PhenixFIN Corp
For the period ended Sep 30, 2025. Filed Dec 12, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Dec 12, 2025
PFX$42.03+1.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-09-30; filed 2024-12-17.
0001213900-24-109444
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-09-30; filed 2025-12-12.
0001213900-25-120913
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 133 previous paragraphs and 134 current paragraphs.
101 unchanged; 24 reworded; 8 added; 7 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 58 previous and 60 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Current report
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 set forth above based on the factors described above. The threshold, target, and maximum performance levels are structured similar to those of the 2022 LTIP Plan. The Compensation Committee, in approving the awards, evaluated each Performance Goal separately.
Current report
$11.9 million, and invested $173.9 million.
Current report
Results of Operations
Current report
For the year ended September 30, 2025, investment income totaled $25.3 million, of which $16.6 million was attributable to portfolio interest, approximately $7.5 million was attributable to dividend income, $1.0 million was attributable to fee and other income, and $0.2 million was attributable to interest on cash and cash equivalents. Dividend income was received from 11 investments during the year ended September 30, 2025.
Current report
For the year ended September 30, 2025, we had $10.7 million of net change in unrealized appreciation on investments. The net unrealized appreciation resulted from the reversal of the unrealized loss from the sale of Black Angus Steakhouses, LLC and unrealized appreciation primarily on Altisource S.A.R.L. and ECC Capital Corp.
Current report
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 $50,000,000 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.
Current report
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 investment assets. During the year ended September 30, 2025, the Company recognized $0.7 million of income related to these contracts.
Removed paragraphs (7)
Previous report
For the year ended September 30, 2022, investment income totaled $15.5 million, of which $9.3 million was attributable to portfolio interest, approximately $5.5 million was attributable to dividend income, and $0.7 million was attributable to fee and other income. Dividend income was received from 12 investments during the year ended September 30, 2022.
Previous report
During the year ended September 30, 2022, we recognized $5.2 million of net realized gains on our portfolio investments. The realized gains were primarily due to the partial and full repayments of two investments and the restructuring of three investments, offset by realized losses due to the sale of three investments and the repayment of four investments.
Previous report
In the event that we modify or extinguish our debt prior to maturity, we account for it in accordance with ASC 470-50, Modifications and Extinguishments, in which we measure the difference between the reacquisition price of the debt and the net carrying amount of the debt, which includes any unamortized debt issuance costs.
Previous report
During the year ended September 30, 2024 and 2023, the Company did not recognize a net loss on extinguishment of debt.
Previous report
During the year ended September 30, 2022, the Company recognized a net loss on extinguishment of debt of $0.3 million, which was due to the Company’s $55.3 million repayment of the 2023 Notes on December 16, 2021.
Previous report
On October 1, 2024, the Company consummated the acquisition of approximately 80% of the equity of The National Security Group, an Alabama based insurance holding company (“NSG”). NSG is a nationwide underwriter of life, accident, and health insurance. In addition, NSG is a specialty underwriter of property and casualty insurance throughout the southeast, other than Florida and Louisiana. The Company has entered into a contract with NSG to manage a portion of its investment assets.
Previous report
On October 1, 2024, the Company consummated the acquisition of approximately 80% of the equity of The National Security Group, an Alabama based insurance holding company (“NSG”). NSG is a nationwide underwriter of life, accident, and health insurance. In addition, NSG is a specialty underwriter of property and casualty insurance throughout the southeast, other than Florida and Louisiana. The Company has entered into a contract with NSG to manage a portion of its investment assets.
Reworded paragraphs (24)
Previous wording
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 lending 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.
Current wording
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 lending business and 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.
