UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q 

[x]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

OR

[ ]	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 000-54755 

	CĪON Investment Corporation
	(Exact name of registrant as specified in its charter)

 

Maryland		45-3058280
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
3 Park Avenue, 36th Floor New York, New York		10016
(Address of principal executive offices)		(Zip Code)

	(212) 418-4700
	(Registrant’s telephone number, including area code)
	Not applicable
	(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class	Trading symbol(s)	Name of each exchange on which registered
None	Not applicable	Not applicable

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 [x] 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.

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	Large accelerated filer [ ]	Accelerated filer [ ]
	Non-accelerated filer [x]	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 Exchange Act).  

Yes [ ] No [x]

The number of shares of the registrant’s common stock, $0.001 par value, outstanding as of August 8, 2019 was 113,786,639.

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CĪON INVESTMENT CORPORATION

FORM 10-Q

TABLE OF CONTENTS

		Page
	PART I - FINANCIAL INFORMATION
	Item 1. Financial Statements	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Operations	2
	Consolidated Statements of Changes in Net Assets	3
	Consolidated Statements of Cash Flows	4
	Consolidated Schedules of Investments	5
	Notes to Consolidated Financial Statements	23
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	52
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	66
	Item 4. Controls and Procedures	67
	PART II – OTHER INFORMATION
	Item 1. Legal Proceedings	68
	Item 1A. Risk Factors	68
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	68
	Item 3. Defaults Upon Senior Securities	68
	Item 4. Mine Safety Disclosures	68
	Item 5. Other Information	68
	Item 6. Exhibits	69
	Signatures	72

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

CĪON Investment Corporation

Consolidated Balance Sheets

(in thousands, except share and per share amounts)

		June 30, 2019				December 31, 2018
		(unaudited)
Assets
Investments, at fair value:
Non-controlled, non-affiliated investments (amortized cost of $1,868,367 and $1,866,316, respectively)		$	1,813,582			$	1,823,338
Non-controlled, affiliated investments (amortized cost of $51,112 and $50,447, respectively)		39,141				41,972
Total investments, at fair value (amortized cost of $1,919,479 and $1,916,763, respectively)		1,852,723				1,865,310
Cash		4,923				17,579
Interest receivable on investments		16,487				17,596
Receivable due on investments sold		2,676				5,787
Prepaid expenses and other assets		538				189
Total assets		$	1,877,347			$	1,906,461

Liabilities and Shareholders' Equity
Liabilities
Financing arrangements (net of unamortized debt issuance costs of $5,840 and $5,927, respectively)		$	876,702			$	892,615
Payable for investments purchased		14,317				16,851
Accounts payable and accrued expenses		828				939
Interest payable		3,582				3,960
Accrued management fees		9,237				9,308
Accrued subordinated incentive fee on income		4,117				2,604
Accrued administrative services expense		83				913
Total liabilities		908,866				927,190
Commitments and contingencies (Note 4 and Note 10)
Shareholders' Equity
Common stock, $0.001 par value; 500,000,000 shares authorized;
113,396,246 and 112,709,239 shares issued and outstanding, respectively		113				113
Capital in excess of par value		1,054,913				1,048,693
Accumulated distributable losses		(86,545		)		(69,535		)
Total shareholders' equity		968,481				979,271
Total liabilities and shareholders' equity		$	1,877,347			$	1,906,461
Net asset value per share of common stock at end of period		$	8.54			$	8.69

See accompanying notes to consolidated financial statements.

1

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CĪON Investment Corporation

Consolidated Statements of Operations

(in thousands, except share and per share amounts)

		Three Months Ended June 30,								Six Months Ended June 30,
		2019				2018				2019				2018
		(unaudited)				(unaudited)				(unaudited)				(unaudited)
Investment income
Interest income:
Non-controlled, non-affiliated investments		$	47,871			$	42,687			$	95,669			$	83,519
Non-controlled, affiliated investments		559				269				982				385
Total interest income		48,430				42,956				96,651				83,904
Non-cash dividend income:
Non-controlled, non-affiliated investments		90				—				180				—
Non-controlled, affiliated investments		475				—				3,037				—
Total non-cash dividend income		565				—				3,217				—
Fee and other income		524				667				822				881
Total investment income		49,519				43,623				100,690				84,785
Operating expenses
Management fees		9,237				8,602				18,568				16,541
Administrative services expense		483				531				980				992
Subordinated incentive fee on income		4,117				—				9,492				—
General and administrative		1,197				1,604				2,586				3,586
Interest expense		12,824				10,851				25,864				19,769
Total operating expenses		27,858				21,588				57,490				40,888
Net investment income		21,661				22,035				43,200				43,897
Realized and unrealized (losses) gains
Net realized (loss) gain on:
Non-controlled, non-affiliated investments		(2,242		)		(6,851		)		(3,199		)		(7,532		)
Non-controlled, affiliated investments		—				—				—				—
Foreign currency		(132		)		7				(135		)		9
Net realized losses		(2,374		)		(6,844		)		(3,334		)		(7,523		)
Net change in unrealized (depreciation) appreciation on:
Non-controlled, non-affiliated investments		(8,178		)		3,604				(11,807		)		2,271
Non-controlled, affiliated investments		(3,075		)		(777		)		(3,496		)		(894		)
Foreign currency		113				—				—				—
Net change in unrealized (depreciation) appreciation		(11,140		)		2,827				(15,303		)		1,377
Net realized and unrealized losses		(13,514		)		(4,017		)		(18,637		)		(6,146		)
Net increase in net assets resulting from operations		$	8,147			$	18,018			$	24,563			$	37,751
Per share information—basic and diluted
Net increase in net assets per share resulting from operations		$	0.07			$	0.16			$	0.22			$	0.33
Weighted average shares of common stock outstanding		113,747,617				114,830,847				113,682,699				114,840,350

See accompanying notes to consolidated financial statements.

2

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CĪON Investment Corporation

Consolidated Statements of Changes in Net Assets

(in thousands, except share and per share amounts)

			Three Months Ended June 30,								Six Months Ended June 30,
			2019				2018				2019				2018
			(unaudited)				(unaudited)				(unaudited)				(unaudited)
Changes in net assets from operations:
Net investment income			$	21,661			$	22,035			$	43,200			$	43,897
Net realized loss on investments			(2,242		)		(6,851		)		(3,199		)		(7,532		)
Net realized (loss) gain on foreign currency			(132		)		7				(135		)		9
Net change in unrealized (depreciation) appreciation on investments			(11,253		)		2,827				(15,303		)		1,377
Net change in unrealized depreciation on foreign currency translation			113				—				—				—
Net increase in net assets resulting from operations			8,147				18,018				24,563				37,751
Changes in net assets from shareholders' distributions:
Distributions to shareholders			(20,801		)		(21,004		)		(41,573		)		(42,006		)
Net decrease in net assets resulting from shareholders' distributions			(20,801		)		(21,004		)		(41,573		)		(42,006		)
Changes in net assets from capital share transactions:
Issuance of common stock, net of issuance costs of $0, $237, $296 and $708, respectively			—				6,794				6,220				18,460
Reinvestment of shareholders' distributions			8,926				9,783				18,287				19,627
Repurchase of common stock			(8,926		)		(21,525		)		(18,287		)		(39,904		)
Net (decrease) increase in net assets resulting from capital share transactions			—				(4,948		)		6,220				(1,817		)
Total decrease in net assets			(12,654		)		(7,934		)		(10,790		)		(6,072		)
Net assets at beginning of period			981,135				1,060,553				979,271				1,058,691
Net assets at end of period			$	968,481			$	1,052,619			$	968,481			$	1,052,619
Net asset value per share of common stock at end of period			$	8.54			$	9.11			$	8.54			$	9.11
Shares of common stock outstanding at end of period			113,396,246				115,570,125				113,396,246				115,570,125

See accompanying notes to consolidated financial statements.

3

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CĪON Investment Corporation

Consolidated Statements of Cash Flows

(in thousands)

		Six Months Ended June 30,
		2019				2018
		(unaudited)				(unaudited)
Operating activities:
Net increase in net assets resulting from operations		$	24,563			$	37,751
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:
Net accretion of discount on investments		(6,335		)		(8,805		)
Proceeds from principal repayment of investments		162,731				321,081
Purchase of investments		(285,125		)		(706,858		)
Paid-in-kind interest		(4,323		)		(802		)
(Increase) decrease in short term investments, net		(21,203		)		23,779
Proceeds from sale of investments		148,324				96,932
Net realized loss on investments		3,199				7,532
Net unrealized appreciation (depreciation) on investments		15,303				(1,377		)
Amortization of debt issuance costs		1,515				1,469
(Increase) decrease in interest receivable on investments		1,125				(1,471		)
(Increase) decrease in receivable due on investments sold		3,111				24,964
(Increase) decrease in prepaid expenses and other assets		(349		)		843
Increase (decrease) in payable for investments purchased		(2,534		)		16,605
Increase (decrease) in accounts payable and accrued expenses		(111		)		(237		)
Increase (decrease) in interest payable		(378		)		873
Increase (decrease) in accrued management fees		(71		)		781
Increase (decrease) in accrued administrative services expense		(830		)		(400		)
Increase (decrease) in due to CIG - offering costs		—				2
Increase (decrease) in subordinated incentive fee on income payable		1,513				(3,222		)
Net cash provided by (used in) operating activities		40,125				(190,560		)
Financing activities:
Gross proceeds from issuance of common stock		6,516				19,168
Commissions and dealer manager fees paid		(296		)		(708		)
Repurchase of common stock		(18,287		)		(39,904		)
Shareholders' distributions paid		(23,286		)		(22,379		)
Repayments under financing arrangements		(149,500		)		—
Borrowings under financing arrangements		133,500				187,500
Debt issuance costs paid		(1,428		)		(508		)
Net cash (used in) provided by financing activities		(52,781		)		143,169
Net decrease in cash and restricted cash		(12,656		)		(47,391		)
Cash and restricted cash, beginning of period		17,579				56,354
Cash and restricted cash, end of period		$	4,923			$	8,963
Supplemental disclosure of cash flow information:
Cash paid for interest		$	24,727			$	17,417
Supplemental non-cash financing activities:
Reinvestment of shareholders' distributions		$	18,287			$	19,627
Restructuring of portfolio investment		$	9,903			$	—

See accompanying notes to consolidated financial statements.

4

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CĪON Investment Corporation

Consolidated Schedule of Investments (unaudited)

June 30, 2019

(in thousands)

Portfolio Company(a)		Index Rate(b)		Industry		Principal/ Par Amount/ Units(e)				Cost(d)				Fair Value(c)
Senior Secured First Lien Debt - 150.0%
Academy, Ltd., L+400, 1.00% LIBOR Floor, 7/1/2022(q)		1 Month LIBOR		Retail		$	14,324			$	12,440			$	10,277
ACProducts, Inc., L+550, 0.00% LIBOR Floor, 2/15/2024(q)		1 Month LIBOR		Construction & Building		4,969				4,733				4,745
Adams Publishing Group, LLC, L+750, 1.00% LIBOR Floor, 7/2/2023(p)(r)		3 Month LIBOR		Media: Advertising, Printing & Publishing		15,324				15,188				15,247
Adams Publishing Group, LLC, 0.38% Unfunded, 7/2/2020(p)		None		Media: Advertising, Printing & Publishing		1,600				—				(8		)
Adapt Laser Acquisition, Inc., L+800, 1.00% LIBOR Floor, 12/31/2023(p)		3 Month LIBOR		Capital Equipment		11,820				11,820				11,525
Adapt Laser Acquisition, Inc., 0.50% Unfunded, 12/31/2023		None		Capital Equipment		2,000				—				(50		)
Aegis Toxicology Sciences Corp., L+550, 1.00% LIBOR Floor, 5/9/2025(q)		3 Month LIBOR		Healthcare & Pharmaceuticals		9,925				9,744				9,540
AIS Holdco, LLC, L+500, 0.00% LIBOR Floor, 8/15/2025(q)		3 Month LIBOR		Banking, Finance, Insurance & Real Estate		5,451				5,387				5,097
Alchemy US Holdco 1, LLC, L+550, 10/10/2025(q)		1 Month LIBOR		Construction & Building		7,900				7,791				7,861
Allen Media, LLC, L+650, 1.00% LIBOR Floor, 8/30/2023(p)(q)(r)(s)		3 Month LIBOR		Media: Diversified & Production		70,080				68,566				69,729
ALM Media, LLC, L+450, 1.00% LIBOR Floor, 7/31/2020(q)		3 Month LIBOR		Media: Advertising, Printing & Publishing		12,965				12,403				11,971
American Clinical Solutions LLC, 12.50%, 6/11/2020(u)(w)		None		Healthcare & Pharmaceuticals		9,339				8,968				6,817
American Media, LLC, L+750, 0.00% LIBOR Floor, 12/31/2023(p)		3 Month LIBOR		Media: Advertising, Printing & Publishing		19,250				18,813				18,865
American Media, LLC, L+750, 0.00% LIBOR Floor, 12/31/2023		3 Month LIBOR		Media: Advertising, Printing & Publishing		1,277				1,279				1,251
American Media, LLC, 0.50% Unfunded, 12/31/2023		None		Media: Advertising, Printing & Publishing		426				(41		)		(9		)
American Teleconferencing Services, Ltd., L+650, 1.00% LIBOR Floor, 12/8/2021(p)(q)(r)(s)		3 Month LIBOR		Telecommunications		19,566				18,429				11,495
Analogic Corp., L+600, 1.00% LIBOR Floor, 6/21/2024(r)(s)		1 Month LIBOR		Healthcare & Pharmaceuticals		29,775				29,258				29,477
AP Exhaust Acquisition, LLC, L+500, 1.00% LIBOR Floor, 5/10/2024(q)(r)		3 Month LIBOR		Automotive		10,477				9,937				9,115
APCO Holdings, LLC, L+550, 0.00% LIBOR Floor, 6/9/2025(q)		1 Month LIBOR		Banking, Finance, Insurance & Real Estate		11,127				11,029				11,155
Ascent Resources - Marcellus, LLC, L+650, 1.00% LIBOR Floor, 3/30/2023		1 Month LIBOR		Energy: Oil & Gas		712				712				705
Associated Asphalt Partners, LLC, L+525, 1.00% LIBOR Floor, 4/5/2024(q)		1 Month LIBOR		Construction & Building		10,770				10,617				10,527
Avison Young (USA) Inc., L+500, 0.00% LIBOR Floor, 1/31/2026(i)(q)		3 Month LIBOR		Banking, Finance, Insurance & Real Estate		9,950				9,759				9,801
Bi-Lo, LLC, L+800, 1.00% LIBOR Floor, 5/31/2024(q)(r)		3 Month LIBOR		Retail		12,962				12,600				12,476
Cadence Aerospace, LLC, L+650, 1.00% LIBOR Floor, 11/14/2023(r)(s)		3 Month LIBOR		Aerospace & Defense		25,829				25,619				25,312
Cardinal US Holdings, Inc., L+500, 1.00% LIBOR Floor, 7/31/2023(q)		3 Month LIBOR		Services: Business		8,351				7,909				8,289
CB URS Holdings Corp., L+525, 1.00% LIBOR Floor, 9/1/2024(q)(s)		1 Month LIBOR		Transportation: Cargo		16,674				16,584				16,611
Central Security Group, Inc., L+563, 1.00% LIBOR Floor, 10/6/2021(q)(s)		1 Month LIBOR		Services: Consumer		24,531				24,548				24,164
Charming Charlie LLC, L+1000, 1.00% LIBOR Floor, 4/24/2023(u)(v)(w)		3 Month LIBOR		Retail		3,501				1,912				—
Charming Charlie LLC, L+1000, 1.00% LIBOR Floor, 4/24/2023(u)(v)(w)		3 Month LIBOR		Retail		2,859				2,619				—
Charming Charlie LLC, 20.00%, 5/15/2019(v)		None		Retail		157				157				157
Charming Charlie LLC, 3.50% Unfunded, 5/28/2022(v)		None		Retail		890				—				—
Charming Charlie LLC, 2.50% Unfunded, 5/15/2020(v)		None		Retail		1,047				—				—
CHC Solutions Inc., 12.00%, 7/20/2023(w)		None		Healthcare & Pharmaceuticals		7,200				7,200				7,200
CircusTrix Holdings, LLC, L+550, 1.00% LIBOR Floor, 12/16/2021(r)(s)		1 Month LIBOR		Hotel, Gaming & Leisure		24,003				23,756				23,523

See accompanying notes to consolidated financial statements.

5

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CĪON Investment Corporation

Consolidated Schedule of Investments (unaudited)

June 30, 2019

(in thousands)

Portfolio Company(a)		Index Rate(b)		Industry		Principal/ Par Amount/ Units(e)			Cost(d)			Fair Value(c)
CircusTrix Holdings, LLC, L+550, 1.00% LIBOR Floor, 12/16/2021		1 Month LIBOR		Hotel, Gaming & Leisure		1,766			1,766			1,730
CircusTrix Holdings, LLC, 1.00% Unfunded, 12/27/2019		None		Hotel, Gaming & Leisure		5,573			—			(111	)
Country Fresh Holdings, LLC, L+500, 1.00% LIBOR Floor, 4/29/2023		3 Month LIBOR		Beverage, Food & Tobacco		414			414			414
Country Fresh Holdings, LLC, L+500, 1.00% LIBOR Floor, 4/29/2023		3 Month LIBOR		Beverage, Food & Tobacco		286			274			286
Country Fresh Holdings, LLC, 1.00% Unfunded, 4/29/2023		None		Beverage, Food & Tobacco		735			(29	)		—
Covenant Surgical Partners, Inc., L+475, 0.00% LIBOR Floor, 10/4/2024(q)		3 Month LIBOR		Healthcare & Pharmaceuticals		912			911			912
Crown Subsea Communications Holdings, Inc., L+600, 0.00% LIBOR Floor, 11/2/2025(q)		1 Month LIBOR		Capital Equipment		7,800			7,655			7,800
David's Bridal, Inc., L+800, 1.00% LIBOR Floor, 1/18/2024		1 Month LIBOR		Retail		1,682			1,682			1,329
David's Bridal, Inc., L+750, 1.00% LIBOR Floor, 7/18/2023		1 Month LIBOR		Retail		420			341			425
Dayton Superior Corp., L+1400, 1.00% LIBOR Floor, 11/15/2021(q)(u)(w)		1 Month LIBOR		Construction & Building		6,390			5,903			3,514
Del Frisco's Restaurant Group, Inc., L+600, 0.00% LIBOR Floor, 6/27/2025(i)(p)(q)		1 Month LIBOR		Retail		13,915			13,695			13,950
Deluxe Entertainment Services Group Inc., L+550, 1.00% LIBOR Floor, 2/28/2020(q)		3 Month LIBOR		Media: Diversified & Production		15,843			15,811			14,180
DFC Global Facility Borrower II LLC, L+1075, 1.00% LIBOR Floor, 9/27/2022		1 Month LIBOR		Services: Consumer		24,683			24,585			24,683
DFC Global Facility Borrower II LLC, 0.50% Unfunded, 9/27/2019		None		Services: Consumer		5,317			—			—
DMT Solutions Global Corp., L+700, 0.00% LIBOR Floor, 7/2/2024(q)(s)		3 Month LIBOR		Services: Business		19,000			18,508			18,383
Eagle Family Foods Group LLC, L+650, 1.00% LIBOR Floor, 6/14/2024(s)		6 Month LIBOR		Beverage, Food & Tobacco		14,850			14,570			14,627
Elemica, Inc., L+700, 1.00% LIBOR Floor, 7/7/2021(p)(r)		1 Month LIBOR		High Tech Industries		16,975			16,767			16,890
Elemica, Inc., L+700, 1.00% LIBOR Floor, 7/7/2021		1 Month LIBOR		High Tech Industries		2,000			2,004			1,990
Elemica, Inc., 0.50% Unfunded, 7/7/2021		None		High Tech Industries		500			(30	)		(3	)
Entertainment Studios P&A LLC, 6.18%, 5/18/2037(m)		None		Media: Diversified & Production		17,244			17,096			17,029
Entertainment Studios P&A LLC, 5.00%, 5/18/2037(m)		None		Media: Diversified & Production		—			—			2,705
EnTrans International, LLC, L+600, 0.00% LIBOR Floor, 11/1/2024(q)(s)		1 Month LIBOR		Capital Equipment		28,875			28,617			28,586
ES Chappaquiddick LLC, 10.00%, 5/18/2022		None		Media: Diversified & Production		965			965			1,013
Evergreen Skills Lux S.À.R.L., L+475, 1.00% LIBOR Floor, 4/28/2021(i)(q)		1 Month LIBOR		High Tech Industries		10,130			9,767			8,769
Extreme Reach, Inc., L+750, 0.00% LIBOR Floor, 3/29/2024(r)		1 Month LIBOR		Media: Diversified & Production		22,849			22,738			22,735
Extreme Reach, Inc., 0.50% Unfunded, 3/29/2024		None		Media: Diversified & Production		1,744			(6	)		(9	)
F+W Media, Inc., L+650, 1.50% LIBOR Floor, 5/24/2022(u)(v)(w)		1 Month LIBOR		Media: Diversified & Production		1,168			1,168			426
F+W Media, Inc., L+1000, 1.50% LIBOR Floor, 5/24/2022(p)(u)(v)(w)		1 Month LIBOR		Media: Diversified & Production		3,286			2,759			—
F+W Media, Inc., L+1000, 8/10/2019(v)(w)		1 Month LIBOR		Media: Diversified & Production		513			504			579
F+W Media, Inc., 2.00% Unfunded, 8/10/2019(v)		None		Media: Diversified & Production		261			—			26
Flavors Holdings Inc., L+575, 1.00% LIBOR Floor, 4/3/2020(p)(r)		3 Month LIBOR		Consumer Goods: Non-Durable		13,388			12,819			12,568
Foundation Consumer Healthcare, LLC, L+550, 1.00% LIBOR Floor, 11/2/2023(p)(r)(s)		3 Month LIBOR		Healthcare & Pharmaceuticals		38,892			38,664			38,892
Foundation Consumer Healthcare, LLC, 0.50% Unfunded, 11/2/2023		None		Healthcare & Pharmaceuticals		4,211			(23	)		—
Genesis Healthcare, Inc., L+600, 0.50% LIBOR Floor, 3/6/2023(i)(p)(s)		1 Month LIBOR		Healthcare & Pharmaceuticals		35,000			34,724			34,300
Geo Parent Corp., L+550, 0.00% LIBOR Floor, 12/19/2025(q)		3 Month LIBOR		Services: Business		14,963			14,821			14,944
Harland Clarke Holdings Corp., L+475, 1.00% LIBOR Floor, 11/3/2023(q)(s)		3 Month LIBOR		Services: Business		13,601			13,549			11,510

See accompanying notes to consolidated financial statements.

6

---

CĪON Investment Corporation

Consolidated Schedule of Investments (unaudited)

June 30, 2019

(in thousands)

Portfolio Company(a)		Index Rate(b)		Industry		Principal/ Par Amount/ Units(e)				Cost(d)			Fair Value(c)
Healogics, Inc., L+425, 1.00% LIBOR Floor, 7/1/2021(q)		3 Month LIBOR		Healthcare & Pharmaceuticals		4,774				4,619			3,891
Homer City Generation, L.P., L+1100, 1.00% LIBOR Floor, 4/5/2023(p)		1 Month LIBOR		Energy: Oil & Gas		14,518				13,976			13,974
Hummel Station LLC, L+600, 1.00% LIBOR Floor, 10/27/2022(q)		1 Month LIBOR		Energy: Oil & Gas		9,600				9,249			8,664
Independent Pet Partners Intermediate Holdings, LLC, L+900, 1.00% LIBOR Floor, 11/19/2023		6 Month LIBOR		Retail		11,108				11,023			10,913
Independent Pet Partners Intermediate Holdings, LLC, 1.00% Unfunded, 11/19/2023		None		Retail		8,889				(108	)		(156	)
Infinity Sales Group, LLC, L+1050, 1.00% LIBOR Floor, 11/23/2020(p)		1 Month LIBOR		Services: Business		7,873				7,600			7,873
InfoGroup Inc., L+500, 1.00% LIBOR Floor, 4/3/2023(q)(r)(s)		3 Month LIBOR		Media: Advertising, Printing & Publishing		15,837				15,824			15,402
Instant Web, LLC, L+650, 0.00% LIBOR Floor, 12/15/2022(p)(r)(s)		1 Month LIBOR		Media: Advertising, Printing & Publishing		37,986				37,903			36,847
Instant Web, LLC, L+650, 0.00% LIBOR Floor, 12/15/2022		1 Month LIBOR		Media: Advertising, Printing & Publishing		649				649			629
Instant Web, LLC, 0.50% Unfunded, 12/15/2022		None		Media: Advertising, Printing & Publishing		2,055				—			(62	)
Intermedia Holdings, Inc., L+600, 1.00% LIBOR Floor, 7/21/2025(q)		1 Month LIBOR		High Tech Industries		12,438				12,327			12,500
International Seaways, Inc., L+600, 1.00% LIBOR Floor, 6/22/2022(i)(q)		1 Month LIBOR		Transportation: Cargo		9,374				9,250			9,374
Isagenix International, LLC, L+575, 1.00% LIBOR Floor, 6/14/2025(q)		3 Month LIBOR		Beverage, Food & Tobacco		14,250				14,124			11,329
Island Medical Management Holdings, LLC, L+650, 1.00% LIBOR Floor, 9/1/2022(r)		1 Month LIBOR		Healthcare & Pharmaceuticals		11,883				11,777			10,814
Jab Wireless, Inc., L+800, 0.00% LIBOR Floor, 5/2/2023(s)		3 Month LIBOR		Telecommunications		19,800				19,800			19,800
Jackson Hewitt Tax Service Inc., L+625, 0.00% LIBOR Floor, 5/30/2023(s)		3 Month LIBOR		Services: Consumer		17,663				17,662			17,663
Jenny C Acquisition, Inc., L+850, 0.00% LIBOR Floor, 10/1/2024(p)		1 Month LIBOR		Services: Consumer		9,925				9,829			9,826
JP Intermediate B, LLC, L+550, 1.00% LIBOR Floor, 11/20/2025(k)(q)		3 Month LIBOR		Beverage, Food & Tobacco		16,578				16,241			14,464
KLO Intermediate Holdings, LLC, L+775, 1.50% LIBOR Floor, 4/7/2022		1 Month LIBOR		Chemicals, Plastics & Rubber		7,074				7,020			6,013
KLO Intermediate Holdings, LLC, L+775, 1.50% LIBOR Floor, 4/7/2022		1 Month LIBOR		Chemicals, Plastics & Rubber		4,095				4,064			3,481
KNB Holdings Corp., L+550, 1.00% LIBOR Floor, 4/26/2024(q)(s)		3 Month LIBOR		Consumer Goods: Durable		8,403				8,277			8,088
Labvantage Solutions Inc., L+750, 1.00% LIBOR Floor, 12/29/2020(r)		1 Month LIBOR		High Tech Industries		3,754				3,738			3,754
Labvantage Solutions Ltd., E+750, 1.00% EURIBOR Floor, 12/29/2020(i)		1 Month EURIBOR		High Tech Industries		€	3,791			4,244			4,309
LAV Gear Holdings, Inc., L+550, 1.00% LIBOR Floor, 10/31/2024		3 Month LIBOR		Services: Business		20,629				20,331			20,217
LAV Gear Holdings, Inc., L+550, 1.00% LIBOR Floor, 10/31/2024		3 Month LIBOR		Services: Business		4,308				4,246			4,222
LD Intermediate Holdings, Inc., L+588, 1.00% LIBOR Floor, 12/9/2022(q)		3 Month LIBOR		High Tech Industries		4,824				4,533			4,794
Lift Brands, Inc., L+700, 1.00% LIBOR Floor, 4/16/2023(p)(r)(s)		3 Month LIBOR		Services: Consumer		44,438				43,662			43,327
Lift Brands, Inc., L+700, 1.00% LIBOR Floor, 4/16/2023		3 Month LIBOR		Services: Consumer		1,350				1,350			1,316
Lift Brands, Inc., 1.00% Unfunded, 4/16/2023		None		Services: Consumer		3,650				—			(91	)
Longview Power, LLC, L+600, 1.00% LIBOR Floor, 4/13/2021(p)(r)		3 Month LIBOR		Energy: Oil & Gas		17,838				15,991			15,563
Manna Pro Products, LLC, L+600, 0.00% LIBOR Floor, 12/8/2023		1 Month LIBOR		Retail		9,472				9,472			9,377
Manna Pro Products, LLC, 1.00% Unfunded, 12/8/2019		None		Retail		5,528				(54	)		(55	)
Mimeo.com, Inc., L+700, 1.00% LIBOR Floor, 12/21/2023(p)(s)		3 Month LIBOR		Services: Business		22,828				22,827			22,828
Mimeo.com, Inc., L+700, 1.00% LIBOR Floor, 12/21/2023		3 Month LIBOR		Services: Business		2,500				2,500			2,500
Mimeo.com, Inc., 0.25% Unfunded, 12/21/2020		None		Services: Business		10,000				—			—
Mimeo.com, Inc., 1.00% Unfunded, 12/21/2023		None		Services: Business		500				—			—

See accompanying notes to consolidated financial statements.

