income, and $870.51 million was attributable to interest on cash and cash equivalents. ~~All~~Dividend ~~other~~income ~~material~~was ~~terms~~received offrom eight investments during the ~~Credit~~six ~~Facility remain~~months ~~unchanged~~ended March 31, 2025.

OnOperating April 17, 2025 (the “Third Amendment Effective Date”), in order to extend the term and increase the size of the Credit Facility, the parties to the Credit Facility amended the terms of the Credit Facility, effective as of the Third Amendment Effective Date (the “Third Amendment”). The Third Amendment increased the principal amount of the loan available under the Credit Facility by $12.5 million to $100.0 million (with potential access to up to an additional $50,000,000 pursuant to an uncommitted accordion provision) and appointed BankUnited, N.A. to assume all agency and syndication responsibilities from the prior agent and lenders. Outstanding loans under the terms of the Amendment bear a monthly interest rate ranging from ABR + 1.35% to ABR + 1.75% for any alternative base rate loans and from Term SOFR + 2.35% to Term SOFR + 2.75% for any term benchmark loans based on the total debt to tangible net worth ratio. The Amendment also extended the term of the credit facility to April 17, 2030, five years from the Effective Date. Other material terms remain substantially unchanged. As of December 31, 2025, there was $90.0 million outstanding borrowings by the Company under the Credit Facility.Expenses

~~Unsecured~~Operating expenses for the three and six months ~~Notes~~ended March 31, 2026 and 2025 are as follows (dollars in thousands):

2028 Notes

	For the Three Months Ended March 31,				For the Six Months Ended March 31,
	2026		2025		2026		2025
Interest and financing expenses	$	2,310	$	2,579	$	4,742	$	5,125
Salaries and benefits		1,017		1,185		1,986		2,214
Professional fees, net		410		578		800		996
General and administrative		362		308		723		529
Directors fees		169		204		373		408
Administrator expenses		109		113		211		197
Insurance expenses		74		86		150		175
Total Expenses	$	4,451	$	5,053	$	8,985	$	9,644

~~On November~~For ~~9, 2021,~~ the ~~Company~~three ~~entered~~months ~~into~~ended anMarch ~~underwriting agreement~~31, ~~by and between the Company and Oppenheimer & Co. Inc.~~2026, ~~as representative~~total ofoperating ~~the~~expenses ~~several~~decreased ~~underwriters~~by ~~named in Exhibit A thereto, in connection with the issuance and sale~~ $(~~the “Offering”~~0.6) ~~of $57~~million,~~500,000 (including~~ ~~the~~or ~~underwriters’ option to purchase up to $7,500,000 aggregate principal amount) in aggregate principal amount of its 5~~(11.259)% ~~Notes~~compared ~~due~~to ~~2028 (~~the ~~“2028~~three ~~Notes”).~~months ~~The~~ended ~~Offering~~March ~~occurred on November 15~~31, ~~2021,~~2025. ~~pursuant~~For to the ~~Company’s~~six ~~effective shelf~~months ~~registration statement on Form N-2 previously filed with the SEC, as supplemented by a preliminary prospectus supplement dated~~ended ~~November~~March 831, ~~2021~~2026, ~~the~~total ~~pricing~~operating ~~term~~expenses ~~sheet~~decreased ~~dated~~by ~~November~~$(0.7) 9million, ~~2021~~or ~~and a final prospectus supplement dated November 9, 2021~~(6.8)% ~~Effective~~compared ~~November 16,~~to ~~2021,~~ the ~~2028~~six ~~Notes~~months ~~began~~ended ~~trading~~March on31, ~~the NASDAQ Global Market under the trading symbol “PFXNZ~~2025.”

~~On November~~Interest ~~15, 2021, the Company~~ and ~~U.S.~~Financing 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.Expenses

49Interest and financing expenses for the three months ended March 31, 2026 decreased by $(0.3) million, or (10.4)% compared to the three months ended March 31, 2025. The decrease in interest and financing expenses for the three and six months ended March 31, 2026 was primarily due to borrowing at lower floating interest rates on the Credit Facility.

~~2028 Promissory~~Professional ~~Note~~Fees and General and Administrative Expenses

~~On May~~Professional 2,fees ~~2024,~~and ~~the~~general ~~Company~~and ~~issued~~administrative expenses afor ~~5.25%~~the ~~note~~three ~~due~~months ~~November~~ended 1March 31, ~~2028~~2026 inincreased ~~the~~by ~~principal amount of~~ $(0.1) million,~~661,498~~ toor ~~National Security Insurance Company~~ (~~the “2028 Promissory Note”)~~12.9)% ~~The~~compared ~~financial~~to ~~terms of~~ the ~~note~~three ~~are~~months ~~substantially~~ended ~~the~~March ~~same as the 2028 Notes~~31, 2025.

~~Contractual Obligations~~Net ~~and~~Realized ~~Off-Balance~~Gains/Losses ~~Sheet~~from ~~Arrangements~~Investments

~~As of~~We ~~December~~measure ~~31,~~realized ~~2025~~gains ~~and~~or ~~September~~losses ~~30,~~by 2025, we had commitments under loan and financing agreements to fund up to $3.9 million to six portfolio companies and $5.5 million to six portfolio companies, respectively. These commitments are primarily composed of senior secured term loans and revolvers, and the ~~determination of their fair value is included in the Consolidated Schedule of Investments.~~difference ~~The~~between ~~commitments are generally subject to~~ the ~~borrowers~~net ~~meeting~~proceeds ~~certain~~from ~~criteria such as compliance with covenants and certain operational metrics. The terms of~~ the ~~borrowings~~disposition and ~~financings subject to commitment are comparable to~~ the ~~terms~~amortized ofcost ~~other~~basis ~~loan and equity securities in our portfolio. A summary~~ of ~~the~~an ~~composition of the unfunded commitments as of December 31~~investment, ~~2025~~without ~~and~~regard ~~September~~to ~~30,~~unrealized ~~2025~~gains isor ~~shown in~~losses ~~the~~previously ~~table below (dollars in thousands):~~recognized.

