CION Investment Corp - Quarter Report: 2021 June (Form 10-Q)

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, 2021


[ ]			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.


			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 10, 2021 was 113,505,009.

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			26
			Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			58
			Item 3. Quantitative and Qualitative Disclosures About Market Risk			73
			Item 4. Controls and Procedures			73
			PART II – OTHER INFORMATION
			Item 1. Legal Proceedings			75
			Item 1A. Risk Factors			75
			Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			75
			Item 3. Defaults Upon Senior Securities			75
			Item 4. Mine Safety Disclosures			75
			Item 5. Other Information			75
			Item 6. Exhibits			76
			Signatures			79

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

CĪON Investment Corporation

Consolidated Balance Sheets

(in thousands, except share and per share amounts)


	June 30, 2021		December 31, 2020
	(unaudited)
Assets
Investments, at fair value:
Non-controlled, non-affiliated investments (amortized cost of $1,607,939 and $1,501,529, respectively)	$	1,571,606	$	1,440,004
Non-controlled, affiliated investments (amortized cost of $152,896 and $134,184, respectively)	152,432		116,895
Controlled investments (amortized cost of $0 and $15,539, respectively)	—		12,472
Total investments, at fair value (amortized cost of $1,760,835 and $1,651,252, respectively)	1,724,038		1,569,371

Cash	1,496		19,914



Interest receivable on investments	20,279		17,484

Receivable due on investments sold and repaid	8,888		6,193
Dividends receivable on investments	187		45
Prepaid expenses and other assets	426		1,788
Total assets	$	1,755,314	$	1,614,795


Liabilities and Shareholders' Equity
Liabilities
Financing arrangements (net of unamortized debt issuance costs of $8,997 and $5,044, respectively)	$	796,003	$	719,956
Payable for investments purchased	17,938		133
Accounts payable and accrued expenses	2,160		694
Interest payable	4,185		2,500

Accrued management fees	8,243		7,668
Accrued subordinated incentive fee on income	—		4,323
Accrued administrative services expense	905		1,265


Total liabilities	829,434		736,539

Commitments and contingencies (Note 4 and Note 11)

Shareholders' Equity
Common stock, $0.001 par value; 500,000,000 shares authorized;
113,297,189 and 113,293,723 shares issued and outstanding, respectively	113		113
Capital in excess of par value	1,054,881		1,054,911
Accumulated distributable losses	(129,114)		(176,768)
Total shareholders' equity	925,880		878,256
Total liabilities and shareholders' equity	$	1,755,314	$	1,614,795
Net asset value per share of common stock at end of period	$	8.17	$	7.75

See accompanying notes to consolidated financial statements.

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,				Year Ended December 31,
	2021		2020		2021		2020		2020
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Investment income
Non-controlled, non-affiliated investments
Interest income	$	30,167	$	28,157	$	56,269	$	67,578	$	125,395
Paid-in-kind interest income	3,853		3,076		9,988		4,952		17,078
Fee income	880		737		1,813		1,341		4,393
Dividend income	91		173		173		309		331
Non-controlled, affiliated investments
Interest income	1,041		1,471		2,442		2,269		7,883
Dividend income	933		473		1,760		948		3,012
Paid-in-kind interest income	1,056		429		1,879		1,212		2,082
Fee income	—		—		—		—		150
Controlled investments
Dividend income	—		1,292		—		2,947		3,518
Total investment income	38,021		35,808		74,324		81,556		163,842
Operating expenses
Management fees	8,243		7,929		16,026		16,380		31,828
Administrative services expense	697		806		1,381		1,200		2,465
Subordinated incentive fee on income	—		—		—		3,308		7,631
General and administrative	2,567		1,715		5,256		3,185		6,353
Interest expense	7,828		11,442		15,376		21,906		36,837
Total operating expenses	19,335		21,892		38,039		45,979		85,114


Net investment income	18,686		13,916		36,285		35,577		78,728
Realized and unrealized gains (losses)
Net realized gains (losses) on:
Non-controlled, non-affiliated investments	445		(10,980)		471		(14,963)		(69,687)
Non-controlled, affiliated investments	—		—		(1,080)		(211)		(211)
Controlled investments	—		—		(3,067)		—		—
Foreign currency	(4)		(6)		(11)		(8)		26
Net realized gains (losses)	441		(10,986)		(3,687)		(15,182)		(69,872)
Net change in unrealized appreciation (depreciation) on:
Non-controlled, non-affiliated investments	5,957		13,543		25,195		(97,183)		1,110
Non-controlled, affiliated investments	2,885		(709)		16,823		(8,546)		(17,945)
Controlled investments	—		823		3,067		(3,991)		(3,043)


Net change in unrealized appreciation (depreciation)	8,842		13,657		45,085		(109,720)		(19,878)
Net realized and unrealized gains (losses)	9,283		2,671		41,398		(124,902)		(89,750)
Net increase (decrease) in net assets resulting from operations	$	27,969	$	16,587	$	77,683	$	(89,325)	$	(11,022)
Per share information—basic and diluted
Net increase (decrease) in net assets per share resulting from operations	$	0.25	$	0.15	$	0.68	$	(0.79)	$	(0.10)
Weighted average shares of common stock outstanding	113,495,366		113,311,656		113,501,166		113,505,901		113,635,682

See accompanying notes to consolidated financial statements.

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,				Year Ended December 31,
	2021		2020		2021		2020		2020
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Changes in net assets from operations:
Net investment income	$	18,686	$	13,916	$	36,285	$	35,577	$	78,728
Net realized gain (loss) on investments	445		(10,980)		(3,676)		(15,174)		(69,898)
Net realized (loss) gain on foreign currency	(4)		(6)		(11)		(8)		26
Net change in unrealized appreciation (depreciation) on investments	8,842		13,657		45,085		(109,720)		(19,878)



Net increase (decrease) in net assets resulting from operations	27,969		16,587		77,683		(89,325)		(11,022)
Changes in net assets from shareholders' distributions:
Distributions to shareholders	(15,000)		—		(30,029)		(20,793)		(63,283)
Net decrease in net assets resulting from shareholders' distributions	(15,000)		—		(30,029)		(20,793)		(63,283)
Changes in net assets from capital share transactions:

Reinvestment of shareholders' distributions	5,132		(1)		10,424		8,070		23,298
Repurchase of common stock	(5,163)		(14)		(10,454)		(8,085)		(23,300)
Net decrease in net assets resulting from capital share transactions	(31)		(15)		(30)		(15)		(2)

Total increase (decrease) in net assets	12,938		16,572		47,624		(110,133)		(74,307)
Net assets at beginning of period	912,942		825,858		878,256		952,563		952,563
Net assets at end of period	$	925,880	$	842,430	$	925,880	$	842,430	$	878,256
Net asset value per share of common stock at end of period	$	8.17	$	7.43	$	8.17	$	7.43	$	7.75
Shares of common stock outstanding at end of period	113,297,189		113,311,355		113,297,189		113,311,355		113,293,723

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Statements of Cash Flows

(in thousands)