7

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CĪON Investment Corporation

Consolidated Schedule of Investments (unaudited)

June 30, 2019

(in thousands)

Portfolio Company(a)		Index Rate(b)		Industry		Principal/ Par Amount/ Units(e)			Cost(d)			Fair Value(c)
Moss Holding Company, L+625, 1.00% LIBOR Floor, 4/17/2023(p)(r)		3 Month LIBOR		Services: Business		20,350			20,081			19,943
Moss Holding Company, 0.50% Unfunded, 4/17/2023		None		Services: Business		2,232			—			(45	)
Moxie Patriot LLC, L+575, 1.00% LIBOR Floor, 12/19/2020(q)		3 Month LIBOR		Energy: Oil & Gas		9,850			9,839			9,456
MRP Generation Holdings, LLC, L+700, 1.00% LIBOR Floor, 10/18/2022(q)		3 Month LIBOR		Energy: Oil & Gas		2,203			2,173			2,199
Murray Energy Corp., L+725, 1.00% LIBOR Floor, 10/17/2022(q)		3 Month LIBOR		Metals & Mining		3,574			3,543			2,403
NewsCycle Solutions, Inc., L+700, 1.00% LIBOR Floor, 12/29/2022(r)(s)		1 Month LIBOR		Media: Advertising, Printing & Publishing		20,342			20,180			20,139
One Call Corp., L+525, 1.00% LIBOR Floor, 11/25/2022(q)		1 Month LIBOR		Healthcare & Pharmaceuticals		7,967			7,583			6,453
Petroflow Energy Corp., L+800, 1.00% LIBOR Floor, 6/29/2019(p)(u)(v)(w)		1 Month LIBOR		Energy: Oil & Gas		725			215			170
PFS Holding Corp., L+350, 1.00% LIBOR Floor, 1/31/2021		1 Month LIBOR		Retail		3,113			2,605			1,206
PH Beauty Holdings III, Inc., L+500, 0.00% LIBOR Floor, 9/28/2025(q)		1 Month LIBOR		Consumer Goods: Non-Durable		9,925			9,835			9,863
Pixelle Specialty Solutions LLC, L+600, 1.00% LIBOR Floor, 10/31/2024(q)		1 Month LIBOR		Forest Products & Paper		19,900			19,445			19,651
Plano Molding Company, LLC, L+700, 1.00% LIBOR Floor, 5/12/2021(p)		1 Month LIBOR		Consumer Goods: Non-Durable		6,041			6,000			5,708
Polymer Additives, Inc., L+600, 0.00% LIBOR Floor, 7/31/2025(p)(q)		1 Month LIBOR		Chemicals, Plastics & Rubber		19,900			19,541			19,154
Polymer Process Holdings, Inc., L+600, 0.00% LIBOR Floor, 5/1/2026(q)		1 Month LIBOR		Chemicals, Plastics & Rubber		25,000			24,506			24,625
Rhino Energy LLC, L+1000, 1.00% LIBOR Floor, 12/27/2020(s)		1 Month LIBOR		Metals & Mining		7,074			6,806			7,004
SEK Holding Co LLC, L+1150, 0.00% LIBOR Floor, 3/14/2022(p)(w)		1 Month LIBOR		Banking, Finance, Insurance & Real Estate		15,145			14,868			14,842
Sequoia Healthcare Management, LLC, L+1050, 1.75% LIBOR Floor, 8/21/2023(p)(r)		1 Month LIBOR		Healthcare & Pharmaceuticals		9,484			9,402			9,341
SIMR, LLC, L+900, 2.00% LIBOR Floor, 9/7/2023(p)(v)		1 Month LIBOR		Healthcare & Pharmaceuticals		14,873			14,612			14,334
Smart & Final Inc., L+675, 0.00% LIBOR Floor, 6/20/2025(k)(q)		3 Month LIBOR		Retail		10,000			9,091			9,288
Sorenson Communications, LLC, L+650, 0.00% LIBOR Floor, 4/30/2024(q)		3 Month LIBOR		Telecommunications		13,500			12,976			13,559
SOS Security Holdings LLC, L+650, 1.00% LIBOR Floor, 4/30/2025(p)(s)		3 Month LIBOR		Services: Business		17,500			17,326			17,325
Spinal USA, Inc. / Precision Medical Inc., L+950, 1.00% LIBOR Floor, 9/30/2020(p)		3 Month LIBOR		Healthcare & Pharmaceuticals		12,715			12,698			12,588
Spinal USA, Inc. / Precision Medical Inc., L+950, 1.00% LIBOR Floor, 12/31/2021(p)(w)		3 Month LIBOR		Healthcare & Pharmaceuticals		495			495			490
Sprint Industrial Holdings, LLC, L+675, 1.25% LIBOR Floor, 8/15/2019(p)(w)		3 Month LIBOR		Energy: Oil & Gas		8,019			7,992			8,019
Stats Intermediate Holdings, LLC, L+525, 0.00% LIBOR Floor, 7/12/2026(k)(q)		1 Month LIBOR		High Tech Industries		10,000			9,780			9,856
STG-Fairway Acquisitions, Inc., L+525, 1.00% LIBOR Floor, 6/30/2022(q)		1 Month LIBOR		Services: Business		3,929			3,856			3,936
STL Parent Corp., L+700, 0.00% LIBOR Floor, 12/6/2022(r)(s)		1 Month LIBOR		Capital Equipment		19,750			19,141			19,947
Teladoc, Inc., 0.50% Unfunded, 7/14/2020(i)		None		High Tech Industries		1,250			(17	)		—
Telestream Holdings Corp., L+645, 1.00% LIBOR Floor, 3/24/2022(l)(p)		6 Month LIBOR		High Tech Industries		8,350			8,235			8,183
Tenere Inc., L+1000, 1.00% LIBOR Floor, 12/23/2021(p)(r)		3 Month LIBOR		Capital Equipment		29,680			29,309			29,383
Tensar Corp., L+475, 1.00% LIBOR Floor, 7/9/2021(q)		3 Month LIBOR		Chemicals, Plastics & Rubber		12,980			12,527			12,282
The Pasha Group, L+750, 1.00% LIBOR Floor, 1/26/2023(r)		1 Month LIBOR		Transportation: Cargo		6,391			6,243			6,459
The Pay-O-Matic Corp., L+900, 0.00% LIBOR Floor, 4/5/2021(h)(p)		3 Month LIBOR		Services: Consumer		21,725			21,589			21,725
Therapure Biopharma Inc., L+875, 0.50% LIBOR Floor, 12/1/2021(i)(w)		1 Month LIBOR		Healthcare & Pharmaceuticals		15,363			15,321			15,324
Volta Charging, LLC, 12.00%, 6/19/2024		None		Media: Diversified & Production		10,000			10,000			10,000

See accompanying notes to consolidated financial statements.

8

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CĪON Investment Corporation

Consolidated Schedule of Investments (unaudited)

June 30, 2019

(in thousands)

Portfolio Company(a)		Index Rate(b)		Industry		Principal/ Par Amount/ Units(e)				Cost(d)			Fair Value(c)
Volta Charging, LLC, 0.00% Unfunded, 6/19/2021(t)		None		Media: Diversified & Production		12,000				—			—
Wok Holdings Inc., L+650, 0.00% LIBOR Floor, 3/1/2026(q)		6 Month LIBOR		Beverage, Food & Tobacco		12,968				12,797			12,546
Woodstream Corp., L+625, 1.00% LIBOR Floor, 5/29/2022(s)		3 Month LIBOR		Consumer Goods: Non-Durable		14,300				14,300			14,300
Woodstream Corp., 0.50% Unfunded, 5/29/2021		None		Consumer Goods: Non-Durable		559				—			—
Total Senior Secured First Lien Debt										1,491,564			1,452,981
Senior Secured Second Lien Debt - 30.1%
1A Smart Start LLC, L+825, 1.00% LIBOR Floor, 8/21/2022(p)(r)		1 Month LIBOR		High Tech Industries		17,800				17,529			17,355
ABG Intermediate Holdings 2 LLC, L+775, 1.00% LIBOR Floor, 9/29/2025(p)		1 Month LIBOR		Retail		9,707				9,658			9,616
Access CIG, LLC, L+775, 0.00% LIBOR Floor, 2/27/2026(r)		1 Month LIBOR		Services: Business		17,250				17,121			17,153
Albany Molecular Research, Inc., L+700, 1.00% LIBOR Floor, 8/30/2025(p)		1 Month LIBOR		Healthcare & Pharmaceuticals		10,000				9,835			10,012
ALM Media, LLC, L+800, 1.00% LIBOR Floor, 7/30/2021(p)(r)		3 Month LIBOR		Media: Advertising, Printing & Publishing		10,344				10,299			6,723
American Residential Services LLC, L+800, 1.00% LIBOR Floor, 12/31/2022(p)		1 Month LIBOR		Construction & Building		5,180				5,131			5,076
Argon Medical Devices Holdings, Inc., L+800, 0.00% LIBOR Floor, 1/23/2026(p)		1 Month LIBOR		Healthcare & Pharmaceuticals		14,400				14,328			14,220
Carestream Health, Inc., L+950, 1.00% LIBOR Floor, 6/7/2021(r)		1 Month LIBOR		Healthcare & Pharmaceuticals		10,662				10,662			10,209
Country Fresh Holdings, LLC, L+850, 1.00% LIBOR Floor, 4/29/2024		3 Month LIBOR		Beverage, Food & Tobacco		1,885				1,885			1,885
EagleTree-Carbide Acquisition Corp., L+850, 1.00% LIBOR Floor, 8/28/2025(p)(r)		3 Month LIBOR		Consumer Goods: Durable		23,000				22,718			22,540
Emerald 3 Ltd., L+700, 1.00% LIBOR Floor, 5/16/2022(i)(p)		1 Month LIBOR		Environmental Industries		3,000				2,987			2,999
Evergreen Skills Lux S.À.R.L., L+825, 1.00% LIBOR Floor, 4/28/2022(i)(r)		1 Month LIBOR		High Tech Industries		9,999				7,965			4,033
Global Tel*Link Corp., L+825, 0.00% LIBOR Floor, 11/29/2026(r)		1 Month LIBOR		Telecommunications		11,500				11,307			11,191
LSCS Holdings, Inc., L+825, 0.00% LIBOR Floor, 3/16/2026(p)		3 Month LIBOR		Services: Business		11,891				11,649			11,831
Mayfield Agency Borrower Inc., L+850, 0.00% LIBOR Floor, 3/2/2026(p)(r)(s)		1 Month LIBOR		Banking, Finance, Insurance & Real Estate		20,000				19,716			19,775
Medical Solutions Holdings, Inc., L+825, 1.00% LIBOR Floor, 6/16/2025(p)		1 Month LIBOR		Healthcare & Pharmaceuticals		10,000				9,872			9,925
MedPlast Holdings, Inc., L+775, 0.00% LIBOR Floor, 7/2/2026(s)		3 Month LIBOR		Healthcare & Pharmaceuticals		6,750				6,690			6,666
Ministry Brands, LLC, L+925, 1.00% LIBOR Floor, 6/2/2023(p)(r)		3 Month LIBOR		Services: Business		7,000				6,925			7,000
Niacet Corp., E+875, 1.00% EURIBOR Floor, 8/1/2024(i)		1 Month EURIBOR		Chemicals, Plastics & Rubber		€	7,489			7,973			8,429
Patterson Medical Supply, Inc., L+850, 1.00% LIBOR Floor, 8/28/2023(p)		3 Month LIBOR		Healthcare & Pharmaceuticals		13,500				13,412			12,488
PetroChoice Holdings, Inc., L+875, 1.00% LIBOR Floor, 8/21/2023(p)		3 Month LIBOR		Chemicals, Plastics & Rubber		15,000				14,766			14,850
PFS Holding Corp., L+725, 1.00% LIBOR Floor, 1/31/2022(q)(u)		1 Month LIBOR		Retail		4,998				4,470			562
Premiere Global Services, Inc., L+950, 1.00% LIBOR Floor, 6/6/2022(p)		3 Month LIBOR		Telecommunications		3,000				2,927			1,050
PT Intermediate Holdings III, LLC, L+800, 1.00% LIBOR Floor, 12/8/2025(r)		3 Month LIBOR		Services: Business		9,375				9,301			9,094
Securus Technologies Holdings, Inc., L+825, 1.00% LIBOR Floor, 11/1/2025(r)		3 Month LIBOR		Telecommunications		2,942				2,915			2,707
SESAC Holdco II LLC, L+725, 1.00% LIBOR Floor, 2/23/2025(r)		1 Month LIBOR		Media: Broadcasting & Subscription		250				248			248
STG-Fairway Acquisitions, Inc., L+925, 1.00% LIBOR Floor, 6/30/2023(p)(r)		1 Month LIBOR		Services: Business		10,000				9,905			9,600
TexOak Petro Holdings LLC, 8.00%, 12/29/2019(u)(v)(w)		None		Energy: Oil & Gas		8,237				2,592			—
TMK Hawk Parent, Corp., L+800, 1.00% LIBOR Floor, 8/28/2025(p)		1 Month LIBOR		Services: Business		13,393				13,105			12,991
TouchTunes Interactive Networks, Inc., L+825, 1.00% LIBOR Floor, 5/29/2022(r)		1 Month LIBOR		Hotel, Gaming & Leisure		5,226				5,193			5,226

See accompanying notes to consolidated financial statements.

9

---

CĪON Investment Corporation

Consolidated Schedule of Investments (unaudited)

June 30, 2019

(in thousands)

Portfolio Company(a)		Index Rate(b)		Industry		Principal/ Par Amount/ Units(e)			Cost(d)			Fair Value(c)
Winebow Holdings, Inc., L+750, 1.00% LIBOR Floor, 1/2/2022(p)		1 Month LIBOR		Beverage, Food & Tobacco		12,823			12,662			8,784
Zest Acquisition Corp., L+750, 1.00% LIBOR Floor, 3/13/2026(r)		1 Month LIBOR		Healthcare & Pharmaceuticals		15,000			14,866			14,138
Zywave Inc., L+900, 1.00% LIBOR Floor, 11/17/2023(p)		3 Month LIBOR		High Tech Industries		3,173			3,127			3,173
Total Senior Secured Second Lien Debt									313,739			291,549
Collateralized Securities and Structured Products - Debt - 1.4%
Deutsche Bank AG Frankfurt CRAFT 2015-2 Class Credit Linked Note, L+925, 1/16/2022(i)		3 Month LIBOR		Diversified Financials		13,405			13,405			13,305
Total Collateralized Securities and Structured Products - Debt									13,405			13,305
Collateralized Securities and Structured Products - Equity - 1.6%
APIDOS CLO XVI Subordinated Notes, 6.39% Estimated Yield, 1/19/2025(i)		(g)		Diversified Financials		9,000			3,697			2,842
CENT CLO 19 Ltd. Subordinated Notes, 37.72% Estimated Yield, 10/29/2025(i)		(g)		Diversified Financials		2,000			1,163			1,135
Galaxy XV CLO Ltd. Class A Subordinated Notes, 6.78% Estimated Yield, 4/15/2025(i)		(g)		Diversified Financials		4,000			2,306			1,838
Ivy Hill Middle Market Credit Fund VIII, Ltd. Subordinated Loan, 11.84% Estimated Yield, 2/2/2026(i)		(g)		Diversified Financials		10,000			9,433			9,599
Total Collateralized Securities and Structured Products - Equity									16,599			15,414
Equity - 4.8%
Ascent Resources - Marcellus, LLC, Common Shares(t)				Energy: Oil & Gas		511,255 Units			1,642			1,342
Ascent Resources - Marcellus, LLC, Warrants(t)				Energy: Oil & Gas		132,367 Units			13			4
Avaya Holdings Corp., Common Stock(j)(q)(t)				Telecommunications		321,260 Units			5,285			3,826
Charming Charlie LLC, Common Stock(t)(v)				Retail		30,046,243 Units			1,302			—
CHC Medical Partners, Inc., Series C Preferred Stock, 12% Dividend(f)				Healthcare & Pharmaceuticals		1,818,182 Units			4,845			4,918
Conisus Holdings, Inc., Series B Preferred Stock, 12% Dividend(f)(v)				Healthcare & Pharmaceuticals		12,677,833 Units			12,237			11,861
Conisus Holdings, Inc., Common Stock(t)(v)				Healthcare & Pharmaceuticals		4,914,556 Units			200			1,590
Country Fresh Holdings, Common Shares(t)				Beverage, Food & Tobacco		2,985 Units			5,249			5,249
David's Bridal, Inc., Common Stock(t)				Retail		32,296 Units			580			161
F+W Media, Inc., Common Stock(t)(v)				Media: Diversified & Production		31,211 Units			—			—
Independent Pet Partners Intermediate Holdings, LLC, Class A Preferred Units(t)				Retail		1,000,000 Units			1,000			1,050
Independent Pet Partners Intermediate Holdings, LLC, Warrants(t)				Retail		155,880 Units			—			9
Mooregate ITC Acquisition, LLC, Class A Units(t)				High Tech Industries		500 Units			563			204
Mount Logan Capital Inc., Common Stock(i)(j)(t)(v)				Banking, Finance, Insurance & Real Estate		7,842,273 Units			3,335			2,575
NS NWN Acquisition, LLC, Voting Units(t)				High Tech Industries		346 Units			393			668
NS NWN Acquisition, LLC, Class A Preferred Units(t)				High Tech Industries		111 Units			111			332
NSG Co-Invest (Bermuda) LP, Partnership Interests(i)(t)				Consumer Goods: Durable		1,575 Units			1,000			753
Rhino Energy LLC, Warrants(t)				Metals & Mining		170,972 Units			280			83
SIMR Parent, LLC, Class B Common Units(t)(v)				Healthcare & Pharmaceuticals		7,500,000 Units			7,500			7,423
Spinal USA, Inc. / Precision Medical Inc., Warrants(t)				Healthcare & Pharmaceuticals		9,317,237 Units			4,736			3,354
Tenere Inc., Warrant(t)				Capital Equipment		N/A			161			332
TexOak Petro Holdings LLC, Membership Interests(t)(v)				Energy: Oil & Gas		60,000 Units			—			—

See accompanying notes to consolidated financial statements.

10

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CĪON Investment Corporation

Consolidated Schedule of Investments (unaudited)

June 30, 2019

(in thousands)

Portfolio Company(a)				Industry		Principal/ Par Amount/ Units(e)		Cost(d)				Fair Value(c)
Total Equity								50,432				45,734
Short Term Investments - 3.5%(n)
First American Treasury Obligations Fund, Class Z Shares, 2.23%(o)								33,740				33,740
Total Short Term Investments								33,740				33,740
TOTAL INVESTMENTS - 191.3%								$	1,919,479			1,852,723
LIABILITIES IN EXCESS OF OTHER ASSETS - (91.3%)												(884,242		)
NET ASSETS - 100%												$	968,481

a.	All of the Company’s investments are issued by eligible U.S. portfolio companies, as defined in the Investment Company Act of 1940, as amended, or the 1940 Act, except for investments specifically identified as non-qualifying per note i. below. Unless specifically identified in note w. below, investments do not contain a paid-in-kind, or PIK, interest provision.

b.

The 1, 3, and 6 month London Interbank Offered Rate, or LIBOR, rates were 2.40%, 2.32%, and 2.20%, respectively, as of June 30, 2019.  The actual LIBOR rate for each loan listed may not be the applicable LIBOR rate as of June 30, 2019, as the loan may have been priced or repriced based on a LIBOR rate prior to or subsequent to June 30, 2019. The 1 month Euro Interbank Offered Rate, or EURIBOR, rate was (0.43%) as of June 30, 2019.

c.	Fair value determined in good faith by the Company’s board of directors (see Note 8) using significant unobservable inputs unless otherwise noted.

d.	Represents amortized cost for debt securities and cost for equity investments.

e.	Denominated in U.S. dollars unless otherwise noted.

f.	For the six months ended June 30, 2019, non-cash dividend income of $3,037 and $180 was recorded on the Company's investment in Conisus Holdings, Inc. and CHC Medical Partners, Inc., respectively.

g.

The CLO subordinated notes are considered equity positions in the CLO vehicles and are not rated. Equity investments are entitled to recurring distributions, which are generally equal to the remaining cash flow of the payments made by the underlying vehicle's securities less contractual payments to debt holders and expenses. The estimated yield indicated is based upon a current projection of the amount and timing of these recurring distributions and the estimated amount of repayment of principal upon termination. Such projections are periodically reviewed and adjusted, and the estimated yield may not ultimately be realized.

h.	As a result of an arrangement between the Company and the other lenders in the syndication, the Company is entitled to less interest than the stated interest rate of this loan, which is reflected in this schedule, in exchange for a higher payment priority.

i.

The investment or a portion thereof is not a qualifying asset under the 1940 Act. A business development company may not acquire any asset other than qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the company’s total assets as defined under Section 55 of the 1940 Act. As of June 30, 2019, 92.3% of the Company’s total assets represented qualifying assets.

j.	Fair value determined using level 1 inputs.

k.	Position or a portion thereof unsettled as of June 30, 2019.

l.	In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company may be entitled to receive additional amounts as a result of an arrangement between the Company and other lenders in the syndication in exchange for lower payment priority.

m.	In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company may be entitled to receive additional residual amounts.

n.	Short term investments represent an investment in a fund that invests in highly liquid investments with average original maturity dates of three months or less.

o.	7-day effective yield as of June 30, 2019.

p.	Investment or a portion thereof held within the Company’s wholly-owned consolidated subsidiary, 34th Street Funding, LLC, or 34th Street, and was pledged as collateral supporting the amounts outstanding under the credit facility with JPMorgan Chase Bank, National Association, or JPM, as of June 30, 2019 (see Note 7).

q.	Investment or a portion thereof held within the Company’s wholly-owned consolidated subsidiary, Flatiron Funding II, LLC, or Flatiron Funding II, and was pledged as collateral supporting the amounts outstanding under the credit facility with Citibank N.A., or Citibank, as of June 30, 2019 (see Note 7).

r.	Investment or a portion thereof held within the Company’s wholly-owned consolidated subsidiary, Murray Hill Funding II, LLC, or Murray Hill Funding II, and was pledged as collateral supporting the amounts outstanding under the repurchase agreement with UBS AG, or UBS, as of June 30, 2019 (see Note 7).

s.	Investment or a portion thereof held within the Company’s wholly-owned consolidated subsidiary, 33rd Street Funding, LLC, or 33rd Street, and was pledged as collateral supporting the amounts outstanding under the credit facility with Morgan Stanley N.A., or MS, as of June 30, 2019 (see Note 7).

t.	Non-income producing security.

u.	Investment was on non-accrual status as of June 30, 2019.

See accompanying notes to consolidated financial statements.

11

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CĪON Investment Corporation

Consolidated Schedule of Investments (unaudited)

June 30, 2019

(in thousands)

v.	Investment determined to be an affiliated investment as defined in the 1940 Act as the Company owns between 5% and 25% of the portfolio company’s outstanding voting securities but does not control the company. Fair value as of December 31, 2018 and June 30, 2019, along with transactions during the six months ended June 30, 2019 in these affiliated investments are as follows:

						Six Months Ended June 30, 2019																Six Months Ended June 30, 2019
Non-Controlled, Affiliated Investments		Fair Value at December 31, 2018				Gross Additions (Cost)(1)				Gross Reductions (Cost)(2)				Net Unrealized (Loss) Gain				Fair Value at June 30, 2019				Net Realized Gain (Loss)				Interest Income(3)				Dividend Income
Charming Charlie, LLC
First Lien Term Loan B1		$	1,021			$	—			$	—			$	(1,021	)		$	—			$	—			$	—			$	—
First Lien Term Loan B2		1,249				—				—				(1,249		)		—				—				—				—
Vendor Payment Financing		157				—				—				—				157				—				39				—
Common Stock		—				—				—				—				—				—				—				—
Conisus Holdings, Inc.
Series B Preferred Stock		10,903				3,037				—				(2,079		)		11,861				—				—				3,037
Common Stock		197				—				—				1,393				1,590				—				—				—
F+W Media, Inc.
First Lien Term Loan B-1		1,137				51				—				(762		)		426				—				50				—
First Lien Term Loan B-2		161				—				—				(161		)		—				—				—				—
First Lien DIP Term Loan		—				504				—				101				605				—				72				—
Common Stock		—				—				—				—				—				—				—				—
Mount Logan Capital Inc.
Common Stock		2,645				—				—				(70		)		2,575				—				—				—
SIMR, LLC
First Lien Term Loan		14,757				23				(431		)		(15		)		14,334				—				912				—
SIMR Parent, LLC
Class B Common Units		7,382				—				—				41				7,423				—				—				—
Petroflow Energy Corp.
First Lien Term Loan		2,363				—				(2,519		)		326				170				—				(91		)		—
TexOak Petro Holdings LLC
Second Lien Term Loan		—				—				—				—				—				—				—				—
Membership Interests		—				—				—				—				—				—				—				—
Totals		$	41,972			$	3,615			$	(2,950	)		$	(3,496	)		$	39,141			$	—			$	982			$	3,037

(1)	Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest, the amortization of unearned income, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.

(2)	Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.

(3)	Includes PIK interest income.

See accompanying notes to consolidated financial statements.

12

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CĪON Investment Corporation

Consolidated Schedule of Investments (unaudited)

June 30, 2019

(in thousands)

w.	For the six months ended June 30, 2019, the following investments contain a PIK interest provision whereby the issuer has either the option or the obligation to make interest payments with the issuance of additional securities:

				Interest Rate						Interest Amount
Portfolio Company		Investment Type		Cash		PIK		All-in-Rate		Cash				PIK				Total
American Clinical Solutions LLC(u)		Senior Secured First Lien Debt		10.50%		2.00%		12.50%		$	—			$	—			$	—
Charming Charlie LLC(u)		Senior Secured First Lien Debt		7.58%		5.00%		12.58%		$	—			$	—			$	—
Charming Charlie LLC(u)		Senior Secured First Lien Debt		3.58%		9.00%		12.58%		$	—			$	—			$	—
CHC Solutions Inc.		Senior Secured First Lien Debt		8.00%		4.00%		12.00%		$	288			$	144			$	432
Dayton Superior Corp.(u)		Senior Secured First Lien Debt		10.33%		6.00%		16.33%		$	346			$	94			$	440
F+W Media, Inc.(u)		Senior Secured First Lien Debt		—		12.41%		12.41%		$	—			$	—			$	—
F+W Media, Inc.(u)		Senior Secured First Lien Debt		—		8.91%		8.91%		$	—			$	51			$	51
F+W Media, Inc.		Senior Secured First Lien Debt		—		12.38%		12.38%		$	—			$	13			$	13
Petroflow Energy Corp.(u)		Senior Secured First Lien Debt		3.00%		7.44%		10.44%		$	—			$	—			$	—
SEK Holding Co LLC		Senior Secured First Lien Debt		10.39%		3.50%		13.89%		$	477			$	160			$	637
Spinal USA, Inc. / Precision Medical Inc.		Senior Secured First Lien Debt		—		11.83%		11.83%		$	—			$	15			$	15
Sprint Industrial Holdings, LLC		Senior Secured First Lien Debt		8.35%		1.00%		9.35%		$	259			$	101			$	360
TexOak Petro Holdings LLC(u)		Senior Secured Second Lien Debt		—		8.00%		8.00%		$	—			$	—			$	—
Therapure Biopharma Inc.(x)		Senior Secured First Lien Debt		11.19%		—		11.19%		$	866			$	363			$	1,229

x.	Default interest was paid-in-kind.

See accompanying notes to consolidated financial statements.

13

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CĪON Investment Corporation

Consolidated Schedule of Investments

December 31, 2018

(in thousands)

Portfolio Company(a)		Index Rate(b)		Industry		Principal/ Par Amount/ Units(e)				Cost(d)				Fair Value(c)
Senior Secured First Lien Debt - 149.4%
Academy, Ltd., L+400, 1.00% LIBOR Floor, 7/1/2022(q)		3 Month LIBOR		Retail		$	14,411			$	12,124			$	9,718
Achilles Acquisition LLC, L+400, 0.00% LIBOR Floor, 10/11/2025		1 Month LIBOR		High Tech Industries		739				739				730
Achilles Acquisition LLC, 1.00% Unfunded, 1/11/2020		None		High Tech Industries		43				—				(1		)
Adams Publishing Group, LLC, L+750, 1.00% LIBOR Floor, 7/2/2023(p)(r)		3 Month LIBOR		Media: Advertising, Printing & Publishing		17,034				16,854				16,864
Adams Publishing Group, LLC, 0.38% Unfunded, 7/2/2020(p)		None		Media: Advertising, Printing & Publishing		2,069				—				(21		)
Adapt Laser Acquisition, Inc., L+800, 1.00% LIBOR Floor, 12/31/2023		3 Month LIBOR		Capital Equipment		12,000				12,000				12,000
Adapt Laser Acquisition, Inc., L+800, 1.00% LIBOR Floor, 12/31/2023		3 Month LIBOR		Capital Equipment		500				500				500
Adapt Laser Acquisition, Inc., 0.50% Unfunded, 12/31/2023		None		Capital Equipment		1,500				—				—
Aegis Toxicology Sciences Corp., L+550, 1.00% LIBOR Floor, 5/9/2025(q)		3 Month LIBOR		Healthcare & Pharmaceuticals		9,975				9,780				9,526
AIS Holdco, LLC, L+500, 0.00% LIBOR Floor, 8/15/2025(q)		3 Month LIBOR		Banking, Finance, Insurance & Real Estate		5,521				5,451				5,438
Alchemy US Holdco 1, LLC, L+550, 10/10/2025(q)		1 Month LIBOR		Construction & Building		8,000				7,882				7,680
Allen Media, LLC, L+650, 1.00% LIBOR Floor, 8/30/2023(p)(r)(s)		3 Month LIBOR		Media: Diversified & Production		80,000				78,115				77,700
ALM Media, LLC, L+450, 1.00% LIBOR Floor, 7/31/2020(q)		3 Month LIBOR		Media: Advertising, Printing & Publishing		13,272				12,459				11,912
American Clinical Solutions LLC, 12.50%, 6/11/2020(u)(w)		None		Healthcare & Pharmaceuticals		9,293				8,968				7,435
American Media, Inc., L+800, 1.00% LIBOR Floor, 8/24/2020(p)		3 Month LIBOR		Media: Advertising, Printing & Publishing		18,503				18,451				19,428
American Media, Inc., 0.50% Unfunded, 8/24/2020		None		Media: Advertising, Printing & Publishing		1,778				(22		)		89
American Teleconferencing Services, Ltd., L+650, 1.00% LIBOR Floor, 12/8/2021(p)(q)(r)(s)		3 Month LIBOR		Telecommunications		20,152				18,779				15,114
Analogic Corp., L+600, 1.00% LIBOR Floor, 6/21/2024(s)		1 Month LIBOR		Healthcare & Pharmaceuticals		29,925				29,368				29,626
AP Exhaust Acquisition, LLC, L+500, 1.00% LIBOR Floor, 5/10/2024(q)(r)		3 Month LIBOR		Automotive		10,544				9,955				9,595
APCO Holdings, LLC, L+550, 0.00% LIBOR Floor, 6/9/2025(q)		1 Month LIBOR		Banking, Finance, Insurance & Real Estate		11,427				11,317				11,313
Ascent Resources - Marcellus, LLC, L+650, 1.00% LIBOR Floor, 3/30/2023		1 Month LIBOR		Energy: Oil & Gas		712				712				714
Associated Asphalt Partners, LLC, L+525, 1.00% LIBOR Floor, 4/5/2024(q)		1 Month LIBOR		Construction & Building		10,833				10,666				10,494
Bi-Lo, LLC, L+800, 1.00% LIBOR Floor, 5/31/2024(k)(r)		3 Month LIBOR		Retail		2,000				1,950				1,917
Cadence Aerospace, LLC, L+650, 1.00% LIBOR Floor, 11/14/2023(r)(s)		3 Month LIBOR		Aerospace & Defense		25,960				25,732				25,440
Canam Construction Inc., L+500, 1.00% LIBOR Floor, 7/1/2024		1 Month LIBOR		Construction & Building		4,975				4,963				4,875
Cardinal US Holdings, Inc., L+500, 1.00% LIBOR Floor, 7/31/2023(q)		3 Month LIBOR		Services: Business		8,394				7,905				8,268
CB URS Holdings Corp., L+525, 1.00% LIBOR Floor, 9/1/2024(q)(s)		1 Month LIBOR		Transportation: Cargo		14,437				14,371				14,149
Central Security Group, Inc., L+563, 1.00% LIBOR Floor, 10/6/2021(q)(s)		1 Month LIBOR		Services: Consumer		24,660				24,682				24,167
Charming Charlie LLC, L+1000, 1.00% LIBOR Floor, 4/24/2023(u)(v)(w)		3 Month LIBOR		Retail		3,288				1,912				1,249
Charming Charlie LLC, L+1000, 1.00% LIBOR Floor, 4/24/2023(u)(v)(w)		3 Month LIBOR		Retail		2,686				2,619				1,021
Charming Charlie LLC, 20.00%, 5/15/2019(v)		None		Retail		157				157				157
Charming Charlie LLC, 2.50% Unfunded, 5/15/2019(v)		None		Retail		1,938				—				—
CHC Solutions Inc., 12.00%, 7/20/2023(w)		None		Healthcare & Pharmaceuticals		7,057				7,057				7,057
CircusTrix Holdings, LLC, L+550, 1.00% LIBOR Floor, 12/16/2021(r)(s)		1 Month LIBOR		Hotel, Gaming & Leisure		25,900				25,609				25,382
CircusTrix Holdings, LLC, 1.00% Unfunded, 12/27/2019		None		Hotel, Gaming & Leisure		5,573				—				(111		)

See accompanying notes to consolidated financial statements.