	December 31, 2025		September 30, 2025
MB Precision Investment Holdings LLC - Senior Secured First Lien Revolver	$	3	$	85
MB Precision Investment Holdings LLC - Senior Secured Delayed Draw Term Loan		85		1,521
PREIT Associates - Revolver		61		61
PSB Group, LLC - Revolver		472		472
SS Acquisition, LLC (dba Soccer Shots Franchising) - Revolver		1,029		1,029
Tamarix Capital Partners II, L.P. - Fund Investment		865		865
WHI Global, LLC - Revolver		1,358		1,484
Total unfunded commitments	$	3,873	$	5,517

During the three months ended March 31, 2026, we recognized $1.1 million of realized losses on our portfolio investments. The realized losses for the three months ended March 31, 2026 were primarily due to realized losses on sales of Copper Property CTL Pass Through Trust for $0.6 million and Chimera Investment Corp for $0.4 million.

~~The~~During the six months ended March 31, 2026, we ~~following~~recognized ~~table~~$0.4 ~~shows~~million of realized losses on our ~~payment~~portfolio ~~obligations~~investments. byThe ~~calendar~~realized ~~year~~losses for ~~repayment~~the six months ended March 31, 2026 were primarily due to realized losses on sales of ~~debt~~Copper Property CTL Pass Through Trust for $0.6 million and ~~other~~Chimera ~~contractual~~Investment ~~obligations~~Corp atfor ~~December~~$0.4 million, 31offset by realized gains on sales of Neptune Bidco US Inc. for $0.4 million and CB&L Associates Holdco I, ~~2025~~ ~~(dollars~~LLC infor ~~thousands):~~$0.3 million.

	Payments Due by Period
	2026			2027			2028			2029			2030			Thereafter			Total
Revolving Credit Facility	$	-		$	-		$	-		$	-		$	(89,991,619	)	$	-		$	(89,991,619	)
2028 Notes		-			-			(57,500,000	)		-			-			-			(57,500,000	)
Operating Lease Obligation (1)		(265,650	)		(327,695	)		(337,525	)		(347,651	)		(358,081	)		(1,817,021	)		(3,453,623	)
Total contractual obligations	$	(265,650	)	$	(327,695	)	$	(57,837,525	)	$	(347,651	)	$	(90,349,700	)	$	(1,817,021	)	$	(150,945,242	)

During the three months ended March 31, 2025, we recognized $1.1 million of realized losses on our portfolio investments. During the six months ended March 31, 2025, we recognized $0.1 of realized gain on our portfolio investments. The realized losses for the three months ended March 31, 2025 were due to the realized loss of $1.9 million on Point.360, offset by realized gains on Altisource S.A.R.L., CB&L Associates Holdco I, LLC, and All Around Roustabout, LLC of $0.7 million. The realized gains for six months ended were primarily due to a realized gain on PHH Mortgage Corp. for $0.8 million, a realized gain on Chimera Investment Corp for $0.3 million, and realized gains on Altisource S.A.R.L., CB&L Associates Holdco I, LLC, and All Around Roustabout, LLC of $0.7 million, offset by a realized loss of $1.9 million on Point.360.

~~(1)~~Net ~~Operating~~Unrealized ~~Lease~~Appreciation/Depreciation 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 December 18, 2024, the Company amended the terms of the lease, contingent on certain events, extending the lease term until August 31, 2035, with a right to terminate on the 36th and 60th month anniversaries of September 5, 2025, as well as any time on or after the 84th month anniversary of September 5, 2025. Investments

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

~~We have~~For ~~elected,~~the ~~and~~three ~~intend~~months toended ~~continue~~March to31, ~~qualify annually~~2026, ~~to be treated for U.S. federal income tax purposes as a RIC under Subchapter~~we Mhad ~~of the Code~~$1.7 Asmillion ~~a RIC, in any taxable year with respect to which we timely distribute at least 90 percent~~ of ~~the~~net ~~sum~~unrealized ofappreciation ~~our~~on ~~(i)~~investments. ~~investment company~~The ~~taxable income (which is generally our~~ net ~~ordinary~~unrealized ~~income~~appreciation ~~plus~~resulted ~~the~~primarily ~~excess~~from ofunrealized ~~realized net short-term capital~~ gains ~~over realized~~ ~~net~~on ~~long-term~~FST ~~capital~~Holdings ~~losses)~~Parent ~~determined without regard to the deduction~~ for ~~dividends~~$1.2 ~~paid and (ii) net tax exempt interest income (which is the excess of our gross tax exempt interest income over certain disallowed deductions)~~million, weNVTN ~~(but~~LLC ~~not~~for ~~our stockholders) generally will not be subject to U~~$1.S.2 ~~federal~~million, ~~income tax on investment company taxable income~~ and ~~net~~WHI ~~capital~~Global ~~gains~~LLC ~~that~~for ~~we distribute to our stockholders~~$1. We0 ~~intend to distribute annually all or substantially all of such income~~million, ~~but~~offset weby ~~may~~unrealized ~~also~~losses ~~elect to periodically spill over certain excess~~on ~~undistributed~~MB ~~taxable~~Precision ~~income~~Holdings ~~from~~LLC ~~one~~for ~~tax year to the next tax year~~$1.4 ~~To the extent that we retain our net capital gains or any investment company taxable income, we will be subject to U~~million.~~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 or excise tax, described below.~~

50For the six months ended March 31, 2026, we had $(5.5) million of net unrealized depreciation on investments. The net unrealized depreciation resulted primarily from unrealized losses on NVTN LLC for $3.7 million, Altisource S.A.R.L. for $3.4 million, and MB Precision Holdings LLC for $1.5 million, offset by unrealized gains on ECC Capital Corp for $3.0 million.