	Three Months Ended June 30,				Six Months Ended June 30,				Year Ended December 31,
	2021		2020		2021		2020		2020
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Operating activities:
Net increase (decrease) in net assets resulting from operations	$	27,969	$	16,587	$	77,683	$	(89,325)	$	(11,022)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash (used in) provided by operating activities:
Net accretion of discount on investments	(2,733)		(1,836)		(5,905)		(7,017)		(13,214)
Proceeds from principal repayment of investments	91,697		57,924		265,971		240,738		465,547
Purchase of investments	(222,098)		(25,872)		(405,732)		(201,503)		(359,633)
Paid-in-kind interest and dividends capitalized	(5,303)		(4,083)		(12,818)		(7,353)		(21,420)
Decrease (increase) in short term investments, net	39,110		24,989		25,114		(2,141)		(44,071)
Proceeds from sale of investments	5,131		16,844		20,131		44,428		77,630
Net realized (gain) loss on investments	(445)		10,980		3,676		15,174		69,898
Net change in unrealized (appreciation) depreciation on investments	(8,842)		(13,657)		(45,085)		109,720		19,878
Amortization of debt issuance costs	682		3,277		1,431		3,964		5,037
(Increase) decrease in due from counterparty	—		5,146		—		3,281		3,281
(Increase) decrease in interest receivable on investments	(2,092)		(3,463)		(2,814)		(4,291)		(1,137)
(Increase) decrease in dividends receivable on investments	128		(1,104)		(142)		(1,410)		1,061
(Increase) decrease in receivable due on investments sold and repaid	31,027		(1,015)		(2,695)		16,646		12,359
(Increase) decrease in prepaid expenses and other assets	241		71		1,362		433		(803)
Increase (decrease) in payable for investments purchased	(22,279)		(19,761)		17,805		—		(1,435)
Increase (decrease) in accounts payable and accrued expenses	1,239		(202)		1,466		60		(121)
Increase (decrease) in interest payable	1,468		(290)		1,685		(684)		(663)
Increase (decrease) in accrued management fees	460		(522)		575		(940)		(1,201)
Increase (decrease) in accrued administrative services expense	516		412		(360)		(484)		48


Increase (decrease) in subordinated incentive fee on income payable	—		—		(4,323)		(2,304)		(1,289)
Net cash (used in) provided by operating activities	(64,124)		64,425		(62,975)		116,992		198,730
Financing activities:


Repurchase of common stock	(5,163)		(14)		(10,454)		(8,085)		(23,300)
Shareholders' distributions paid	(9,868)		(1)		(19,605)		(12,723)		(39,985)
Repayments under financing arrangements	—		(505,859)		(125,000)		(581,159)		486,153
Borrowings under financing arrangements	80,000		445,035		205,000		486,153		(602,194)

Debt issuance costs paid	(990)		(5,625)		(5,384)		(5,625)		(5,625)
Net cash provided by (used in) financing activities	63,979		(66,464)		44,557		(121,439)		(184,951)
Net (decrease) increase in cash	(145)		(2,039)		(18,418)		(4,447)		13,779
Cash, beginning of period	1,641		3,727		19,914		6,135		6,135
Cash, end of period	$	1,496	$	1,688	$	1,496	$	1,688	$	19,914

Supplemental disclosure of cash flow information:
Cash paid for interest	$	5,676	$	8,484	$	12,258	$	18,645	$	32,403
Supplemental non-cash financing activities:
Reinvestment of shareholders' distributions	$	5,132	$	(1)	$	10,424	$	8,070	$	23,298
Restructuring of portfolio investment	$	2,286	$	38,763	$	2,286	$	38,763	$	91,326
Cash interest receivable exchanged for additional securities	$	—	$	—	$	1,304	$	—	$	—

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Schedule of Investments (unaudited)

June 30, 2021

(in thousands)


Portfolio Company(a)	Index Rate(b)	Industry	Principal/ Par Amount/ Units(e)		Cost(d)		Fair Value(c)
Senior Secured First Lien Debt - 152.0%
1244311 B.C. LTD., L+500, 1.00% LIBOR Floor, 9/30/2025(s)	3 Month LIBOR	Chemicals, Plastics & Rubber	$	2,410	$	2,291	$	2,286
1244311 B.C. LTD., L+500, 1.00% LIBOR Floor, 9/30/2025(s)(v)	3 Month LIBOR	Chemicals, Plastics & Rubber	832		785		783
ABB/CON-CISE Optical Group LLC, L+500, 1.00% LIBOR Floor, 6/15/2023(o)	6 Month LIBOR	Consumer Goods: Non-Durable	3,505		3,409		3,404
Adams Publishing Group, LLC, L+700, 1.75% LIBOR Floor, 7/2/2023(n)(o)	1 Month LIBOR	Media: Advertising, Printing & Publishing	10,797		10,745		10,797
Adapt Laser Acquisition, Inc., L+1200, 1.00% LIBOR Floor, 12/31/2023(n)(v)	3 Month LIBOR	Capital Equipment	11,247		11,247		9,237
Adapt Laser Acquisition, Inc., L+1000, 1.00% LIBOR Floor, 12/31/2023	3 Month LIBOR	Capital Equipment	2,000		2,000		1,643
Aegis Toxicology Sciences Corp., L+550, 1.00% LIBOR Floor, 5/9/2025(n)	3 Month LIBOR	Healthcare & Pharmaceuticals	8,440		8,334		8,219
AIS Holdco, LLC, L+500, 0.00% LIBOR Floor, 8/15/2025(n)	3 Month LIBOR	Banking, Finance, Insurance & Real Estate	1,995		1,979		1,960
Alchemy US Holdco 1, LLC, L+550, 10/10/2025(n)	1 Month LIBOR	Construction & Building	11,287		11,184		11,223
Alert 360 Opco, Inc., L+600, 1.00% LIBOR Floor, 10/16/2025(n)(s)	1 Month LIBOR	Services: Consumer	12,178		12,178		12,194
Allen Media, LLC, L+550, 0.00% LIBOR Floor, 2/10/2027(n)(o)	3 Month LIBOR	Media: Diversified & Production	9,759		9,759		9,759
Alliance Healthcare Services, Inc., L+450, 1.00% LIBOR Floor, 10/24/2023(v)	1 Month LIBOR	Healthcare & Pharmaceuticals	4,114		3,951		4,093
ALM Media, LLC, L+650, 1.00% LIBOR Floor, 11/25/2024(n)(o)	3 Month LIBOR	Media: Advertising, Printing & Publishing	18,447		18,186		17,709
AMCP Staffing Intermediate Holdings III, LLC, L+675, 1.50% LIBOR Floor, 9/24/2025(n)	3 Month LIBOR	Services: Business	12,143		12,100		11,960
AMCP Staffing Intermediate Holdings III, LLC, L+675, 1.50% LIBOR Floor, 9/24/2025	1 Month LIBOR	Services: Business	457		457		450
AMCP Staffing Intermediate Holdings III, LLC, 0.50% Unfunded, 9/24/2025	None	Services: Business	1,142		—		(17)
American Clinical Solutions LLC, 7.00%, 12/31/2022(n)(s)	None	Healthcare & Pharmaceuticals	3,500		3,445		3,334
American Clinical Solutions LLC, 7.00%, 12/31/2021(n)(s)	None	Healthcare & Pharmaceuticals	250		250		246
American Consolidated Natural Resources, Inc., L+1300, 1.00% LIBOR Floor, 9/16/2025(n)(v)	3 Month LIBOR	Metals & Mining	580		421		584
American Media, LLC, L+775, 1.50% LIBOR Floor, 12/31/2023(n)	3 Month LIBOR	Media: Advertising, Printing & Publishing	10,452		10,309		10,347
American Media, LLC, L+775, 1.50% LIBOR Floor, 12/31/2023(n)	3 Month LIBOR	Media: Advertising, Printing & Publishing	1,617		1,596		1,601
American Media, LLC, 0.50% Unfunded, 12/31/2023(n)	None	Media: Advertising, Printing & Publishing	85		—		(1)
American Teleconferencing Services, Ltd., L+650, 1.00% LIBOR Floor, 12/8/2021(n)	3 Month LIBOR	Telecommunications	19,505		18,920		13,678
Analogic Corp., L+525, 1.00% LIBOR Floor, 6/21/2024(n)(o)	1 Month LIBOR	Healthcare & Pharmaceuticals	4,925		4,870		4,802
Ancile Solutions, Inc., L+1000, 1.00% LIBOR Floor, 6/11/2026(v)	3 Month LIBOR	High Tech Industries	12,500		12,127		12,125
Anthem Sports & Entertainment Inc., L+950, 1.00% LIBOR Floor, 9/9/2024(n)(v)	3 Month LIBOR	Media: Diversified & Production	15,586		15,135		15,430
Anthem Sports & Entertainment Inc., L+950, 1.00% LIBOR Floor, 9/9/2024	3 Month LIBOR	Media: Diversified & Production	417		417		415
Anthem Sports & Entertainment Inc., 0.50% Unfunded, 9/9/2024	None	Media: Diversified & Production	1,750		—		(9)
APCO Holdings, LLC, L+550, 0.00% LIBOR Floor, 6/9/2025(n)	1 Month LIBOR	Banking, Finance, Insurance & Real Estate	8,305		8,252		8,305
Appalachian Resource Company, LLC, L+500, 1.00% LIBOR Floor, 9/10/2023	1 Month LIBOR	Metals & Mining	11,137		9,842		10,357
Appalachian Resource Company, LLC, 0.00% Unfunded, 9/10/2023(p)	None	Metals & Mining	2,500		—		—
Associated Asphalt Partners, LLC, L+525, 1.00% LIBOR Floor, 4/5/2024(n)(o)	1 Month LIBOR	Construction & Building	14,436		14,082		13,624
Avison Young (USA) Inc., L+500, 0.00% LIBOR Floor, 1/31/2026(h)(n)	3 Month LIBOR	Banking, Finance, Insurance & Real Estate	14,737		14,552		14,590
BK Medical Holding Company, Inc., L+525, 1.00% LIBOR Floor, 6/22/2024(n)(o)	1 Month LIBOR	Healthcare & Pharmaceuticals	4,938		4,908		4,814
Blackboard Inc., L+600, 1.00% LIBOR Floor, 6/30/2024	3 Month LIBOR	Services: Consumer	4,975		4,975		5,001

