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Commitments
 3 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments

Note 8. Commitments

 

Unfunded commitments

 

As of December 31, 2022 and September 30, 2022, we had commitments under loan and financing agreements to fund up to $2.2 million to four portfolio companies and $6.0 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 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 December 31, 2022 and September 30, 2022 is shown in the table below (dollars in thousands):

 

   December 31,
2022		   September 30,
2022		 
SS Acquisition, LLC (dba Soccer Shots Franchising) - Senior Secured First Lien Delayed Draw Term Loan  $1,333   $4,000 
Kemmerer Operations, LLC - Senior Secured First Lien Delayed Draw Term Loan   
-
    908 
Secure Acquisition Inc. (dba Paragon Films) - Senior Secured First Lien Delayed Draw Term Loan   517    517 
NVTN LLC - 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    167 
1888 Industrial Services, LLC - Revolving Credit Facility   -    216 
Total unfunded commitments   $2,237    $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.

 

As of December 31, 2022 and September 30, 2022, the asset related to the operating lease was $478,604 and $513,142, respectively, and is included in the Other assets balance on the Consolidated Balance Sheet. The lease liability was $534,769 and $570,695, respectively, and is included in the Other liabilities balance on the Consolidated Statements of Assets and Liabilities. As of December 31, 2022 and September 30, 2022, the remaining lease term was approximately four years 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 December 31, 2022:

 

For the Years Ended December 31,  Amount 
2023  $111,240 
2024   152,399 
2025   156,971 
2026   161,680 
2027   27,417 
Thereafter   - 
    609,707 
Difference between undiscounted and discounted cash flows   (74,938)
   $534,769