14

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CĪON Investment Corporation

Consolidated Schedule of Investments

December 31, 2018

(in thousands)

Portfolio Company(a)		Index Rate(b)		Industry		Principal/ Par Amount/ Units(e)				Cost(d)			Fair Value(c)
Confie Seguros Holding II Co., L+475, 1.00% LIBOR Floor, 4/16/2022(q)		3 Month LIBOR		Banking, Finance, Insurance & Real Estate		15,371				15,285			15,227
Country Fresh Holdings, LLC, L+500, 1.00% LIBOR Floor, 3/31/2023(s)		3 Month LIBOR		Beverage, Food & Tobacco		9,859				9,716			8,133
Covenant Surgical Partners, Inc., L+450, 0.00% LIBOR Floor, 10/4/2024(q)		3 Month LIBOR		Healthcare & Pharmaceuticals		917				915			903
Crown Subsea Communications Holdings, Inc., L+600, 0.00% LIBOR Floor, 11/2/2025(q)		1 Month LIBOR		Capital Equipment		8,000				7,843			7,720
David's Bridal, Inc., L+400, 1.25% LIBOR Floor, 10/11/2019(q)(u)		1 Month LIBOR		Retail		3,406				3,137			1,822
Dayton Superior Corp., L+1400, 1.00% LIBOR Floor, 11/15/2021(q)(w)		3 Month LIBOR		Construction & Building		6,398				5,929			5,358
DBRS, Inc., L+525, 1.00% LIBOR Floor, 3/4/2022(i)(q)		3 Month LIBOR		Services: Business		5,846				5,700			5,803
Del Frisco's Restaurant Group, Inc., L+600, 0.00% LIBOR Floor, 6/27/2025(i)(p)(q)		1 Month LIBOR		Retail		9,975				9,911			9,227
Deluxe Entertainment Services Group Inc., L+550, 1.00% LIBOR Floor, 2/28/2020(q)		3 Month LIBOR		Media: Diversified & Production		16,071				16,014			14,223
DFC Global Facility Borrower II LLC, L+1075, 1.00% LIBOR Floor, 9/27/2022		1 Month LIBOR		Services: Consumer		24,683				24,570			24,683
DFC Global Facility Borrower II LLC, 0.50% Unfunded, 9/27/2019		None		Services: Consumer		5,317				—			—
DMT Solutions Global Corp., L+700, 0.00% LIBOR Floor, 7/2/2024(q)(s)		3 Month LIBOR		Services: Business		19,500				18,955			18,720
Eagle Family Foods Group LLC, L+650, 1.00% LIBOR Floor, 6/14/2024(s)		3 Month LIBOR		Beverage, Food & Tobacco		14,925				14,615			14,776
Eastman Kodak Company, L+625, 1.00% LIBOR Floor, 9/3/2019(i)(q)		3 Month LIBOR		Consumer Goods: Durable		1,965				1,963			1,859
Elemica, Inc., L+700, 1.00% LIBOR Floor, 7/7/2021(p)(r)		1 Month LIBOR		High Tech Industries		17,063				16,810			16,892
Elemica, Inc., 0.50% Unfunded, 7/7/2021		None		High Tech Industries		2,500				(32	)		(25	)
Emmis Operating Company, L+750, 1.00% LIBOR Floor, 4/18/2019(q)		1 Month LIBOR		Media: Broadcasting & Subscription		1,364				1,339			1,337
Entertainment Studios P&A LLC, 6.22%, 5/18/2037(m)		None		Media: Diversified & Production		17,465				17,315			17,115
Entertainment Studios P&A LLC, 5.00%, 5/18/2037(m)		None		Media: Diversified & Production		—				—			2,864
EnTrans International, LLC, L+600, 0.00% LIBOR Floor, 11/1/2024(q)(s)		1 Month LIBOR		Capital Equipment		30,000				29,704			29,850
Episerver Inc., E+600, 0.00% EURIBOR Floor, 10/9/2024		1 Month EURIBOR		High Tech Industries		€	13,077			14,700			14,661
ES Chappaquiddick LLC, 10.00%, 5/18/2022		None		Media: Diversified & Production		1,076				1,076			1,103
Evergreen Skills Lux S.À.R.L., L+475, 1.00% LIBOR Floor, 4/28/2021(i)(q)		1 Month LIBOR		High Tech Industries		10,183				9,729			8,283
F+W Media, Inc., L+650, 1.50% LIBOR Floor, 5/24/2022(v)(w)		1 Month LIBOR		Media: Diversified & Production		1,117				1,117			1,137
F+W Media, Inc., L+1000, 1.50% LIBOR Floor, 5/24/2022(p)(u)(v)(w)		1 Month LIBOR		Media: Diversified & Production		3,058				2,759			161
Flavors Holdings Inc., L+575, 1.00% LIBOR Floor, 4/3/2020(p)		3 Month LIBOR		Consumer Goods: Non-Durable		7,967				7,485			7,410
Foundation Consumer Healthcare, LLC, L+650, 1.00% LIBOR Floor, 11/2/2023(p)(r)(s)		3 Month LIBOR		Healthcare & Pharmaceuticals		41,121				40,858			41,121
Foundation Consumer Healthcare, LLC, 0.50% Unfunded, 11/2/2023		None		Healthcare & Pharmaceuticals		4,211				(26	)		—
Genesis Healthcare, Inc., L+600, 0.50% LIBOR Floor, 3/6/2023(i)(p)(s)		1 Month LIBOR		Healthcare & Pharmaceuticals		35,000				34,695			34,650
Geo Parent Corp., L+550, 0.00% LIBOR Floor, 12/19/2025(k)		2 Month LIBOR		Services: Business		15,000				14,850			14,925
Global Tel*Link Corp., L+425, 0.00% LIBOR Floor, 11/29/2025(q)		3 Month LIBOR		Telecommunications		4,000				3,980			3,895
Harland Clarke Holdings Corp., L+475, 1.00% LIBOR Floor, 11/3/2023(q)(s)		3 Month LIBOR		Services: Business		14,022				13,964			12,602
Healogics, Inc., L+425, 1.00% LIBOR Floor, 7/1/2021(q)		3 Month LIBOR		Healthcare & Pharmaceuticals		4,799				4,608			4,352
Homer City Generation, L.P., L+1100, 1.00% LIBOR Floor, 4/5/2023(p)		1 Month LIBOR		Energy: Oil & Gas		9,151				8,769			8,785
Hummel Station LLC, L+600, 1.00% LIBOR Floor, 10/27/2022(q)		3 Month LIBOR		Energy: Oil & Gas		9,860				9,457			9,515

See accompanying notes to consolidated financial statements.

15

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CĪON Investment Corporation

Consolidated Schedule of Investments

December 31, 2018

(in thousands)

Portfolio Company(a)		Index Rate(b)		Industry		Principal/ Par Amount/ Units(e)				Cost(d)			Fair Value(c)
Infinity Sales Group, LLC, L+1050, 1.00% LIBOR Floor, 11/23/2020(p)		3 Month LIBOR		Services: Business		7,873				7,517			7,676
InfoGroup Inc., L+500, 1.00% LIBOR Floor, 4/3/2023(q)(r)(s)		3 Month LIBOR		Media: Advertising, Printing & Publishing		15,918				15,904			15,759
Instant Web, LLC, L+650, 0.00% LIBOR Floor, 12/15/2022(p)(r)(s)		1 Month LIBOR		Media: Advertising, Printing & Publishing		39,189				39,098			38,797
Instant Web, LLC, 0.50% Unfunded, 12/15/2022		None		Media: Advertising, Printing & Publishing		2,704				—			(27	)
Intermedia Holdings, Inc., L+600, 1.00% LIBOR Floor, 7/21/2025(q)		1 Month LIBOR		High Tech Industries		12,500				12,383			12,344
International Seaways, Inc., L+600, 1.00% LIBOR Floor, 6/22/2022(i)(q)		1 Month LIBOR		Transportation: Cargo		9,499				9,356			9,404
Isagenix International, LLC, L+575, 1.00% LIBOR Floor, 6/14/2025(q)		3 Month LIBOR		Beverage, Food & Tobacco		14,625				14,488			14,040
Island Medical Management Holdings, LLC, L+650, 1.00% LIBOR Floor, 9/1/2022(r)		1 Month LIBOR		Healthcare & Pharmaceuticals		11,953				11,833			10,996
ITC Service Group Acquisition LLC, L+950, 0.50% LIBOR Floor, 5/26/2021(l)(p)		1 Month LIBOR		High Tech Industries		11,250				11,119			11,025
Jab Wireless, Inc., L+800, 0.00% LIBOR Floor, 5/2/2023(s)		1 Month LIBOR		Telecommunications		19,850				19,850			19,850
Jackson Hewitt Tax Service Inc., L+625, 0.00% LIBOR Floor, 5/30/2023(s)		1 Month LIBOR		Services: Consumer		17,888				17,888			17,888
JP Intermediate B, LLC, L+550, 1.00% LIBOR Floor, 11/20/2025(q)		3 Month LIBOR		Beverage, Food & Tobacco		15,000				14,852			14,438
Key Surgical LLC, L+475, 1.00% LIBOR Floor, 6/1/2023		3 Month LIBOR		Healthcare & Pharmaceuticals		997				979			979
KLO Intermediate Holdings, LLC, L+775, 1.50% LIBOR Floor, 4/7/2022(r)		1 Month LIBOR		Chemicals, Plastics & Rubber		7,122				7,059			6,694
KLO Intermediate Holdings, LLC, L+775, 1.50% LIBOR Floor, 4/7/2022(r)		1 Month LIBOR		Chemicals, Plastics & Rubber		4,123				4,087			3,876
KNB Holdings Corp., L+550, 1.00% LIBOR Floor, 4/26/2024(q)(s)		3 Month LIBOR		Consumer Goods: Durable		13,513				13,294			13,175
Labvantage Solutions Inc., L+750, 1.00% LIBOR Floor, 12/29/2020(r)		1 Month LIBOR		High Tech Industries		4,078				4,056			4,037
Labvantage Solutions Ltd., E+750, 1.00% EURIBOR Floor, 12/29/2020(i)		1 Month EURIBOR		High Tech Industries		€	4,065			4,546			4,616
Lannett Company, Inc., L+538, 1.00% LIBOR Floor, 11/25/2022(i)(q)		1 Month LIBOR		Healthcare & Pharmaceuticals		6,974				6,876			5,754
LD Intermediate Holdings, Inc., L+588, 1.00% LIBOR Floor, 12/9/2022(q)		3 Month LIBOR		High Tech Industries		4,954				4,619			4,496
Lift Brands, Inc., L+700, 1.00% LIBOR Floor, 4/16/2023(p)(r)(s)		3 Month LIBOR		Services: Consumer		45,513				44,641			44,375
Lift Brands, Inc., 1.00% Unfunded, 4/16/2023		None		Services: Consumer		4,150				—			(104	)
Logix Holding Company, LLC, L+575, 1.00% LIBOR Floor, 12/22/2024(q)		1 Month LIBOR		Telecommunications		4,988				4,942			4,950
Longview Power, LLC, L+600, 1.00% LIBOR Floor, 4/13/2021(p)(r)		3 Month LIBOR		Energy: Oil & Gas		14,923				13,057			12,647
LTCG Holdings Corp., L+500, 1.00% LIBOR Floor, 6/6/2020(q)		1 Month LIBOR		Services: Business		5,911				5,727			5,837
Mimeo.com, Inc., L+700, 1.00% LIBOR Floor, 12/21/2023(p)(s)		3 Month LIBOR		Services: Business		43,000				43,000			43,000
Mimeo.com, Inc., 0.25% Unfunded, 12/21/2020		None		Services: Business		10,000				—			—
Mimeo.com, Inc., 1.00% Unfunded, 12/21/2023		None		Services: Business		3,000				—			—
Ministry Brands, LLC, L+400, 1.00% LIBOR Floor, 12/2/2022(r)		1 Month LIBOR		Services: Business		11,992				11,935			11,992
Ministry Brands, LLC, L+100, 1.00% LIBOR Floor Unfunded, 10/18/2020		3 Month LIBOR		Services: Business		2,924				—			—
Moss Holding Company, L+675, 1.00% LIBOR Floor, 4/17/2023(p)(r)		3 Month LIBOR		Services: Business		18,687				18,422			18,407
Moss Holding Company, 0.50% Unfunded, 4/17/2023		None		Services: Business		2,232				—			(33	)
Moxie Patriot LLC, L+575, 1.00% LIBOR Floor, 12/19/2020(q)		3 Month LIBOR		Energy: Oil & Gas		9,901				9,886			9,703
MRO Holdings, Inc., L+475, 1.00% LIBOR Floor, 10/25/2023(q)		3 Month LIBOR		Aerospace & Defense		4,445				4,408			4,412
MRP Generation Holdings, LLC, L+700, 1.00% LIBOR Floor, 10/18/2022(q)		3 Month LIBOR		Energy: Oil & Gas		2,214				2,180			2,137
Murray Energy Corp., L+725, 1.00% LIBOR Floor, 10/17/2022(q)		3 Month LIBOR		Metals & Mining		3,592				3,543			3,038

See accompanying notes to consolidated financial statements.

16

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CĪON Investment Corporation

Consolidated Schedule of Investments

December 31, 2018

(in thousands)

Portfolio Company(a)		Index Rate(b)		Industry		Principal/ Par Amount/ Units(e)			Cost(d)			Fair Value(c)
NewsCycle Solutions, Inc., L+700, 1.00% LIBOR Floor, 12/29/2022(r)(s)		1 Month LIBOR		Media: Advertising, Printing & Publishing		20,884			20,698			20,466
One Call Corp., L+525, 1.00% LIBOR Floor, 11/25/2022(q)		1 Month LIBOR		Healthcare & Pharmaceuticals		8,012			7,579			7,151
Orbcomm Inc., 8.00%, 4/1/2024(p)		None		Telecommunications		9,237			9,237			9,557
OTG Management, LLC, L+700, 1.00% LIBOR Floor, 8/26/2021		3 Month LIBOR		Beverage, Food & Tobacco		267			221			250
OTG Management, LLC, 1.00% Unfunded, 4/10/2020		None		Beverage, Food & Tobacco		514			—			(33	)
P.F. Chang's China Bistro, Inc., L+500, 1.00% LIBOR Floor, 9/1/2022(q)		3 Month LIBOR		Beverage, Food & Tobacco		14,837			14,545			14,837
PDI TA Holdings, Inc., L+450, 1.00% LIBOR Floor, 10/24/2024		3 Month LIBOR		High Tech Industries		1,999			1,970			1,989
PDI TA Holdings, Inc., L+450, 1.00% LIBOR Floor, 10/24/2024		3 Month LIBOR		High Tech Industries		877			878			873
PDI TA Holdings, Inc., 0.50% Unfunded, 10/24/2019		None		High Tech Industries		104			—			(1	)
Petroflow Energy Corp., L+800, 1.00% LIBOR Floor, 6/29/2019(p)(u)(v)(w)		1 Month LIBOR		Energy: Oil & Gas		3,068			2,734			2,363
PFS Holding Corp., L+350, 1.00% LIBOR Floor, 1/31/2021		1 Month LIBOR		Retail		3,129			2,486			1,721
PH Beauty Holdings III. Inc., L+500, 0.00% LIBOR Floor, 9/28/2025(q)		1 Month LIBOR		Consumer Goods: Non-Durable		9,975			9,877			9,626
Photonis Technologies SAS, L+750, 1.00% LIBOR Floor, 9/18/2019(i)(q)		3 Month LIBOR		Aerospace & Defense		6,397			6,060			5,965
Pixelle Specialty Solutions LLC, L+600, 1.00% LIBOR Floor, 10/31/2024(q)		1 Month LIBOR		Forest Products & Paper		20,000			19,511			19,525
Plano Molding Company, LLC, L+750, 1.00% LIBOR Floor, 5/12/2021(p)		1 Month LIBOR		Consumer Goods: Non-Durable		6,071			6,020			5,570
Polymer Additives, Inc., L+600, 0.00% LIBOR Floor, 7/31/2025(p)(q)		1 Month LIBOR		Chemicals, Plastics & Rubber		20,000			19,619			18,500
Rhino Energy LLC, L+1000, 1.00% LIBOR Floor, 12/27/2020(s)		1 Month LIBOR		Metals & Mining		7,262			6,909			7,189
Sequoia Healthcare Management, LLC, L+850, 1.75% LIBOR Floor, 8/21/2023(p)(r)		1 Month LIBOR		Healthcare & Pharmaceuticals		9,851			9,758			9,753
SG Acquisition, Inc., L+500, 1.00% LIBOR Floor, 3/29/2024(q)		3 Month LIBOR		Banking, Finance, Insurance & Real Estate		3,495			3,469			3,482
Shift PPC LLC, L+450, 1.00% LIBOR Floor, 12/22/2021(r)		6 Month LIBOR		High Tech Industries		4,191			4,119			4,191
SIMR, LLC, L+900, 2.00% LIBOR Floor, 9/7/2023(p)(v)		1 Month LIBOR		Healthcare & Pharmaceuticals		15,312			15,020			14,757
Spinal USA, Inc. / Precision Medical Inc., L+950, 1.00% LIBOR Floor, 9/30/2020(p)		3 Month LIBOR		Healthcare & Pharmaceuticals		12,776			12,745			12,648
Spinal USA, Inc. / Precision Medical Inc., L+950, 1.00% LIBOR Floor, 12/31/2021(p)(w)		3 Month LIBOR		Healthcare & Pharmaceuticals		481			480			476
Sprint Industrial Holdings, LLC, L+575, 1.25% LIBOR Floor, 5/14/2019(p)		3 Month LIBOR		Energy: Oil & Gas		7,940			7,853			7,582
STG-Fairway Acquisitions, Inc., L+525, 1.00% LIBOR Floor, 6/30/2022(q)		3 Month LIBOR		Services: Business		3,929			3,845			3,889
STL Parent Corp., L+700, 0.00% LIBOR Floor, 12/6/2022(r)(s)		1 Month LIBOR		Capital Equipment		20,000			19,306			19,400
Studio Movie Grill Holdings, LLC, L+725, 1.00% LIBOR Floor, 9/30/2020(f)(p)		3 Month LIBOR		Hotel, Gaming & Leisure		23,418			23,352			23,418
Teladoc, Inc., 0.50% Unfunded, 7/14/2020		None		High Tech Industries		1,250			(25	)		—
Telestream Holdings Corp., L+645, 1.00% LIBOR Floor, 3/24/2022(l)(p)		3 Month LIBOR		High Tech Industries		8,460			8,322			8,207
Tenere Inc., L+1000, 1.00% LIBOR Floor, 12/23/2021(p)(r)		3 Month LIBOR		Capital Equipment		30,080			29,630			29,328
Tensar Corp., L+475, 1.00% LIBOR Floor, 7/9/2021(q)		3 Month LIBOR		Chemicals, Plastics & Rubber		12,980			12,426			12,753
The Pasha Group, L+750, 1.00% LIBOR Floor, 1/26/2023(r)		1 Month LIBOR		Transportation: Cargo		7,018			6,836			7,061
The Pay-O-Matic Corp., L+900, 0.00% LIBOR Floor, 4/5/2021(h)(p)		3 Month LIBOR		Services: Consumer		22,425			22,241			22,201
TherapeuticsMD, Inc., L+775, 1.50% LIBOR Floor, 5/1/2023(i)(s)		1 Month LIBOR		Healthcare & Pharmaceuticals		15,000			14,865			14,850
TherapeuticsMD, Inc., 0.00% Unfunded, 12/31/2019(i)(t)		None		Healthcare & Pharmaceuticals		10,000			(88	)		(100	)

See accompanying notes to consolidated financial statements.

17

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CĪON Investment Corporation

Consolidated Schedule of Investments

December 31, 2018

(in thousands)

Portfolio Company(a)		Index Rate(b)		Industry		Principal/ Par Amount/ Units(e)				Cost(d)			Fair Value(c)
TherapeuticsMD, Inc., 0.00% Unfunded, 5/31/2019(i)(t)		None		Healthcare & Pharmaceuticals		15,000				(132	)		(150	)
Therapure Biopharma Inc., L+875, 0.50% LIBOR Floor, 12/1/2021(i)		1 Month LIBOR		Healthcare & Pharmaceuticals		15,000				14,952			14,625
Vertex Aerospace Services Corp., L+475, 0.00% LIBOR Floor, 6/29/2025(q)		1 Month LIBOR		Aerospace & Defense		9,913				9,864			9,838
Woodstream Corp., L+625, 1.00% LIBOR Floor, 5/29/2022(s)		3 Month LIBOR		Consumer Goods: Non-Durable		14,542				14,542			14,542
Woodstream Corp., 0.50% Unfunded, 5/29/2021		None		Consumer Goods: Non-Durable		559				—			—
Total Senior Secured First Lien Debt										1,492,034			1,462,989
Senior Secured Second Lien Debt - 33.0%
1A Smart Start LLC, L+825, 1.00% LIBOR Floor, 8/21/2022(p)(r)		1 Month LIBOR		High Tech Industries		17,800				17,494			17,266
ABG Intermediate Holdings 2 LLC, L+775, 1.00% LIBOR Floor, 9/29/2025(p)		1 Month LIBOR		Retail		9,897				9,846			9,749
Access CIG, LLC, L+775, 0.00% LIBOR Floor, 2/27/2026(r)		3 Month LIBOR		Services: Business		17,250				17,116			17,099
ALM Media, LLC, L+800, 1.00% LIBOR Floor, 7/30/2021(p)(r)		3 Month LIBOR		Media: Advertising, Printing & Publishing		10,344				10,279			8,353
American Residential Services LLC, L+800, 1.00% LIBOR Floor, 12/31/2022(p)		1 Month LIBOR		Construction & Building		5,180				5,150			5,076
Argon Medical Devices Holdings, Inc., L+800, 0.00% LIBOR Floor, 1/23/2026(p)		1 Month LIBOR		Healthcare & Pharmaceuticals		14,400				14,329			14,256
Carestream Health, Inc., L+950, 1.00% LIBOR Floor, 6/7/2021(r)		1 Month LIBOR		Healthcare & Pharmaceuticals		10,662				10,662			10,502
Drew Marine Group, Inc., L+700, 1.00% LIBOR Floor, 5/19/2021(i)(p)		1 Month LIBOR		Chemicals, Plastics & Rubber		9,500				9,474			9,512
EagleTree-Carbide Acquisition Corp., L+850, 1.00% LIBOR Floor, 8/28/2025(r)		3 Month LIBOR		Consumer Goods: Durable		20,000				19,734			20,000
Emerald 3 Ltd., L+700, 1.00% LIBOR Floor, 5/16/2022(i)(p)		3 Month LIBOR		Environmental Industries		3,000				2,985			2,955
Evergreen Skills Lux S.À.R.L., L+825, 1.00% LIBOR Floor, 4/28/2022(i)(r)		1 Month LIBOR		High Tech Industries		9,999				7,709			5,550
Flexera Software LLC, L+725, 1.00% LIBOR Floor, 2/26/2026(r)		1 Month LIBOR		High Tech Industries		3,462				3,446			3,423
Global Tel*Link Corp., L+825, 0.00% LIBOR Floor, 11/29/2026(r)		3 Month LIBOR		Telecommunications		11,500				11,300			11,270
GOBP Holdings, Inc., L+725, 0.00% LIBOR Floor, 10/22/2026(r)		3 Month LIBOR		Retail		5,000				4,950			4,969
LSCS Holdings, Inc., L+825, 0.00% LIBOR Floor, 3/16/2026(p)		1 Month LIBOR		Services: Business		11,891				11,640			11,831
Mayfield Agency Borrower Inc., L+850, 0.00% LIBOR Floor, 3/2/2026(p)(r)(s)		1 Month LIBOR		Banking, Finance, Insurance & Real Estate		20,000				19,710			19,812
Medical Solutions Holdings, Inc., L+825, 1.00% LIBOR Floor, 6/16/2025(p)		1 Month LIBOR		Healthcare & Pharmaceuticals		10,000				9,867			9,925
MedPlast Holdings, Inc., L+775, 0.00% LIBOR Floor, 7/2/2026(s)		3 Month LIBOR		Healthcare & Pharmaceuticals		6,750				6,687			6,581
Ministry Brands, LLC, L+925, 1.00% LIBOR Floor, 6/2/2023(p)(r)		1 Month LIBOR		Services: Business		7,000				6,918			7,000
Niacet Corp., E+875, 1.00% EURIBOR Floor, 8/1/2024(i)		1 Month EURIBOR		Chemicals, Plastics & Rubber		€	7,489			7,955			8,503
Patterson Medical Supply, Inc., L+850, 1.00% LIBOR Floor, 8/28/2023(p)		3 Month LIBOR		Healthcare & Pharmaceuticals		13,500				13,404			12,352
PDI TA Holdings, Inc., L+850, 1.00% LIBOR Floor, 10/24/2025		3 Month LIBOR		High Tech Industries		2,267				2,224			2,245
PDI TA Holdings, Inc., 0.50% Unfunded, 10/24/2019		None		High Tech Industries		133				—			(1	)
PetroChoice Holdings, Inc., L+875, 1.00% LIBOR Floor, 8/21/2023(p)		3 Month LIBOR		Chemicals, Plastics & Rubber		15,000				14,742			14,737
PFS Holding Corp., L+725, 1.00% LIBOR Floor, 1/31/2022(q)(u)		1 Month LIBOR		Retail		4,998				4,716			900
Premiere Global Services, Inc., L+950, 1.00% LIBOR Floor, 6/6/2022(p)		3 Month LIBOR		Telecommunications		3,000				2,917			2,100
PT Intermediate Holdings III, LLC, L+800, 1.00% LIBOR Floor, 12/8/2025(r)		3 Month LIBOR		Services: Business		9,375				9,295			9,281
Securus Technologies Holdings, Inc., L+825, 1.00% LIBOR Floor, 11/1/2025(r)		1 Month LIBOR		Telecommunications		2,942				2,914			2,847

See accompanying notes to consolidated financial statements.

18

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CĪON Investment Corporation

Consolidated Schedule of Investments

December 31, 2018

(in thousands)

Portfolio Company(a)		Index Rate(b)		Industry		Principal/ Par Amount/ Units(e)			Cost(d)			Fair Value(c)
SESAC Holdco II LLC, L+725, 1.00% LIBOR Floor, 2/23/2025(r)		1 Month LIBOR		Media: Broadcasting & Subscription		250			248			241
STG-Fairway Acquisitions, Inc., L+925, 1.00% LIBOR Floor, 6/30/2023(p)(r)		3 Month LIBOR		Services: Business		10,000			9,898			9,600
TexOak Petro Holdings LLC, 8.00%, 12/29/2019(u)(v)(w)		None		Energy: Oil & Gas		7,804			2,592			—
TMK Hawk Parent, Corp., L+800, 1.00% LIBOR Floor, 8/28/2025(p)		2 Month LIBOR		Services: Business		13,393			13,092			12,991
TouchTunes Interactive Networks, Inc, L+825, 1.00% LIBOR Floor, 5/29/2022(r)		1 Month LIBOR		Hotel, Gaming & Leisure		6,000			5,958			6,000
U.S. Renal Care, Inc., L+800, 1.00% LIBOR Floor, 12/29/2023(p)		3 Month LIBOR		Healthcare & Pharmaceuticals		5,000			4,931			4,787
Wand Intermediate I LP, L+725, 1.00% LIBOR Floor, 9/19/2022(p)		2 Month LIBOR		Automotive		15,050			14,971			15,050
Winebow Holdings, Inc., L+750, 1.00% LIBOR Floor, 1/2/2022(p)		1 Month LIBOR		Beverage, Food & Tobacco		12,823			12,636			7,053
Zest Acquisition Corp., L+750, 1.00% LIBOR Floor, 3/13/2026(r)		1 Month LIBOR		Healthcare & Pharmaceuticals		15,000			14,863			14,550
Zywave Inc., L+900, 1.00% LIBOR Floor, 11/17/2023(p)		3 Month LIBOR		High Tech Industries		5,000			4,943			5,000
Total Senior Secured Second Lien Debt									341,595			323,365
Collateralized Securities and Structured Products - Debt - 1.6%
Deutsche Bank AG Frankfurt CRAFT 2015-2 Class Credit Linked Note, L+925, 1/16/2022(i)		3 Month LIBOR		Diversified Financials		15,193			15,193			15,193
Total Collateralized Securities and Structured Products - Debt									15,193			15,193
Collateralized Securities and Structured Products - Equity - 1.5%
APIDOS CLO XVI Subordinated Notes, 0.02% Estimated Yield, 1/19/2025(i)		(g)		Diversified Financials		9,000			3,799			2,488
CENT CLO 19 Ltd. Subordinated Notes, 16.86% Estimated Yield, 10/29/2025(i)		(g)		Diversified Financials		2,000			1,163			1,026
Galaxy XV CLO Ltd. Class A Subordinated Notes, 9.02% Estimated Yield, 4/15/2025(i)		(g)		Diversified Financials		4,000			2,334			1,889
Ivy Hill Middle Market Credit Fund VIII, Ltd. Subordinated Loan, 11.84% Estimated Yield, 2/2/2026(f)(i)		(g)		Diversified Financials		10,000			9,498			9,424
Total Collateralized Securities and Structured Products - Equity									16,794			14,827
Equity - 3.7%
Ascent Resources - Marcellus, LLC, Common Shares(t)				Energy: Oil & Gas		511,255 Units			1,642			1,457
Ascent Resources - Marcellus, LLC, Warrants(t)				Energy: Oil & Gas		132,367 Units			13			4
Avaya Holdings Corp., Common Stock(j)(q)(t)				Telecommunications		321,260 Units			5,285			4,678
Charming Charlie LLC, Common Stock(t)(v)				Retail		30,046,243 Units			1,302			—
CHC Medical Partners, Inc., Series C Preferred Stock, 12% Dividend				Healthcare & Pharmaceuticals		1,818,182 Units			3,000			3,236
Conisus Holdings, Inc., Series B Preferred Stock, 12% Dividend(u)(v)				Healthcare & Pharmaceuticals		12,677,833 Units			9,200			10,903
Conisus Holdings, Inc., Common Stock(t)(v)				Healthcare & Pharmaceuticals		4,914,556 Units			200			197
F+W Media, Inc., Common Stock(t)(v)				Media: Diversified & Production		31,211 Units			—			—
Mooregate ITC Acquisition, LLC, Class A Units(t)				High Tech Industries		500 Units			563			90
Mount Logan Capital Inc., Common Stock(i)(j)(v)				Banking, Finance, Insurance & Real Estate		7,842,273 Units			3,335			2,645
NS NWN Acquisition, LLC, Voting Units(t)				High Tech Industries		404 Units			393			730
NSG Co-Invest (Bermuda) LP, Partnership Interests(i)(t)				Consumer Goods: Durable		1,575 Units			1,000			675
Rhino Energy LLC, Warrants(t)				Metals & Mining		170,972 Units			280			106
SIMR Parent, LLC, Class B Common Units(t)(v)				Healthcare & Pharmaceuticals		7,500,000 Units			7,500			7,382

See accompanying notes to consolidated financial statements.