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Schedule of Investments (unaudited)

June 30, 2021

(in thousands)


Portfolio Company(a)	Index Rate(b)	Industry	Principal/ Par Amount/ Units(e)	Cost(d)	Fair Value(c)
Cadence Aerospace, LLC, L+850, 1.00% LIBOR Floor, 11/14/2023(n)(o)(v)	3 Month LIBOR	Aerospace & Defense	38,752	38,348	37,444
Cardenas Markets LLC, L+625, 1.00% LIBOR Floor, 6/3/2027	6 Month LIBOR	Retail	11,000	10,891	11,041
CB URS Holdings Corp., L+575, 1.00% LIBOR Floor, 9/1/2024(n)	6 Month LIBOR	Transportation: Cargo	15,618	15,566	14,036
Celerity Acquisition Holdings, LLC, L+850, 1.00% LIBOR Floor, 5/28/2026	3 Month LIBOR	Services: Business	15,000	15,000	15,000
Charming Charlie LLC, 20.00%, 4/24/2023(r)(s)	None	Retail	777	657	350
CHC Solutions Inc., 12.00%, 7/20/2023(o)(v)	None	Healthcare & Pharmaceuticals	7,806	7,806	7,738
CircusTrix Holdings, LLC, L+800, 1.00% LIBOR Floor, 1/16/2024(n)(o)(v)	1 Month LIBOR	Hotel, Gaming & Leisure	26,536	26,330	24,048
CircusTrix Holdings, LLC, L+800, 1.00% LIBOR Floor, 1/16/2024(n)(v)	1 Month LIBOR	Hotel, Gaming & Leisure	2,701	2,701	2,448
CircusTrix Holdings, LLC, L+800, 1.00% LIBOR Floor, 7/16/2023(n)(v)	1 Month LIBOR	Hotel, Gaming & Leisure	1,757	1,607	2,047
CircusTrix Holdings, LLC, 1.00% Unfunded, 12/31/2021	None	Hotel, Gaming & Leisure	180	—	30
Country Fresh Holdings, LLC, L+500, 1.00% LIBOR Floor, 4/29/2023(r)	3 Month LIBOR	Beverage, Food & Tobacco	1,020	1,000	170
Country Fresh Holdings, LLC, L+500, 1.00% LIBOR Floor, 4/29/2023(n)(r)	3 Month LIBOR	Beverage, Food & Tobacco	414	414	69
Country Fresh Holdings, LLC, 12.00%, 6/1/2022(v)	None	Beverage, Food & Tobacco	31	30	31
Coyote Buyer, LLC, L+600, 1.00% LIBOR Floor, 2/6/2026(n)(o)	3 Month LIBOR	Chemicals, Plastics & Rubber	34,563	34,313	34,563
Coyote Buyer, LLC, L+800, 1.00% LIBOR Floor, 8/6/2026(o)	3 Month LIBOR	Chemicals, Plastics & Rubber	6,219	6,108	6,219
Coyote Buyer, LLC, 0.50% Unfunded, 2/6/2025	None	Chemicals, Plastics & Rubber	2,500	—	—
David's Bridal, LLC, L+1000, 1.00% LIBOR Floor, 6/23/2023(v)	3 Month LIBOR	Retail	5,477	4,700	5,477
David's Bridal, LLC, L+1000, 1.00% LIBOR Floor, 5/23/2024(v)	3 Month LIBOR	Retail	5,000	5,000	5,000
David's Bridal, LLC, L+600, 1.00% LIBOR Floor, 6/30/2023(v)	3 Month LIBOR	Retail	767	682	767
Deluxe Entertainment Services, Inc., L+650, 1.00% LIBOR Floor, 3/25/2024(n)(s)(v)	3 Month LIBOR	Media: Diversified & Production	3,354	3,453	3,354
DMT Solutions Global Corp., L+700, 0.00% LIBOR Floor, 7/2/2024(n)	(w)	Services: Business	16,990	16,712	16,905
Eagle Family Foods Group LLC, L+650, 1.00% LIBOR Floor, 6/14/2024	3 Month LIBOR	Beverage, Food & Tobacco	14,025	13,853	14,025
East Valley Tourist Development Authority, L+800, 1.00% LIBOR Floor, 3/7/2022(i)	6 Month LIBOR	Hotel, Gaming & Leisure	5,000	4,950	4,950
Entertainment Studios P&A LLC, 6.30%, 5/18/2037(k)(n)	None	Media: Diversified & Production	11,971	11,872	10,085
Entertainment Studios P&A LLC, 5.00%, 5/18/2037(k)	None	Media: Diversified & Production	—	—	2,339
EnTrans International, LLC, L+600, 0.00% LIBOR Floor, 11/1/2024(n)	1 Month LIBOR	Capital Equipment	25,500	25,346	24,161
Extreme Reach, Inc., L+750, 1.50% LIBOR Floor, 3/29/2024(n)(o)	1 Month LIBOR	Media: Diversified & Production	19,588	19,452	19,490
Extreme Reach, Inc., 0.50% Unfunded, 3/29/2024(n)(o)	None	Media: Diversified & Production	1,744	—	(9)
F+W Media, Inc., L+1000, 1.50% LIBOR Floor, 5/24/2022(r)(s)	1 Month LIBOR	Media: Diversified & Production	1,139	—	—
Foundation Consumer Healthcare, LLC, L+575, 1.00% LIBOR Floor, 11/2/2023(n)(o)	3 Month LIBOR	Healthcare & Pharmaceuticals	33,395	33,092	33,646
Foundation Consumer Healthcare, LLC, 0.50% Unfunded, 11/2/2023	None	Healthcare & Pharmaceuticals	2,094	—	16
Genesis Healthcare, Inc., 0.50% Unfunded, 3/6/2023(h)	None	Healthcare & Pharmaceuticals	35,000	—	—
Geo Parent Corp., L+525, 0.00% LIBOR Floor, 12/19/2025(n)	1 Month LIBOR	Services: Business	14,663	14,560	14,663
Geon Performance Solutions, LLC, L+625, 1.63% LIBOR Floor, 10/25/2024(n)(o)	1 Month LIBOR	Chemicals, Plastics & Rubber	20,616	20,361	20,616
Geon Performance Solutions, LLC, 0.50% Unfunded, 10/25/2024	None	Chemicals, Plastics & Rubber	2,586	—	—
Harland Clarke Holdings Corp., L+475, 1.00% LIBOR Floor, 11/3/2023(n)	3 Month LIBOR	Services: Business	11,915	11,893	10,754