~~Amounts not~~For ~~distributed~~the onthree amonths ~~timely~~ended ~~basis~~March in31, ~~accordance~~2025, ~~with~~we had a$(0.5) ~~calendar~~million ~~year~~of ~~distribution~~net ~~requirement~~unrealized ~~are~~depreciation ~~subject~~on toinvestments. aThe ~~nondeductible~~net 4%unrealized ~~U.S.~~depreciation resulted from unrealized depreciation ~~federal~~on ~~excise~~JFL-NGS-WCS ~~tax~~Partners, ~~payable~~LLC byfor us$0.9 Tomillion, ~~avoid~~NVTN ~~this~~LLC ~~tax,~~for we$0.9 ~~must~~million, ~~distribute~~ECC ~~(or~~Capital beCorp. ~~deemed~~for to$0.4 ~~have~~million, ~~distributed)~~and ~~during~~Staples, ~~each~~Inc. ~~calendar~~for ~~year~~$0.3 anmillion, ~~amount~~offset ~~equal~~by to the ~~sum~~reversal of: the unrealized loss on Point.360 for $2.1 million.

1For the six months ended March 31, 2025, we had $(0.8) atmillion ~~least~~of 98net unrealized depreciation on investments.0% The net unrealized depreciation resulted from unrealized depreciation on NVTN LLC of ~~our~~$1.1 ~~ordinary~~million, ~~income~~Black ~~(not~~Angus ~~taking~~Steakhouses, ~~into~~LLC ~~account~~for ~~any~~$1.0 ~~capital~~million, ~~gains~~and orNSG ~~losses)~~Captive Inc. for $0.8 million, offset by the ~~calendar~~reversal of ~~year;~~the unrealized loss on Point.360 for $2.1 million.

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

3) Certain consolidated subsidiaries of ours are subject to U.S. federal and state income ~~realized,~~taxes. ~~but~~These taxable subsidiaries are not ~~distributed~~consolidated with the Company for income tax purposes, inbut ~~preceding~~are ~~years~~consolidated for GAAP purposes, and onmay ~~which~~generate weincome ~~did~~tax ~~not~~liabilities ~~pay~~or ~~federal~~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 March 31, 2026 the Company recorded a change in provision for deferred taxes of $(166,015) and $(589,444), respectively.

~~While we~~Changes ~~intend to distribute any income and capital gains~~ in ~~the~~Net ~~manner~~Assets ~~necessary~~from 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.Operations

To For the ~~extent~~three ~~our~~months ~~taxable~~ended ~~earnings~~March ~~fall~~31, ~~below~~2026, ~~the~~we recorded ~~total~~a ~~amount~~net increase in net assets resulting from operations of ~~our~~$1.1 ~~distributions~~million ~~for~~compared to a ~~taxable~~net ~~year,~~decrease ain ~~portion~~net ofassets ~~those~~resulting ~~distributions~~from ~~may~~operations beof ~~deemed~~$(0.9) amillion ~~return~~for ofthe ~~capital~~three tomonths ~~our~~ended ~~stockholders~~March ~~for~~31, U2025.S. ~~federal~~Based ~~income~~on ~~tax~~1,972,943 ~~purposes.~~and ~~Stockholders~~2,019,778 ~~should~~weighted ~~read~~average ~~any~~common ~~written disclosure~~shares ~~accompanying~~outstanding afor ~~distribution~~the ~~carefully~~three months ended March 31, 2026 and ~~should~~2025, ~~not~~respectively, ~~assume~~our ~~that~~per share net increase (decrease) in net assets resulting from operations was $0.57 for the ~~source~~three ofmonths ~~any~~ended ~~distribution~~March is31, ~~our~~2026 ~~ordinary~~and ~~income~~$(0.44) orfor ~~gains~~the three months ended March 31, 2025.

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.50

~~On May~~Financial 9Condition, ~~2024,~~Liquidity the Board of Directors declared a special dividend in the amount of $2,645,925. This dividend was paid on June 10, 2024 to stockholders of record as of May 27, 2024. On February 6, 2025, the Board of Directors declared a special dividend in the amount of $2,888,283 for a record date of February 17, 2025 and ~~paid on February 19, 2025. The Company did not declare any distribution payments~~Capital ~~during the three months ended December 31, 2025 and 2024.~~Resources

~~Related~~As a RIC, we distribute substantially all of our ~~Party~~taxable ~~Transactions~~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.

~~We have~~Our ~~adopted~~liquidity aand ~~formal~~capital ~~business~~resources ~~code~~historically have ofbeen ~~conduct~~generated ~~and~~primarily ~~ethics~~from ~~that governs~~ the ~~conduct~~net proceeds of ~~our~~public ~~CEO,~~offerings ~~CFO,~~of ~~chief~~common ~~accounting~~stock, ~~officer~~advances ~~(which~~from ~~role is~~the ~~currently~~Credit ~~fulfilled~~Facility ~~by our CFO)~~ and ~~controller~~net ~~(Covered~~proceeds from ~~Officers).~~the ~~Our~~issuance ~~officers~~of ~~and~~notes ~~directors~~as ~~also~~well ~~remain~~as ~~subject~~cash toflows ~~the~~from ~~duties~~operations. ~~imposed by~~In ~~both~~ the ~~1940~~future, ~~Act~~we ~~and~~may ~~the~~generate ~~Delaware~~cash ~~General~~from ~~Corporation~~future ~~Law.~~offerings ~~Our Code~~ of ~~Business~~securities, future ~~Conduct~~borrowings and ~~Ethics~~cash ~~requires~~flows ~~that~~from ~~all Covered Officers promote honest and ethical conduct~~operations, including ~~the~~interest ~~ethical~~earned ~~handling~~from ofthe ~~actual~~temporary orinvestment ~~apparent conflicts~~ of ~~interest~~cash ~~between~~in anU.S. ~~individual’s personal~~government securities and ~~professional~~other ~~relationships.~~high-quality ~~Pursuant~~debt toinvestments ~~our~~that ~~Code~~mature ofin ~~Business~~one ~~Conduct~~year ~~and~~or ~~Ethics,~~less. ~~each~~Our ~~Covered~~primary ~~Officer~~use ~~must~~of ~~disclose~~funds tois ~~the Company’s~~investments ~~CCO~~in ~~any~~our ~~conflicts~~targeted ~~of interest~~asset classes, orcash ~~actions~~distributions ~~or relationships that might give rise~~ to ~~a conflict. Any approvals or waivers under~~ our ~~Code~~stockholders, ~~of Business Conduct~~ and ~~Ethics~~other ~~must~~general becorporate ~~considered by the disinterested directors~~purposes.