19

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CĪON Investment Corporation

Consolidated Schedule of Investments

December 31, 2018

(in thousands)

Portfolio Company(a)				Industry		Principal/ Par Amount/ Units(e)		Cost(d)				Fair Value(c)
Spinal USA, Inc. / Precision Medical Inc., Warrants(p)(t)				Healthcare & Pharmaceuticals		9,317,237 Units		4,736				4,100
Tenere Inc., Warrant(t)				Capital Equipment		N/A		161				196
TexOak Petro Holdings LLC, Membership Interests(t)(v)				Energy: Oil & Gas		60,000 Units		—				—
Total Equity								38,610				36,399
Short Term Investments - 1.3%(n)
First American Treasury Obligations Fund, Class Z Shares, 2.36%(o)								12,537				12,537
Total Short Term Investments								12,537				12,537
TOTAL INVESTMENTS - 190.5%								$	1,916,763			1,865,310
LIABILITIES IN EXCESS OF OTHER ASSETS - (90.5%)												(886,039		)
NET ASSETS - 100%												$	979,271

a.	All of the Company’s investments are issued by eligible U.S. portfolio companies, as defined in the 1940 Act, except for investments specifically identified as non-qualifying per note i. below. Unless specifically identified in note w. below, investments do not contain a PIK interest provision.

b.	The 1, 2, 3 and 6 month LIBOR rates were 2.52%, 2.62%, 2.80% and 2.87%, respectively, as of December 31, 2018.  The actual LIBOR rate for each loan listed may not be the applicable LIBOR rate as of December 31, 2018, as the loan may have been priced or repriced based on a LIBOR rate prior to or subsequent to December 31, 2018. The 1 month EURIBOR rate was (0.41%) as of December 31, 2018.

c.	Fair value determined in good faith by the Company’s board of directors (see Note 8) using significant unobservable inputs unless otherwise noted.

d.	Represents amortized cost for debt securities and cost for equity investments.

e.	Denominated in U.S. dollars unless otherwise noted.

f.	As of December 31, 2018, the Company was committed, upon the satisfaction of certain conditions, to fund additional amounts in connection with this investment. See Note 10 for additional information.

g.

The CLO subordinated notes are considered equity positions in the CLO vehicles and are not rated. Equity investments are entitled to recurring distributions, which are generally equal to the remaining cash flow of the payments made by the underlying vehicle's securities less contractual payments to debt holders and expenses. The estimated yield indicated is based upon a current projection of the amount and timing of these recurring distributions and the estimated amount of repayment of principal upon termination. Such projections are periodically reviewed and adjusted, and the estimated yield may not ultimately be realized.

h.	As a result of an arrangement between the Company and the other lenders in the syndication, the Company is entitled to less interest than the stated interest rate of this loan, which is reflected in this schedule, in exchange for a higher payment priority.

i.

The investment or a portion thereof is not a qualifying asset under the 1940 Act. A business development company may not acquire any asset other than qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the company’s total assets as defined under Section 55 of the 1940 Act. As of December 31, 2018, 90.7% of the Company’s total assets represented qualifying assets.

j.	Fair value determined using level 1 inputs.

k.	Position or a portion thereof unsettled as of December 31, 2018.

l.	In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company may be entitled to receive additional amounts as a result of an arrangement between the Company and other lenders in the syndication in exchange for a lower payment priority.

m.	In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company may be entitled to receive additional residual amounts.

n.	Short term investments represent an investment in a fund that invests in highly liquid investments with average original maturity dates of three months or less.

o.	7-day effective yield as of December 31, 2018.

p.	Investment or a portion thereof held within the Company’s wholly-owned consolidated subsidiary, 34th Street, and was pledged as collateral supporting the amounts outstanding under the credit facility with JPM as of December 31, 2018 (see Note 7).

q.	Investment or a portion thereof held within the Company’s wholly-owned consolidated subsidiary, Flatiron Funding II, and was pledged as collateral supporting the amounts outstanding under the credit facility with Citibank as of December 31, 2018 (see Note 7).

See accompanying notes to consolidated financial statements.

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CĪON Investment Corporation

Consolidated Schedule of Investments

December 31, 2018

(in thousands)

r.	Investment or a portion thereof held within the Company’s wholly-owned consolidated subsidiary, Murray Hill Funding II, and was pledged as collateral supporting the amounts outstanding under the repurchase agreement with UBS as of December 31, 2018 (see Note 7).

s.	Investment or a portion thereof held within the Company’s wholly-owned consolidated subsidiary, 33rd Street, and was pledged as collateral supporting the amounts outstanding under the credit facility with MS as of December 31, 2018 (see Note 7).

t.	Non-income producing security.

u.	Investment was on non-accrual status as of December 31, 2018.

v.	Investment determined to be an affiliated investment as defined in the 1940 Act as the Company owns between 5% and 25% of the portfolio company’s outstanding voting securities but does not control the company. Fair value as of December 31, 2017 and 2018, along with transactions during the year ended December 31, 2018 in these affiliated investments are as follows:

						Year Ended December 31, 2018																Year Ended December 31, 2018
Non-Controlled, Affiliated Investments		Fair Value at December 31, 2017				Gross Additions (Cost)(1)				Gross Reductions (Cost)(2)				Net Unrealized (Loss) Gain				Fair Value at December 31, 2018				Net Realized Gain (Loss)				Interest Income(3)
Charming Charlie, LLC
First Lien Term Loan B1		$	—			$	2,619			$	—			$	(1,598	)		$	1,021			$	—			$	99
First Lien Term Loan B2		—				1,912				—				(663		)		1,249				—				191
Vendor Payment Financing Facility		—				157				—				—				157				—				44
Common Stock		—				1,302				—				(1,302		)		—				—				—
Conisus Holdings, Inc.
Series B Preferred Stock		9,300				—				—				1,603				10,903				—				—
Common Stock		175				—				—				22				197				—				—
F+W Media, Inc.
First Lien Term Loan B-1		1,169				103				(100		)		(35		)		1,137				—				95
First Lien Term Loan B-2		1,498				16				—				(1,353		)		161				—				39
Common Stock		—				—				—				—				—				—				—
Mount Logan Capital Inc.
Common Stock		—				3,335				—				(690		)		2,645				—				—
SIMR, LLC
First Lien Term Loan		—				15,020				—				(263		)		14,757				—				580
SIMR Parent, LLC
Class B Common Units		—				7,500				—				(118		)		7,382				—
Petroflow Energy Corp.
First Lien Term Loan		3,391				63				(902		)		(189		)		2,363				—				199
TexOak Petro Holdings LLC
Second Lien Term Loan		—				—				—				—				—				—				—
Membership Interests		—				—				—				—				—				—				—
Totals		$	15,533			$	32,027			$	(1,002	)		$	(4,586	)		$	41,972			$	—			$	1,247

(1)	Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest, the amortization of unearned income, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.

(2)	Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.

(3)	Includes PIK interest income.

See accompanying notes to consolidated financial statements.

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CĪON Investment Corporation

Consolidated Schedule of Investments

December 31, 2018

(in thousands)

w.	For the year ended December 31, 2018, the following investments contain a PIK interest provision whereby the issuer has either the option or the obligation to make interest payments with the issuance of additional securities:

				Interest Rate						Interest Amount
Portfolio Company		Investment Type		Cash		PIK		All-in-Rate		Cash				PIK				Total
American Clinical Solutions LLC(u)		Senior Secured First Lien Debt		10.50%		2.00%		12.50%		$	326			$	168			$	494
Charming Charlie LLC(u)		Senior Secured First Lien Debt		6.00%		5.00%		11.00%		$	98			$	—			$	98
Charming Charlie LLC(u)		Senior Secured First Lien Debt		2.00%		9.00%		11.00%		$	54			$	—			$	54
CHC Solutions Inc.		Senior Secured First Lien Debt		8.00%		4.00%		12.00%		$	258			$	129			$	387
Dayton Superior Corp.		Senior Secured First Lien Debt		9.00%		6.00%		15.00%		$	578			$	194			$	772
F+W Media, Inc.(u)		Senior Secured First Lien Debt		—		11.50%		11.50%		$	—			$	24			$	24
F+W Media, Inc.		Senior Secured First Lien Debt		—		8.00%		8.00%		$	—			$	95			$	95
Lonestar Prospects, Ltd.(x)		Senior Secured First Lien Debt		9.50%		1.00%		10.50%		$	190			$	27			$	217
Petroflow Energy Corp.(u)		Senior Secured First Lien Debt		3.00%		6.00%		9.00%		$	70			$	—			$	70
Rimini Street, Inc.(x)		Senior Secured First Lien Debt		12.00%		3.00%		15.00%		$	1,228			$	278			$	1,506
Sequoia Healthcare Management, LLC(x)		Senior Secured First Lien Debt		12.00%		4.00%		16.00%		$	370			$	171			$	541
Spinal USA, Inc. / Precision Medical Inc.		Senior Secured First Lien Debt		—		10.50%		10.50%		$	—			$	40			$	40
TexOak Petro Holdings LLC(u)		Senior Secured Second Lien Debt		—		8.00%		8.00%		$	—			$	—			$	—
Visual Edge Technology, Inc.(x)		Subordinated Note		—		12.50%		12.50%		$	—			$	224			$	224

x.	Prior to December 31, 2018, the Company exited the investment.

See accompanying notes to consolidated financial statements.

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

Note 1. Organization and Principal Business

CĪON Investment Corporation, or the Company, was incorporated under the general corporation laws of the State of Maryland on August 9, 2011. On December 17, 2012, the Company successfully raised gross proceeds from unaffiliated outside investors of at least $2,500, or the minimum offering requirement, and commenced operations. The Company is an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company, or BDC, under the 1940 Act. The Company elected to be treated for federal income tax purposes as a regulated investment company, or RIC, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code.

The Company’s investment objective is to generate current income and, to a lesser extent, capital appreciation for investors. The Company’s portfolio is comprised primarily of investments in senior secured debt, including first lien loans, second lien loans and unitranche loans, and, to a lesser extent, collateralized securities, structured products and other similar securities, and equity, of private and thinly-traded U.S. middle-market companies.

The Company is managed by CION Investment Management, LLC, or CIM, a registered investment adviser and an affiliate of the Company. Pursuant to an investment advisory agreement with the Company, CIM oversees the management of the Company’s activities and is responsible for making investment decisions for the Company’s investment portfolio. On November 1, 2018, the board of directors of the Company, including a majority of the board of directors who are not interested persons, approved the renewal of the investment advisory agreement with CIM for a period of twelve months commencing December 17, 2018. The Company and CIM previously engaged Apollo Investment Management, L.P., or AIM, a subsidiary of Apollo Global Management, LLC, or, together with its subsidiaries, Apollo, a leading global alternative investment manager, to act as the Company’s investment sub-adviser.

On July 11, 2017, the members of CIM entered into a third amended and restated limited liability company agreement of CIM, or the Third Amended CIM LLC Agreement, for the purpose of creating a joint venture between AIM and CION Investment Group, LLC, or CIG, an affiliate of the Company. Under the Third Amended CIM LLC Agreement, AIM became a member of CIM and was issued a newly-created class of membership interests in CIM pursuant to which AIM, among other things, shares in the profits, losses, distributions and expenses of CIM with the other members in accordance with the terms of the Third Amended CIM LLC Agreement, which results in CIG and AIM each owning a 50% economic interest in CIM.

On July 10, 2017, the Company’s independent directors unanimously approved the termination of the investment sub-advisory agreement with AIM, effective as of July 11, 2017. Although the investment sub-advisory agreement and AIM's engagement as the Company’s investment sub-adviser were terminated, AIM's investment professionals continue to perform certain services for CIM and the Company, including, without limitation, identifying investment opportunities for approval by CIM's investment committee. AIM is not paid a separate fee in exchange for such services, but is entitled to receive distributions as a member of CIM as described above.

On December 4, 2017, the members of CIM entered into a fourth amended and restated limited liability company agreement of CIM, or the Fourth Amended CIM LLC Agreement. Under the Fourth Amended CIM LLC Agreement, AIM's investment professionals perform certain services for CIM, which include, among other services, (i) assistance with identifying and providing information about potential investment opportunities for approval by CIM’s investment committee; and (ii) providing (a) trade and settlement support; (b) portfolio and cash reconciliation; (c) market pipeline information regarding syndicated deals, in each case, as reasonably requested by CIM; and (d) monthly valuation reports and support for all broker-quoted investments. All of the Company's investment decisions are the sole responsibility of, and are made at the sole discretion of, CIM's investment committee, which consists entirely of CIG senior personnel.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial information and pursuant to the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. For a more complete discussion of significant accounting policies and certain other information, the Company’s interim unaudited consolidated financial statements should be read in conjunction with its audited consolidated financial statements as of December 31, 2018 and for the year then ended included in the Company’s Annual Report on Form 10-K. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year ending December 31, 2019. The consolidated balance sheet and the consolidated schedule of investments as of December 31, 2018 are derived from the 2018 audited consolidated financial statements and include the accounts of the Company’s wholly-owned subsidiaries.

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

The Company evaluates subsequent events through the date that the consolidated financial statements are issued.

Reclassification

Unamortized original issue discounts, or OID, and market discounts/premiums received upon the early repayment of debt investments have been reclassified from net realized gains on investments to interest income. As a result, prior year amounts have been reclassified to conform to the current presentation.

Recently Announced Accounting Standards

In March 2017, the FASB issued ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities, or ASU 2017-08, which shortens the amortization period for the premium on certain purchased callable debt securities to the earliest call date. ASU 2017-08 is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption during an interim period. If the Company early adopts the amendments during an interim period, any adjustments will be reflected as of the beginning of the fiscal year that includes such interim period. The Company is in the process of evaluating the impact that this guidance will have on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Changes to the Disclosure Requirements for Fair Value Measurement, or ASU 2018-13, which modifies the disclosure requirements for fair value measurements in Topic 820 by removing, modifying, or adding certain disclosures. ASU 2018-13 is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is in the process of evaluating the impact that this guidance will have on its consolidated financial statements.

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks and highly liquid investments with original maturity dates of three months or less. The Company’s cash and cash equivalents are held principally at one financial institution and at times may exceed insured limits. The Company periodically evaluates the creditworthiness of this institution and has not experienced any losses on such deposits.

Foreign Currency Translations

The accounting records of the Company are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the foreign exchange rate on the date of valuation. The Company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Changes in the relationship of foreign currencies to the U.S. dollar can significantly affect the value of these investments and therefore the earnings of the Company.

Short Term Investments

Short term investments include an investment in a U.S. Treasury obligations fund, which seeks to provide current income and daily liquidity by purchasing U.S. Treasury securities and repurchase agreements that are collateralized by such securities. The Company had $33,740 and $12,537 of such investments at June 30, 2019 and December 31, 2018, respectively, which are included in investments, at fair value on the accompanying consolidated balance sheets and on the consolidated schedules of investments.

Offering Costs

Offering costs included, among other things, legal fees and other costs pertaining to the preparation of the Company’s registration statements in connection with the continuous public offerings of the Company’s shares. Certain initial offering costs that were funded by CIG on behalf of the Company were submitted by CIG for reimbursement upon meeting the minimum offering requirement on December 17, 2012. These costs were capitalized and amortized over a twelve month period as an adjustment to capital in excess of par value. All other offering costs were expensed as incurred by the Company. The Company's follow-on continuous public offering ended on January 25, 2019.

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

Income Taxes

The Company elected to be treated for federal income tax purposes as a RIC under Subchapter M of the Code. To qualify and maintain qualification as a RIC, the Company must, among other things, meet certain source of income and asset diversification requirements and distribute to shareholders, for each taxable year, at least 90% of the Company’s “investment company taxable income”, which is generally equal to the sum of the Company’s net ordinary income plus the excess, if any, of realized net short-term capital gains over realized net long-term capital losses. If the Company continues to qualify as a RIC and continues to satisfy the annual distribution requirement, the Company will not be subject to corporate level federal income taxes on any income that the Company distributes to its shareholders. The Company intends to make distributions in an amount sufficient to maintain RIC status each year and to avoid any federal income taxes on income. The Company will also be subject to nondeductible federal excise taxes if the Company does not distribute at least 98.0% of net ordinary income, 98.2% of capital gains, if any, and any recognized and undistributed income from prior years for which it paid no federal income taxes. 

Two of the Company’s wholly-owned consolidated subsidiaries, View ITC, LLC and View Rise, LLC, or collectively the Taxable Subsidiaries, have elected to be treated as taxable entities for U.S. federal income tax purposes. As a result, the Taxable Subsidiaries are not consolidated with the Company for income tax purposes and may generate income tax expense or benefit, and the related tax assets and liabilities, as a result of its ownership of certain portfolio investments. The income tax expense or benefit, if any, and the related tax assets and liabilities, where material, are reflected in the Company’s consolidated financial statements. There were no deferred tax assets or liabilities as of June 30, 2019.

Book/tax differences relating to permanent differences are reclassified among the Company’s capital accounts, as appropriate. Additionally, the tax character of distributions is determined in accordance with income tax regulations that may differ from GAAP (see Note 5).

Uncertainty in Income Taxes

The Company evaluates its tax positions to determine if the tax positions taken meet the minimum recognition threshold for the purposes of measuring and recognizing tax liabilities in the consolidated financial statements. Recognition of a tax benefit or liability with respect to an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by the taxing authorities. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the consolidated statements of operations. The Company did not have any uncertain tax positions during the periods presented herein. 

The Company is subject to examination by U.S. federal, New York State, New York City and Maryland income tax jurisdictions for 2015, 2016, and 2017.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of 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 may materially differ from those estimates.

Valuation of Portfolio Investments

The fair value of the Company’s investments is determined quarterly in good faith by the Company’s board of directors pursuant to its consistently applied valuation procedures and valuation process in accordance with Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosure, or ASC 820. ASC 820 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a three-tier fair value hierarchy that prioritizes and ranks the level of market price observability of inputs used in measuring investments at fair value. Inputs used to measure these fair values are classified into the following hierarchy:

Level 1 -	Quoted prices in active markets for identical assets or liabilities, accessible by the Company at the measurement date.

Level 2 -	Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or other observable inputs other than quoted prices.

Level 3 -

Unobservable inputs for the asset or liability. The inputs used in the determination of fair value may require significant management judgment or estimation. Such information may be the result of consensus pricing information or broker quotes that include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by the disclaimer would result in classification as a Level 3 asset, assuming no additional corroborating evidence.

25

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

Market price observability is affected by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Based on the observability of the inputs used in the valuation techniques, the Company is required to provide disclosures on fair value measurements according to the fair value hierarchy. The level in the fair value hierarchy for each fair value measurement has been determined based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each investment. The level assigned to the investment valuations may not be indicative of the risk or liquidity associated with investing in such investments. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may differ materially from the value that would be received upon an actual sale of such investments. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses that the Company ultimately realizes on these investments to materially differ from the valuations currently assigned.

The Company’s investments, excluding short term investments, consist primarily of debt securities that are traded on a private over-the-counter market for institutional investments. CIM attempts to obtain market quotations from at least two brokers or dealers for each investment (if available, otherwise from a principal market maker or a primary market dealer or other independent pricing service). CIM utilizes mid-market pricing to determine fair value unless a different point within the range is more representative. Because of the private nature of this marketplace (meaning actual transactions are not publicly reported) and the non-binding nature of consensus pricing and/or quotes, the Company believes that these valuation inputs result in Level 3 classification within the fair value hierarchy.

Notwithstanding the foregoing, if in the reasonable judgment of CIM, the price of any investment held by the Company and determined in the manner described above does not accurately reflect the fair value of such investment, CIM will value such investment at a price that reflects such investment’s fair value and report such change in the valuation to the board of directors or its designee as soon as practicable. Investments that carry certain restrictions on sale will typically be valued at a discount from the public market value of the investment.

Any investments that are not publicly traded or for which a market price is not otherwise readily available are valued at a price that reflects its fair value. With respect to such investments, if CIM is unable to obtain market quotations, the investments are reviewed and valued using one or more of the following types of analyses:

i.	Market comparable statistics and public trading multiples discounted for illiquidity, minority ownership and other factors for companies with similar characteristics.

ii.	Valuations implied by third-party investments in the applicable portfolio companies.

iii.	Discounted cash flow analysis, including a terminal value or exit multiple.

Determination of fair value involves subjective judgments and estimates. Accordingly, these notes to the Company’s consolidated financial statements refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on the Company’s consolidated financial statements. Below is a description of factors that the Company’s board of directors may consider when valuing the Company’s equity and debt investments where a market price is not readily available:

•	the size and scope of a portfolio company and its specific strengths and weaknesses;

•	prevailing interest rates for like securities;

•	expected volatility in future interest rates;

•	leverage;

•	call features, put features and other relevant terms of the debt;

•	the borrower’s ability to adequately service its debt;

•	the fair market value of the portfolio company in relation to the face amount of its outstanding debt;

•	the quality of collateral securing the Company’s debt investments;

•	multiples of earnings before interest, taxes, depreciation and amortization, or EBITDA, cash flows, net income, revenues or, in some cases, book value or liquidation value; and

•	other factors deemed applicable.

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

All of these factors may be subject to adjustment based upon the particular circumstances of a portfolio company or the Company’s actual investment position. For example, adjustments to EBITDA may take into account compensation to previous owners, or acquisition, recapitalization, and restructuring expenses or other related or non-recurring items. The choice of analyses and the weight assigned to such factors may vary across investments and may change within an investment if events occur that warrant such a change.

The discounted cash flow model deemed appropriate by CIM is prepared for the applicable investments and reviewed by the designated members of CIM’s management team. Such models are prepared at least quarterly or on an as needed basis. The model uses the estimated cash flow projections for the underlying investments and an appropriate discount rate is determined based on the latest financial information available for the borrower, prevailing market trends, comparable analysis and other inputs. The model, key assumptions, inputs, and results are reviewed by the designated members of CIM’s management team with final approval from the board of directors.

Consistent with the Company’s valuation policy, the Company evaluates the source of inputs, including any markets in which the Company’s investments are trading, in determining fair value.

The Company periodically benchmarks the broker quotes from the brokers or dealers against the actual prices at which the Company purchases and sells its investments. Based on the results of the benchmark analysis and the experience of the Company’s management in purchasing and selling these investments, the Company believes that these quotes are reliable indicators of fair value. The Company may also use other methods to determine fair value for securities for which it cannot obtain market quotations through brokers or dealers, including the use of an independent valuation firm. Designated members of CIM’s management team and the Company's board of directors review and approve the valuation determinations made with respect to these investments in a manner consistent with the Company’s valuation process.

Revenue Recognition

Securities transactions are accounted for on the trade date. The Company records interest and dividend income on an accrual basis beginning on the trade settlement date or the ex-dividend date, respectively, to the extent that the Company expects to collect such amounts.  For investments in equity tranches of collateralized loan obligations, the Company records income based on the effective interest rate determined using the amortized cost and estimated cash flows, which is updated periodically. Loan origination fees, OID, and market discounts/premiums are recorded and such amounts are amortized as adjustments to interest income over the respective term of the loan using the effective interest rate method. Upon the prepayment of a loan or security, prepayment premiums, any unamortized loan origination fees, OID, or market discounts are recorded as interest income. In addition, the Company may generate revenue in the form of commitment, amendment, structuring or diligence fees, monitoring fees, fees for providing managerial assistance and possibly consulting fees and performance-based fees. Any such fees generated in connection with investments are recognized when earned.

The Company may have investments in its investment portfolio that contain a PIK interest provision. PIK interest is accrued as interest income if the portfolio company valuation indicates that such PIK interest is collectible and recorded as interest receivable up to the interest payment date. On the interest payment dates, the Company will capitalize the accrued interest receivable attributable to PIK as additional principal due from the borrower. Additional PIK securities typically have the same terms, including maturity dates and interest rates, as the original securities. In order to maintain RIC status, substantially all of this income must be paid out to shareholders in the form of distributions, even if the Company has not collected any cash. For additional information on investments that contain a PIK interest provision, see the consolidated schedules of investments as of June 30, 2019 and December 31, 2018.

Loans and debt securities, including those that are individually identified as being impaired under Accounting Standards Codification 310, Receivables, or ASC 310, are generally placed on non-accrual status immediately if, in the opinion of management, principal or interest is not likely to be paid, or when principal or interest is past due 90 days or more. Interest accrued but not collected at the date a loan or security is placed on non-accrual status is reversed against interest income. Interest income is recognized on non-accrual loans or debt securities only to the extent received in cash. However, where there is doubt regarding the ultimate collectibility of principal, cash receipts, whether designated as principal or interest, are thereafter applied to reduce the carrying value of the loan or debt security. Loans or securities are restored to accrual status only when interest and principal payments are brought current and future payments are reasonably assured.

Dividend income on preferred equity securities is recorded on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly-traded portfolio companies.

Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation

Gains or losses on the sale of investments are calculated by using the weighted-average method. The Company measures realized gains or losses by the difference between the net proceeds from the sale and the weighted-average amortized cost of the investment, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.

27

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

Capital Gains Incentive Fee

Pursuant to the terms of the investment advisory agreement the Company entered into with CIM, the incentive fee on capital gains earned on liquidated investments of the Company’s investment portfolio during operations is determined and payable in arrears as of the end of each calendar year. Such fee equals 20% of the Company’s incentive fee capital gains (i.e., the Company’s realized capital gains on a cumulative basis from inception, calculated as of the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis), less the aggregate amount of any previously paid capital gains incentive fees. On a cumulative basis and to the extent that all realized capital losses and unrealized capital depreciation exceed realized capital gains as well as the aggregate realized net capital gains for which a fee has previously been paid, the Company would not be required to pay CIM a capital gains incentive fee. On a quarterly basis, the Company accrues for the capital gains incentive fee by calculating such fee as if it were due and payable as of the end of such period.

CIM did not take any incentive fees with respect to the Company’s TRS. For purposes of computing the capital gains incentive fee, CIM became entitled to a capital gains incentive fee upon the termination of the TRS, at which point all gains and losses of the underlying loans constituting the reference assets of the TRS were realized. However, realized losses exceeded realized gains on the underlying loans, resulting in no capital gains incentive fees on the TRS. Any net unrealized gains on the TRS were reflected in total assets on the Company’s consolidated balance sheets and included in the computation of the base management fee. Any net unrealized losses on the TRS were reflected in total liabilities on the Company’s consolidated balance sheets and excluded in the computation of the base management fee.

While the investment advisory agreement with CIM neither includes nor contemplates the inclusion of unrealized gains in the calculation of the capital gains incentive fee, pursuant to an interpretation of the American Institute for Certified Public Accountants, or AICPA, Technical Practice Aid for investment companies, the Company accrues capital gains incentive fees on unrealized gains. This accrual reflects the incentive fees that would be payable to CIM if the Company’s entire investment portfolio was liquidated at its fair value as of the balance sheet date even though CIM is not entitled to an incentive fee with respect to unrealized gains unless and until such gains are actually realized.

Net Increase in Net Assets per Share

Net increase in net assets per share is calculated based upon the daily weighted average number of shares of common stock outstanding during the reporting period.

Distributions

Distributions to shareholders are recorded as of the record date. The amount paid as a distribution is declared by the Company's co-chief executive officers and ratified by the board of directors on a quarterly basis. Net realized capital gains, if any, are distributed at least annually.

Note 3. Share Transactions

The Company’s initial continuous public offering commenced on July 2, 2012 and ended on December 31, 2015. The Company’s follow-on continuous public offering commenced on January 25, 2016 and ended on January 25, 2019.

The following table summarizes transactions with respect to shares of the Company’s common stock during the six months ended June 30, 2019 and 2018:

	Six Months Ended June 30,
	2019							2018
	Shares			Amount				Shares			Amount
Gross shares/proceeds from the offering	696,264			$	6,516			2,003,534			$	19,168
Reinvestment of distributions	2,108,240			18,287				2,151,956			19,627
Total gross shares/proceeds	2,804,504			24,803				4,155,490			38,795
Sales commissions and dealer manager fees	—			(296		)		—			(708		)
Net shares/proceeds	2,804,504			24,507				4,155,490			38,087
Share repurchase program	(2,117,497	)		(18,287		)		(4,367,116	)		(39,904		)
Net shares/proceeds from (for) share transactions	687,007			$	6,220			(211,626	)		$	(1,817	)

28

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

During the six months ended June 30, 2019 and 2018, the Company sold 2,804,504 and 4,155,490 shares, respectively, at an average price per share of $8.84 and $9.34, respectively.