Previous wording
In connection with the approval of the CIP, the Compensation Committee in April 2022 approved awards for the three-year performance period commencing on October 1, 2021 and ending on September 30, 2024 (the “2022 LTIP Plan”). Each participant is eligible to receive an amount of cash equal to 0%-200% of the target award set forth in the table below (“Target Performance Award”), based on the achievement of net asset value (“NAV”) and NAV per share goals (weighted at 30% and 70%, respectively) as of the end of the performance period (the “Performance Goals”). Performance is evaluated separately for each Performance Goal. No payment is made with respect to a Performance Goal if a threshold level of performance is not achieved. Each Performance Goal is subject to (i) a threshold level of performance at which a percentage of the Target Performance Award attributable to that Performance Goal may be paid and below which no payment is made pursuant to an award, (ii) a target level of performance at which 100% of the Target Performance Award attributable to that Performance Goal may be paid and (iii) a maximum level of performance, at which 200% of the Target Performance Award attributable to that Performance Goal may be paid, in each case subject to such other terms and conditions of an award. Between threshold, target and maximum performance levels for each Performance Goal, the portion of that award attributed to the Performance Goals shall be interpolated in a linear progression.
Current wording
In connection with the approval of the CIP, the Compensation Committee in April 2022, approved awards for the three-year performance period commencing on October 1, 2021 and ending on September 30, 2024 (the “2022 LTIP Plan”). Each participant is eligible to receive an amount of cash equal to a percentage of the target award amount set forth above based on the factors described above. The Compensation Committee, in approving the awards, evaluated each Performance Goal separately.
Previous wording
The Target Performance Award for each executive officer for the 2022 LTIP Plan, the 2023 LTIP Plan, and the 2024 LTIP Plan is set forth in the table below:
Current wording
The Target Performance Award for each executive officer for the 2023 LTIP Plan, the 2024 LTIP Plan, and the 2025 LTIP Plan is set forth in the tables below:
Previous wording
During the years ended September 30, 2024 and September 30, 2023, the Company recorded an accrual of $2,798,437 and $317,000, respectively, for these awards. During the year ended September 30, 2022 the Company did not record an accrual. To date, no amounts have been paid under these awards.
Current wording
During the years ended September 30, 2025 and September 30, 2024, the Company recorded an expense of $1,425,922 and $2,798,437, respectively, for these awards. During the year ended September 30, 2025, the Company paid out $2,002,790 for the 2022 LTIP plan based on achievement of the Performance Goals. During the year ended September 30, 2024, the Company did not pay out anything for these awards.
Previous wording
As of September 30, 2024 and 2023, our portfolio had a fair market value of approximately $227.9 million and $226.5 million, respectively.
Current wording
As of September 30, 2025 and 2024, our portfolio had a fair market value of approximately $302.3 million and $227.9 million, respectively.
Previous wording
During the year ended September 30, 2023, we received proceeds excluding non-cash items from sale and settlements of investments of $66.6 million, including principal and dividend proceeds, realized net losses on investments of $11.5 million, and invested $76.5 million.
Current wording
During the year ended September 30, 2025, we received proceeds excluding non-cash items from sale and settlements of investments of $100.3 million, including principal and dividend proceeds, realized net losses on investments of
Previous wording
As of September 30, 2024, our income-bearing investment portfolio based upon cost represented 84.5% of our total portfolio of which 57.9% bore interest based on floating rates, such as SOFR or LIBOR, 17.0% bore interest at fixed rates, and 25.1% are income-producing equity investments. As of September 30, 2023, our income-bearing investment portfolio based upon cost represented 88.2% of our total portfolio of which 59.5% bore interest based on floating rates, such as LIBOR or SOFR, while 13.9% bore interest at fixed rates and 26.6% are income-producing equity investments. As of September 30, 2024, the Company had a weighted average yield of 12.3% on debt and other income producing investments. As of September 30, 2023, the Company had a weighted average yield of 13.3% on debt and other income producing investments. The weighted average yield of our total portfolio does not represent the total return to our stockholders.
Current wording
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 September 30, 2024, our income-bearing investment portfolio based upon cost represented 84.5% of our total portfolio of which 57.9% bore interest based on floating rates, such as LIBOR or SOFR, while 17.0% bore interest at fixed rates and 25.1% are income-producing equity investments. As of September 30, 2025, the Company had a weighted average yield of 12.8% on debt and other income producing investments. As of September 30, 2024, the Company had a weighted average yield of 12.3% on debt and other income producing investments. The weighted average yield of our total portfolio does not represent the total return to our stockholders.
Previous wording
For the year ended September 30, 2024, investment income totaled $22.2 million, of which $14.3 million was attributable to portfolio interest, approximately $6.9 million was attributable to dividend income, $0.5 million was attributable to fee and other income, and $0.5 million was attributable to interest on cash and cash equivalents. Dividend income was received from 10 investments during the year ended September 30, 2024.