~~The Company~~As ~~has~~of ~~entered~~March ~~into contracts with its affiliated portfolio companies~~31, ~~The~~2026 ~~National Security Group (~~and ~~certain~~September of30, ~~its affiliates) and ECC Capital Corporation~~2025, ~~pursuant to which the Company (and/or certain of its subsidiaries) provide such affiliated portfolio companies~~we ~~certain~~had ~~services, including managing a portion of their investment assets~~$3.1 ~~During~~million ~~the~~and ~~three months ended December 31, 2025, the Company recognized~~ $07.23 million, ofrespectively, ~~income~~in ~~related~~cash toand ~~these~~cash ~~contracts~~equivalents.

~~Pledge~~In order to maintain 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 ~~Security~~any ~~Agreement~~ 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.

~~In connection~~On ~~with~~January 11, 2021, the ~~Credit~~Company ~~Facility~~announced ~~discussed~~that its inboard ~~Note~~of 5,directors ~~the~~approved ~~Company~~a ~~has~~share ~~entered~~repurchase ~~into~~program. aOn ~~Pledge~~February ~~and~~9, ~~Security~~2022, ~~Agreement~~the ~~with~~Board of Directors approved the ~~Lenders~~expansion of the ~~pursuant~~amount toauthorized ~~which~~for repurchase under the Company’s ~~and~~share ~~its~~repurchase ~~wholly~~program ~~owned~~from ~~subsidiaries~~$15 ~~have~~million ~~pledged~~to ~~all~~$25 ~~their~~million. ~~assets~~On February 8, ~~including~~2023, the Board of Directors approved the ~~cash~~further ~~and~~expansion ~~securities~~of ~~held in~~the amount authorized for repurchase under the Company’s ~~custodial~~share ~~account~~repurchase program ~~with~~from ~~Computershare~~$25 ~~Trust~~million ~~Company,~~to N$35 million.A. Under the share repurchase program, asthe ~~collateral~~Company ~~for~~repurchased ~~any~~an ~~borrowings~~aggregate ~~made~~of by787,425 ~~the~~shares ~~Company~~of ~~pursuant~~common tostock ~~the~~through ~~Credit~~March ~~Agreement~~31, 2026, or 28.9% ~~The~~of ~~Lenders~~shares ~~have~~outstanding ~~the~~as ~~typical~~of ~~rights~~the ~~and~~program’s ~~remedies~~inception, ofwith a ~~secured~~total ~~lender~~cost ~~under~~of ~~the~~$32.2 ~~Uniform~~million. The ~~Commercial~~total ~~Code, including~~remaining amount authorized under the ~~right~~expanded toshare ~~foreclose~~repurchase onprogram ~~the~~at ~~collateral~~March ~~pledged~~31, by2026 ~~the~~was ~~Company~~approximately $2.8 million.

~~On February~~Credit 21, 2024, the Pledge and Security Agreement was amended to (i) release and terminate the security interest in the equity interest of FlexFIN, LLC, pledged by PhenixFIN Investment Holdings LLC, (ii) grant a security interest in the membership interest of FlexFIN Holdco LLC, pledged by PhenixFIN Investment Holdings LLC, and (iii) reflect equity interests of certain subsidiaries held by the Company and its subsidiary in the exhibits.Facility

On ~~August~~ 5December 15, ~~2024~~2022, the ~~Pledge~~Company and ~~Security~~its ~~Agreement~~wholly-owned subsidiaries ~~was~~executed ~~further~~a ~~amended~~three-year, to$50 ~~join~~million anrevolving ~~additional~~credit ~~subsidiary~~facility of (the ~~Company~~“Credit asFacility”) awith ~~Guarantor~~WoodForest Bank, N.A. (“WoodForest”), Valley National Bank, and ~~grant~~Axiom aBank, ~~security~~(collectively, ~~interest~~the in“Lenders”). WoodForest was the administrative ~~equity~~agent, ~~interest~~sole bookrunner and sole lead arranger. The Credit Facility had an original maturity date of ~~such~~December ~~additional~~15, ~~subsidiary~~2025.

~~On September~~Outstanding ~~30,~~loans ~~2024,~~under the ~~Pledge~~Credit ~~and~~Facility ~~Security~~bear interest ~~Agreement~~at ~~was~~a ~~further~~monthly ~~amended~~rate of Term SOFR + 2.90%. The Company is also subject to ~~exclude~~a ~~assets~~commitment ~~owned~~fee byof ~~excluded~~0.25%, ~~subsidiaries~~which ~~from~~shall accrue on the ~~collateral~~actual ~~package~~daily ~~and~~amount ~~reflect~~of the ~~equity~~undrawn portion of the revolving credit. The Credit Facility contains customary representations and warranties and affirmative and negative covenants. 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 anmaterial ~~additional~~representations and ~~subsidiary~~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 inmay be required to repay all amounts outstanding under the ~~exhibits~~Credit Facility.