Since commencing its initial continuous public offering on July 2, 2012 and through June 30, 2019, the Company issued 113,396,246 net shares of common stock for net proceeds of $1,155,287 at an average price per share of $10.19. The net proceeds include gross proceeds received from reinvested shareholder distributions of $181,151, for which the Company issued 20,004,535 shares of common stock, and gross proceeds paid for shares of common stock tendered for repurchase of $181,151, for which the Company repurchased 20,100,034 shares of common stock.

During the period from July 1, 2019 to August 8, 2019, the Company received gross proceeds of $3,323 from reinvested shareholder distributions, for which the Company issued 390,393 shares of common stock.

Since commencing its initial continuous public offering on July 2, 2012 and through August 8, 2019, the Company issued 113,786,639 net shares of common stock for net proceeds of $1,158,610 at an average price per share of $10.18. The net proceeds include gross proceeds received from reinvested shareholder distributions of $184,474, for which the Company issued 20,394,928 shares of common stock, and gross proceeds paid for shares of common stock tendered for repurchase of $181,151, for which the Company repurchased 20,100,034 shares of common stock.

To ensure that the offering price per share, net of sales commissions and dealer manager fees, equaled or exceeded the net asset value per share on each subscription closing date and distribution reinvestment date, certain of the Company’s directors increased the offering price per share of common stock on certain dates. Due to a decline in the Company’s net asset value per share to an amount more than 2.5% below the Company’s then-current net offering price, certain of the Company’s directors decreased the offering price per share of common stock effective January 2, 2019 and January 9, 2019 from $9.50 to $9.45 and from $9.45 to $9.40, respectively. 

Share Repurchase Program

On a quarterly basis, the Company offers, and intends to continue offering, to repurchase shares on such terms as may be determined by the Company’s board of directors in its complete and absolute discretion unless, in the judgment of the independent directors of the Company’s board of directors, such repurchases would not be in the best interests of the Company’s shareholders or would violate applicable law.

The Company currently limits the number of shares to be repurchased during any calendar year to the number of shares it can repurchase with the proceeds it receives from the issuance of shares pursuant to its fifth amended and restated distribution reinvestment plan. At the discretion of the Company’s board of directors, it may also use cash on hand, cash available from borrowings and cash from liquidation of investments as of the end of the applicable period to repurchase shares. The Company currently offers to repurchase such shares at a price equal to the estimated net asset value per share on each date of repurchase.

Any periodic repurchase offers are subject in part to the Company’s available cash and compliance with the BDC and RIC qualification and diversification rules promulgated under the 1940 Act and the Code, respectively. While the Company conducts quarterly tender offers as described above, it is not required to do so and may suspend or terminate the share repurchase program at any time, upon 30 days’ notice.

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

The following table summarizes the share repurchases completed during the year ended December 31, 2018 and the six months ended June 30, 2019:

Three Months Ended		Repurchase Date		Shares Repurchased			Percentage of Shares Tendered That Were Repurchased			Repurchase Price Per Share				Aggregate Consideration for Repurchased Shares
2018
March 31, 2018		January 3, 2018		2,014,536			100	%		$	9.12			$	18,379
June 30, 2018		April 4, 2018		2,352,580			100	%		9.15				21,525
September 30, 2018		July 5, 2018		2,507,596			100	%		9.06				22,724
		September 26, 2018		2,086,133			100	%		9.06				18,907
December 31, 2018		December 26, 2018		1,759,845			63	%		8.81				15,508
Total for the year ended December 31, 2018				10,720,690										$	97,043
2019
March 31, 2019		March 27, 2019		1,078,856			30	%		$	8.68			$	9,361
June 30, 2019		June 26, 2019		1,038,641			15	%		8.59				8,926
Total for the six months ended June 30, 2019				2,117,497										$	18,287

Note 4. Transactions with Related Parties

For the three and six months ended June 30, 2019 and 2018, fees and other expenses incurred by the Company related to CIM and its affiliates were as follows:  

						Three Months Ended June 30,								Six Months Ended June 30,
Entity		Capacity		Description		2019				2018				2019				2018
CION Securities, LLC		Dealer manager		Dealer manager fees(1)		$	(3	)		$	105			$	121			$	323
CIM		Investment adviser		Management fees(2)		9,237				8,602				18,568				16,541
CIM		Investment adviser		Incentive fees(2)		4,117				—				9,492				—
CIM		Administrative services provider		Administrative services expense(2)		483				531				980				531
ICON Capital, LLC		Administrative services provider		Administrative services expense(2)		—				—				—				461
Apollo Investment Administration, L.P.		Administrative services provider		Transaction costs(2)		30				—				60				—
						$	13,864			$	9,238			$	29,221			$	17,856

(1)	Amounts charged directly to equity.

(2)	Amounts charged directly to operations.

On December 28, 2016, the Company entered into an amended and restated follow-on dealer manager agreement with CIM and CION Securities, LLC (formerly, ICON Securities, LLC), or CION Securities, in connection with the Company's follow-on continuous public offering, which ended on January 25, 2019. Under the amended and restated dealer manager agreement, the dealer manager fee was reduced from up to 3% to up to 2% of gross offering proceeds and selling commissions to the selling dealers were reduced from up to 7% to up to 3% of gross offering proceeds. Such costs were charged against capital in excess of par value when incurred. Since commencing its initial continuous public offering on July 2, 2012 through January 25, 2019, the Company paid or accrued sales commissions of $65,278 to the selling dealers and dealer manager fees of $32,628 to CION Securities. 

30

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

The Company has entered into an investment advisory agreement with CIM. On November 1, 2018, the board of directors of the Company, including a majority of the board of directors who are not interested persons, approved the renewal of the investment advisory agreement for a period of twelve months commencing December 17, 2018.  Pursuant to the investment advisory agreement, CIM is paid an annual base management fee equal to 2.0% of the average value of the Company’s gross assets, less cash and cash equivalents, and an incentive fee based on the Company’s performance, as described below. The base management fee is payable quarterly in arrears and is calculated based on the two most recently completed calendar quarters. The incentive fee consists of two parts. The first part, which is referred to as the subordinated incentive fee on income, is calculated and payable quarterly in arrears based on “pre-incentive fee net investment income” for the immediately preceding quarter and is subject to a hurdle rate, measured quarterly and expressed as a rate of return on adjusted capital, as defined in the investment advisory agreement, equal to 1.875% per quarter, or an annualized rate of 7.5%. For the six months ended June 30, 2019 and 2018, the liability recorded for subordinated incentive fees was $9,492 and $0, respectively. The second part of the incentive fee, which is referred to as the capital gains incentive fee, is described in Note 2.

The Company accrues the capital gains incentive fee based on net realized gains and net unrealized appreciation; however, under the terms of the investment advisory agreement, the fee payable to CIM is based on net realized gains and unrealized depreciation and no such fee is payable with respect to unrealized appreciation unless and until such appreciation is actually realized. For the three and six months ended June 30, 2019 and 2018, the Company had no liability for and did not record any capital gains incentive fees.

With respect to the TRS, CIM became entitled to receive a capital gains incentive fee upon the termination of the TRS, at which point all net gains and losses of the underlying loans constituting the reference assets of the TRS were realized. However, CIM did not take any incentive fees with respect to the Company’s TRS as realized losses exceeded realized gains on the underlying loans upon termination. See Note 2 for an additional discussion of CIM's entitlement to receive payment of incentive fees.

Under the terms of the investment advisory agreement, CIM and certain of its affiliates, which includes CIG, are entitled to receive reimbursement of up to 1.5% of the gross proceeds raised until all offering and organizational costs have been reimbursed. The Company’s payment of offering and organizational costs will not exceed 1.5% of the actual gross proceeds raised from the offerings (without giving effect to any potential expense support from CIG and its affiliates, which includes CIM). With respect to any reimbursements for offering and organizational costs, the Company interprets the 1.5% limit based on actual gross proceeds raised at the time of such reimbursement.  In addition, the Company will not issue any of its shares or other securities for services or for property other than cash or securities except as a dividend or distribution to its security holders or in connection with a reorganization. 

Reinvestment of shareholder distributions and share repurchases are excluded from the gross proceeds from the Company’s offerings for purposes of determining the total amount of offering and organizational costs that can be paid by the Company. As of June 30, 2019, the Company raised gross offering proceeds of $1,155,287, of which it can pay up to $17,329 in offering and organizational costs (which represents 1.5% of the actual gross offering proceeds raised). Through June 30, 2019, the Company paid $10,709 of such costs, leaving an additional $6,620 that can be paid.

The Company entered into an administration agreement with CIM’s affiliate, ICON Capital, LLC, or ICON Capital, pursuant to which ICON Capital furnished the Company with administrative services including accounting, investor relations and other administrative services necessary to conduct its day-to-day operations. ICON Capital was reimbursed for administrative expenses it incurred on the Company’s behalf in performing its obligations, provided that such reimbursement was for the lower of ICON Capital’s actual costs or the amount that the Company would have been required to pay for comparable administrative services in the same geographic location. Such costs were reasonably allocated to the Company on the basis of assets, revenues, time records or other reasonable methods. The Company did not reimburse ICON Capital for any services for which it received a separate fee or for rent, depreciation, utilities, capital equipment or other administrative items allocated to a person with a controlling interest in ICON Capital.

On April 1, 2018, the Company entered into an administration agreement with CIM for the purpose of replacing ICON Capital with CIM as the Company's administrator pursuant to the terms of the administration agreement. No other material terms of the administration agreement with ICON Capital were amended in connection with the administration agreement with CIM. On November 1, 2018, the board of directors of the Company, including a majority of the board of directors who are not interested persons, approved the renewal of the administration agreement with CIM for a period of twelve months commencing December 17, 2018.

On January 1, 2019, the Company entered into a servicing agreement with CIM’s affiliate, Apollo Investment Administration, L.P., or AIA, pursuant to which AIA furnishes the Company with administrative services including, but not limited to, loan and high yield trading services, trade and settlement support, and monthly valuation reports and support for all broker quoted investments. AIA is reimbursed for administrative expenses it incurs on the Company’s behalf in performing its obligations, provided that such reimbursement is reasonable, and costs and expenses incurred are documented. The servicing agreement may be terminated at any time, without the payment of any penalty, by either party, upon 60 days' written notice to the other party.

31

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

On January 30, 2013, the Company entered into the expense support and conditional reimbursement agreement with CIG, whereby CIG agreed to provide expense support to the Company in an amount that is sufficient to: (1) ensure that no portion of the Company’s distributions to shareholders will be paid from its offering proceeds or borrowings, and/or (2) reduce the Company’s operating expenses until it has achieved economies of scale sufficient to ensure that it bears a reasonable level of expense in relation to its investment income. On December 16, 2015 and December 14, 2016, the Company further amended and restated the expense support and conditional reimbursement agreement for purposes of including AIM as a party to the agreement and extending the termination date from December 31, 2016 to December 31, 2017, respectively. On January 2, 2018, the Company entered into an expense support and conditional reimbursement agreement with CIM for purposes of (i) replacing CIG and AIM with CIM as the expense support provider pursuant to the terms of the expense support and conditional reimbursement agreement; and (ii) extending the termination date to December 31, 2018. On December 26, 2018, the Company and CIM amended the expense support and conditional reimbursement agreement to extend the termination date of such agreement from December 31, 2018 to December 31, 2019.

Pursuant to the expense support and conditional reimbursement agreement, the Company will have a conditional obligation to reimburse CIM for any amounts funded by CIM under such agreement (i) if expense support amounts funded by CIM exceed operating expenses incurred during any fiscal quarter, (ii) if the sum of the Company’s net investment income for tax purposes, net capital gains and the amount of any dividends and other distributions paid to the Company on account of investments in portfolio companies (to the extent not included in net investment income or net capital gains for tax purposes) exceeds the distributions paid by the Company to shareholders, and (iii) during any fiscal quarter occurring within three years of the date on which CIM funded such amount. The obligation to reimburse CIM for any expense support provided by CIM under such agreement is further conditioned by the following: (i) in the period in which reimbursement is sought, the ratio of operating expenses to average net assets, when considering the reimbursement, cannot exceed the ratio of operating expenses to average net assets, as defined, for the period when the expense support was provided; (ii) in the period when reimbursement is sought, the annualized distribution rate cannot fall below the annualized distribution rate for the period when the expense support was provided; and (iii) the expense support can only be reimbursed within three years from the date the expense support was provided.

Expense support, if any, will be determined as appropriate to meet the objectives of the expense support and conditional reimbursement agreement. The Company did not record any obligation to repay expense support from CIG or CIM during the three and six months ended June 30, 2018 or 2019, respectively. The Company did not repay any expense support to CIG or CIM during the three and six months ended June 30, 2018 or 2019, respectively. The Company may or may not be requested to reimburse any expense support provided in the future.

The Company or CIM may terminate the expense support and conditional reimbursement agreement at any time. CIM has indicated that it expects to continue such expense support to ensure that the Company bears a reasonable level of expenses in relation to its income. If the Company terminates the investment advisory agreement with CIM, the Company may be required to repay all unreimbursed expense support funded by CIM within three years of the date of termination. There will be no acceleration or increase of such repayment obligation at termination of the investment advisory agreement with CIM. The specific amount of expense support provided by CIM, if any, will be determined at the end of each quarter. There can be no assurance that the expense support and conditional reimbursement agreement will remain in effect or that CIM will support any portion of the Company’s expenses in future quarters.

As of June 30, 2019 and December 31, 2018, the total liability payable to CIM and its affiliates was $13,497 and $12,825, respectively, which primarily related to fees earned by CIM during the three months ended June 30, 2019 and December 31, 2018, respectively.

Because CIM’s senior management team is comprised of substantially the same personnel as the senior management team of the Company’s affiliate, ICON Capital, which is the investment manager to certain equipment finance funds, or equipment funds, such members of senior management provide investment advisory and management services to the equipment funds in addition to the Company. In the event that CIM undertakes to provide investment advisory services to other clients in the future, it will strive to allocate investment opportunities in a fair and equitable manner consistent with the Company’s investment objective and strategies so that the Company will not be disadvantaged in relation to any other client of the investment adviser or its senior management team. However, it is currently possible that some investment opportunities will be provided to other clients of CIM rather than to the Company.

Indemnifications

The investment advisory agreement, the administration agreement and the dealer manager agreement each provide certain indemnifications from the Company to the other relevant parties to such agreements.  The Company’s maximum exposure under these agreements is unknown. However, the Company has not experienced claims or losses pursuant to these agreements and believes the risk of loss related to such indemnifications to be remote.

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

Note 5. Distributions

From February 1, 2014 through July 17, 2017, the Company’s board of directors authorized and declared on a monthly basis a weekly distribution amount per share of common stock. On July 18, 2017, the Company's board of directors authorized and declared on a quarterly basis a weekly distribution amount per share of common stock. Effective September 28, 2017, the Company's board of directors delegated to management the authority to determine the amount, record dates, payment dates and other terms of distributions to shareholders, which will be ratified by the board of directors, each on a quarterly basis. Declared distributions are paid monthly.

The Company’s board of directors declared or ratified distributions for 52 and 26 record dates during the year ended December 31, 2018 and the six months ended June 30, 2019, respectively.

The following table presents cash distributions per share that were declared during the year ended December 31, 2018 and the six months ended June 30, 2019:

		Distributions
Three Months Ended		Per Share				Amount
2018
March 31, 2018 (thirteen record dates)		$	0.1829			$	21,002
June 30, 2018 (thirteen record dates)		0.1829				21,004
September 30, 2018 (thirteen record dates)		0.1829				20,776
December 31, 2018 (thirteen record dates)		0.1829				20,701
Total distributions for the year ended December 31, 2018		$	0.7316			$	83,483
2019
March 31, 2019 (thirteen record dates)		$	0.1829			$	20,772
June 30, 2019 (thirteen record dates)		0.1829				20,801
Total distributions for the six months ended June 30, 2019		$	0.3658			$	41,573

On June 25, 2019, the Company's co-chief executive officers declared regular weekly cash distributions of $0.014067 per share for July 2019 through September 2019. Each distribution was or will be paid monthly to shareholders of record as of the weekly record dates set forth below.

Record Date		Payment Date		Distribution Amount Per Share
July 2, 2019		July 31, 2019		$0.014067
July 9, 2019		July 31, 2019		$0.014067
July 16, 2019		July 31, 2019		$0.014067
July 23, 2019		July 31, 2019		$0.014067
July 30, 2019		July 31, 2019		$0.014067
August 6, 2019		August 28, 2019		$0.014067
August 13, 2019		August 28, 2019		$0.014067
August 20, 2019		August 28, 2019		$0.014067
August 27, 2019		August 28, 2019		$0.014067
September 3, 2019		September 25, 2019		$0.014067
September 10, 2019		September 25, 2019		$0.014067
September 17, 2019		September 25, 2019		$0.014067
September 24, 2019		September 25, 2019		$0.014067

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

The Company has adopted an “opt in” distribution reinvestment plan for shareholders. As a result, if the Company makes a distribution, shareholders will receive distributions in cash unless they specifically “opt in” to the fifth amended and restated distribution reinvestment plan so as to have their cash distributions reinvested in additional shares of the Company’s common stock.

On December 8, 2016, the Company amended and restated its distribution reinvestment plan pursuant to the fifth amended and restated distribution reinvestment plan, or the Fifth Amended DRIP. The Fifth Amended DRIP became effective as of, and first applied to the reinvestment of cash distributions paid on, February 1, 2017.  Under the Fifth Amended DRIP, cash distributions to participating shareholders will be reinvested in additional shares of common stock at a purchase price equal to the estimated net asset value per share of common stock as of the date of issuance.

    

The Company may fund its cash distributions to shareholders from any sources of funds available to the Company, including borrowings, net investment income from operations, capital gains proceeds from the sale of assets, non-capital gains proceeds from the sale of assets, dividends or other distributions paid to it on account of preferred and common equity investments in portfolio companies and expense support from CIM, which is subject to repayment by the Company within three years. The Company has not established limits on the amount of funds it may use from available sources to make distributions. For the six months ended June 30, 2019 and the year ended December 31, 2018, none of the Company's distributions resulted from expense support from CIM. The purpose of this arrangement is to avoid such distributions being characterized as a return of capital. Shareholders should understand that any such distributions are not based on the Company’s investment performance, and can only be sustained if the Company achieves positive investment performance in future periods and/or CIM provides such expense support. Shareholders should also understand that the Company’s future repayments of expense support will reduce the distributions that they would otherwise receive. There can be no assurance that the Company will achieve such performance in order to sustain these distributions, or be able to pay distributions at all. CIM has no obligation to provide expense support to the Company in future periods.

The following table reflects the sources of cash distributions on a GAAP basis that the Company has declared on its shares of common stock during the six months ended June 30, 2019 and 2018:

		Six Months Ended June 30,
		2019											2018
Source of Distribution		Per Share				Amount				Percentage			Per Share				Amount				Percentage
Net investment income		$	0.3658			$	41,573			100.0	%		$	0.3658			$	42,006			100.0	%
Total distributions		$	0.3658			$	41,573			100.0	%		$	0.3658			$	42,006			100.0	%

It is the Company's policy to comply with all requirements of the Code applicable to RICs and to distribute substantially all of its taxable income to its shareholders. In addition, by distributing during each calendar year substantially all of its net investment income, net realized capital gains and certain other amounts, if any, the Company intends not to be subject to corporate level federal income tax or federal excise taxes. Accordingly, no federal income tax provision was required for the year ended December 31, 2018.  

    

Income and capital gain distributions are determined in accordance with the Code and federal tax regulations, which may differ from amounts determined in accordance with GAAP. These book/tax differences, which could be material, are primarily due to differing treatments of income and gains on various investments held by the Company. Permanent book/tax differences result in reclassifications to capital in excess of par value, accumulated undistributed net investment income and accumulated undistributed realized gain on investments. During 2018, book/tax differences were primarily due to differing treatments of income and gains on various investments held by the Company.

The determination of the tax attributes of the Company’s distributions is made annually as of the end of the Company’s fiscal year based upon the Company’s taxable income for the full year and distributions paid for the full year. The tax characteristics of distributions to shareholders are reported to shareholders annually on Form 1099-DIV. All distributions for 2018 were characterized as ordinary income distributions for federal income tax purposes.

The tax components of accumulated earnings for the current year will be determined at year end. As of December 31, 2018, the components of accumulated losses on a tax basis were as follows:

	December 31, 2018
Undistributed ordinary income	$	7,127
Other accumulated losses	(2,933		)
Net unrealized depreciation on investments and total return swap	(73,729		)
Total accumulated losses	$	(69,535	)

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

As of June 30, 2019, the aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost was $13,458; the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value was $102,061; the net unrealized depreciation was $88,603; and the aggregate cost of securities for Federal income tax purposes was $1,941,326.

As of December 31, 2018, the aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost was $11,059; the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value was $84,788; the net unrealized depreciation was $73,729; and the aggregate cost of securities for Federal income tax purposes was $1,939,039.

Note 6. Investments

The composition of the Company’s investment portfolio as of June 30, 2019 and December 31, 2018 at amortized cost and fair value was as follows:

		June 30, 2019											December 31, 2018
		Cost(1)				Fair Value				Percentage of Investment Portfolio			Cost(1)				Fair Value				Percentage of Investment Portfolio
Senior secured first lien debt		$	1,491,564			$	1,452,981			79.9	%		$	1,492,034			$	1,462,989			79.0	%
Senior secured second lien debt		313,739				291,549				16.0	%		341,595				323,365				17.4	%
Collateralized securities and structured products - debt		13,405				13,305				0.7	%		15,193				15,193				0.8	%
Collateralized securities and structured products - equity		16,599				15,414				0.9	%		16,794				14,827				0.8	%
Equity		50,432				45,734				2.5	%		38,610				36,399				2.0	%
Subtotal/total percentage		1,885,739				1,818,983				100.0	%		1,904,226				1,852,773				100.0	%
Short term investments(2)		33,740				33,740							12,537				12,537
Total investments		$	1,919,479			$	1,852,723						$	1,916,763			$	1,865,310

(1)	Cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, for debt investments and cost for equity investments.

(2)	Short term investments represent an investment in a fund that invests in highly liquid investments with average original maturity dates of three months or less.

35

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

The following tables show the composition of the Company’s investment portfolio by industry classification and geographic dispersion, and the percentage, by fair value, of the total investment portfolio assets in such industries and geographies as of June 30, 2019 and December 31, 2018:

		June 30, 2019							December 31, 2018
Industry Classification		Investments at Fair Value				Percentage of Investment Portfolio			Investments at Fair Value				Percentage of Investment Portfolio
Healthcare & Pharmaceuticals		$	307,177			16.9	%		$	325,180			17.5	%
Services: Business		219,594				12.1	%		218,888				11.7	%
Services: Consumer		142,613				7.8	%		133,210				7.2	%
Media: Diversified & Production		138,413				7.6	%		114,303				6.2	%
Media: Advertising, Printing & Publishing		126,995				7.0	%		131,620				7.1	%
Capital Equipment		97,523				5.4	%		98,994				5.3	%
High Tech Industries		96,807				5.3	%		126,620				6.8	%
Chemicals, Plastics & Rubber		88,834				4.9	%		74,575				4.0	%
Retail		80,585				4.4	%		42,450				2.3	%
Beverage, Food & Tobacco		69,584				3.8	%		73,494				4.0	%
Telecommunications		63,628				3.5	%		74,261				4.0	%
Banking, Finance, Insurance & Real Estate		63,245				3.5	%		57,917				3.1	%
Energy: Oil & Gas		60,096				3.3	%		54,907				3.0	%
Consumer Goods: Non-Durable		42,439				2.3	%		37,148				2.0	%
Transportation: Cargo		32,444				1.8	%		30,614				1.7	%
Construction & Building		31,723				1.7	%		33,483				1.8	%
Consumer Goods: Durable		31,381				1.7	%		35,709				1.9	%
Hotel, Gaming & Leisure		30,368				1.7	%		54,689				3.0	%
Diversified Financials		28,719				1.6	%		30,020				1.6	%
Aerospace & Defense		25,312				1.4	%		45,655				2.5	%
Forest Products & Paper		19,651				1.1	%		19,525				1.1	%
Metals & Mining		9,490				0.5	%		10,333				0.6	%
Automotive		9,115				0.5	%		24,645				1.3	%
Environmental Industries		2,999				0.2	%		2,955				0.2	%
Media: Broadcasting & Subscription		248				—			1,578				0.1	%
Subtotal/total percentage		1,818,983				100.0	%		1,852,773				100.0	%
Short term investments		33,740							12,537
Total investments		$	1,852,723						$	1,865,310

36

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

		June 30, 2019							December 31, 2018
Geographic Dispersion(1)		Investments at Fair Value				Percentage of Investment Portfolio			Investments at Fair Value				Percentage of Investment Portfolio
United States		$	1,717,885			94.4	%		$	1,740,168			93.9	%
Canada		33,713				1.9	%		27,122				1.6	%
Cayman Islands		15,414				0.8	%		14,827				0.8	%
Germany		13,305				0.8	%		15,193				0.8	%
Luxembourg		12,802				0.7	%		13,833				0.7	%
Marshall Islands		9,374				0.5	%		9,404				0.5	%
Netherlands		8,429				0.5	%		18,015				1.0	%
Cyprus		4,309				0.2	%		4,616				0.2	%
United Kingdom		2,999				0.2	%		2,955				0.2	%
Bermuda		753				—			675				—
France		—				—			5,965				0.3	%
Subtotal/total percentage		1,818,983				100.0	%		1,852,773				100.0	%
Short term investments		33,740							12,537
Total investments		$	1,852,723						$	1,865,310

(1)	The geographic dispersion is determined by the portfolio company's country of domicile.

As of June 30, 2019 and December 31, 2018, investments on non-accrual status represented 0.6% and 1.4%, respectively, of the Company's investment portfolio on a fair value basis.

The Company’s investment portfolio may contain senior secured investments that are in the form of lines of credit, delayed draw term loans, revolving credit facilities, or unfunded commitments, which may require the Company to provide funding when requested in accordance with the terms of the underlying agreements. As of June 30, 2019 and December 31, 2018, the Company’s unfunded commitments amounted to $70,968 and $79,078, respectively. As of August 6, 2019, the Company’s unfunded commitments amounted to $68,656. Since these commitments may expire without being drawn upon, unfunded commitments do not necessarily represent future cash requirements or future earning assets for the Company.  Refer to Note 10 for further details on the Company’s unfunded commitments.

Note 7. Financing Arrangements

The following table presents summary information with respect to the Company’s outstanding financing arrangements as of June 30, 2019: 

Financing Arrangement

Type of Financing Arrangement

Rate

Amount Outstanding

Amount Available

Maturity Date

Citibank Credit Facility

Revolving Credit Facility

L+2.00%

$

307,542

$

42,458

March 30, 2022

JPM Credit Facility

Term Loan Credit Facility

L+3.00%

250,000

25,000

August 24, 2021

UBS Facility

Repurchase Agreement

L+3.50%

200,000

—

May 19, 2020

MS Credit Facility

Revolving Credit Facility

L+3.00%

125,000

25,000

December 19, 2022

$

882,542

$

92,458

Citibank Credit Facility

    

On March 29, 2017, Flatiron Funding II entered into a senior secured credit facility with Citibank. The senior secured credit facility with Citibank, or the Citibank Credit Facility, provided for a revolving credit facility in an aggregate principal amount of $325,000, subject to compliance with a borrowing base. On July 11, 2017, Flatiron Funding II amended the Citibank Credit Facility, or the Amended Citibank Credit Facility, with Citibank to make certain immaterial administrative amendments as a result of the termination of AIM as the Company's investment sub-adviser as discussed in Note 1.

37

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

On March 14, 2019, Flatiron Funding II further amended the Citibank Credit Facility, or the Second Amended Citibank Credit Facility, with Citibank to (i) increase the aggregate principal amount available for borrowings from $325,000 to $350,000, subject to compliance with a borrowing base, (ii) extend the reinvestment period for two years until March 29, 2021 and (iii) extend the maturity date until March 30, 2022.

As of December 31, 2018, the principal amount outstanding on the Amended Citibank Credit Facility was $298,542. As of June 30, 2019 and August 8, 2019, the principal amount outstanding on the Second Amended Citibank Credit Facility was $307,542 and $327,542, respectively.

Advances under the Second Amended Citibank Credit Facility bear interest at a floating rate equal to (1) the higher of (a) the Citibank prime rate, (b) the federal funds rate plus 1.5% or (c) the three-month LIBOR plus 1.0%, plus (2) a spread of (a) 2% per year during the period from and including March 29, 2017 and the earlier of March 29, 2021 and the date the Second Amended Citibank Credit Facility matures, or (b) 3% per year during the period from the date the Second Amended Citibank Credit Facility matures until all obligations under the Second Amended Citibank Credit Facility have been paid in full. Interest is payable quarterly in arrears. All advances under the Second Amended Citibank Credit Facility will mature, and all accrued and unpaid interest thereunder will be due and payable, by no later than March 30, 2022. Flatiron Funding II may prepay advances pursuant to the terms and conditions of the credit and security agreement. Flatiron Funding II must repay 50% of advances under the Second Amended Citibank Credit Facility outstanding on March 29, 2021 by September 15, 2021. In addition, Flatiron Funding II will be subject to a non-usage fee of 0.75% per year (subject to an increase to 2% in certain circumstances) on the amount, if any, of the aggregate principal amount available under the Second Amended Citibank Credit Facility that has not been borrowed. The non-usage fees, if any, are payable quarterly in arrears. Flatiron Funding II incurred certain customary costs and expenses in connection with obtaining and amending the Citibank Credit Facility.

    

The Company incurred debt issuance costs of $3,373 in connection with obtaining and amending the Citibank Credit Facility, which were recorded as a direct reduction to the outstanding balance of the Second Amended Citibank Credit Facility, which is included in the Company’s consolidated balance sheets and will amortize to interest expense over the term of the Second Amended Citibank Credit Facility. At June 30, 2019, the unamortized portion of the debt issuance costs was $1,899.