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Schedule of Investments (unaudited)

June 30, 2021

(in thousands)


Portfolio Company(a)	Index Rate(b)	Industry	Principal/ Par Amount/ Units(e)		Cost(d)	Fair Value(c)
HDT Holdco, Inc., L+575, 0.75% LIBOR Floor, 7/8/2027(i)	3 Month LIBOR	Aerospace & Defense	5,000		4,850	4,887
Heritage Power, LLC, L+600, 1.00% LIBOR Floor, 7/30/2026	6 Month LIBOR	Energy: Oil & Gas	4,975		4,795	4,442
Hilliard, Martinez & Gonzales, LLP, L+1800, 2.00% LIBOR Floor, 12/17/2022(n)(v)	1 Month LIBOR	Services: Consumer	22,982		22,858	22,659
Homer City Generation, L.P., 15.00%, 4/5/2023(n)(v)	None	Energy: Oil & Gas	9,445		9,818	7,485
Hoover Group, Inc., L+850, 1.25% LIBOR Floor, 10/1/2024(o)	3 Month LIBOR	Services: Business	5,182		5,165	5,169
HUMC Holdco, LLC, 9.00%, 9/9/2021(n)	None	Healthcare & Pharmaceuticals	9,667		9,667	9,630
Hummel Station LLC, L+600, 1.00% LIBOR Floor, 10/27/2022(n)(o)	1 Month LIBOR	Energy: Oil & Gas	14,083		10,381	10,102
Hummel Station LLC, L+600, 1.00% LIBOR Floor, 10/27/2022(n)	1 Month LIBOR	Energy: Oil & Gas	872		4,270	4,213
Hyperion Materials & Technologies, Inc., L+550, 1.00% LIBOR Floor, 8/28/2026(n)	3 Month LIBOR	Chemicals, Plastics & Rubber	9,850		9,696	9,856
Independent Pet Partners Intermediate Holdings, LLC, 6.00%, 11/20/2023(n)(v)	None	Retail	9,986		9,911	8,538
Independent Pet Partners Intermediate Holdings, LLC, Prime+500, 12/22/2022(n)(v)	Prime	Retail	2,043		2,043	2,043
Independent Pet Partners Intermediate Holdings, LLC, L+600, 0.00% LIBOR Floor, 12/22/2022(n)(v)	3 Month LIBOR	Retail	260		260	260
InfoGroup Inc., L+500, 1.00% LIBOR Floor, 4/3/2023(n)(o)	3 Month LIBOR	Media: Advertising, Printing & Publishing	15,513		15,507	14,776
Instant Web, LLC, L+650, 1.00% LIBOR Floor, 12/15/2022(n)(o)	1 Month LIBOR	Media: Advertising, Printing & Publishing	36,908		36,876	34,740
Instant Web, LLC, 0.50% Unfunded, 12/15/2022(n)	None	Media: Advertising, Printing & Publishing	2,704		—	—
Invincible Boat Company, L+650, 1.50% LIBOR Floor, 8/28/2025	3 Month LIBOR	Consumer Goods: Durable	14,906		14,760	14,757
Invincible Boat Company, 0.50% Unfunded, 8/28/2025	None	Consumer Goods: Durable	798		—	(8)
INW Manufacturing, LLC, L+575, 0.75% LIBOR Floor, 3/25/2027(o)	3 Month LIBOR	Services: Business	15,358		14,905	15,051
INW Manufacturing, LLC, L+575, 0.75% LIBOR Floor, 3/25/2027	3 Month LIBOR	Services: Business	4,545		4,411	4,455
Isagenix International, LLC, L+575, 1.00% LIBOR Floor, 6/14/2025(n)	3 Month LIBOR	Beverage, Food & Tobacco	17,332		15,609	15,621
Island Medical Management Holdings, LLC, L+650, 1.00% LIBOR Floor, 9/1/2022(n)(o)	3 Month LIBOR	Healthcare & Pharmaceuticals	11,118		11,079	10,896
Jenny C Acquisition, Inc., L+1050, 1.75% LIBOR Floor, 10/1/2024(n)(v)	3 Month LIBOR	Services: Consumer	11,373		11,309	10,645
JP Intermediate B, LLC, L+550, 1.00% LIBOR Floor, 11/20/2025(n)	3 Month LIBOR	Beverage, Food & Tobacco	14,814		14,593	14,394
K&N Parent, Inc., L+475, 1.00% LIBOR Floor, 10/20/2023	3 Month LIBOR	Consumer Goods: Durable	4,987		4,805	4,837
KITV, Inc., L+750, 1.00% LIBOR Floor, 3/4/2026(n)	3 Month LIBOR	Media: Diversified & Production	20,500		20,500	21,013
KNB Holdings Corp., L+550, 1.00% LIBOR Floor, 4/26/2024(n)	6 Month LIBOR	Consumer Goods: Durable	7,964		7,870	7,234
Labvantage Solutions Ltd., E+750, 1.00% EURIBOR Floor, 9/30/2021(h)	1 Month EURIBOR	High Tech Industries	€	1,921	2,159	2,278
Labvantage Solutions Inc., L+750, 1.00% LIBOR Floor, 9/30/2021(n)(o)	1 Month LIBOR	High Tech Industries	1,055		1,055	1,055
LAV Gear Holdings, Inc., L+750, 1.00% LIBOR Floor, 10/31/2024(n)(o)(v)	3 Month LIBOR	Services: Business	26,004		25,659	24,736
LAV Gear Holdings, Inc., L+750, 1.00% LIBOR Floor, 10/31/2024(n)(o)(v)	3 Month LIBOR	Services: Business	4,485		4,444	4,267
LGC US Finco, LLC, L+650, 1.00% LIBOR Floor, 12/20/2025(n)	1 Month LIBOR	Capital Equipment	9,700		9,458	9,421
LH Intermediate Corp., L+750, 1.00% LIBOR Floor, 6/2/2026	3 Month LIBOR	Consumer Goods: Durable	14,813		14,578	14,627
Lift Brands, Inc., L+750, 1.00% LIBOR Floor, 6/29/2025(n)(o)(s)	1 Month LIBOR	Services: Consumer	23,642		23,641	23,642
Lift Brands, Inc., 9.50%, 6/29/2025(n)(o)(s)(v)	None	Services: Consumer	5,094		4,998	4,954
Lift Brands, Inc., 6/29/2025(n)(o)(q)(s)	None	Services: Consumer	5,296		4,749	4,700
Longview Power, LLC, L+1000, 1.50% LIBOR Floor, 7/30/2025(s)	3 Month LIBOR	Energy: Oil & Gas	4,211		2,577	4,421

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Schedule of Investments (unaudited)

June 30, 2021

(in thousands)