51On February 21, 2024 (the “First Amendment Effective Date”), in order to increase the size of the Credit Facility, the parties to the Credit Facility amended the terms of the Credit Facility, effective as of the First Amendment Effective Date (the “First Amendment”). The First Amendment increased the principal amount of the loan available under the Credit Facility by $12.5 million to $62.5 million. All other material terms of the Credit Facility remain unchanged.

~~Critical~~On August 5, 2024 (the “Second Amendment ~~Accounting~~Effective ~~Policies~~Date”), in order to increase the size of the Credit Facility, the parties to the Credit Facility amended the Credit Facility, effective as of the Second Amendment Effective Date (the “Second Amendment”). The Second Amendment increased the principal amount of the loan available under the Credit Facility by $25 million to $87.5 million. All other material terms of the Credit Facility remain unchanged.

~~The preparation~~On ofApril ~~financial~~17, ~~statements~~2025 ~~and~~(the ~~related~~“Third ~~disclosures~~Amendment Effective Date”), in ~~conformity~~order ~~with~~to ~~U.S.~~extend ~~generally~~the ~~accepted~~term ~~accounting~~and ~~principles~~increase ~~requires management~~the tosize ~~make~~of ~~estimates~~the ~~and~~Credit ~~assumptions~~Facility, ~~that~~the ~~affect~~parties to the ~~reported~~Credit ~~amounts~~Facility amended the terms of ~~assets~~the ~~and~~Credit ~~liabilities~~Facility, ~~disclosure~~effective as of ~~contingent~~the ~~assets~~Third Amendment Effective Date (the “Third Amendment”). The ~~and~~Third ~~liabilities~~Amendment atincreased the ~~date~~principal amount of the ~~financial~~loan ~~statements~~available under the Credit Facility by $12.5 million to $100.0 million (with potential access to up to an additional $50,000,000 pursuant to an uncommitted accordion provision) and ~~revenues~~appointed BankUnited, N.A. to assume all agency and ~~expenses~~syndication ~~during~~responsibilities from the ~~periods~~prior ~~reported~~agent and lenders. ~~Actual~~Outstanding ~~results~~loans ~~could~~under the terms of the Amendment ~~materially~~bear ~~differ~~a monthly interest rate ranging from ~~those~~ABR ~~estimates~~+ 1.35% Weto ~~have~~ABR ~~identified~~+ 1.75% for any alternative base rate loans and from Term SOFR + 2.35% to Term SOFR + 2.75% for any term benchmark loans based on the ~~following~~total ~~items~~debt asto ~~critical~~tangible ~~accounting~~net ~~policies~~worth ratio. The Amendment also extended the term of the credit facility to April 17, 2030, five years from the Effective Date. Other material terms remain substantially unchanged. As of March 31, 2026, there was $90.0 million of outstanding borrowings by the Company under the Credit Facility. As of March 31, 2026, the Company was in compliance in all respects with the terms of the Credit Facility

~~Valuation of Portfolio Investments~~51

~~The~~Unsecured 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. The three levels are defined below:Notes

~~● Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities at the measurement date.~~2028 Notes

●On November ~~Level~~9, 22021, -the ~~Valuations~~Company ~~based~~entered oninto ~~quoted~~an ~~prices~~underwriting agreement, by and between the Company and Oppenheimer & Co. Inc., as representative of the several underwriters named in ~~markets~~Exhibit ~~that~~A ~~are~~thereto, ~~not~~in ~~active~~connection orwith ~~for~~the ~~which~~issuance ~~all~~and ~~significant~~sale ~~inputs~~(the ~~are~~“Offering”) ~~observable~~of $57,500,000 (including ~~either~~the ~~directly~~underwriters’ oroption ~~indirectly~~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 Offering occurred on November 15, 2021, pursuant to the Company’s effective shelf registration statement on Form N-2 previously filed with the SEC, as supplemented by a preliminary prospectus supplement dated November 8, 2021, the pricing term sheet dated November 9, 2021 and a final prospectus supplement dated November 9, 2021. Effective November 16, 2021, the 2028 Notes began trading on the NASDAQ Global Market under the trading symbol “PFXNZ.”

●On November ~~Level~~15, 32021, -the ~~Valuations~~Company ~~based~~and onU.S. ~~inputs~~Bank ~~that~~National ~~are~~Association, ~~unobservable~~as trustee entered into a Fourth Supplemental Indenture to its base Indenture, dated February 7, 2012, between the Company and ~~significant~~the Trustee. The Fourth Supplemental Indenture relates to the ~~overall~~Offering ~~fair~~of ~~value~~the 2028 ~~measurement~~Notes.

We2028 ~~value~~Promissory 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.Note

~~Valuation~~On ~~methods~~May ~~may include comparisons of financial ratios of the portfolio companies that issued such private equity securities to peer companies that are public~~2, ~~the nature and realizable value of any collateral~~2024, the ~~portfolio~~Company ~~company’s~~issued ~~ability~~a to5.25% ~~make~~note ~~payments~~due ~~and~~November ~~its earnings and discounted cash flows~~1, ~~the~~2028 ~~markets~~ in ~~which~~ the ~~portfolio~~principal ~~company~~amount ~~does~~of ~~business~~$1, ~~and other relevant factors. When an external event such as a purchase transaction~~661,498 ~~public~~to ~~offering~~National orSecurity ~~subsequent equity sale occurs, we will consider the pricing indicated by the external~~Insurance ~~event~~Company ~~to corroborate~~ (the ~~private~~“2028 ~~equity~~Promissory ~~valuation~~Note”). ~~Due~~The tofinancial ~~the~~terms ~~inherent uncertainty~~ of ~~determining~~ the ~~fair~~note ~~value~~are ofsubstantially ~~investments that do not have a readily available market value,~~ the ~~fair~~same ~~value~~as of the ~~investments~~2028 ~~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~~Notes.