    

Flatiron Funding II purchased loans and other corporate debt securities with a fair value of $354,967 on the closing date pursuant to master participation and assignment agreements between Flatiron Funding II and each of 15th Street Loan Funding LLC and 15th Street Loan Funding 2 LLC, each a special purpose subsidiary of Citibank. 15th Street Loan Funding LLC and 15th Street Loan Funding 2 LLC held loans and other corporate debt securities in connection with the total return swap agreement between Citibank and Flatiron Funding, LLC, which expired in accordance with its terms on April 18, 2017. Flatiron Funding II’s obligations to Citibank under the Second Amended Citibank Credit Facility are secured by a first priority security interest in all of the assets of Flatiron Funding II. The obligations of Flatiron Funding II under the Second Amended Citibank Credit Facility are non-recourse to the Company, and the Company’s exposure under the Second Amended Citibank Credit Facility is limited to the value of the Company’s investment in Flatiron Funding II. 

In connection with the Second Amended Citibank Credit Facility, Flatiron Funding II has made certain representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. As of and for the six months ended June 30, 2019, Flatiron Funding II was in compliance with all covenants and reporting requirements.

For the three and six months ended June 30, 2019 and 2018, the components of interest expense, average borrowings, and weighted average interest rate for the Second Amended Citibank Credit Facility were as follows:

		Three Months Ended June 30,								Six Months Ended June 30,
		2019				2018				2019				2018
Stated interest expense		$	3,419			$	3,515			$	6,603			$	6,422
Amortization of deferred financing costs		172				161				334				321
Non-usage fee		102				1				217				2
Total interest expense		$	3,693			$	3,677			$	7,154			$	6,745
Weighted average interest rate(1)		4.71		%		4.29		%		4.81		%		3.94		%
Average borrowings		$	296,399			$	324,542			$	282,525			$	324,542

(1)	Includes the stated interest expense and non-usage fee, if any, on the unused portion of the Second Amended Citibank Credit Facility and is annualized for periods covering less than one year.

38

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

JPM Credit Facility

On August 26, 2016, 34th Street entered into a senior secured credit facility with JPM. The senior secured credit facility with JPM, or the JPM Credit Facility, provided for borrowings in an aggregate principal amount of $150,000, of which $25,000 may be funded as a revolving credit facility, each subject to conditions described in the JPM Credit Facility. On August 26, 2016, 34th Street drew down $57,000 of borrowings under the JPM Credit Facility. On August 21, 2018, 34th Street drew down $25,577 of additional borrowings under the Amended JPM Credit Facility (as defined below).

    

On September 30, 2016, July 11, 2017, November 28, 2017 and May 23, 2018, 34th Street amended and restated the JPM Credit Facility, or the Amended JPM Credit Facility, with JPM. Under the Amended JPM Credit Facility entered into on September 30, 2016, the aggregate principal amount available for borrowings was increased from $150,000 to $225,000, of which $25,000 may be funded as a revolving credit facility, subject to conditions described in the Amended JPM Credit Facility. On September 30, 2016, 34th Street drew down $167,423 of additional borrowings under the Amended JPM Credit Facility, a portion of which was used to purchase the portfolio of loans from Credit Suisse Park View BDC, Inc. Under the Amended JPM Credit Facility entered into on July 11, 2017 and November 28, 2017, certain immaterial administrative amendments were made as a result of the termination of AIM as the Company's investment sub-adviser as discussed in Note 1. Under the Amended JPM Credit Facility entered into on May 23, 2018, the aggregate principal amount available for borrowings was increased from $225,000 to $275,000, of which $25,000 may be funded as a revolving credit facility, subject to conditions described in the Amended JPM Credit Facility, and the maturity date was extended to August 24, 2021.

As of June 30, 2019 and 2018, the principal amount outstanding on the Amended JPM Credit Facility was $250,000 and $224,423, respectively.

Advances under the Amended JPM Credit Facility bear interest at a floating rate equal to the three-month LIBOR, plus a spread of 3.00% per year, which was reduced from 3.50% under the Amended JPM Credit Facility entered into on May 23, 2018. Interest is payable quarterly in arrears. All advances under the Amended JPM Credit Facility will mature, and all accrued and unpaid interest thereunder will be due and payable, by no later than August 24, 2021. 34th Street may prepay advances pursuant to the terms and conditions of the Amended JPM Credit Facility, subject to a 1% premium in certain circumstances. In addition, 34th Street will be subject to a non-usage fee of 1.0% per year on the amount, if any, of the aggregate principal amount available under the Amended JPM Credit Facility that has not been borrowed during the period from August 23, 2018, and ending on, but excluding, August 24, 2020. The non-usage fees, if any, are payable quarterly in arrears.

The Company contributed loans and other corporate debt securities to 34th Street in exchange for 100% of the membership interests of 34th Street, and may contribute additional loans and other corporate debt securities to 34th Street in the future. 34th Street’s obligations to JPM under the Amended JPM Credit Facility are secured by a first priority security interest in all of the assets of 34th Street. The obligations of 34th Street under the Amended JPM Credit Facility are non-recourse to the Company, and the Company’s exposure under the Amended JPM Credit Facility is limited to the value of the Company’s investment in 34th Street.  

In connection with the Amended JPM Credit Facility, 34th Street has made certain representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. As of and for the six months ended June 30, 2019, 34th Street was in compliance with all covenants and reporting requirements.

The Company incurred debt issuance costs of $4,052 in connection with obtaining and amending the JPM Credit Facility, which were recorded as a direct reduction to the outstanding balance of the Amended JPM Credit Facility, which is included in the Company’s consolidated balance sheet as of June 30, 2019 and will amortize to interest expense over the term of the Amended JPM Credit Facility. At June 30, 2019, the unamortized portion of the debt issuance costs was $1,308.

39

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

For the three and six months ended June 30, 2019 and 2018, the components of interest expense, average borrowings, and weighted average interest rate for the Amended JPM Credit Facility were as follows:

		Three Months Ended June 30,								Six Months Ended June 30,
		2019				2018				2019				2018
Stated interest expense		$	3,534			$	3,073			$	7,083			$	5,911
Amortization of deferred financing costs		152				208				458				425
Non-usage fee		64				28				126				29
Total interest expense		$	3,750			$	3,309			$	7,667			$	6,365
Weighted average interest rate(1)		5.69		%		5.47		%		5.74		%		5.26		%
Average borrowings		$	250,000			$	224,423			$	250,000			$	224,423

(1)	Includes the stated interest expense and non-usage fee, if any, on the unused portion of the Amended JPM Credit Facility and is annualized for periods covering less than one year.

UBS Facility

On May 19, 2017, the Company, through two newly-formed, wholly-owned, special-purpose financing subsidiaries, entered into a financing arrangement with UBS pursuant to which up to $125,000 was made available to the Company.

    

Pursuant to the financing arrangement, assets in the Company's portfolio may be contributed from time to time to Murray Hill Funding II through Murray Hill Funding, LLC, or Murray Hill Funding, each a newly-formed, wholly-owned, special-purpose financing subsidiary of the Company. On May 19, 2017, the Company contributed assets to Murray Hill Funding II. The assets held by Murray Hill Funding II secure the obligations of Murray Hill Funding II under Class A Notes, or the Notes, issued by Murray Hill Funding II. Pursuant to an Indenture, dated May 19, 2017, between Murray Hill Funding II and U.S. Bank National Association, or U.S. Bank, as trustee, or the Indenture, the aggregate principal amount of Notes that may be issued by Murray Hill Funding II from time to time was $192,308. Murray Hill Funding purchased the Notes issued by Murray Hill Funding II at a purchase price equal to their par value. Murray Hill Funding makes capital contributions to Murray Hill Funding II to, among other things, maintain the value of the portfolio of assets held by Murray Hill Funding II.

Principal on the Notes will be due and payable on the stated maturity date of May 19, 2027. Pursuant to the Indenture, Murray Hill Funding II has made certain representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar transactions. The Indenture contains events of default customary for similar transactions, including, without limitation: (a) the failure to make principal payments on the Notes at their stated maturity or any earlier redemption date or to make interest payments on the Notes and such failure is not cured within three business days; (b) the failure to disburse amounts in accordance with the priority of payments and such failure is not cured within three business days; and (c) the occurrence of certain bankruptcy and insolvency events with respect to Murray Hill Funding II or Murray Hill Funding.

Murray Hill Funding, in turn, entered into a repurchase transaction with UBS, pursuant to the terms of a Global Master Repurchase Agreement and the related Annex and Master Confirmation thereto, each dated May 19, 2017, or collectively, the UBS Facility. Pursuant to the UBS Facility, on May 19, 2017 and June 19, 2017, UBS purchased Notes held by Murray Hill Funding for an aggregate purchase price equal to 65% of the principal amount of Notes purchased. Subject to certain conditions, the maximum principal amount of Notes that may be purchased under the UBS Facility was $192,308. Accordingly, the aggregate maximum amount payable to Murray Hill Funding under the UBS Facility would not exceed $125,000. Murray Hill Funding will repurchase the Notes sold to UBS under the UBS Facility by no later than May 19, 2020. The repurchase price paid by Murray Hill Funding to UBS will be equal to the purchase price paid by UBS for the repurchased Notes (giving effect to any reductions resulting from voluntary partial prepayment(s)). If the UBS Facility is accelerated prior to May 19, 2020 due to an event of default or a mandatory or voluntary full payment by Murray Hill Funding, then Murray Hill Funding must pay to UBS a fee equal to the present value of the spread portion of the financing fees that would have been payable to UBS from the date of acceleration through May 19, 2020 had the acceleration not occurred. The financing fee under the UBS Facility is equal to the three-month LIBOR plus a spread of up to 3.50% per year for the relevant period.

40

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

On December 1, 2017, Murray Hill Funding II amended and restated the Indenture, or the Amended Indenture, pursuant to which the aggregate principal amount of Notes that may be issued by Murray Hill Funding II was increased from $192,308 to $266,667. Murray Hill Funding will purchase the Notes to be issued by Murray Hill Funding II from time to time. On December 1, 2017, Murray Hill Funding entered into a First Amended and Restated Master Confirmation to the Global Master Repurchase Agreement, or the Amended Master Confirmation, which sets forth the terms of the repurchase transaction between Murray Hill Funding and UBS under the UBS Facility. As part of the Amended Master Confirmation, on December 15, 2017 and April 2, 2018, UBS purchased the increased aggregate principal amount of Notes held by Murray Hill Funding for an aggregate purchase price equal to 75% of the principal amount of Notes issued. As a result of the Amended Master Confirmation, the aggregate maximum amount payable to Murray Hill Funding and made available to the Company under the UBS Facility was increased from $125,000 to $200,000. No other material terms of the UBS Facility were revised in connection with the Amended UBS Facility.

UBS may require Murray Hill Funding to post cash collateral if, without limitation, the sum of the market value of the portfolio of assets and the cash and eligible investments held by Murray Hill Funding II, together with any posted cash collateral, is less than the required margin amount under the UBS Facility; provided, however, that Murray Hill Funding will not be required to post cash collateral with UBS until such market value has declined at least 10% from the initial market value of the portfolio assets.

The Company has no contractual obligation to post any such cash collateral or to make any payments to UBS on behalf of Murray Hill Funding. The Company may, but is not obligated to, increase its investment in Murray Hill Funding for the purpose of funding any cash collateral or payment obligations for which Murray Hill Funding becomes obligated in connection with the Amended UBS Facility. The Company’s exposure under the Amended UBS Facility is limited to the value of the Company’s investment in Murray Hill Funding.  

Pursuant to the Amended UBS Facility, Murray Hill Funding has made certain representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar transactions. The Amended UBS Facility contains events of default customary for similar financing transactions, including, without limitation: (a) failure to transfer the Notes to UBS on the applicable purchase date or repurchase the Notes from UBS on the applicable repurchase date; (b) failure to pay certain fees and make-whole amounts when due; (c) failure to post cash collateral as required; (d) the occurrence of insolvency events with respect to Murray Hill Funding; and (e) the admission by Murray Hill Funding of its inability to, or its intention not to, perform any of its obligations under the Amended UBS Facility.

Murray Hill Funding paid an upfront fee and incurred certain other customary costs and expenses totaling $2,637 in connection with obtaining the Amended UBS Facility, which were recorded as a direct reduction to the outstanding balance of the Amended UBS Facility, which is included in the Company’s consolidated balance sheets and will amortize to interest expense over the term of the Amended UBS Facility. At June 30, 2019, the unamortized portion of the upfront fee and other expenses was $833.

As of June 30, 2019, Notes in the aggregate principal amount of $266,667 had been purchased by Murray Hill Funding from Murray Hill Funding II and subsequently sold to UBS under the Amended UBS Facility for aggregate proceeds of $200,000. The carrying amount outstanding under the Amended UBS Facility approximates its fair value. The Company funded each purchase of Notes by Murray Hill Funding through a capital contribution to Murray Hill Funding. As of June 30, 2019, the amount due at maturity under the Amended UBS Facility was $200,000. The Notes issued by Murray Hill Funding II and purchased by Murray Hill Funding eliminate in consolidation on the Company’s consolidated financial statements.

    

As of June 30, 2019, the fair value of assets held by Murray Hill Funding II was $320,778.

    

For the three and six months ended June 30, 2019 and 2018, the components of interest expense, average borrowings, and weighted average interest rate for the Amended UBS Facility were as follows:

		Three Months Ended June 30,								Six Months Ended June 30,
		2019				2018				2019				2018
Stated interest expense		$	3,078			$	2,853			$	6,150			$	4,858
Amortization of deferred financing costs		234				234				466				466
Total interest expense		$	3,312			$	3,087			$	6,616			$	5,324
Weighted average interest rate(1)		6.09		%		5.66		%		6.12		%		5.33		%
Average borrowings		$	200,000			$	199,588			$	200,000			$	181,146

(1)	Includes the stated interest expense and non-usage fee, if any, on the unused portion of the Amended UBS Facility and is annualized for periods covering less than one year.

41

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

MS Credit Facility

On December 19, 2017, 33rd Street Funding entered into a senior secured credit facility, or the MS Credit Facility, with MS. The MS Credit Facility provided for a revolving credit facility in an aggregate principal amount of up to $200,000, subject to compliance with a borrowing base.

    

Advances under the MS Credit Facility will be available through December 19, 2020 and will bear interest at a floating rate equal to the three-month LIBOR, plus a spread of (i) 3.0% per year through December 19, 2020 and (ii) 3.5% per year thereafter through December 19, 2022. Interest is payable quarterly in arrears. All advances under the MS Credit Facility will mature, and all accrued and unpaid interest thereunder will be due and payable, by no later than December 19, 2022. In addition, 33rd Street Funding will be subject to a non-usage fee of 0.75% per year that accrues for each day of an accrual period on the amount by which $200,000 exceeds the greater of (x) the aggregate principal amount, if any, of the advances outstanding on such day and (y) during the period from June 20, 2018 through December 19, 2020, 75% of $200,000 (or such smaller amount if the committed facility amount is reduced pursuant to the terms and conditions of the loan and servicing agreement). The non-usage fees, if any, are payable quarterly in arrears. 33rd Street Funding incurred certain customary costs and expenses in connection with obtaining the MS Credit Facility.

On July 9, 2018, 33rd Street Funding amended and restated the MS Credit Facility to make certain immaterial administrative amendments. 33rd Street Funding further amended and restated the MS Credit Facility, or the Amended MS Credit Facility, with MS on December 18, 2018. Pursuant to the amendment, 33rd Street Funding may prepay advances pursuant to the terms and conditions of the loan and servicing agreement subject to a 2% or 1% premium if the amount of the Amended MS Credit Facility is reduced or terminated on or prior to December 19, 2019 or December 19, 2020, respectively.

Pursuant to the terms of the loan and servicing agreement, on March 15, 2019, 33rd Street Funding reduced the aggregate principal amount available for borrowings under the Amended MS Credit Facility from $200,000 to $150,000.

In connection with the Amended MS Credit Facility, 33rd Street Funding has made certain representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. The Amended MS Credit Facility contains customary events of default for similar financing transactions, including, without limitation: (a) the failure to make any payment when due and thereafter (other than with respect to payments of principal and interest), within one business day following the earlier of (i) 33rd Street Funding becoming aware of such failure; or (ii) notice of such default is provided by MS; (b) the insolvency or bankruptcy of 33rd Street Funding, the Company or CIM; (c) a change of control of 33rd Street Funding shall have occurred or CIM ceases to be the investment advisor of the Company; (d) the failure by 33rd Street Funding to make any payment when due in connection with any of its other indebtedness having an aggregate value of at least $500, or any other default by 33rd Street Funding of any agreement related to such indebtedness; (e) any representation, warranty, condition or agreement of 33rd Street Funding, the Company or CIM under the loan and servicing agreement is incorrect or not performed, which if capable of being cured, is not cured within 30 days; and (f) the failure to satisfy certain financial covenants, which if capable of being cured, is not cured within the time period specified in the loan and servicing agreement. Upon the occurrence and during the continuation of an event of default, MS may declare the outstanding advances and all other obligations under the Amended MS Credit Facility immediately due and payable.

    

The Company contributed loans and other corporate debt securities to 33rd Street Funding in exchange for 100% of the membership interests of 33rd Street Funding, and may contribute additional loans and other corporate debt securities to 33rd Street Funding in the future. 33rd Street Funding’s obligations to MS under the Amended MS Credit Facility are secured by a first priority security interest in all of the assets of 33rd Street Funding. The obligations of 33rd Street Funding under the Amended MS Credit Facility are non-recourse to the Company, and the Company's exposure under the Amended MS Credit Facility is limited to the value of the Company's investment in 33rd Street Funding. 33rd Street Funding has appointed CIM to manage its portfolio.

On June 5, 2018, June 12, 2018 and June 28, 2018, 33rd Street Funding drew down $25,000, $75,000 and $50,000 of borrowings under the MS Credit Facility, respectively. On May 8, 2019 and May 23, 2019, 33rd Street Funding repaid $20,000 and $5,000 of borrowings under the MS Credit Facility, respectively. As of June 30, 2019 and December 31, 2018, the principal amount outstanding on the Amended MS Credit Facility was $125,000 and $150,000, respectively. As of August 8, 2019, the principal amount outstanding on the Amended MS Credit Facility was $115,000.

33rd Street Funding paid an upfront fee and incurred certain other customary costs and expenses totaling $2,591 in connection with obtaining and amending the MS Credit Facility, which the Company initially recorded as prepaid expenses and other assets on the Company’s consolidated balance sheets and will amortize to interest expense over the term of the Amended MS Credit Facility. On June 5, 2018, unamortized upfront fees were recorded as a direct reduction to the outstanding balance of the Amended MS Credit Facility, which is included in the Company’s consolidated balance sheet as of June 30, 2019. At June 30, 2019, the unamortized portion of the upfront fee and other expenses was $1,800.

42

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

For the three and six months ended June 30, 2019 and 2018, the components of interest expense, average borrowings, and weighted average interest rate for the Amended MS Credit Facility were as follows:

		Three Months Ended June 30,								Six Months Ended June 30,
		2019				2018				2019				2018
Stated interest expense		$	1,910			$	316			$	4,064			$	316
Amortization of deferred financing costs		129				129				257				257
Non-usage fee		30				333				106				762
Total interest expense		$	2,069			$	778			$	4,427			$	1,335
Weighted average interest rate(1)		5.64		%		10.49		%		5.80		%		17.43		%
Average borrowings		$	135,989			$	24,451			$	142,956			$	12,293

(1)	Includes the stated interest expense and non-usage fee, if any, on the unused portion of the Amended MS Credit Facility and is annualized for periods covering less than one year.

Note 8. Fair Value of Financial Instruments

 

The following table presents fair value measurements of the Company’s portfolio investments as of June 30, 2019 and December 31, 2018, according to the fair value hierarchy: 

	June 30, 2019																December 31, 2018
	Level 1				Level 2				Level 3				Total				Level 1				Level 2				Level 3				Total
Senior secured first lien debt	$	—			$	—			$	1,452,981			$	1,452,981			$	—			$	—			$	1,462,989			$	1,462,989
Senior secured second lien debt	—				—				291,549				291,549				—				—				323,365				323,365
Collateralized securities and structured products - debt	—				—				13,305				13,305				—				—				15,193				15,193
Collateralized securities and structured products - equity	—				—				15,414				15,414				—				—				14,827				14,827
Equity	6,401				—				39,333				45,734				7,323				—				29,076				36,399
Short term investments	33,740				—				—				33,740				12,537				—				—				12,537
Total Investments	$	40,141			$	—			$	1,812,582			$	1,852,723			$	19,860			$	—			$	1,845,450			$	1,865,310

 

43

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

The following tables provide a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the three and six months ended June 30, 2019 and 2018:

	Three Months Ended June 30, 2019
	Senior Secured First Lien Debt				Senior Secured Second Lien Debt				Collateralized Securities and Structured Products - Debt				Collateralized Securities and Structured Products - Equity				Equity				Total
Beginning balance, March 31, 2019	$	1,413,468			$	310,192			$	15,030			$	15,475			$	32,984			$	1,787,149
Investments purchased(1)	137,901				4,856				—				—				7,723				150,480
Net realized loss	(2,087		)		—				—				—				(155		)		(2,242		)
Net change in unrealized (depreciation) appreciation	(6,701		)		(1,489		)		14				27				(1,219		)		(9,368		)
Accretion of discount	2,909				409				—				—				—				3,318
Sales and principal repayments(1)	(92,509		)		(22,419		)		(1,739		)		(88		)		—				(116,755		)
Ending balance, June 30, 2019	$	1,452,981			$	291,549			$	13,305			$	15,414			$	39,333			$	1,812,582
Change in net unrealized (depreciation) appreciation on investments still held as of June 30, 2019(2)	$	(8,775	)		$	(1,334	)		$	14			$	27			$	(1,219	)		$	(11,287	)

(1)	Includes non-cash restructured securities.

(2)	Included in net change in unrealized (depreciation) appreciation on investments in the consolidated statements of operations.

	Six Months Ended June 30, 2019
	Senior Secured First Lien Debt				Senior Secured Second Lien Debt				Collateralized Securities and Structured Products - Debt				Collateralized Securities and Structured Products - Equity				Equity				Total
Beginning balance, December 31, 2018	$	1,462,989			$	323,365			$	15,193			$	14,827			$	29,076			$	1,845,450
Investments purchased(1)	272,678				14,680				—				—				11,977				299,335
Net realized loss	(2,982		)		(13		)		(49		)		—				(155		)		(3,199		)
Net change in unrealized (depreciation) appreciation	(9,538		)		(3,960		)		(100		)		782				(1,565		)		(14,381		)
Accretion of discount	5,572				763				—				—				—				6,335
Sales and principal repayments(1)	(275,738		)		(43,286		)		(1,739		)		(195		)		—				(320,958		)
Ending balance, June 30, 2019	$	1,452,981			$	291,549			$	13,305			$	15,414			$	39,333			$	1,812,582
Change in net unrealized (depreciation) appreciation on investments still held as of June 30, 2019(2)	$	(12,057	)		$	(3,972	)		$	(100	)		$	782			$	(1,565	)		$	(16,912	)

(1)	Includes non-cash restructured securities.

(2)	Included in net change in unrealized (depreciation) appreciation on investments in the consolidated statements of operations.

44

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

	Three Months Ended June 30, 2018
	Senior Secured First Lien Debt				Senior Secured Second Lien Debt				Collateralized Securities and Structured Products - Debt				Collateralized Securities and Structured Products - Equity				Equity				Total
Beginning balance, March 31, 2018	$	1,160,746			$	354,061			$	22,380			$	18,731			$	17,307			$	1,573,225
Investments purchased	363,182				20,472				—				—				1,301				384,955
Net realized (loss) gain	(938		)		(6,050		)		—				137				—				(6,851		)
Net change in unrealized appreciation (depreciation)	2,067				1,772				(329		)		(10		)		72				3,572
Accretion of discount	2,992				367				352				—				—				3,711
Sales and principal repayments	(149,894		)		(5,024		)		(7,500		)		(2,808		)		—				(165,226		)
Ending balance, June 30, 2018	$	1,378,155			$	365,598			$	14,903			$	16,050			$	18,680			$	1,793,386
Change in net unrealized appreciation (depreciation) on investments still held as of June 30, 2018(1)	$	1,589			$	(4,216	)		$	22			$	112			$	72			$	(2,421	)

(1)	Included in net change in unrealized appreciation (depreciation) on investments in the consolidated statements of operations.

	Six Months Ended June 30, 2018
	Senior Secured First Lien Debt				Senior Secured Second Lien Debt				Collateralized Securities and Structured Products - Debt				Collateralized Securities and Structured Products - Equity				Unsecured Debt				Equity				Total
Beginning balance, December 31, 2017	$	1,100,336			$	333,944			$	25,289			$	18,525			$	7,639			$	16,277			$	1,502,010
Investments purchased	608,835				95,480				—				—				—				3,237				707,552
Net realized (loss) gain	(2,508		)		(5,182		)		—				137				21				—				(7,532		)
Net change in unrealized (depreciation) appreciation	(2,215		)		3,124				122				353				14				(834		)		564
Accretion of discount	7,714				725				362				—				4				—				8,805
Sales and principal repayments	(334,007		)		(62,493		)		(10,870		)		(2,965		)		(7,678		)		—				(418,013		)
Ending balance, June 30, 2018	$	1,378,155			$	365,598			$	14,903			$	16,050			$	—			$	18,680			$	1,793,386
Change in net unrealized (depreciation) appreciation on investments still held as of June 30, 2018(1)	$	(1,023	)		$	(1,993	)		$	295			$	(74	)		$	—			$	(834	)		$	(3,629	)

(1)	Included in net change in unrealized (depreciation) appreciation on investments in the consolidated statements of operations.

45

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

Significant Unobservable Inputs

The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements of investments as of June 30, 2019 and December 31, 2018 were as follows:

June 30, 2019

Fair Value

Valuation Techniques/ Methodologies

Unobservable Inputs

Range

Weighted Average(1)

Senior secured first lien debt

$

961,007

Discounted Cash Flow

Discount Rates

5.0%

—

20.8%

10.0%

483,798

Broker Quotes

Broker Quotes

N/A

N/A

8,176

Other(2)

Other(2)

N/A

N/A

Senior secured second lien debt

144,001

Broker Quotes

Broker Quotes

N/A

N/A

140,825

Discounted Cash Flow

Discount Rates

10.0%

—

13.2%

11.4%

6,723

Market Comparable Approach

EBITDA Multiple

4.73x

N/A

Collateralized securities and structured products - debt

13,305

Discounted Cash Flow

Discount Rates

12.4%

N/A

Collateralized securities and structured products - equity

15,414

Discounted Cash Flow

Discount Rates

12.5%

—

16.0%

13.8%

Equity

19,632

Market Comparable Approach

EBITDA Multiple

4.50x

—

9.50x

7.84x

7,263

Revenue Multiple

0.30x

—

3.49x

0.72x

11,861

Discounted Cash Flow

Discount Rates

18.8%

N/A

414

Options Pricing Model

Expected Volatility

33.0%

—

65.0%

39.4%

163

Broker Quotes

Broker Quotes

N/A

N/A

Total

$

1,812,582

(1)	Weighted average amounts are based on the estimated fair values.

(2)	Fair value based on expected outcome of proposed corporate transactions and/or other factors.

46

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

December 31, 2018

Fair Value

Valuation Techniques/ Methodologies

Unobservable Inputs

Range

Weighted Average(1)

Senior secured first lien debt

$

959,417

Discounted Cash Flow

Discount Rates

3.0%

-

32.5%

10.6%

497,641

Broker Quotes

Broker Quotes

N/A

N/A

2,270

Market Comparable Approach

EBITDA Multiple

4.00x

-

5.00x

4.00x

1,298

Revenue Multiple

0.15x

-

0.20x

0.18x

2,363

Other(2)

Other(2)

N/A

N/A

Senior secured second lien debt

170,578

Discounted Cash Flow

Discount Rates

9.6%

-

25.7%

11.9%

145,734

Broker Quotes

Broker Quotes

N/A

N/A

7,053

Market Comparable Approach

EBITDA Multiple

8.25x

-

9.25x

8.79x

Collateralized securities and structured products - debt

15,193

Discounted Cash Flow

Discount Rates

11.0%

N/A

Collateralized securities and structured products - equity

14,827

Discounted Cash Flow

Discount Rates

13.3%

-

15.0%

13.9%

Equity

24,077

Market Comparable Approach

EBITDA Multiple

4.00x

-

10.00x

7.96x

3,236

Revenue Multiple

0.15x

-

1.25x

1.00x

1,461

Broker Quotes

Broker Quotes

N/A

N/A

302

Options Pricing Model

Expected Volatility

33.0%

-

110.7

%

56.7%

Total

$

1,845,450

(1)	Weighted average amounts are based on the estimated fair values.

(2)	Fair value based on expected outcome of proposed corporate transactions and/or other factors.

The significant unobservable inputs used in the fair value measurement of the Company’s senior secured first lien debt, senior secured second lien debt, collateralized securities and structured products, and equity are discount rates, EBITDA multiples, revenue multiples, broker quotes and expected volatility. A significant increase or decrease in discount rates would result in a significantly lower or higher fair value measurement, respectively. A significant increase or decrease in the EBITDA multiples, revenue multiples, expected proceeds from proposed corporate transactions, broker quotes and expected volatility would result in a significantly higher or lower fair value measurement, respectively.

Note 9. General and Administrative Expense

General and administrative expense consisted of the following items for the three and six months ended June 30, 2019 and 2018:

	Three Months Ended June 30,								Six Months Ended June 30,
	2019				2018				2019				2018
Professional fees	$	117			$	324			$	670			$	953
Transfer agent expense	338				317				603				646
Valuation expense	227				207				342				371
Director fees and expenses	119				121				240				242
Insurance expense	103				103				204				203
Accounting and administration costs	188				174				203				352
Dues and subscriptions	24				158				159				402
Due diligence fees	—				27				61				109
Printing and marketing expense	34				74				56				146
Other expenses	47				99				48				162
Total general and administrative expense	$	1,197			$	1,604			$	2,586			$	3,586

47

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

Note 10. Commitments and Contingencies

The Company entered into certain contracts with other parties that contain a variety of indemnifications. The Company’s maximum exposure under these arrangements is unknown. However, the Company has not experienced claims or losses pursuant to these contracts and believes the risk of loss related to such indemnifications to be remote.