Portfolio Company(a)	Index Rate(b)	Industry	Principal/ Par Amount/ Units(e)	Cost(d)	Fair Value(c)
MacNeill Pride Group Corp., L+650, 1.00% LIBOR Floor, 4/20/2026(n)	3 Month LIBOR	Services: Consumer	15,000	14,855	14,850
MacNeill Pride Group Corp., 0.50% Unfunded, 7/20/2023(n)	None	Services: Consumer	5,000	(48)	(50)
Mimeo.com, Inc., L+700, 1.00% LIBOR Floor, 12/21/2023(q)	3 Month LIBOR	Services: Business	23,737	23,737	23,143
Mimeo.com, Inc., L+1700, 1.00% LIBOR Floor, 12/21/2023(v)	3 Month LIBOR	Services: Business	2,006	2,006	2,058
Mimeo.com, Inc., 1.00% Unfunded, 12/21/2023	None	Services: Business	1,250	—	33
Moss Holding Company, L+700, 1.00% LIBOR Floor, 4/17/2024(n)(o)(v)	3 Month LIBOR	Services: Business	19,590	19,430	17,631
Moss Holding Company, 0.50% Unfunded, 4/17/2023	None	Services: Business	2,232	—	—
Napa Management Services Corp., L+500, 1.00% LIBOR Floor, 4/19/2023	1 Month LIBOR	Healthcare & Pharmaceuticals	5,346	5,277	5,343
NASCO Healthcare Inc., L+450, 1.00% LIBOR Floor, 6/30/2023(n)	3 Month LIBOR	Services: Business	17,556	17,556	17,314
NewsCycle Solutions, Inc., L+700, 1.00% LIBOR Floor, 12/29/2022(n)(o)	3 Month LIBOR	Media: Advertising, Printing & Publishing	12,125	12,059	12,004
NWN Parent Holdings LLC, L+650, 1.00% LIBOR Floor, 5/7/2026	3 Month LIBOR	High Tech Industries	13,167	13,037	13,183
NWN Parent Holdings LLC, 0.50% Unfunded, 5/7/2026	None	High Tech Industries	1,800	(18)	2
Optio Rx, LLC, L+700, 0.00% LIBOR Floor, 6/28/2024(n)(o)	1 Month LIBOR	Healthcare & Pharmaceuticals	23,625	23,522	23,182
Optio Rx, LLC, L+1000, 0.00% LIBOR Floor, 6/28/2024(o)	1 Month LIBOR	Healthcare & Pharmaceuticals	2,515	2,495	2,666
Patterson Medical Supply, Inc., L+475, 1.00% LIBOR Floor, 8/28/2022	1 Month LIBOR	Healthcare & Pharmaceuticals	5,968	5,893	5,968
PetroChoice Holdings, Inc., L+500, 1.00% LIBOR Floor, 8/20/2022	3 Month LIBOR	Chemicals, Plastics & Rubber	3,916	3,812	3,760
PH Beauty Holdings III. Inc., L+500, 0.00% LIBOR Floor, 9/28/2025(n)	3 Month LIBOR	Consumer Goods: Non-Durable	9,725	9,161	9,530
Pixelle Specialty Solutions LLC, L+650, 1.00% LIBOR Floor, 10/31/2024(n)	1 Month LIBOR	Forest Products & Paper	21,686	21,406	21,699
Playboy Enterprises, Inc., L+575, 0.50% LIBOR Floor, 5/25/2027(h)(o)	3 Month LIBOR	Consumer Goods: Non-Durable	20,000	19,600	19,600
Polymer Additives, Inc., L+600, 0.00% LIBOR Floor, 7/31/2025(n)	3 Month LIBOR	Chemicals, Plastics & Rubber	19,500	19,247	18,769
RA Outdoors, LLC, L+675, 0.00% LIBOR Floor, 4/8/2026(n)	3 Month LIBOR	Media: Diversified & Production	15,951	15,951	15,811
RA Outdoors, LLC, 0.50% Unfunded, 4/8/2026	None	Media: Diversified & Production	1,049	(170)	(9)
Rapid Fire Protection, Inc., L+650, 1.75% LIBOR Floor, 11/22/2024(i)	1 Month LIBOR	Construction & Building	7,000	6,974	7,000
Retail Services WIS Corp., L+775, 1.00% LIBOR Floor, 5/20/2025(n)	3 Month LIBOR	Services: Business	10,000	9,803	9,850
Rogers Mechanical Contractors, LLC, L+650, 1.00% LIBOR Floor, 9/9/2025(n)	1 Month LIBOR	Services: Business	17,692	17,692	17,692
Rogers Mechanical Contractors, LLC, 0.75% Unfunded, 9/9/2025	None	Services: Business	2,885	—	—
Rogers Mechanical Contractors, LLC, 1.00% Unfunded, 4/28/2023	None	Services: Business	1,923	—	—
Securus Technologies Holdings, Inc., L+450, 1.00% LIBOR Floor, 11/1/2024(n)	6 Month LIBOR	Telecommunications	3,929	3,118	3,929
Sequoia Healthcare Management, LLC, 12.75%, 8/21/2023(n)(o)(r)	None	Healthcare & Pharmaceuticals	8,525	8,457	6,394
SIMR, LLC, L+1700, 2.00% LIBOR Floor, 9/7/2023(n)(s)(v)	1 Month LIBOR	Healthcare & Pharmaceuticals	18,779	18,625	15,470
Smart & Final Inc., L+675, 0.00% LIBOR Floor, 6/20/2025(n)	1 Month LIBOR	Retail	7,705	7,178	7,739
Software Luxembourg Acquisitions S.À.R.L., L+750, 1.00% LIBOR Floor, 4/27/2025(h)(o)	3 Month LIBOR	High Tech Industries	3,004	2,909	3,004
Software Luxembourg Acquisitions S.À.R.L., L+750, 1.00% LIBOR Floor, 12/27/2024(h)(o)	3 Month LIBOR	High Tech Industries	805	784	805
Sorenson Communications, LLC, L+550, 0.75% LIBOR Floor, 3/17/2026(n)	3 Month LIBOR	Telecommunications	9,750	9,656	9,847
Spinal USA, Inc. / Precision Medical Inc., L+950, 10/1/2021(n)	3 Month LIBOR	Healthcare & Pharmaceuticals	12,556	12,535	12,117
Spinal USA, Inc. / Precision Medical Inc., L+950, 10/1/2021(n)(v)	3 Month LIBOR	Healthcare & Pharmaceuticals	1,176	1,116	1,178

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Schedule of Investments (unaudited)

June 30, 2021

(in thousands)


