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Commitments
 12 Months Ended
Sep. 30, 2023
Commitments [Abstract]  
Commitments

Note 8. Commitments

 

Insurance Reimbursements Related to Professional Fees

 

The Company has received insurance proceeds under its insurance policy primarily relating to the legal expenses associated with the dismissed stockholder class action, captioned as FrontFour Capital Group LLC, et al. v Brook Taube et al. During the years ended September 30, 2023, 2022 and 2021, the Company received insurance proceeds of $0 million, $0 million and $2.1 million, respectively. The reimbursements have been recorded as an offset or reduction in professional fees and expenses on the Consolidated Statements of Operations.

 

Unfunded commitments

 

As of September 30, 2023 and 2022, we had commitments under loan and financing agreements to fund up to $3.4 million to four portfolio companies and $6.0 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. A summary of the composition of the unfunded commitments as of September 30, 2023 and 2022 is shown in the table below (dollars in thousands):

 

   September
30, 2023		   September
30, 2022		 
SS Acquisition, LLC (dba Soccer Shots Franchisin–) - Senior Secured First Lien Delayed Draw Term Loan  $-   $4,000 
Kemmerer Operations, L–C - Senior Secured First Lien Delayed Draw Term Loan   -    908 
Secure Acquisition Inc. (dba Paragon Film–) - Senior Secured First Lien Delayed Draw Term Loan   517    517 
NVTN L–C - Senior Secured First Lien Delayed Draw Term Loan   220    220 
Black Angus Steakhouses, LLC Senior Secured First Lien Super Priority Delayed Draw Term Loan   -    167 
1888 Industrial Services, L–C - Revolving Credit Facility   -    216 
Deer Management Systems L–C - Senior Secured First Lien Delayed Draw Term Loan   600    - 
Tamarix Capital Partners II, L.–. - Fund Investment   2,038    - 
Total unfunded commitments   3,375    6,028 

 

Lease obligations

 

The Company evaluates its leases to determine whether they should be classified as operating or financing leases. PhenixFIN identified one operating lease for its office space. The lease commenced September 1, 2021 and expires November 30, 2026.

 

Upon entering into the lease on September 1, 2021, PhenixFIN recorded a right-of-use asset and a lease liability as of that date.

 

Total operating lease cost incurred by PhenixFIN for the years ended September 30, 2023 and 2022 was $141,330 and $129,552, respectively. During the year ended September 30, 2021, the Company made a security deposit of $72,000 and prepaid rent of $12,000 and no operating lease costs were incurred. As of September 30, 2023 and 2022, the asset related to the operating lease was $449,815 and $513,142, respectively, and is included in the Other assets balance on the Consolidated Balance Sheet. As of September 30, 2023 and 2022, the lease liability was $432,698 and $570,695, respectively, and is included in the Other liabilities balance on the Consolidated Statements of Assets and Liabilities. As of September 30, 2023 and 2022, the remaining lease term was approximately three and four years, respectively, for each of the respective periods and the implied borrowing rate was 5.25% for each of the respective periods.

 

The following table shows future minimum payments under PhenixFIN’s operating lease as of September 30, 2023:

 

For the Years Ended September 30,  Amount 
2024  $156,359 
2025   156,971 
2026   161,680 
2027   27,417 
Thereafter   - 
    502,427 
Difference between undiscounted and discounted cash flows   (69,729)
   $432,698