InOn December ~~2020~~8, 2025, the ~~SEC~~Company ~~adopted~~redeemed ~~Rule~~in ~~2a-5~~aggregate ~~under~~its principal amount of the ~~1940~~issued ~~Act,~~and ~~which~~outstanding ~~permits~~2028 aPromissory ~~BDC’s~~Note, ~~board~~comprising all ofissued ~~directors~~and tooutstanding ~~designate~~2028 ~~its~~Promissory ~~executive officer(s)~~Notes, asat a ~~valuation~~price ~~designee~~equal to ~~determine~~ the ~~fair~~closing ~~value~~market price of ~~its investment portfolio, subject to~~ the ~~oversight~~2028 ofNotes ~~the~~on ~~board.~~December ~~The~~5, 2025, ~~Board~~plus ~~approved~~accrued ~~policies~~ and ~~procedures~~unpaid ~~pursuant~~interest tothereon ~~Rule~~from ~~2a-5~~November ~~and~~1, ~~has~~2025, ~~designated~~through, ~~Ellida~~but ~~McMillan~~excluding, ~~the~~December ~~Company’s CFO~~8, to2025 ~~serve~~in asaccordance with the terms of the ~~Board’s~~indenture ~~valuation~~governing ~~designee~~the ~~(“Valuation~~2028 ~~Designee”),~~Promissory ~~subject~~Note. toThe ~~the~~redemption ~~Board’s~~was ~~oversight,~~completed ~~effective~~on ~~September~~ December 8, ~~2022~~2025.

~~With~~Contractual ~~respect~~Obligations ~~to investments for which market quotations are not readily available, our board oversees~~ and ~~our Valuation Designee undertakes a multi~~Off-~~step~~Balance ~~valuation~~Sheet ~~process each quarter, as described below:~~Arrangements

●As of ~~Our~~March ~~quarterly~~31, ~~valuation~~2026 ~~process~~and September 30, 2025, we had commitments under loan and financing agreements to fund up to $3.4 million to six portfolio companies and $5.5 million to six portfolio companies, respectively. These commitments are primarily composed of senior secured term loans and revolvers, and the determination of their fair value is included in the Consolidated Schedule of Investments. The commitments are generally ~~begins~~subject to the borrowers meeting certain criteria such as compliance with ~~each~~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 ~~investment~~summary ~~being~~of ~~initially~~the ~~valued~~composition byof athe ~~Valuation~~unfunded ~~Firm;~~commitments as of March 31, 2026 and September 30, 2025 is shown in the table below (dollars in thousands):

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

	March 31, 2026		September 30, 2025
MB Precision Investment Holdings LLC - Senior Secured First Lien Revolver	$	3	$	85
MB Precision Investment Holdings LLC - Senior Secured Delayed Draw Term Loan		85		1,521
PREIT Associates - Revolver		61		61
PSB Group, LLC - Revolver		472		472
SS Acquisition, LLC (dba Soccer Shots Franchising) - Revolver		1,029		1,029
Tamarix Capital Partners II, L.P. - Fund Investment		865		865
WHI Global, LLC - Revolver		916		1,484
Total unfunded commitments	$	3,431	$	5,517

●The following ~~Available~~table ~~portfolio~~shows ~~company~~our ~~data~~payment ~~and~~obligations ~~general~~by ~~industry~~calendar ~~data~~year ~~are~~for ~~then~~repayment ~~reviewed~~of bydebt ~~the~~and ~~Fair~~other ~~Value~~contractual ~~Personnel.~~obligations at March 31, 2026 (dollars in thousands):

● Preliminary valuation conclusions are then documented by the Valuation Firm and discussed with the Fair Value Personnel.

	Payments Due by Period
	2026			2027			2028			2029			2030			Thereafter			Total
Revolving Credit Facility	$	-		$	-		$	-		$	-		$	(89,991,619	)	$	-		$	(89,991,619	)
2028 Notes		-			-			(57,500,000	)		-			-			-			(57,500,000	)
Operating Lease Obligation⁽¹⁾		(239,400	)		(327,695	)		(337,525	)		(347,651	)		(358,081	)		(1,817,021	)		(3,427,373	)
Total contractual obligations	$	(239,400	)	$	(327,695	)	$	(57,837,525	)	$	(347,651	)	$	(90,349,700	)	$	(1,817,021	)	$	(150,918,992	)

52(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 December 18, 2024, the Company amended the terms of the lease, contingent on certain events, extending the lease term until August 31, 2035, with a right to terminate on the 36th and 60th month anniversaries of September 5, 2025, as well as any time on or after the 84th month anniversary of September 5, 2025.

● 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.52

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.Distributions

~~Determination~~We ofhave ~~fair~~elected, ~~values~~and ~~involves~~intend ~~subjective~~to ~~judgments~~continue ~~and~~to ~~estimates~~qualify ~~made~~annually, byto ~~management~~be treated for U.S. ~~The~~federal ~~notes~~income totax ~~our~~purposes ~~consolidated~~as ~~financial~~a ~~statements~~RIC ~~refer~~under Subchapter toM of the ~~uncertainty~~Code. As a RIC, in any taxable year with respect to which we timely distribute at least 90 percent of the ~~possible~~sum ~~effect~~of our (i) investment company taxable income (which is generally our net ordinary income plus the excess of ~~such~~realized ~~valuations~~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 ~~any~~net ~~change~~capital ingains that we distribute to our stockholders. We intend to distribute annually all or substantially all of such ~~valuations~~income, onbut 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 ~~consolidated~~net ~~financial~~capital gains or any investment ~~statements~~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 or excise tax, described below.