As of June 30, 2019 and December 31, 2018, the Company’s unfunded commitments were as follows:

Unfunded Commitments		June 30, 2019(1)				December 31, 2018(1)
Volta Charging, LLC		$	12,000			$	—
Mimeo.com, Inc.		10,500				13,000
Independent Pet Partners Intermediate Holdings, LLC		8,889				—
CircusTrix Holdings, LLC		5,573				5,573
Manna Pro Products, LLC		5,528				—
DFC Global Facility Borrower II LLC		5,317				5,317
Foundation Consumer Healthcare, LLC		4,211				4,211
Lift Brands, Inc.		3,650				4,150
Moss Holding Company		2,232				2,232
Instant Web, LLC		2,055				2,704
Adapt Laser Acquisition, Inc.		2,000				1,500
Charming Charlie, LLC		1,938				1,938
LAV Gear Holdings, Inc.		1,744				—
Adams Publishing Group, LLC		1,600				2,069
Teladoc, Inc.		1,250				1,250
Country Fresh Holdings, LLC		735				—
Woodstream Corp.		559				559
Elemica, Inc.		500				2,500
American Media, Inc.		426				1,778
F+W Media, Inc.		261				—
TherapeuticsMD, Inc.		—				25,000
Ministry Brands, LLC		—				2,924
Ivy Hill Middle Market Credit Fund VIII, Ltd.		—				1,111
OTG Management, LLC		—				514
Studio Movie Grill Holdings, LLC		—				468
PDI TA Holdings, Inc.		—				237
Achilles Acquisition, LLC		—				43
Total		$	70,968			$	79,078

(1)	Unless otherwise noted, the funding criteria for these unfunded commitments had not been met at the date indicated.

Unfunded commitments to provide funds to companies are not recorded on the Company’s consolidated balance sheets. Since these commitments may expire without being drawn upon, unfunded commitments do not necessarily represent future cash requirements or future earning assets for the Company. The Company intends to use cash on hand, short-term investments, proceeds from borrowings, and other liquid assets to fund these commitments should the need arise. For information on the companies to which the Company is committed to fund additional amounts as of June 30, 2019 and December 31, 2018, refer to the table above and the consolidated schedules of investments. As of August 6, 2019, the Company was committed, upon the satisfaction of certain conditions, to fund an additional $68,656.

48

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

The Company will fund its unfunded commitments from the same sources it uses to fund its investment commitments that are funded at the time they are made (i.e., advances from its financing arrangements and/or cash flows from operations). The Company will not fund its unfunded commitments from future net proceeds generated by securities offerings, if any. The Company follows a process to manage its liquidity and ensure that it has available capital to fund its unfunded commitments. Specifically, the Company prepares detailed analyses of the level of its unfunded commitments relative to its then available liquidity on a daily basis. These analyses are reviewed and discussed on a weekly basis by the Company’s executive officers and senior members of CIM (including members of the investment committee) and are updated on a “real time” basis in order to ensure that the Company has adequate liquidity to satisfy its unfunded commitments.

Note 11. Fee Income

Fee income consists of commitment fees, origination fees and amendment fees. The following table summarizes the Company’s fee income for the three and six months ended June 30, 2019 and 2018:

	Three Months Ended June 30,								Six Months Ended June 30,
	2019				2018				2019				2018
Amendment fees	$	146			$	389			$	444			$	544
Origination fees	350				—				350				—
Commitment fees	28				278				28				337
Total	$	524			$	667			$	822			$	881

Income from all fees was non-recurring.

49

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

Note 12. Financial Highlights

The following is a schedule of financial highlights as of and for the six months ended June 30, 2019 and 2018:

		Six Months Ended June 30,
		2019				2018
Per share data:(1)
Net asset value at beginning of period		$	8.69			$	9.14
Results of operations:
Net investment income		0.38				0.38
Net realized and net change in unrealized losses(2)		(0.16		)		(0.04		)
Net increase in net assets resulting from operations(2)		0.22				0.34
Shareholder distributions:
Distributions from net investment income		(0.37		)		(0.37		)
Net decrease in net assets from shareholders' distributions		(0.37		)		(0.37		)
Capital share transactions:
Issuance of common stock above net asset value(3)		—				—
Repurchases of common stock(4)		—				—
Net increase in net assets resulting from capital share transactions		—				—
Net asset value at end of period		$	8.54			$	9.11
Shares of common stock outstanding at end of period		113,396,246				115,570,125
Total investment return-net asset value(5)		2.52		%		3.67		%
Net assets at beginning of period		$	979,271			$	1,058,691
Net assets at end of period		$	968,481			$	1,052,619
Average net assets		$	983,857			$	1,052,915
Ratio/Supplemental data:
Ratio of net investment income to average net assets(6)		4.39		%		4.17		%
Ratio of gross operating expenses to average net assets(6)(7)		5.84		%		3.88		%
Ratio of expenses to average net assets(6)		5.84		%		3.88		%
Portfolio turnover rate(8)		15.74		%		25.90		%
Asset coverage ratio(9)		2.10				2.17

(1)	The per share data for the six months ended June 30, 2019 and 2018 was derived by using the weighted average shares of common stock outstanding during each period.

(2)

The amount shown for net realized and net change in unrealized losses on investments is the balancing figure 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 change in the aggregate gains and losses in portfolio securities for the period because of the timing of sales and repurchases of the Company’s shares in relation to fluctuating market values for the portfolio. As a result, net increase in net assets resulting from operations in this schedule may vary from the consolidated statements of operations.

(3)

The continuous issuance of shares of common stock may cause an incremental increase in net asset value per share due to the sale of shares at the then prevailing public offering price and the receipt of net proceeds per share by the Company in excess of net asset value per share on each subscription closing date. The per share impact of the continuous issuance of shares of common stock was an increase to net asset value of less than $0.01 per share during the six months ended June 30, 2019 and 2018.

50

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CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2019

(in thousands, except share and per share amounts)

(4)	Repurchases of common stock may cause an incremental decrease in net asset value per share due to the repurchase of shares at a price in excess of net asset value per share on each repurchase date. The per share impact of repurchases of common stock was a decrease to net asset value of less than $0.01 per share during the six months ended June 30, 2019 and 2018.

(5)

Total investment return-net asset value is a measure of the change in total value for shareholders who held the Company’s common stock at the beginning and end of the period, including distributions paid or payable during the period. Total investment return-net asset value is based on (i) the beginning period net asset value per share on the first day of the period, (ii) the net asset value per share on the last day of the period of (A) one share plus (B) any fractional shares issued in connection with the reinvestment of monthly distributions, and (iii) the value of distributions payable, if any, on the last day of the period. The total investment return-net asset value calculation assumes that monthly cash distributions are reinvested in accordance with the Company's distribution reinvestment plan then in effect as described in Note 5. The total investment return-net asset value does not consider the effect of the sales load from the sale of the Company’s common stock. The total investment return-net asset value includes the effect of the issuance of shares at a net offering price that is greater than net asset value per share, which causes an increase in net asset value per share. Total returns covering less than a full year are not annualized.

(6)	Ratio is not annualized.

(7)	Ratio of gross operating expenses to average net assets does not include expense support provided by CIG, AIM and/or CIM, if any.

(8)	Portfolio turnover rate is calculated using the lesser of year-to-date sales or purchases over the average of the invested assets at fair value, excluding short term investments, and is not annualized.

(9)	Asset coverage ratio is equal to (i) the sum of (a) net assets at the end of the period and (b) total senior securities outstanding at the end of the period (excluding unfunded commitments), divided by (ii) total senior securities outstanding at the end of the period.

51

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

As used in this Quarterly Report on Form 10-Q, “we,” “us,” “our” or similar terms include CĪON Investment Corporation and its consolidated subsidiaries.

The following discussion should be read in conjunction with our unaudited consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2018. In addition to historical information, the following discussion and other parts of this Quarterly Report on Form 10-Q contain forward-looking information that involves risks and uncertainties. Amounts and percentages presented herein may have been rounded for presentation and all dollar amounts, excluding share and per share amounts, are presented in thousands unless otherwise noted.

Forward-Looking Statements

Some of the statements within this Quarterly Report on Form 10-Q constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this Quarterly Report on Form 10-Q may include statements as to:

•	our future operating results;

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

•	the impact of the investments that we expect to make;

•	the ability of our portfolio companies to achieve their objectives;

•	our current and expected financings and investments;

•	the adequacy of our cash resources, financing sources and working capital;

•	the use of borrowed money to finance a portion of our investments;

•	the timing of cash flows, if any, from the operations of our portfolio companies;

•	our contractual arrangements and relationships with third parties;

•	the actual and potential conflicts of interest with CIM and Apollo and their respective affiliates;

•	the ability of CIM's and AIM's investment professionals to locate suitable investments for us and the ability of CIM to monitor and administer our investments;

•	the ability of CIM and its affiliates to attract and retain highly talented professionals;

•	the dependence of our future success on the general economy and its impact on the industries in which we invest;

•	the effects of a changing interest rate environment;

•	our ability to source favorable private investments;

•	our tax status;

•	the effect of changes to tax legislation and our tax position;

•	the tax status of the companies in which we invest; and

•	the timing and amount of distributions and dividends from the companies in which we invest.

In addition, words such as “anticipate,” “believe,” “expect” and “intend” indicate a forward-looking statement, although not all forward-looking statements include these words. 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 in “Risk Factors” in Item 1A of Part II of this Quarterly Report on Form 10-Q. Other factors that could cause actual results to differ materially include: 

•	changes in the economy;

•	risks associated with possible disruption in our operations or the economy generally due to terrorism or natural disasters; and

•	future changes in laws or regulations and conditions in our operating areas.

We have based the forward-looking statements on information available to us on the date of this Quarterly Report on Form 10-Q. Except as required by the federal securities laws, 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 review any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. The forward-looking statements contained in this Quarterly Report on Form 10-Q are excluded from the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

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Overview

We were incorporated under the general corporation laws of the State of Maryland on August 9, 2011 and commenced operations on December 17, 2012 upon raising proceeds of $2,500 from persons not affiliated with us, CIM or Apollo. We are an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a BDC under the 1940 Act. We elected to be treated for federal income tax purposes as a RIC, as defined under Subchapter M of the Code.

Our investment objective is to generate current income and, to a lesser extent, capital appreciation for investors. Our portfolio is comprised primarily of investments in senior secured debt, including first lien loans, second lien loans and unitranche loans, and, to a lesser extent, collateralized securities, structured products and other similar securities, and equity, of private and thinly traded U.S. middle-market companies. In connection with our debt investments, we may receive equity interests such as warrants or options as additional consideration. We may also purchase equity interests in the form of common or preferred stock in our target companies, either in conjunction with one of our debt investments or through a co-investment with a financial sponsor.

We are managed by CIM, our affiliate and a registered investment adviser. Pursuant to an investment advisory agreement with us, CIM oversees the management of our activities and is responsible for making investment decisions for our portfolio. On November 1, 2018, our board of directors, including a majority of directors who are not interested persons, approved the renewal of the investment advisory agreement with CIM for a period of twelve months commencing December 17, 2018. We and CIM previously engaged AIM to act as our investment sub-adviser.

On July 11, 2017, the members of CIM entered into the Third Amended CIM LLC Agreement for the purpose of creating a joint venture between AIM and CIG. Under the Third Amended CIM LLC Agreement, AIM became a member of CIM and was issued a newly-created class of membership interests in CIM pursuant to which AIM, among other things, shares in the profits, losses, distributions and expenses of CIM with the other members in accordance with the terms of the Third Amended CIM LLC Agreement, which results in CIG and AIM each owning a 50% economic interest in CIM.

On July 10, 2017, our independent directors unanimously approved the termination of the investment sub-advisory agreement with AIM, effective as of July 11, 2017, as part of the new and ongoing relationship among us, CIM and AIM. Although the investment sub-advisory agreement and AIM's engagement as our investment sub-adviser were terminated, AIM's investment professionals continue to perform certain services for CIM and us, including, without limitation, identifying investment opportunities for approval by CIM's investment committee. AIM is not paid a separate fee in exchange for such services, but is entitled to receive distributions as a member of CIM as described above.

On December 4, 2017, the members of CIM entered into the Fourth Amended CIM LLC Agreement. Under the Fourth Amended CIM LLC Agreement, AIM’s investment professionals perform sourcing services for CIM, which include, among other services, (i) assistance with identifying and providing information about potential investment opportunities for approval by CIM’s investment committee; and (ii) providing (a) trade and settlement support; (b) portfolio and cash reconciliation; (c) market pipeline information regarding syndicated deals, in each case, as reasonably requested by CIM; and (d) monthly valuation reports and support for all broker-quoted investments. All of our investment decisions are the sole responsibility of, and are made at the sole discretion of, CIM's investment committee, which consists entirely of CIG personnel.

We seek to meet our investment objective by utilizing the experienced management team of CIM, which includes its access to the relationships and human capital of its affiliates in sourcing, evaluating and structuring transactions, as well as monitoring and servicing our investments. We focus primarily on the senior secured debt of private and thinly-traded U.S. middle-market companies, which we define as companies that generally possess annual EBITDA of $50 million or less, with experienced management teams, significant free cash flow, strong competitive positions and potential for growth.

Revenue

We primarily generate revenue in the form of interest income on the debt securities that we hold and capital gains on debt or other equity interests that we acquire in portfolio companies. The majority of our senior debt investments bear interest at a floating rate. Interest on debt securities is generally payable quarterly or monthly. In some cases, some of our investments may provide for deferred interest payments or PIK interest. The principal amount of the debt securities and any accrued, but unpaid, interest generally will become due at the maturity date. In addition, we may generate revenue in the form of commitment, structuring or diligence fees, monitoring fees, fees for providing managerial assistance and possibly consulting fees and performance-based fees. Any such fees generated in connection with our investments will be recognized when earned.

Operating Expenses

Our primary operating expenses are the payment of advisory fees under the investment advisory agreement and interest expense on our financing arrangements. Our investment advisory fees compensate CIM for its work in identifying, evaluating, negotiating, executing, monitoring and servicing our investments. We bear all other expenses of our operations and transactions.

Reclassification

Unamortized OID and market discounts/premiums received upon the early repayment of debt investments have been reclassified from net realized gains on investments to interest income. As a result, prior year amounts have been reclassified to conform to the current presentation.

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Portfolio Investment Activity for the Three Months Ended June 30, 2019 and 2018

The following table summarizes our investment activity, excluding short term investments and PIK securities, for the three months ended June 30, 2019 and 2018:

		Three Months Ended June 30,
Net Investment Activity		2019				2018
Purchases and drawdowns
Senior secured first lien debt		$	137,623			$	362,929
Senior secured second lien debt		4,856				20,472
Equity		6,904				1,301
Sales and principal repayments		(116,755		)		(165,226		)
Net portfolio activity		$	32,628			$	219,476

The following tables summarize the composition of our investment portfolio at amortized cost and fair value as of June 30, 2019 and December 31, 2018:

		June 30, 2019
		Investments Cost(1)				Investments Fair Value				Percentage of Investment Portfolio
Senior secured first lien debt		$	1,491,564			$	1,452,981			79.9	%
Senior secured second lien debt		313,739				291,549				16.0	%
Collateralized securities and structured products - debt		13,405				13,305				0.7	%
Collateralized securities and structured products - equity		16,599				15,414				0.9	%
Equity		50,432				45,734				2.5	%
Subtotal/total percentage		1,885,739				1,818,983				100.0	%
Short term investments(2)		33,740				33,740
Total investments		$	1,919,479			$	1,852,723
Number of portfolio companies										141
Average annual EBITDA of portfolio companies						$81.6 million
Median annual EBITDA of portfolio companies						$56.1 million
Purchased at a weighted average price of par										97.10	%
Gross annual portfolio yield based upon the purchase price(3)										9.74	%

(1)	Represents amortized cost for debt investments and cost for equity investments. Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on our investments.

(2)	Short term investments represent an investment in a fund that invests in highly liquid investments with average original maturity dates of three months or less.

(3)	The gross annual portfolio yield does not represent and may be higher than an actual investment return to shareholders because it excludes our expenses and all sales commissions and dealer manager fees and does not consider the cost of leverage.

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	December 31, 2018
	Investments Cost(1)				Investments Fair Value				Percentage of Investment Portfolio
Senior secured first lien debt	$	1,492,034			$	1,462,989			79.0	%
Senior secured second lien debt	341,595				323,365				17.4	%
Collateralized securities and structured products - debt	15,193				15,193				0.8	%
Collateralized securities and structured products - equity	16,794				14,827				0.8	%
Equity	38,610				36,399				2.0	%
Subtotal/total percentage	1,904,226				1,852,773				100.0	%
Short term investments(2)	12,537				12,537
Total investments	$	1,916,763			$	1,865,310
Number of portfolio companies									153
Average annual EBITDA of portfolio companies					$79.0 million
Median annual EBITDA of portfolio companies					$56.0 million
Purchased at a weighted average price of par									97.35	%
Gross annual portfolio yield based upon the purchase price(3)									9.83	%

(1)	Represents amortized cost for debt investments and cost for equity investments. Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on our investments.

(2)	Short term investments represent an investment in a fund that invests in highly liquid investments with average original maturity dates of three months or less.

(3)	The gross annual portfolio yield does not represent and may be higher than an actual investment return to shareholders because it excludes our expenses and all sales commissions and dealer manager fees and does not consider the cost of leverage.

The following table summarizes the composition of our investment portfolio by the type of interest rate as of June 30, 2019 and December 31, 2018, excluding short term investments of $33,740 and $12,537, respectively:

		June 30, 2019											December 31, 2018
Interest Rate Allocation		Investments Cost				Investments Fair Value				Percentage of Investment Portfolio			Investments Cost				Investments Fair Value				Percentage of Investment Portfolio
Floating interest rate investments		$	1,772,038			$	1,713,487			94.2	%		$	1,802,745			$	1,756,777			94.8	%
Fixed interest rate investments		46,656				41,393				2.3	%		34,109				34,806				1.9	%
Other income producing investments		33,695				35,148				1.9	%		41,182				39,180				2.1	%
Non-income producing equity		33,350				28,955				1.6	%		26,190				22,010				1.2	%
Total investments		$	1,885,739			$	1,818,983			100.0	%		$	1,904,226			$	1,852,773			100.0	%

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The following table shows the composition of our investment portfolio by industry classification and the percentage, by fair value, of the total assets in such industries as of June 30, 2019 and December 31, 2018:

		June 30, 2019							December 31, 2018
Industry Classification		Investments at Fair Value				Percentage of Investment Portfolio			Investments at Fair Value				Percentage of Investment Portfolio
Healthcare & Pharmaceuticals		$	307,177			16.9	%		$	325,180			17.5	%
Services: Business		219,594				12.1	%		218,888				11.7	%
Services: Consumer		142,613				7.8	%		133,210				7.2	%
Media: Diversified & Production		138,413				7.6	%		114,303				6.2	%
Media: Advertising, Printing & Publishing		126,995				7.0	%		131,620				7.1	%
Capital Equipment		97,523				5.4	%		98,994				5.3	%
High Tech Industries		96,807				5.3	%		126,620				6.8	%
Chemicals, Plastics & Rubber		88,834				4.9	%		74,575				4.0	%
Retail		80,585				4.4	%		42,450				2.3	%
Beverage, Food & Tobacco		69,584				3.8	%		73,494				4.0	%
Telecommunications		63,628				3.5	%		74,261				4.0	%
Banking, Finance, Insurance & Real Estate		63,245				3.5	%		57,917				3.1	%
Energy: Oil & Gas		60,096				3.3	%		54,907				3.0	%
Consumer Goods: Non-Durable		42,439				2.3	%		37,148				2.0	%
Transportation: Cargo		32,444				1.8	%		30,614				1.7	%
Construction & Building		31,723				1.7	%		33,483				1.8	%
Consumer Goods: Durable		31,381				1.7	%		35,709				1.9	%
Hotel, Gaming & Leisure		30,368				1.7	%		54,689				3.0	%
Diversified Financials		28,719				1.6	%		30,020				1.6	%
Aerospace & Defense		25,312				1.4	%		45,655				2.5	%
Forest Products & Paper		19,651				1.1	%		19,525				1.1	%
Metals & Mining		9,490				0.5	%		10,333				0.6	%
Automotive		9,115				0.5	%		24,645				1.3	%
Environmental Industries		2,999				0.2	%		2,955				0.2	%
Media: Broadcasting & Subscription		248				—			1,578				0.1	%
Subtotal/total percentage		1,818,983				100.0	%		1,852,773				100.0	%
Short term investments		33,740							12,537
Total investments		$	1,852,723						$	1,865,310

Our investment portfolio may contain senior secured investments that are in the form of lines of credit, delayed draw term loans, revolving credit facilities, or unfunded commitments, which may require us to provide funding when requested in accordance with the terms of the underlying agreements. As of June 30, 2019 and December 31, 2018, our unfunded commitments amounted to $70,968 and $79,078, respectively. As of August 6, 2019, our unfunded commitments amounted to $68,656. Since these commitments may expire without being drawn upon, unfunded commitments do not necessarily represent future cash requirements or future earning assets for us. Refer to the section “Commitments and Contingencies and Off-Balance Sheet Arrangements” for further details on our unfunded commitments.

Investment Portfolio Asset Quality

CIM uses an investment rating system to characterize and monitor our expected level of returns on each investment in our portfolio. These ratings are just one of several factors that CIM uses to monitor our portfolio, are not in and of themselves determinative of fair value or revenue recognition and are presented for indicative purposes. CIM rates the credit risk of all investments on a scale of 1 to 5 no less frequently than quarterly. This system is intended primarily to reflect the underlying risk of a portfolio investment relative to our initial cost basis in respect of such portfolio investment (i.e., at the time of acquisition), although it may also take into account under certain circumstances the performance of the portfolio company’s business, the collateral coverage of the investment and other relevant factors.

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The following is a description of the conditions associated with each investment rating used in this ratings system:

Investment Rating		Description
1		Indicates the least amount of risk to our initial cost basis. The trends and risk factors for this investment since origination or acquisition are generally favorable, which may include the performance of the portfolio company or a potential exit.
2		Indicates a level of risk to our initial cost basis that is similar to the risk to our initial cost basis at the time of origination or acquisition. This portfolio company is generally performing in accordance with our analysis of its business and the full return of principal and interest or dividend is expected.
3		Indicates that the risk to our ability to recoup the cost of such investment has increased since origination or acquisition, but full return of principal and interest or dividend is expected. A portfolio company with an investment rating of 3 requires closer monitoring.
4		Indicates that the risk to our ability to recoup the cost of such investment has increased significantly since origination or acquisition, including as a result of factors such as declining performance and noncompliance with debt covenants, and we expect some loss of interest, dividend or capital appreciation, but still expect an overall positive internal rate of return on the investment.
5		Indicates that the risk to our ability to recoup the cost of such investment has increased materially since origination or acquisition and the portfolio company likely has materially declining performance. Loss of interest or dividend and some loss of principal investment is expected, which would result in an overall negative internal rate of return on the investment.

For investments rated 3, 4, or 5, CIM enhances its level of scrutiny over the monitoring of such portfolio company.

The following table summarizes the composition of our investment portfolio based on the 1 to 5 investment rating scale at fair value as of June 30, 2019 and December 31, 2018, excluding short term investments of $33,740 and $12,537, respectively:

    

		June 30, 2019							December 31, 2018
Investment Rating		Investments Fair Value				Percentage of Investment Portfolio			Investments Fair Value				Percentage of Investment Portfolio
1		$	14,635			0.8	%		$	—			—
2		1,552,990				85.4	%		1,642,270				88.6	%
3		215,098				11.8	%		181,118				9.8	%
4		28,251				1.6	%		26,412				1.4	%
5		8,009				0.4	%		2,973				0.2	%
		$	1,818,983			100.0	%		$	1,852,773			100.0	%

The amount of the investment portfolio in each rating category may vary substantially from period to period resulting primarily from changes in the composition of such portfolio as a result of new investment, repayment and exit activities. In addition, changes in the rating of investments may be made to reflect our expectation of performance and changes in investment values.

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Current Investment Portfolio

The following table summarizes the composition of our investment portfolio at fair value as of August 6, 2019:

		Investments Fair Value				Percentage of Investment Portfolio
Senior secured first lien debt		$	1,442,161			80.0	%
Senior secured second lien debt		287,770				16.0	%
Collateralized securities and structured products - debt		10,399				0.6	%
Collateralized securities and structured products - equity		15,510				0.9	%
Equity		45,454				2.5	%
Subtotal/total percentage		1,801,294				100.0	%
Short term investments(1)		39,265
Total investments		$	1,840,559
Number of portfolio companies						138
Average annual EBITDA of portfolio companies		$81.1 million
Median annual EBITDA of portfolio companies		$56.0 million
Purchased at a weighted average price of par						97.06	%
Gross annual portfolio yield based upon the purchase price(2)						9.72	%

(1)	Short term investments represent an investment in a fund that invests in highly liquid investments with average original maturity dates of three months or less.

(2)	The gross annual portfolio yield does not represent and may be higher than an actual investment return to shareholders because it excludes our expenses and all sales commissions and dealer manager fees and does not consider the cost of leverage.

Results of Operations for the Three Months Ended June 30, 2019 and 2018

Our results of operations for the three months ended June 30, 2019 and 2018 were as follows:

	Three Months Ended June 30,
	2019				2018
Investment income	$	49,519			$	43,623
Net operating expenses	27,858				21,588
Net investment income	21,661				22,035
Net realized loss on investments and foreign currency	(2,374		)		(6,844		)
Net change in unrealized (depreciation) appreciation on investments	(11,253		)		2,827
Net change in unrealized appreciation on foreign currency translation	113				—
Net increase in net assets resulting from operations	$	8,147			$	18,018

Investment Income

For the three months ended June 30, 2019 and 2018, we generated investment income of $49,519 and $43,623, respectively, consisting primarily of interest income on investments in senior secured debt, collateralized securities, and structured products of 147 and 163 portfolio companies held during each respective period. Our average investment portfolio size, excluding our short term investments, increased $117,080, from $1,690,129 for the three months ended June 30, 2018 to $1,807,209 for the three months ended June 30, 2019, as we deployed the net proceeds from our financing arrangements and the net proceeds from our follow-on continuous public offering, which ended on January 25, 2019. During 2018, our investment portfolio continued to grow due to equity available to us for investment from our follow-on continuous public offering and amounts borrowed under our financing arrangements. As a result, we believe that reported investment income for the three months ended June 30, 2018 is not representative of our stabilized or future performance.

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Operating Expenses

The composition of our operating expenses for the three months ended June 30, 2019 and 2018 was as follows:

	Three Months Ended June 30,
	2019				2018
Management fees	$	9,237			$	8,602
Administrative services expense	483				531
Subordinated incentive fee on income	4,117				—
General and administrative	1,197				1,604
Interest expense	12,824				10,851
Total operating expenses	$	27,858			$	21,588

During the three months ended June 30, 2019, the increase in interest expense was primarily the result of additional borrowings on our existing financing arrangements, which resulted in an increase in net assets and an increase in management fees. The increase in subordinated incentive fees was a result of exceeding our hurdle rate of 1.875% for pre-incentive fee net investment income for the three months ended June 30, 2019.

The composition of our general and administrative expenses for the three months ended June 30, 2019 and 2018 was as follows:

	Three Months Ended June 30,
	2019				2018
Transfer agent expense	$	338			$	317
Valuation expense	227				207
Accounting and administration costs	188				174
Director fees and expenses	119				121
Professional fees	117				324
Insurance expense	103				103
Printing and marketing expense	34				74
Dues and subscriptions	24				158
Due diligence fees	—				27
Other expenses	47				99
Total general and administrative expense	$	1,197			$	1,604

Net Investment Income

Our net investment income totaled $21,661 and $22,035 for the three months ended June 30, 2019 and 2018, respectively. The decrease in net investment income was primarily due to an increase in management fees, subordinated incentive fees, and interest expense, which were partially offset by an increase in investment income during the three months ended June 30, 2019.

Net Realized Loss on Investments and Foreign Currency

Our net realized loss on investments and foreign currency totaled ($2,374) and ($6,844) for the three months ended June 30, 2019 and 2018, respectively. This change was driven primarily by smaller realized losses on certain underperforming investments during the three months ended June 30, 2019 as compared to the three months ended June 30, 2018.

Net Change in Unrealized (Depreciation) Appreciation on Investments

The net change in unrealized (depreciation) appreciation on our investments totaled ($11,253) and $2,827 for the three months ended June 30, 2019 and 2018, respectively. This change was driven primarily by unrealized losses on certain underperforming investments during the three months ended June 30, 2019.

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Net Change in Unrealized Depreciation on Foreign Currency Translation

The net change in unrealized depreciation on foreign currency translation totaled $113 and $0 for the three months ended June 30, 2019 and 2018, respectively. This change in unrealized depreciation was due to the realization of previously unrealized depreciation during the three months ended June 30, 2019.

Net Increase in Net Assets Resulting from Operations

For the three months ended June 30, 2019 and 2018, we recorded a net increase in net assets resulting from operations of $8,147 and $18,018, respectively, as a result of our operating activity for the respective periods.

Results of Operations for the Six Months Ended June 30, 2019 and 2018

Our results of operations for the six months ended June 30, 2019 and 2018 were as follows:

	Six Months Ended June 30,
	2019				2018
Investment income	$	100,690			$	84,785
Net operating expenses	57,490				40,888
Net investment income	43,200				43,897
Net realized loss on investments and foreign currency	(3,334		)		(7,523		)
Net change in unrealized (depreciation) appreciation on investments	(15,303		)		1,377
Net increase in net assets resulting from operations	$	24,563			$	37,751

Investment Income

For the six months ended June 30, 2019 and 2018, we generated investment income of $100,690 and $84,785, respectively, consisting primarily of interest income on investments in senior secured debt, collateralized securities, structured products, and unsecured debt of 161 and 185 portfolio companies held during each respective period. Our average investment portfolio size, excluding our short term investments, increased $182,135, from $1,653,743 for the six months ended June 30, 2018 to $1,835,878 for the six months ended June 30, 2019, as we deployed the net proceeds from our financing arrangements and the net proceeds from our follow-on continuous public offering, which ended on January 25, 2019. During 2018, our investment portfolio continued to grow due to equity available to us for investment from our follow-on continuous public offering and amounts borrowed under our financing arrangements. As a result, we believe that reported investment income for the six months ended June 30, 2018 is not representative of our stabilized or future performance.

Operating Expenses

The composition of our operating expenses for the six months ended June 30, 2019 and 2018 was as follows:

	Six Months Ended June 30,
	2019				2018
Management fees	$	18,568			$	16,541
Administrative services expense	980				992
Subordinated incentive fee on income	9,492				—
General and administrative	2,586				3,586
Interest expense	25,864				19,769
Total operating expenses	$	57,490			$	40,888

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During the six months ended June 30, 2019, the increase in interest expense was primarily the result of additional borrowings on our existing financing arrangements, which resulted in an increase in net assets and an increase in management fees. The increase in subordinated incentive fees was a result of exceeding our hurdle rate of 1.875% for pre-incentive fee net investment income for the three months ended March 31, 2019 and June 30, 2019.