Current wording
For the year ended September 30, 2024, investment income totaled $22.2 million, of which $14.3 million was attributable to portfolio interest, approximately $6.8 million was attributable to dividend income, $0.5 million was attributable to fee and other income, and $0.5 million was attributable to interest on cash and cash equivalents. Dividend income was received from 10 investments during the year ended September 30, 2024.
Previous wording
For the year ended September 30, 2023, total operating expenses increased by $1.5 million, or 12.5%, compared to the year ended September 30, 2022.
Current wording
For the year ended September 30, 2025, total operating expenses increased by $2.7 million, or 15.3%, compared to the year ended September 30, 2024.
Previous wording
Interest and financing expenses for the year ended September 30, 2023 increased by $0.4 million, or 8.2%, compared to the year ended September 30, 2022. The increase in interest and financing expenses was primarily due to interest expense on the Credit Facility which was issued on December 15, 2022, partially offset by a decrease due to the full repayment of the 2023 Notes on January 17, 2023.
Current wording
Interest and financing expenses for the year ended September 30, 2025 increased by $3.7 million, or 55.5%, compared to the year ended September 30, 2024. The increase in interest and financing expenses was primarily due to increased interest expense on the Credit Facility from increased borrowings during the year.
Previous wording
Interest and financing expenses for the year ended September 30, 2023 increased by $1.2 million, or 41.8%, compared to the year ended September 30, 2022. The increase in salaries and benefits expenses was primarily due to increased bonus accruals during the year.
Current wording
Salaries and benefits expenses for the year ended September 30, 2025 decreased by $1.8 million, or 26.0%, compared to the year ended September 30, 2024. The decrease in salaries and benefits expenses was primarily due to decreased bonus accruals during the year.
Previous wording
Professional fees and general and administrative expenses for the year ended September 30, 2023 decreased by $0.1 million, or 2.3%, compared to the year ended September 30, 2022. This resulted primarily from a decrease in miscellaneous expenses.
Current wording
Professional fees and general and administrative expenses for the year ended September 30, 2025 increased by $0.7 million, or 25.8%, compared to the year ended September 30, 2024. This resulted primarily from an increase in taxes and increased miscellaneous expenses.
Previous wording
Realized loss on extinguishment of debt
Current wording
During the year ended September 30, 2025, we recognized $11.9 million of realized losses on our portfolio investments. The realized losses were primarily due to a realized loss on Black Angus Steakhouses, LLC for $10.3 million.
Previous wording
During the year ended September 30, 2024, we recognized $7.3 million of net realized gains on our portfolio investments. The realized gains were primarily due to a realized gain on Maritime Wireless Holdings for $7.0 million and a realized gain on Kemmerer Operations, LLC for $8.5 million, offset by a loss on the sale of 1888 Industrial Services for $8.8 million.
Current wording
During the year ended September 30, 2024, we recognized $7.3 million of realized gains on our portfolio investments. The realized gains were primarily due to a realized gain on Maritime Wireless Holdings for $7.0 million and a realized gain on Kemmerer Operations, LLC for $8.5 million, offset by a loss on the sale of 1888 Industrial Services for $8.8 million
Previous wording
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 year ended September 30, 2024, the Company recorded a change in provision for deferred taxes of $0.9 million. For the years ended September 30, 2023 and 2022, the Company did not record a change in provision for deferred taxes.
Current wording
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 years ended September 30, 2025 and 2024 the Company recorded a change in provision for deferred taxes on the unrealized (appreciation)/depreciation on investments of $0.2 million and $0.9 million, respectively. For the year ended September 30, 2023, the Company did not record a change in provision for deferred taxes.
Previous wording
For the year ended September 30, 2024, we recorded a net increase in net assets resulting from operations of $18.6 million compared to a net increase in net assets resulting from operations of $26.9 million for the year ended September 30, 2023, and a net decrease in net assets resulting from operations of $6.1 million for the year ended September 30, 2022 as a result of the factors discussed above. Based on 2,040,253, 2,092,326 and 2,323,601 weighted average common shares outstanding for the years ended September 30, 2024, 2023 and 2022, respectively, our per share net increase (decrease) in net assets resulting from operations was $9.13, $12.87 and $(2.63) for the years ended September 30, 2024, 2023 and 2022, respectively.