Portfolio Company(a)	Index Rate(b)	Industry	Principal/ Par Amount/ Units(e)		Cost(d)	Fair Value(c)
Spinal USA, Inc. / Precision Medical Inc., L+1050, 10/1/2021(i)(n)(v)	3 Month LIBOR	Healthcare & Pharmaceuticals	1,030		1,030	999
Spinal USA, Inc. / Precision Medical Inc., L+950, 10/1/2021(n)(v)	3 Month LIBOR	Healthcare & Pharmaceuticals	634		493	610
Stats Intermediate Holdings, LLC, L+525, 0.00% LIBOR Floor, 7/12/2026(n)	3 Month LIBOR	High Tech Industries	9,850		9,687	9,887
STV Group, Inc., L+525, 0.00% LIBOR Floor, 12/13/2026(o)	1 Month LIBOR	Services: Business	1,995		1,975	1,985
Tenere Inc., L+850, 1.00% LIBOR Floor, 5/5/2025(n)(o)	3 Month LIBOR	Capital Equipment	18,080		18,051	18,103
Tensar Corp., L+675, 1.00% LIBOR Floor, 10/20/2025(n)	3 Month LIBOR	Chemicals, Plastics & Rubber	4,975		4,865	5,003
The Pasha Group, L+800, 1.00% LIBOR Floor, 1/26/2023(n)(o)	2 Month LIBOR	Transportation: Cargo	3,885		3,843	3,924
The Pay-O-Matic Corp., L+900, 1.00% LIBOR Floor, 10/29/2021(j)(n)	3 Month LIBOR	Services: Consumer	6,162		6,126	6,162
Vesta Holdings, LLC, L+1000, 1.00% LIBOR Floor, 2/25/2024(n)(v)	1 Month LIBOR	Banking, Finance, Insurance & Real Estate	25,268		25,268	25,268
Volta Charging, LLC, 12.00%, 6/19/2024(n)	None	Media: Diversified & Production	15,000		15,000	16,219
Volta Charging, LLC, 12.00%, 6/19/2024(n)	None	Media: Diversified & Production	12,000		11,983	12,975
West Dermatology Management Holdings, LLC, L+675, 1.00% LIBOR Floor, 2/11/2025(n)(o)(v)	3 Month LIBOR	Healthcare & Pharmaceuticals	9,455		9,400	9,183
West Dermatology Management Holdings, LLC, L+675, 1.00% LIBOR Floor, 2/11/2025(n)(v)	3 Month LIBOR	Healthcare & Pharmaceuticals	1,657		1,645	1,607
West Dermatology Management Holdings, LLC, L+750, 1.00% LIBOR Floor, 2/11/2025	3 Month LIBOR	Healthcare & Pharmaceuticals	1,182		1,182	1,196
West Dermatology Management Holdings, LLC, 0.75% Unfunded, 2/11/2022	None	Healthcare & Pharmaceuticals	472		—	5
West Dermatology Management Holdings, LLC, 0.75% Unfunded, 2/11/2022	None	Healthcare & Pharmaceuticals	7,182		(20)	(206)
Williams Industrial Services Group, Inc, L+900, 1.00% LIBOR Floor, 12/16/2025(o)	1 Month LIBOR	Services: Business	9,925		9,925	10,024
Williams Industrial Services Group, Inc, 0.50% Unfunded, 6/16/2022	None	Services: Business	5,000		—	50
Wind River Systems, Inc., L+675, 1.00% LIBOR Floor, 6/24/2024	3 Month LIBOR	High Tech Industries	24,342		24,139	24,190
Wok Holdings Inc., L+625, 0.00% LIBOR Floor, 3/1/2026(n)	1 Month LIBOR	Beverage, Food & Tobacco	20,444		19,940	20,316
Total Senior Secured First Lien Debt					1,430,846	1,407,224
Senior Secured Second Lien Debt - 15.3%
Access CIG, LLC, L+775, 0.00% LIBOR Floor, 2/27/2026(n)(o)	1 Month LIBOR	Services: Business	17,250		17,146	17,164
Carestream Health, Inc., L+1250, 1.00% LIBOR Floor, 8/8/2023(n)(o)(v)	3 Month LIBOR	Healthcare & Pharmaceuticals	11,966		11,966	11,764
Country Fresh Holdings, LLC, L+850, 1.00% LIBOR Floor, 4/29/2024(n)(r)(v)	3 Month LIBOR	Beverage, Food & Tobacco	2,364		2,297	—
Dayton Superior Corp., L+700, 2.00% LIBOR Floor, 12/4/2024(n)	3 Month LIBOR	Construction & Building	1,485		1,485	1,483
Deluxe Entertainment Services, Inc., L+850, 1.00% LIBOR Floor, 9/25/2024(n)(r)(s)(v)	3 Month LIBOR	Media: Diversified & Production	10,400		10,017	—
Global Tel*Link Corp., L+825, 0.00% LIBOR Floor, 11/29/2026(o)	1 Month LIBOR	Telecommunications	11,500		11,345	11,471
LSCS Holdings, Inc., L+825, 0.00% LIBOR Floor, 3/16/2026(n)	6 Month LIBOR	Services: Business	11,891		11,701	11,653
Medical Solutions Holdings, Inc., L+838, 1.00% LIBOR Floor, 6/16/2025(n)	1 Month LIBOR	Healthcare & Pharmaceuticals	10,000		9,907	9,750
MedPlast Holdings, Inc., L+775, 0.00% LIBOR Floor, 7/2/2026(n)	1 Month LIBOR	Healthcare & Pharmaceuticals	6,750		6,702	6,202
Ministry Brands, LLC, L+925, 1.00% LIBOR Floor, 6/2/2023(n)(o)	1 Month LIBOR	Services: Business	7,000		7,000	6,982
Niacet Corp., E+875, 1.00% EURIBOR Floor, 8/1/2024(h)	1 Month EURIBOR	Chemicals, Plastics & Rubber	€	6,263	6,721	7,426
Patterson Medical Supply, Inc., L+1050, 1.00% LIBOR Floor, 8/28/2023(n)(v)	3 Month LIBOR	Healthcare & Pharmaceuticals	15,563		15,510	15,563
PetroChoice Holdings, Inc., L+875, 1.00% LIBOR Floor, 8/21/2023	3 Month LIBOR	Chemicals, Plastics & Rubber	15,000		14,399	14,550
Premiere Global Services, Inc., L+950, 1.00% LIBOR Floor, 6/6/2024(r)(v)	3 Month LIBOR	Telecommunications	3,590		3,435	108

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Schedule of Investments (unaudited)

June 30, 2021

(in thousands)


Portfolio Company(a)	Index Rate(b)	Industry	Principal/ Par Amount/ Units(e)	Cost(d)	Fair Value(c)
Securus Technologies Holdings, Inc., L+825, 1.00% LIBOR Floor, 11/1/2025	3 Month LIBOR	Telecommunications	2,942	2,922	2,942
TMK Hawk Parent, Corp., L+800, 1.00% LIBOR Floor, 8/28/2025(n)	1 Month LIBOR	Services: Business	13,393	13,180	9,877
Zest Acquisition Corp., L+750, 1.00% LIBOR Floor, 3/14/2026(n)(o)	1 Month LIBOR	Healthcare & Pharmaceuticals	15,000	14,898	14,775
Total Senior Secured Second Lien Debt				160,631	141,710
Collateralized Securities and Structured Products - Equity - 1.5%
APIDOS CLO XVI Subordinated Notes, 0.00% Estimated Yield, 1/19/2025(h)	(g)	Diversified Financials	9,000	2,402	1,725
CENT CLO 19 Ltd. Subordinated Notes, 0.00% Estimated Yield, 10/29/2025(h)	(g)	Diversified Financials	2,000	1,161	498
Galaxy XV CLO Ltd. Class A Subordinated Notes, 5.76% Estimated Yield, 4/15/2025(h)	(g)	Diversified Financials	4,000	1,877	1,987
Ivy Hill Middle Market Credit Fund VIII, Ltd. Subordinated Loan, 11.84% Estimated Yield, 2/2/2026(h)	(g)	Diversified Financials	10,000	9,047	9,885
Total Collateralized Securities and Structured Products - Equity				14,487	14,095
Unsecured Debt - 0.6%
WPLM Acquisition Corp., 15.00%, 11/24/2025(v)	None	Media: Advertising, Printing & Publishing	5,752	5,675	5,508
Total Unsecured Debt				5,675	5,508
Equity - 11.6%
1244301 B.C. LTD., Common Shares(p)(s)		Chemicals, Plastics & Rubber	807,268 Units	—	186
ACNR Holdings, Inc., Common Stock(p)		Metals & Mining	6,018 Units	90	137
ACNR Holdings, Inc., Preferred Stock(p)		Metals & Mining	1,890 Units	26	203
Alert 360 Topco, Inc., Common Stock(p)(s)		Services: Consumer	584,498 Units	3,624	3,731
American Clinical Solutions LLC, Class A Membership Interests(p)(s)		Healthcare & Pharmaceuticals	6,030,384 Units	1,658	4,704
Anthem Sports and Entertainment Inc., Class A Preferred Stock Warrants(p)		Media: Diversified & Production	907 Units	205	242
Anthem Sports and Entertainment Inc., Class B Preferred Stock Warrants(p)		Media: Diversified & Production	160 Units	—	—
Anthem Sports and Entertainment Inc., Common Stock Warrants(p)		Media: Diversified & Production	2,960 Units	—	—
ARC Financial Partners, LLC, Membership Interests (25% ownership)(p)(s)		Metals & Mining	N/A	—	16
Ascent Resources - Marcellus, LLC, Membership Units(p)		Energy: Oil & Gas	511,255 Units	1,642	456
Ascent Resources - Marcellus, LLC, Warrants(p)		Energy: Oil & Gas	132,367 Units	13	2
BCP Great Lakes Fund LP, Partnership Interests (11.4% ownership)(h)(s)		Diversified Financials	N/A	11,594	11,615
Carestream Health Holdings, Inc., Warrants(p)		Healthcare & Pharmaceuticals	233 Units	565	1,040
CHC Medical Partners, Inc., Series C Preferred Stock, 12% Dividend(u)		Healthcare & Pharmaceuticals	2,727,273 Units	5,634	7,555
CION SOF Funding, LLC, Membership Interests (87.5% ownership)(p)(t)		Diversified Financials	N/A	—	—
Conisus Holdings, Inc., Series B Preferred Stock, 12% Dividend(s)(u)		Healthcare & Pharmaceuticals	12,677,833 Units	16,094	19,571
Conisus Holdings, Inc., Common Stock(p)(s)		Healthcare & Pharmaceuticals	4,914,556 Units	200	19,056
Country Fresh Holdings, LLC, Membership Units(p)		Beverage, Food & Tobacco	2,985 Units	5,249	—
Dayton HoldCo, LLC, Membership Units(p)		Construction & Building	37,264 Units	4,136	7,734
DBI Investors, Inc., Series A1 Preferred Stock(p)		Retail	20,000 Units	802	—
DBI Investors, Inc., Series A2 Preferred Stock(p)		Retail	1,733 Units	—	—
DBI Investors, Inc., Series A Preferred Stock(p)		Retail	1,396 Units	140	—