The composition of our general and administrative expenses for the six months ended June 30, 2019 and 2018 was as follows:

	Six Months Ended June 30,
	2019				2018
Professional fees	$	670			$	953
Transfer agent expense	603				646
Valuation expense	342				371
Director fees and expenses	240				242
Insurance expense	204				203
Accounting and administration costs	203				352
Dues and subscriptions	159				402
Due diligence fees	61				109
Printing and marketing expense	56				146
Other expenses	48				162
Total general and administrative expense	$	2,586			$	3,586

Net Investment Income

Our net investment income totaled $43,200 and $43,897 for the six months ended June 30, 2019 and 2018, respectively. The decrease in net investment income was primarily due to an increase in management fees, subordinated incentive fees, and interest expense, which were partially offset by an increase in investment income during the six months ended June 30, 2019.

Net Realized Loss on Investments and Foreign Currency

Our net realized loss on investments and foreign currency totaled ($3,334) and ($7,523) for the six months ended June 30, 2019 and 2018, respectively. This change was driven primarily by smaller realized losses on certain underperforming investments during the six months ended June 30, 2019 as compared to the six months ended June 30, 2018.

Net Change in Unrealized (Depreciation) Appreciation on Investments

The net change in unrealized (depreciation) appreciation on our investments totaled ($15,303) and $1,377 for the six months ended June 30, 2019 and 2018, respectively. This change was driven primarily by unrealized losses on certain underperforming investments during the six months ended June 30, 2019 that negatively impacted the fair value of certain investments.

Net Increase in Net Assets Resulting from Operations

For the six months ended June 30, 2019 and 2018, we recorded a net increase in net assets resulting from operations of $24,563 and $37,751, respectively, as a result of our operating activity for the respective periods.

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Net Asset Value per Share, Annual Investment Return and Total Return Since Inception 

Our net asset value per share was $8.54 and $8.69 on June 30, 2019 and December 31, 2018, respectively. After considering (i) the overall changes in net asset value per share, (ii) paid distributions of approximately $0.3658 per share during the six months ended June 30, 2019, and (iii) the assumed reinvestment of those distributions in accordance with our distribution reinvestment plan then in effect, the total investment return-net asset value was 2.52% for the six month period ended June 30, 2019. Total investment return-net asset value does not represent and may be higher than an actual return to shareholders because it excludes all sales commissions and dealer manager fees. Total investment return-net asset value is a measure of the change in total value for shareholders who held our common stock at the beginning and end of the period, including distributions paid or payable during the period, and is described further in Note 12 to our consolidated financial statements included in this report.

Initial shareholders who subscribed to the offering in December 2012 with an initial investment of $10,000 and an initial purchase price equal to $9.00 per share (public offering price excluding sales load) have seen an annualized return of 7.33% and a cumulative total return of 58.83% through June 30, 2019 (see chart below). Initial shareholders who subscribed to the offering in December 2012 with an initial investment of $10,000 and an initial purchase price equal to $10.00 per share (the initial public offering price including sales load) have seen an annualized return of 5.62% and a cumulative total return of 42.95% through June 30, 2019. Over the same time period, the S&P/LSTA Leveraged Loan Index, a primary measure of senior debt covering the U.S. leveraged loan market, which currently consists of approximately 1,000 credit facilities throughout numerous industries, recorded an annualized return of 4.15% and a cumulative total return of 30.42%. In addition, the BofA Merrill Lynch US High Yield Index, a primary measure of short-term US dollar denominated below investment grade corporate debt publicly issued in the US domestic market, recorded an annualized return of 5.61% and a cumulative total return of 42.94% over the same period.

(1) Cumulative performance: December 17, 2012 to June 30, 2019

The calculations for the Growth of $10,000 Initial Investment are based upon (i) an initial investment of $10,000 in our common stock at the beginning of the period, at a share price of $10.00 per share (including sales load) and $9.00 per share (excluding sales load), (ii) assumes reinvestment of monthly distributions in accordance with our distribution reinvestment plan then in effect, (iii) the sale of the entire investment position at the net asset value per share on the last day of the period, and (iv) the distributions declared and payable to shareholders, if any, on the last day of the period.

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Financial Condition, Liquidity and Capital Resources

We generate cash primarily from cash flows from interest, fees and dividends earned from our investments as well as principal repayments and proceeds from sales of our investments. We also employ leverage to seek to enhance our returns as market conditions permit and at the discretion of CIM. On March 23, 2018, an amendment to Section 61(a) of the 1940 Act was signed into law to permit BDCs to reduce the minimum “asset coverage” ratio to 150% from 200% and, as a result, to potentially increase the ratio of a BDC’s debt to equity to a maximum of 2-to-1 from a maximum of 1-to-1, so long as certain approval and disclosure requirements are satisfied. We currently have not determined whether to seek to utilize such additional leverage. We generated cash from the net proceeds from our continuous public offerings. Our initial continuous public offering commenced on July 2, 2012 and ended on December 31, 2015. Our follow-on continuous public offering commenced on January 25, 2016 and ended on January 25, 2019.

As of June 30, 2019 and December 31, 2018, we had $33,740 and $12,537 in short term investments, respectively, invested in a fund that primarily invests in U.S. government securities.

Citibank Credit Facility

As of June 30, 2019 and August 8, 2019, our outstanding borrowings under the Second Amended Citibank Credit Facility were $307,542 and $327,542, respectively, and the aggregate unfunded principal amount in connection with the Second Amended Citibank Credit Facility was $42,458 and $22,458, respectively. For a detailed discussion of our Second Amended Citibank Credit Facility, refer to Note 7 to our consolidated financial statements included in this report.

JPM Credit Facility

As of June 30, 2019 and August 8, 2019, our outstanding borrowings under the Amended JPM Credit Facility were $250,000 and the aggregate unfunded principal amount in connection with the Amended JPM Credit Facility was $25,000. For a detailed discussion of our Amended JPM Credit Facility, refer to Note 7 to our consolidated financial statements included in this report.

UBS Facility

As of June 30, 2019 and August 8, 2019, our outstanding borrowings under the amended UBS Facility were $200,000 and no additional principal amount was available for borrowing under the amended UBS Facility. For a detailed discussion of our amended UBS Facility, refer to Note 7 to our consolidated financial statements included in this report.

MS Credit Facility

As of June 30, 2019 and August 8, 2019, our outstanding borrowings under the Amended MS Credit Facility were $125,000 and $115,000, respectively, and the aggregate unfunded principal amount in connection with the Amended MS Credit Facility was $25,000 and $35,000, respectively. For a detailed discussion of our Amended MS Credit Facility, refer to Note 7 to our consolidated financial statements included in this report.

Unfunded Commitments

As of June 30, 2019 and August 6, 2019, our unfunded commitments amounted to $70,968 and $68,656, respectively. For a detailed discussion of our unfunded commitments, refer to Note 10 to our consolidated financial statements included in this report.

Recent Accounting Pronouncements

See Note 2 to our consolidated financial statements included in this report for a discussion of certain recent accounting pronouncements that are applicable to us.

Critical Accounting Policies

Our consolidated financial statements are prepared in conformity with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Critical accounting policies are those that require the application of management’s most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods. In preparing the consolidated financial statements, we also utilize available information, including our past history, industry standards and the current economic environment, among other factors, in forming our estimates and judgments, giving due consideration to materiality. Actual results may differ from these estimates. In addition, other companies may utilize different estimates, which may impact the comparability of our results of operations to those of companies in similar businesses.

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Valuation of Portfolio Investments

The value of our assets is determined quarterly and at such other times that an event occurs that materially affects the valuation. The valuation is made pursuant to Section 2(a)(41) of the 1940 Act, which requires that we value our assets as follows: (i) the market price for those securities for which a market quotation is readily available, and (ii) for all other securities and assets, at fair value, as determined in good faith by our board of directors. As a BDC, Section 2(a)(41) of the 1940 Act requires the board of directors to determine in good faith the fair value of portfolio securities for which a market price is not readily available, and it does so in conjunction with the application of our valuation procedures by CIM.

There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each asset while employing a valuation process that is consistently followed. Determinations of fair value involve subjective judgments and estimates. Accordingly, the notes to our consolidated financial statements refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations in our consolidated financial statements.

Valuation Methods

With respect to investments for which market quotations are not readily available, we undertake a multi-step valuation process each quarter, as described below:

•	our quarterly valuation process begins with each portfolio company or investment being initially valued by certain of CIM’s investment professionals and certain members of its management team, with such valuation taking into account information received from various sources, including independent valuation firms, if applicable;

•	preliminary valuation conclusions are then documented and discussed with members of CIM’s management team;

•	designated members of CIM’s management team review the preliminary valuation, and, if applicable, deliver such preliminary valuation to an independent valuation firm for its review;

•	designated members of CIM’s management team, and, if appropriate, the relevant investment professionals meet with the independent valuation firm to discuss the preliminary valuation;

•	designated members of CIM’s management team respond and supplement the preliminary valuation to reflect any comments provided by the independent valuation firm;

•	our audit committee meets with members of CIM’s management team and the independent valuation firms to discuss the assistance provided and the results of the independent valuation firms' review; and

•	our board of directors discusses the valuation and determines the fair value of each investment in our portfolio in good faith based on various statistical and other factors, including the input and recommendation of CIM, the audit committee and any third-party valuation firm, if applicable.

In addition to the foregoing, certain investments for which a market price is not readily available are evaluated on a quarterly basis by an independent valuation firm and certain other investments are on a rotational basis reviewed by an independent valuation firm. Finally, certain investments are not evaluated by an independent valuation firm unless certain aspects of such investments in the aggregate meet certain criteria.

Given the expected types of investments, excluding short term investments and stock of publicly traded companies that are classified as Level 1, management expects our portfolio holdings to be classified as Level 3. Due to the uncertainty inherent in the valuation process, particularly for Level 3 investments, such fair value estimates may differ significantly from the values that would have been used had an active market for the investments existed. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses that we ultimately realize on these investments to materially differ from the valuations currently assigned. Inputs used in the valuation process are subject to variability in the future and can result in materially different fair values.

For an additional discussion of our investment valuation process, refer to Note 2 to our consolidated financial statements included in this report.

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Related Party Transactions

For a discussion of our relationship with related parties including CION Securities, CIM, ICON Capital, CIG, and AIA and amounts incurred under agreements with such related parties, refer to Note 4 to our consolidated financial statements included in this report.

Contractual Obligations

On August 26, 2016, 34th Street entered into the JPM Credit Facility with JPM, as amended and restated on September 30, 2016, July 11, 2017, November 28, 2017 and May 23, 2018. See Note 7 to our consolidated financial statements for a more detailed description of the JPM Credit Facility.

On March 29, 2017, Flatiron Funding II entered into the Citibank Credit Facility with Citibank, as amended on July 11, 2017 and March 14, 2019. See Note 7 to our consolidated financial statements for a more detailed description of the Citibank Credit Facility.

On May 19, 2017, Murray Hill Funding II entered into the UBS Facility with UBS, as amended on December 1, 2017. See Note 7 to our consolidated financial statements for a more detailed description of the UBS Facility.

On December 19, 2017, 33rd Street entered into the MS Credit Facility with MS, as amended on July 9, 2018 and December 18, 2018. See Note 7 to our consolidated financial statements for a more detailed description of the MS Credit Facility.

Commitments and Contingencies and Off-Balance Sheet Arrangements

Commitments and Contingencies

We have entered into certain contracts with other parties that contain a variety of indemnifications. Our maximum exposure under these arrangements is unknown. However, we have not experienced claims or losses pursuant to these contracts and believe the risk of loss related to such indemnifications to be remote.

Our investment portfolio may contain debt investments that are in the form of lines of credit, delayed draw term loans, revolving credit facilities, or other unfunded commitments, which may require us to provide funding when requested in accordance with the terms of the underlying agreements. For further details on such debt investments, refer to Note 10 to our consolidated financial statements included in this report.

Off-Balance Sheet Arrangements

    

We currently have no off-balance sheet arrangements, except for those discussed in Note 10 to our consolidated financial statements included in this report.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are subject to financial market risks, including changes in interest rates. As of June 30, 2019, 94.2% of our investments paid variable interest rates. A rise in the general level of interest rates can be expected to lead to higher interest rates applicable to our debt investments, especially to the extent that we hold variable rate investments, and to declines in the value of any fixed rate investments we may hold. To the extent that a majority of our investments may be in variable rate investments, an increase in interest rates could make it easier for us to meet or exceed our incentive fee hurdle rate, as defined in our investment advisory agreement, and may result in a substantial increase in our net investment income, and also to the amount of incentive fees payable to CIM with respect to our pre-incentive fee net investment income.

    

Under the terms of the Amended JPM Credit Facility, advances currently bear interest at a floating rate equal to the three-month LIBOR, plus a spread of 3.00% per year. Under the terms of the Second Amended Citibank Credit Facility, advances currently bear interest at a floating rate equal to the three-month LIBOR plus 2.00%. Pursuant to the terms of the amended UBS Facility, we currently pay a financing fee equal to the three-month LIBOR plus a spread of 3.50%. Under the terms of the Amended MS Credit Facility, advances currently bear interest at a floating rate equal to the three-month LIBOR, plus a spread of 3.00% per year. In addition, we may seek to further borrow funds in order to make additional investments. Our net investment income will be impacted, in part, by the difference between the rate at which we borrow funds and the rate at which we invest those funds. As a result, we would be subject to risks relating to changes in market interest rates. In periods of rising interest rates when we have debt outstanding, our cost of funds would increase, which could reduce our net investment income, especially to the extent we hold fixed rate investments. We expect that our long-term investments will be financed primarily with equity and long-term debt. Our interest rate risk management techniques may include various interest rate hedging activities to the extent permitted by the 1940 Act. Adverse developments resulting from changes in interest rates could have a material adverse effect on our business, financial condition and results of operations.

The following table shows the effect over a twelve month period of changes in interest rates on our net interest income, excluding short term investments, assuming no changes in our investment portfolio, the Second Amended Citibank Credit Facility, the Amended JPM Credit Facility, the amended UBS Facility or the Amended MS Credit Facility in effect as of June 30, 2019:

Basis Point Change in Interest Rates		(Decrease) Increase in Net Interest Income(1)				Percentage Change in Net Interest Income
Down 200 basis points		$	(10,852	)		(8.6	)%
Down 100 basis points		(8,853		)		(7.0	)%
Down 50 basis points		(4,477		)		(3.5	)%
No change to current base rate (2.43% as of June 30, 2019)		—				—
Up 50 basis points		4,543				3.6	%
Up 100 basis points		9,085				7.2	%
Up 200 basis points		18,171				14.4	%
Up 300 basis points		27,256				21.6	%

(1)	This table assumes no change in defaults or prepayments by portfolio companies over the next twelve months.

The interest rate sensitivity analysis presented above does not consider the potential impact of the changes in fair value of our fixed rate debt investments and the net asset value of our common stock in the event of sudden changes in interest rates. Approximately 2.3% of our investments paid fixed interest rates as of June 30, 2019. Rising market interest rates will most likely lead to fair value declines for fixed interest rate investments and a decline in the net asset value of our common stock, while declining market interest rates will most likely lead to an increase in the fair value of fixed interest rate investments and an increase in the net asset value of our common stock.

In addition, we may have risk regarding portfolio valuation as discussed in Note 2 to our consolidated financial statements included in this report.

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Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures 

In connection with the preparation of this Quarterly Report on Form 10-Q for the three months ended June 30, 2019, we carried out an evaluation, under the supervision and with the participation of our management, including our Co-Chief Executive Officers and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) and Rule 15d-15(b) of the Securities Exchange Act of 1934, as amended. Based on the foregoing evaluation, the Co-Chief Executive Officers and the Chief Financial Officer concluded that our disclosure controls and procedures were effective.

In designing and evaluating our disclosure controls and procedures, we recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met.  Our disclosure controls and procedures have been designed to meet reasonable assurance standards. Disclosure controls and procedures cannot detect or prevent all error and fraud. Some inherent limitations in disclosure controls and procedures include costs of implementation, faulty decision-making, simple error and mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based, in part, upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all anticipated and unanticipated future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with established policies or procedures.

Evaluation of internal control over financial reporting

There have been no changes in our internal control over financial reporting during the three months ended June 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us. From time to time, we may be party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies and other third parties. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that any such proceedings will have a material effect upon our financial condition or results of operations.

Item 1A. Risk Factors

There have been no material changes from the risk factors disclosed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2018.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Our registration statement on Form N-2, as amended, in connection with our follow-on continuous public offering was declared effective by the SEC on January 25, 2016 (SEC File No. 333-203683). Our follow-on continuous public offering commenced on January 25, 2016 and ended on January 25, 2019.

We did not engage in any unregistered sales of equity securities during the three months ended June 30, 2019.

The table below provides information concerning our repurchases of shares of our common stock during the three months ended June 30, 2019 pursuant to our share repurchase program.

Period		Total Number of Shares Purchased			Average Price Paid per Share				Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs			Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
April 1 to April 30, 2019		—			$	—			—			—
May 1 to May 31, 2019		—			—				—			—
June 1 to June 30, 2019		1,038,641			8.59				1,038,641			(1	)
Total		1,038,641			$	8.59			1,038,641			(1	)

(1)	A description of the maximum number of shares of our common stock that may be repurchased is set forth in a detailed discussion of the terms of our share repurchase program in Note 3 to our unaudited consolidated financial statements contained in this Quarterly Report on Form 10-Q.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

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Item 6. Exhibits

Exhibit Number		Description of Document
2.1		Purchase and Sale Agreement, dated as of September 30, 2016, by and between Park South Funding, LLC and Credit Suisse Alternative Capital, LLC (Incorporated by reference to Exhibit 2.1 to Registrant’s Current Report on Form 8-K filed with the SEC on October 4, 2016 (File No. 814-00941)).
3.1		Articles of Amendment and Restatement of the Articles of Incorporation of CĪON Investment Corporation (Incorporated by reference to Exhibit (A)(2) to Pre-Effective Amendment No. 4 to Registrant’s Registration Statement on Form N-2 filed with the SEC on June 29, 2012 (File No. 333-178646)).
3.2		Second Articles of Amendment and Restatement of the Articles of Incorporation of CĪON Investment Corporation (Incorporated by reference to Exhibit 3.1 to Registrant’s Current Report on Form 8-K filed with the SEC on August 27, 2012 (File No. 814-00941)).
3.3		Bylaws of CĪON Investment Corporation (Incorporated by reference to Exhibit (B) to Pre-Effective Amendment No. 4 to Registrant’s Registration Statement on Form N-2 filed with the SEC on June 29, 2012 (File No. 333-178646)).
4.1		Form of Follow-On Subscription Agreement (Incorporated by reference to Appendix A to Final Prospectus on Form 497 filed with the SEC on September 25, 2018 (File No. 333-203683)).
4.2		Fifth Amended and Restated Distribution Reinvestment Plan of CĪON Investment Corporation (Incorporated by reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K filed with the SEC on December 8, 2016 (File No. 814-00941)).
10.1		Investment Advisory Agreement by and between CĪON Investment Corporation and CION Investment Management, LLC (Incorporated by reference to Exhibit (G)(1) to Pre-Effective Amendment No. 4 to Registrant’s Registration Statement on Form N-2 filed with the SEC on June 29, 2012 (File No. 333-178646)).
10.2		Investment Sub-Advisory Agreement by and among CION Investment Management, LLC, CĪON Investment Corporation and Apollo Investment Management, L.P. (Incorporated by reference to Exhibit (G)(2) to Pre-Effective Amendment No. 4 to Registrant’s Registration Statement on Form N-2 filed with the SEC on June 29, 2012 (File No. 333-178646)).
10.3		Administration Agreement by and between CĪON Investment Corporation and ICON Capital Corp. (Incorporated by reference to Exhibit (K)(2) to Pre-Effective Amendment No. 4 to Registrant’s Registration Statement on Form N-2 filed with the SEC on June 29, 2012 (File No. 333-178646)).
10.4		Custody Agreement by and between CĪON Investment Corporation and U.S. Bank National Association (Incorporated by reference to Exhibit (J) to Pre-Effective Amendment No. 4 to Registrant’s Registration Statement on Form N-2 filed with the SEC on June 29, 2012 (File No. 333-178646)).
10.5		Escrow Agreement by and among CĪON Investment Corporation, UMB Bank, N.A., and ICON Securities Corp. (Incorporated by reference to Exhibit (K)(1) to Pre-Effective Amendment No. 4 to Registrant’s Registration Statement on Form N-2 filed with the SEC on June 29, 2012 (File No. 333-178646)).
10.6		Dealer Manager Agreement by and among CĪON Investment Corporation, CION Investment Management, LLC and ICON Securities Corp. (Incorporated by reference to Exhibit (H)(1) to Pre-Effective Amendment No. 4 to Registrant’s Registration Statement on Form N-2 filed with the SEC on June 29, 2012 (File No. 333-178646)).
10.7		ISDA 2002 Master Agreement, together with the Schedule thereto and Credit Support Annex to such Schedule, each dated as of December 17, 2012, by and between Flatiron Funding, LLC and Citibank, N.A. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 19, 2012 (File No. 814-00941)).
10.8		Thirteenth Amended and Restated Confirmation Letter Agreement, dated as of February 18, 2017, by and between Flatiron Funding, LLC and Citibank, N.A. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 23, 2017 (File No. 814-00941)).
10.9		Amended and Restated Expense Support and Conditional Reimbursement Agreement, dated as of December 26, 2018, by and between CĪON Investment Corporation and CION Investment Management, LLC (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 26, 2018 (File No. 814-00941)).
10.10		Amended and Restated Follow-On Dealer Manager Agreement, dated as of December 28, 2016, by and among CĪON Investment Corporation, CION Investment Management, LLC and CION Securities, LLC (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the SEC on January 4, 2017 (File No. 814-00941)).
10.11		Form of Follow-On Selected Dealer Agreement (Incorporated by reference to Exhibit (H)(4) to Registrant’s Registration Statement on Form N-2 filed with the SEC on April 28, 2015 (File No. 333-203683)).
10.12		Loan and Security Agreement, dated as of April 30, 2015, by and between CĪON Investment Corporation and East West Bank (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the SEC on May 6, 2015 (File No. 814-00941)).
10.13		First Amendment to Loan and Security Agreement, dated as of January 28, 2016, by and between CĪON Investment Corporation and East West Bank (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the SEC on February 3, 2016 (File No. 814-00941)).
10.14		Second Amendment to Loan and Security Agreement, dated as of April 21, 2016, by and between CĪON Investment Corporation and East West Bank (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the SEC on April 27, 2016 (File No. 814-00941)).
10.15		Custody Control Agreement, dated as of April 30, 2015, by and among CĪON Investment Corporation, East West Bank and U.S. Bank National Association (Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed with the SEC on May 6, 2015 (File No. 814-00941)).

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Exhibit Number		Description of Document
10.16		Loan and Security Agreement, dated as of August 26, 2016, by and among 34th Street Funding, LLC, JPMorgan Chase Bank, National Association, U.S. Bank National Association and CION Investment Management, LLC (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the SEC on September 1, 2016 (File No. 814-00941)).
10.17		Sale and Contribution Agreement, dated as of August 26, 2016, by and between 34th Street Funding, LLC and CĪON Investment Corporation (Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed with the SEC on September 1, 2016 (File No. 814-00941)).
10.18		Master Participation Agreement, dated as of August 26, 2016, by and between 34th Street Funding, LLC and CĪON Investment Corporation (Incorporated by reference to Exhibit 10.3 to Registrant’s Current Report on Form 8-K filed with the SEC on September 1, 2016 (File No. 814-00941)).
10.19		Portfolio Management Agreement, dated as of August 26, 2016, by and between 34th Street Funding, LLC and CION Investment Management, LLC (Incorporated by reference to Exhibit 10.4 to Registrant’s Current Report on Form 8-K filed with the SEC on September 1, 2016 (File No. 814-00941)).
10.20		Guarantee of CĪON Investment Corporation dated as of August 26, 2016 (Incorporated by reference to Exhibit 10.5 to Registrant’s Current Report on Form 8-K filed with the SEC on September 1, 2016 (File No. 814-00941)).
10.21		Amended and Restated Loan and Security Agreement, dated as of September 30, 2016, by and among 34th Street Funding, LLC, JPMorgan Chase Bank, National Association, U.S. Bank National Association and CION Investment Management, LLC (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the SEC on October 4, 2016 (File No. 814-00941)).
10.22		Release and Termination Agreement, dated as of September 30, 2016, by and among CĪON Investment Corporation, 34th Street Funding, LLC and JPMorgan Chase Bank, National Association (Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed with the SEC on October 4, 2016 (File No. 814-00941)).
10.23		Amended and Restated Portfolio Management Agreement, dated as of September 30, 2016, by and among 34th Street Funding, LLC, CION Investment Management, LLC and JPMorgan Chase Bank, National Association (Incorporated by reference to Exhibit 10.3 to Registrant’s Current Report on Form 8-K filed with the SEC on October 4, 2016 (File No. 814-00941)).
10.24		Second Amendment, dated as of March 14, 2019, to Credit and Security Agreement, dated as of March 29, 2017, by and among Flatiron Funding II, LLC, CION Investment Management, LLC, CĪON Investment Corporation, the Lenders from time to time party thereto, Citibank, N.A. and U.S. Bank National Association. (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the SEC on March 18, 2019 (File No. 814-00941)).
10.25		Account Control Agreement, dated as of March 29, 2017, by and among Flatiron Funding II, LLC, CION Investment Management, LLC and U.S. Bank National Association (Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed with the SEC on April 4, 2017 (File No. 814-00941)).
10.26		Master Participation and Assignment Agreement, dated as of March 29, 2017, by and between 15th Street Loan Funding LLC and Flatiron Funding II, LLC (Incorporated by reference to Exhibit 10.3 to Registrant’s Current Report on Form 8-K filed with the SEC on April 4, 2017 (File No. 814-00941)).
10.27		Master Participation and Assignment Agreement, dated as of March 29, 2017, by and between 15th Street Loan Funding 2 LLC and Flatiron Funding II, LLC (Incorporated by reference to Exhibit 10.4 to Registrant’s Current Report on Form 8-K filed with the SEC on April 4, 2017 (File No. 814-00941)).
10.28		Contribution Agreement, dated as of May 19, 2017, by and among CĪON Investment Corporation, Murray Hill Funding, LLC and Murray Hill Funding II, LLC (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the SEC on May 25, 2017 (File No. 814-00941)).
10.29		Amended and Restated Indenture, dated as of December 1, 2017, by and between Murray Hill Funding II, LLC and U.S. Bank National Association (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 7, 2017 (File No. 814-00941)).
10.30		Murray Hill Funding II, LLC Class A Notes Due 2027 (Incorporated by reference to Exhibit 10.3 to Registrant’s Current Report on Form 8-K filed with the SEC on May 25, 2017 (File No. 814-00941)).
10.31		Contribution Agreement, dated as of May 19, 2017, by and among UBS AG, London Branch, Murray Hill Funding II, LLC, U.S. Bank National Association, Murray Hill Funding, LLC and CION Investment Management, LLC (Incorporated by reference to Exhibit 10.4 to Registrant’s Current Report on Form 8-K filed with the SEC on May 25, 2017 (File No. 814-00941)).
10.32		October 2000 Version Global Master Repurchase Agreement, by and between UBS AG and Murray Hill Funding, LLC, together with the related Annex and Master Confirmation thereto, each dated as of May 19, 2017 (Incorporated by reference to Exhibit 10.5 to Registrant’s Current Report on Form 8-K filed with the SEC on May 25, 2017 (File No. 814-00941)).

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Exhibit Number		Description of Document
10.33		Collateral Management Agreement, dated as of May 19, 2017, by and between CION Investment Management, LLC and Murray Hill Funding II, LLC (Incorporated by reference to Exhibit 10.6 to Registrant’s Current Report on Form 8-K filed with the SEC on May 25, 2017 (File No. 814-00941)).
10.34		Collateral Administration Agreement, dated as of May 19, 2017, by and among Murray Hill Funding II, LLC, CION Investment Management, LLC and U.S. Bank National Association (Incorporated by reference to Exhibit 10.7 to Registrant’s Current Report on Form 8-K filed with the SEC on May 25, 2017 (File No. 814-00941)).
10.35		Murray Hill Funding II, LLC Class A Notes Due 2027 (Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 7, 2017 (File No. 814-00941)).
10.36		First Amended and Restated Master Confirmation, dated as of December 1, 2017, to the October 2000 Version Global Master Repurchase Agreement, dated as of May 19, 2017, by and between UBS AG, London Branch and Murray Hill Funding, LLC (Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 7, 2017 (File No. 814-00941)).
10.37		Loan and Servicing Agreement, dated as of December 19, 2017, by and among 33rd Street Funding, LLC, CION Investment Management, LLC, Morgan Stanley Asset Funding Inc., Morgan Stanley Bank, N.A. and U.S. Bank National Association (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 22, 2017 (File No. 814-00941)).
10.38		Sale and Contribution Agreement, dated as of December 19, 2017, by and between 33rd Street Funding, LLC and CĪON Investment Corporation (Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 22, 2017 (File No. 814-00941)).
10.39		Portfolio Management Agreement, dated as of December 19, 2017, by and between 33rd Street Funding, LLC and CION Investment Management, LLC (Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 22, 2017 (File No. 814-00941)).
10.40		Administration Agreement, dated as of April 1, 2018, by and between CĪON Investment Corporation and CION Investment Management, LLC (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 3, 2018 (File No. 814-00941)).
10.41		Third Amendment to Amended and Restated Loan Agreement, dated as of May 23, 2018, by and among 34th Street Funding, LLC, JPMorgan Chase Bank, National Association, U.S. Bank National Association and CION Investment Management, LLC (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the SEC on May 25, 2018 (File No. 814-00941)).
31.1		Rule 13a-14(a)/15d-14(a) Certification of Co-Chief Executive Officer.
31.2		Rule 13a-14(a)/15d-14(a) Certification of Co-Chief Executive Officer.
31.3		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
32.1		Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.3		Certification of Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: August 9, 2019

CĪON Investment Corporation

(Registrant)

By: /s/ Michael A. Reisner

Michael A. Reisner

Co-Chief Executive Officer

(Principal Executive Officer)

By: /s/ Mark Gatto

Mark Gatto

Co-Chief Executive Officer

(Principal Executive Officer)

By: /s/ Keith S. Franz

Keith S. Franz

Chief Financial Officer

(Principal Financial and Accounting Officer)

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