~~Revenue~~Amounts ~~Recognition~~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:

~~Our~~1) ~~revenue recognition~~at ~~policies~~least ~~are~~98.0% asof ~~follows:~~our ordinary income (not taking into account any capital gains or losses) for the calendar year;

~~Investments~~2) and Related Investment Income: 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,~~least ~~we will not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not collectible~~98.2% ~~Origination,~~of ~~closing and/or commitment fees associated with investments in portfolio companies are recognized as income when~~ the ~~investment~~amount ~~transaction closes. Other fees are capitalized as deferred revenue and recorded into income over the respective period. Prepayment penalties received~~ by ~~the~~which ~~Company~~our ~~for~~capital ~~debt~~gains ~~instruments~~exceed ~~paid~~our ~~back~~capital ~~to the Company prior to the maturity date are recorded as income upon receipt. Realized gains or~~ losses on(adjusted ~~investments~~for ~~are~~certain ~~measured~~ordinary ~~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.~~for Wea ~~report~~one-year ~~changes~~period inending ~~the~~on ~~fair~~October ~~value~~31st of ~~investments that are measured at fair value as a component of~~ the ~~net~~calendar ~~change~~year; ~~in unrealized appreciation/(depreciation) on investments in our Consolidated Statements of Operations.~~and

~~Non-accrual: We~~3) 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~~realized, inbut ~~our~~not ~~management’s judgment~~distributed, ~~are~~ ~~likely to remain current. At December 31, 2025, a certain investment~~ in ~~one~~preceding ~~portfolio~~years ~~company held by the Company was on non-accrual status with a fair value of approximately $0.0 million, or 0% of the fair value of our portfolio,~~ and ~~a cost of $7.6 million. At September 30, 2025, a certain investment in one portfolio company held by the Company was~~ on ~~non-accrual~~which ~~status~~we ~~with~~did anot ~~combined~~pay ~~fair~~federal ~~value~~income ~~of approximately $0~~tax.~~0 million, or 0.0% of the fair value of our portfolio, and a cost of $7.6 million.~~

~~Federal~~While ~~Income~~we ~~Taxes~~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.

~~The~~To the ~~Company~~extent ~~has~~our ~~elected,~~taxable ~~and~~earnings ~~intends~~fall tobelow ~~continue to~~the ~~qualify~~total ~~annually,~~amount toof beour ~~treated~~distributions for ~~U.S.~~a ~~federal~~taxable ~~income~~year, ~~tax purposes as~~ a ~~RIC~~portion ~~under Subchapter M~~ of ~~the~~those ~~Code~~distributions may ~~and~~be itdeemed ~~intends to operate in~~ a ~~manner~~return ~~so as to maintain its RIC tax treatment. To do so, among other things, the Company is required to meet certain sources~~ of ~~income~~ ~~and~~capital ~~asset diversification requirements and must timely distribute~~ to ~~its~~our 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. The Company will be subject to a nondeductible~~ U.S. federal ~~excise~~income 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~~purposes.2% ofStockholders ~~its~~should ~~capital~~read ~~gain net income for each one-year period ending on October 31 of such calendar year and~~ any ~~income~~written ~~realized,~~disclosure ~~but~~accompanying ~~not~~a ~~distributed,~~distribution incarefully ~~preceding years~~ and onshould ~~which it did~~ not ~~pay~~assume 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~~source ~~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~~distribution ~~excess~~is ~~taxable~~our ~~income~~ordinary ~~as taxable~~ income isor ~~earned~~gains. ~~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.~~

53We 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.

~~Because~~The ~~federal~~Company ~~income~~did ~~tax~~not ~~requirements~~declare ~~differ~~any ~~from~~distribution ~~GAAP,~~payments ~~distributions~~during inthe ~~accordance~~six ~~with~~months ~~tax~~ended ~~requirements~~March ~~may~~31, ~~differ from net investment income and realized gains recognized for financial reporting purposes~~2026. ~~Differences~~On ~~may~~February be6, ~~permanent~~2025, orthe ~~temporary.~~Board ~~Permanent~~of ~~differences are~~Directors ~~reclassified~~declared ~~among~~a ~~capital~~special ~~accounts~~dividend inof ~~the~~$1.43 per ~~consolidated financial statements to reflect their tax character~~share. ~~Temporary~~This ~~differences~~dividend ~~arise when~~was ~~certain~~paid ~~items~~on ofFebruary ~~income~~19, ~~expense,~~2025 ~~gain~~to orstockholders ~~loss are recognized at some time in the future. Differences in classification may also result from the treatment~~ of ~~short-term~~record ~~gains~~ as ~~ordinary~~of ~~income~~February 17, ~~for tax purposes~~2025.

~~Recent~~Related ~~Developments~~Party Transactions

InWe have ~~February~~adopted ~~2026,~~a ~~the~~formal ~~Board~~business code of ~~Directors~~conduct ofand ethics that governs the ~~Company~~conduct ~~appointed~~of ~~Howard~~our CEO, CFO, chief accounting officer (which role ~~Amster~~is tocurrently befulfilled aby ~~member~~our ofCFO) ~~the~~and ~~Audit~~controller ~~Committee~~(Covered Officers). Our officers and ~~Lowell~~directors ~~Robinson~~also remain subject to bethe aduties ~~member~~imposed by ofboth the ~~Nominating~~1940 &Act ~~Governance~~and ~~Committee~~the Delaware General Corporation Law. ~~This~~Our ~~follows~~Code of Business Conduct and Ethics requires that all Covered Officers ~~the~~promote ~~unfortunate~~honest and ~~sudden~~ethical ~~passing~~conduct, ~~away~~including the ethical handling of ~~Arthur~~actual S.or ~~Ainsberg~~apparent conflicts of interest between an individual’s personal and professional relationships. ~~The~~Pursuant ~~Board~~to our Code of ~~Directors~~Business ~~has~~Conduct ~~decreased~~and Ethics, each Covered Officer must disclose to the Company’s ~~size~~CCO any conflicts of ~~the~~interest, ~~board~~or actions or relationships that might give rise to 4a conflict. Any approvals or waivers under our Code of Business Conduct and Ethics must be considered by the disinterested directors.