Current wording
For the year ended September 30, 2025, we recorded a net increase in net assets resulting from operations of $4.2 million compared to a net increase in net assets resulting from operations of $18.6 million for the year ended September 30, 2024, and a net increase in net assets resulting from operations of $26.9 million for the year ended September 30, 2023 as a result of the factors discussed above. Based on 2,015,157, 2,040,253 and 2,092,326 weighted average common shares outstanding for the years ended September 30, 2025, 2024, and 2023, respectively, our per share net increase (decrease) in net assets resulting from operations was $2.07, $9.13, and $12.87 for the years ended September 30, 2025, 2024 and 2023, respectively.
Previous wording
As a RIC, we distribute substantially all of our 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.
Current wording
As a RIC, we distribute substantially all of our taxable 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.
Previous wording
As of September 30, 2024 and 2023, we had $67.6 million and $6.0 million in cash and cash equivalents, respectively.
Current wording
As of September 30, 2025 and 2024, we had $7.3 million and $67.6 million in cash and cash equivalents, respectively.
Previous wording
On January 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 703,931 shares of common stock through September 30, 2024, or 25.8% of shares outstanding as of the program’s inception, with a total cost of $28.1 million. The total remaining amount authorized under the expanded share repurchase program at September 30, 2024 was approximately $6.9 million.
Current wording
On January 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 719,940 shares of common stock through September 30, 2025, or 26.4% of shares outstanding as of the program’s inception, with a total cost of $28.9 million. The total remaining amount authorized under the expanded share repurchase program at September 30, 2025 was approximately $6.1 million.
Previous wording
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 is the administrative agent, sole bookrunner and sole lead arranger. As of September 30, 2024, there was $78.1 million outstanding borrowings by the Company under the Credit Facility.
Current wording
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 is the administrative agent, sole bookrunner and sole lead arranger. As of September 30, 2025, there was $90.0 million outstanding borrowings by the Company under the Credit Facility.
Previous wording
As of September 30, 2024 and 2023, we had commitments under loan and financing agreements to fund up to $1.6 million to two portfolio companies and $3.4 million to four 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, 2024 and September 30, 2023 is shown in the table below (dollars in thousands):
Current wording
As of September 30, 2025 and 2024, we had commitments under loan and financing agreements to fund up to $5.5 million to six portfolio companies and $1.6 million to two 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, 2025 and September 30, 2024 is shown in the table below (dollars in thousands):
Previous wording
On May 9, 2024, 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. During the year ended September 30, 2022, a special dividend was declared in the amount of $265,798 on June 24, 2022 payable on July 13, 2022 to Stockholders of record on July 5, 2022. The Company did not declare any regular distribution payments during the years ended September 30, 2024, 2023 and 2022.
Current wording
On May 9, 2024, 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 regular distribution payments during the years ended September 30, 2025, 2024 and 2023.
Previous wording
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:
Current wording
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. The three levels are defined below:
Previous wording
*Non-accrual:*We 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, in our management’s judgment, are likely to remain current. At September 30, 2024, certain investments in three portfolio companies held by the Company were on non-accrual status with a combined fair value of approximately $2.4 million, or 1.1% of the fair value of our portfolio. At September 30, 2023, certain investments in four portfolio companies held by the Company were on non-accrual status with a combined fair value of approximately $6.5 million, or 2.9% of the fair value of our portfolio.
Current wording
*Non-accrual:*We 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, in our management’s judgment, are likely to remain current. 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. At September 30, 2024, certain investments in three portfolio companies held by the Company were on non-accrual status with a combined fair value of approximately $2.4 million, or 1.1% of the fair value of our portfolio, and a cost of $20.2 million.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
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.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
For the year ended September 30, 2022, we had $14.5 million of net change in unrealized depreciation on investments. The net unrealized depreciation was comprised of $21.3 million of net unrealized depreciation on investments and $6.9 million of net unrealized appreciation that resulted from the reversal of previously recorded unrealized depreciation on investments that were realized, partially sold, or written-off during the year.