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Schedule of Investments (unaudited)

June 30, 2021

(in thousands)


Portfolio Company(a)	Industry	Principal/ Par Amount/ Units(e)	Cost(d)		Fair Value(c)
DBI Investors, Inc., Series B Preferred Stock(p)	Retail	4,183 Units	410		—
DBI Investors, Inc., Common Stock(p)	Retail	39,423 Units	—		—
DBI Investors, Inc., Reallocation Rights(p)	Retail	7,500 Units	—		—
DESG Holdings, Inc., Common Stock(i)(p)(s)	Media: Diversified & Production	1,268,143 Units	13,675		—
HDNet Holdco LLC, Preferred Unit Call Option(p)	Media: Diversified & Production	1 Unit	—		—
Independent Pet Partners Intermediate Holdings, LLC, Class A Preferred Units(p)	Retail	1,000,000 Units	1,000		—
Independent Pet Partners Intermediate Holdings, LLC, Class B-2 Preferred Units(p)	Retail	2,632,771 Units	2,133		1,590
Independent Pet Partners Intermediate Holdings, LLC, Class C Preferred Units(p)	Retail	2,632,771 Units	2,633		2,721
Independent Pet Partners Intermediate Holdings, LLC, Warrants(p)	Retail	155,880 Units	—		—
Longview Intermediate Holdings C, LLC, Membership Units(p)(s)	Energy: Oil & Gas	589,487 Units	2,524		10,422
Mooregate ITC Acquisition, LLC, Class A Units(p)(s)	High Tech Industries	500 Units	563		115
Mount Logan Capital Inc., Common Stock(f)(h)(s)	Banking, Finance, Insurance & Real Estate	1,075,557 Units	3,534		3,045
NS NWN Acquisition, LLC, Voting Units(p)	High Tech Industries	346 Units	393		1,730
NS NWN Acquisition, LLC, Class A Preferred Units(p)	High Tech Industries	111 Units	110		331
NSG Co-Invest (Bermuda) LP, Partnership Interests(h)(p)	Consumer Goods: Durable	1,575 Units	1,000		772
Palmetto Clean Technology, Inc., Warrants(p)	High Tech Industries	724,112 Units	472		2,274
Phillips Pet Holding Corp., Common Stock(p)	Retail	235 Units	13		17
SIMR Parent, LLC, Class B Common Units(p)(s)	Healthcare & Pharmaceuticals	12,283,163 Units	8,002		—
SIMR Parent, LLC, Class W Units(p)(s)	Healthcare & Pharmaceuticals	1,778,219 Units	—		—
Skillsoft Corp., Class A Common Stock(h)(p)	High Tech Industries	243,425 Units	2,286		2,286
Snap Fitness Holdings, Inc., Class A Common Stock(p)(s)	Services: Consumer	9,858 Units	3,078		3,097
Snap Fitness Holdings, Inc., Warrants(p)(s)	Services: Consumer	3,996 Units	1,247		1,255
Spinal USA, Inc. / Precision Medical Inc., Warrants(p)	Healthcare & Pharmaceuticals	20,667,324 Units	5,806		—
Tenere Inc., Warrants(p)	Capital Equipment	N/A	161		1,114
Total Equity			100,712		107,017
Short Term Investments - 5.2%(l)
First American Treasury Obligations Fund, Class Z Shares, 0.01%(m)			48,484		48,484
Total Short Term Investments			48,484		48,484
TOTAL INVESTMENTS - 186.2%			$	1,760,835	1,724,038
LIABILITIES IN EXCESS OF OTHER ASSETS - (86.2%)					(798,158)
NET ASSETS - 100%					$	925,880

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 h. below. Unless specifically identified in note v. below, investments do not contain a paid-in-kind, or PIK, interest provision.

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Schedule of Investments (unaudited)

June 30, 2021

(in thousands)

b.The 1, 2, 3 and 6 month London Interbank Offered Rate, or LIBOR, rates were 0.10%, 0.13%, 0.15% and 0.16%, respectively, as of June 30, 2021. The actual LIBOR rate for each loan listed may not be the applicable LIBOR rate as of June 30, 2021, as the loan may have been priced or repriced based on a LIBOR rate prior to or subsequent to June 30, 2021. The 1 month Euro Interbank Offered Rate, or EURIBOR, rate was (0.59%) as of June 30, 2021.

c.Fair value determined in good faith by the Company’s board of directors (see Note 9) 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.Fair value determined using level 1 inputs.

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.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, 2021, 95.4% of the Company’s total assets represented qualifying assets.

i.Position or a portion thereof unsettled as of June 30, 2021.

j.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.

k.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.

l.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.

m.7-day effective yield as of June 30, 2021.

n.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, 2021 (see Note 8).

o.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, 2021 (see Note 8).

p.Non-income producing security.

q.The ultimate interest earned on this loan will be determined based on the portfolio company’s EBITDA at a specified trigger event.

r.Investment or a portion thereof was on non-accrual status as of June 30, 2021.