~~Item~~The Company has entered into contracts with its affiliated portfolio companies, The National Security Group (and certain of its affiliates) and ECC Capital Corporation, pursuant to which the Company (and/or certain of its subsidiaries) provide such affiliated portfolio companies certain services, including managing a portion of their assets. During the three and six months ended March 31, 2026, the Company recognized $0.2 million and $0.3 million of income, respectively, related to these contracts. ~~Quantitative~~During the three and ~~Qualitative~~six ~~Disclosures~~months ~~About~~ended ~~Market~~March ~~Risk~~31, 2025, the Company recognized $0.2 million and $0.3 million of income, respectively, related to these contracts.

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 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 months ended December 31, 2025 and the year ended September 30, 2025, we did not engage in hedging activities.53

AsPledge of December 31, 2025, 57.6% 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. A prolonged reduction in interest rates will reduce our gross investment income and ~~could~~Security 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.Agreement

~~The~~In ~~composition~~connection ofwith ~~our~~the ~~floating~~Credit ~~rate~~Facility ~~debt~~discussed ~~investments~~in byNote 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 ~~interest~~and ~~rate~~securities ~~floor~~held in the Company’s custodial account with Computershare Trust Company, N.A., as collateral for any borrowings made by the Company pursuant to the Credit Agreement. The Lenders have the typical rights and remedies of ~~December~~a 31secured lender under the Uniform Commercial Code, including ~~2025~~the ~~was~~right asto ~~follows~~foreclose ~~(dollars~~on inthe ~~thousands):~~collateral pledged by the Company.

	December 31, 2025
SOFR and LIBOR Floor	Fair Value		% of Floating Rate Portfolio
Under 1%	$	9,028		8.2	%
1% to under 2%		43,669		39.5
2% to under 3%		2,581		2.3
3% to under 4%		22,784		20.6
4% to under 5%		10,329		9.3
No Floor		22,196		20.1
Total	$	110,587		100.0	%

On February 21, 2024, the Pledge and Security Agreement was amended to (i) release and terminate the security interest in the equity interest of FlexFIN, LLC, pledged by PhenixFIN Investment Holdings LLC, (ii) grant a security interest in the membership interest of FlexFIN Holdco LLC, pledged by PhenixFIN Investment Holdings LLC, and (iii) reflect equity interests of certain subsidiaries held by the Company and its subsidiary in the exhibits.

54On August 5, 2024, the Pledge and Security Agreement was further amended to join an additional subsidiary of the Company as a Guarantor and grant a security interest in the equity interest of such additional subsidiary.

~~Based~~On onSeptember ~~our Consolidated Statements of Assets and Liabilities as of December 31~~30, ~~2025~~2024, the ~~following~~Pledge ~~table~~and ~~(dollars~~Security inAgreement ~~thousands)~~was ~~shows~~further ~~the approximate~~amended ~~increase/(decrease)~~to inexclude ~~components~~assets ofowned ~~net~~by ~~assets~~excluded ~~resulting~~subsidiaries from ~~operations~~the ofcollateral package ~~hypothetical~~and ~~SOFR~~reflect ~~base~~the ~~rate~~equity ~~changes in~~ interest ~~rates,~~ ~~assuming~~of noan ~~changes~~additional insubsidiary ~~our~~of ~~investment~~the ~~and~~Company ~~capital~~in ~~structure~~the exhibits.

Change in Interest Rates	Interest Income(1)			Interest Expense			Net Increase/ (Decrease)
Up 300 basis points	$	3,700		$	(2,700	)	$	1,000
Up 200 basis points		2,500			(1,800	)		700
Up 100 basis points		1,200			(900	)		300
Down 100 basis points		(1,200	)		900			(300	)
Down 200 basis points		(2,500	)		1,800			(700	)
Down 300 basis points		(3,700	)		2,700			(1,000	)

Critical Accounting Policies

~~(1)~~The preparation ~~Assumes~~of nofinancial ~~defaults~~statements orand ~~prepayments~~related bydisclosures ~~portfolio~~in ~~companies~~conformity ~~over~~with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the ~~next~~reported ~~twelve~~amounts ~~months~~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.

~~Item~~Valuation 4.of ~~Controls~~Portfolio ~~and Procedures~~Investments

~~Evaluation~~The Company follows ASC 820 for measuring the fair value of ~~Disclosure~~portfolio ~~Controls~~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 ~~Procedures~~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. The three levels are defined below:

~~Our management,~~● ~~with~~Level ~~the~~1 participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025. The term “disclosure controls and procedures” is defined under Rules 13a-~~15(e)~~ ~~and~~Valuations ~~15d-15(e)~~based ~~under~~on ~~the~~quoted ~~Securities~~prices ~~Exchange~~in ~~Act~~active ofmarkets ~~1934~~for ~~(the~~identical ~~“Exchange~~assets ~~Act”),~~or asliabilities ~~amended.~~at ~~Based on~~ the ~~evaluation of~~measurement ~~our disclosure controls and procedures as of December 31, 2025, our Chief Executive Officer and Chief Financial Officer concluded that, as of such~~ date~~, our disclosure controls and procedures were effective~~.

~~Changes~~ ● Level 2 - Valuations based on quoted prices in ~~Internal~~markets ~~Controls~~that ~~Over~~are ~~Financial~~

Filing Compare · PhenixFIN Corp