PhenixFIN Corp Annual Report - How They Did in Fiscal Year 2025!

Hey there, fellow investor! Let's break down how PhenixFIN Corp performed in their fiscal year ending September 30, 2025. Think of this as your friendly guide to understanding what they've been up to.

What is PhenixFIN Corp, Anyway? First off, PhenixFIN Corp (you might see their stock ticker PFX) is a special kind of company called a Business Development Company (BDC). What does that mean for you? Well, BDCs are set up to invest in smaller, often privately-held companies, usually by providing them with loans or taking a stake in their business (private equity). Their main goal is to generate both regular income and grow their investments over time.

A cool thing about PhenixFIN is that they've been internally managed since January 1, 2021. This means they handle all their investment decisions and operations themselves, rather than paying an external company to do it. They started operations way back on January 20, 2011, after their initial public offering (IPO).

How They Invest Your Money PhenixFIN aims to make money by primarily lending to and investing in private companies. They're not just sticking to one type of investment though! Their portfolio often includes:

• Loans: These are usually "senior secured" loans, meaning they're high up in the repayment line if things go south, and they're backed by assets. They offer both first and second lien loans.
• Equity: They also invest directly in companies through preferred and common stock, and sometimes get warrants (which are like options to buy stock later).
• Other Ventures: They're also branching out into other areas like running an asset-based lending business and even an insurance business to help meet their investment goals.

One of these ventures is FlexFIN, LLC, whose financial statements are included in PhenixFIN's annual filing. FlexFIN, LLC appears to be involved in asset-based financing, generating income primarily from 'option extension fees' – essentially fees for extending options or agreements related to assets, which could be part of their lending or leasing activities.

They like to find opportunities that big banks might miss, often lending directly to companies that are "underserved" by traditional lenders. Their investment team has a lot of experience across various industries, from manufacturing and transportation to energy, finance, and even jewelry and real estate.

A Closer Look at FlexFIN, LLC's Performance Let's dive into how FlexFIN, LLC performed in fiscal year 2025. This gives us a peek into one of PhenixFIN's specialized operations:

• Income Boost: FlexFIN, LLC saw a significant increase in its main source of revenue, option extension fees. These jumped to $6.86 million in 2025, a healthy 38.5% increase from $4.95 million in 2024. This suggests they were more active or successful in these types of financing arrangements.
• Rising Costs: However, their total operating expenses also climbed, reaching $1.88 million in 2025, up a substantial 82.5% from $1.03 million in 2024. A big driver of this was a sharp rise in interest expense and other finance charges, which more than tripled to $1.11 million from $363,752. This could be due to higher interest rates on their own borrowings or an increase in the amount they borrowed to fund their operations.
• Asset and Debt Management: On the balance sheet side, FlexFIN, LLC's total assets were slightly down at $50.32 million in 2025 compared to $51.63 million in 2024. But here's a positive: their total liabilities decreased to $13.52 million from $15.21 million, largely due to a reduction in their bank line of credit. This means they're carrying less debt.
• Growing Value: As a result of managing their debt and operations, the Members' Equity (which represents the owners' stake in the company) grew nicely to $36.80 million from $36.43 million, indicating an increase in the underlying value of this venture.

A Quick Heads-Up on Risk It's important to know that many of the loans and investments PhenixFIN makes are considered "below investment grade" or aren't rated at all. In plain English, this means these investments are seen as having a higher risk compared to, say, a loan to a giant, super-stable corporation. They're considered more speculative, meaning there's a greater chance that the company might struggle to pay back the interest or the original loan amount. This is a common characteristic for BDCs, as they often lend to smaller, growing businesses.

Financial Health Check: Leverage and Asset Coverage As a BDC, PhenixFIN has rules about how much debt they can take on to fund their investments. This is called leverage. The main rule is that their "asset coverage" (basically, how much their assets cover their debt) needs to be at least 200%.

Good news here: As of September 30, 2025, PhenixFIN's asset coverage was 207.8%. This means they're comfortably above the required 200% minimum, showing they're managing their debt responsibly according to the rules.

A Snapshot of Their Size To give you a sense of their scale, the total market value of their common stock held by regular investors (non-affiliates) was about $81.3 million as of March 31, 2025. They had around 2 million shares of common stock outstanding as of December 11, 2025. They are considered a "non-accelerated filer" by the SEC, which generally means they are not one of the very largest public companies.

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Key Takeaways from Fiscal Year 2025:

• Core Business: PhenixFIN operates as an internally managed BDC, focusing on lending to and investing in private companies across various industries, including through specialized ventures like asset-based lending and insurance.
• FlexFIN's Performance: A key subsidiary, FlexFIN, LLC, saw a substantial 38.5% increase in its primary revenue source (option extension fees) to $6.86 million. While operating expenses rose significantly, FlexFIN successfully reduced its total liabilities and grew its Members' Equity to $36.80 million.
• Risk Profile: The company's investments are often in "below investment grade" or unrated assets, which carries a higher risk profile typical for BDCs.
• Financial Stability: PhenixFIN maintained a healthy asset coverage ratio of 207.8% as of September 30, 2025, comfortably exceeding the 200% regulatory minimum for BDCs.
• Company Scale: As of March 31, 2025, the market value of common stock held by non-affiliates was approximately $81.3 million, with about 2 million shares outstanding.