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Schedule of Investments (unaudited)

June 30, 2021

(in thousands)

s.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 portfolio company. Fair value as of December 31, 2020 and June 30, 2021, along with transactions during the six months ended June 30, 2021 in these affiliated investments, were as follows:


			Six Months Ended June 30, 2021								Six Months Ended June 30, 2021
Non-Controlled, Affiliated Investments	Fair Value at December 31, 2020		Gross Additions (Cost)(1)		Gross Reductions (Cost)(2)		Net Unrealized Gain (Loss)		Fair Value at June 30, 2021		Net Realized Gain (Loss)		Interest Income(3)		Dividend Income
1244301 B.C. LTD.
First Lien Term Loan A	$	2,289	$	9	$	(11)	$	(1)	$	2,286	$	—	$	83	$	—
First Lien Term Loan B	755		29		—		(1)		783		—		29		—
Common Shares	—		—		—		186		186		—		—		—
Alert 360 Opco, Inc.
First Lien Term Loan	—		12,239		(61)		16		12,194		—		417		—
Common Stock	—		3,624		—		107		3,731		—		—		—
American Clinical Solutions LLC
Tranche I Term Loan	3,124		18		—		192		3,334		—		141		—
First Amendment Tranche I Term Loan	242		—		—		4		246		—		8		—
Class A Membership Interests	663		—		—		4,041		4,704		—		—		—
ARC Financial, LLC
Membership Interests	—		—		—		16		16		—		—		—
BCP Great Lakes Fund LP
Membership Interests	12,611		1,641		(2,911)		274		11,615		—		—		780
Charming Charlie, LLC
Vendor Payment Financing Facility	350		—		—		—		350		—		—		—
Conisus Holdings, Inc.
Series B Preferred Stock	16,481		951		—		2,139		19,571		—		—		951
Common Stock	12,401		—		—		6,655		19,056		—		—		—
DESG Holdings, Inc.
First Lien Term Loan	3,978		63		(667)		(20)		3,354		—		158		—
Second Lien Term Loan	—		—		—		—		—		—		—		—
Common Stock	—		—		—		—		—		—		—		—
F+W Media, Inc.
First Lien Term Loan B-1	—		—		(1,115)		1,115		—		(1,080)		—		—
Lift Brands, Inc.
Term Loan A	23,642		—		—		—		23,642		—		1,010		—
Term Loan B	4,751		245		—		(42)		4,954		—		245		—
Term Loan C	4,687		64		—		(51)		4,700		—		64		—
Longview Intermediate Holdings C, LLC
Membership Units	7,988		—		—		2,434		10,422		—		—		—
Longview Power, LLC
First Lien Term Loan	2,414		1,959		(13)		61		4,421		—		257		—
Mount Logan Capital Inc.
Common Stock	2,409		—		—		636		3,045		—		—		29
SIMR, LLC
First Lien Term Loan	13,347		2,650		—		(527)		15,470		—		1,909		—
SIMR Parent, LLC
Class B Common Units	—		—		—		—		—		—		—		—
Class W Units	—		—		—		—		—		—		—		—
Snap Fitness Holdings, Inc.
Class A Stock	3,389		—		—		(292)		3,097		—		—		—
Warrants	1,374		—		—		(119)		1,255		—		—		—
Totals	$	116,895	$	23,492	$	(4,778)	$	16,823	$	152,432	$	(1,080)	$	4,321	$	1,760

(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.

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Schedule of Investments (unaudited)

June 30, 2021

(in thousands)

(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.

t.Investment determined to be a controlled investment as defined in the 1940 Act as the Company is deemed to exercise a controlling influence over the management or policies of the portfolio company due to beneficially owning, either directly or through one or more controlled companies, more than 25% of the outstanding voting securities of such portfolio company. Fair value as of December 31, 2020 and June 30, 2021, along with transactions during the six months ended June 30, 2021 in these controlled investments, were as follows:


			Six Months Ended June 30, 2021								Six Months Ended June 30, 2021
Controlled Investments	Fair Value at December 31, 2020		Gross Additions (Cost)(1)		Gross Reductions (Cost)(2)		Net Unrealized Gain (Loss)		Fair Value at June 30, 2021		Net Realized Gain (Loss)		Interest Income(3)		Dividend Income
CION SOF Funding, LLC
Membership Interests	$	12,472	$	—	$	(15,539)	$	3,067	$	—	$	(3,067)	$	—	$	—
Totals	$	12,472	$	—	$	(15,539)	$	3,067	$	—	$	(3,067)	$	—	$	—

(3)Includes PIK interest income.

u.For the six months ended June 30, 2021, non-cash dividend income of $951 and $164 was recorded on the Company's investment in Conisus Holdings, Inc. and CHC Medical Partners, Inc., respectively.

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Schedule of Investments (unaudited)

June 30, 2021

(in thousands)

v.As of June 30, 2021, 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
Portfolio Company	Investment Type	Cash	PIK	All-in-Rate
1244311 B.C. LTD.	Senior Secured First Lien Debt	—	6.00%	6.00%
Adapt Laser Acquisition, Inc.	Senior Secured First Lien Debt	11.00%	2.00%	13.00%
Alliance Healthcare Services, Inc.	Senior Secured First Lien Debt	4.50%	1.00%	5.50%
American Consolidated Natural Resources, Inc.	Senior Secured First Lien Debt	11.00%	3.00%	14.00%
Ancile Solutions, Inc.	Senior Secured First Lien Debt	8.00%	3.00%	11.00%
Anthem Sports & Entertainment Inc.	Senior Secured First Lien Debt	7.75%	2.75%	10.50%
Cadence Aerospace, LLC	Senior Secured First Lien Debt	4.25%	5.25%	9.50%
Carestream Health, Inc.	Senior Secured Second Lien Debt	5.50%	8.00%	13.50%
CHC Solutions Inc.	Senior Secured First Lien Debt	8.00%	4.00%	12.00%

CircusTrix Holdings, LLC	Senior Secured First Lien Debt	6.50%	2.50%	9.00%
Country Fresh Holdings, LLC	Senior Secured First Lien Debt	8.00%	4.00%	12.00%

Country Fresh Holdings, LLC	Senior Secured Second Lien Debt	—	9.50%	9.50%
David's Bridal, LLC	Senior Secured First Lien Debt	6.00%	1.00%	7.00%
David's Bridal, LLC	Senior Secured First Lien Debt	6.00%	5.00%	11.00%
Deluxe Entertainment Services, Inc.	Senior Secured First Lien Debt	6.00%	1.50%	7.50%
Deluxe Entertainment Services, Inc.	Senior Secured Second Lien Debt	7.00%	2.50%	9.50%
Hilliard, Martinez & Gonzales, LLP	Senior Secured First Lien Debt	—	20.00%	20.00%
Homer City Generation, L.P.	Senior Secured First Lien Debt	—	15.00%	15.00%
Independent Pet Partners Intermediate Holdings, LLC	Senior Secured First Lien Debt	—	6.00%	6.00%
Independent Pet Partners Intermediate Holdings, LLC	Senior Secured First Lien Debt	—	8.25%	8.25%
Independent Pet Partners Intermediate Holdings, LLC	Senior Secured First Lien Debt	0.19%	6.00%	6.19%
Jenny C Acquisition, Inc.	Senior Secured First Lien Debt	—	12.25%	12.25%
LAV Gear Holdings, Inc.	Senior Secured First Lien Debt	3.50%	5.00%	8.50%
Lift Brands, Inc.	Senior Secured First Lien Debt	—	9.50%	9.50%
Mimeo.com, Inc.	Revolving Term Loan	8.00%	10.00%	18.00%
Moss Holding Company	Senior Secured First Lien Debt	7.50%	0.50%	8.00%
Patterson Medical Supply, Inc.	Senior Secured Second Lien Debt	1.00%	10.50%	11.50%

Premiere Global Services, Inc.	Senior Secured Second Lien Debt	0.50%	10.00%	10.50%
SIMR, LLC	Senior Secured First Lien Debt	—	19.00%	19.00%
Spinal USA, Inc. / Precision Medical Inc.	Senior Secured First Lien Debt	—	9.70%	9.70%
Spinal USA, Inc. / Precision Medical Inc.	Senior Secured First Lien Debt	9.65%	1.00%	10.65%
Vesta Holdings, LLC	Senior Secured First Lien Debt	7.00%	4.00%	11.00%
West Dermatology Management Holdings, LLC	Senior Secured First Lien Debt	7.00%	0.75%	7.75%
WPLM Acquisition Corp.	Unsecured Note	—	15.00%	15.00%

w.As of June 30, 2021, the index rate for $8,419 and $8,571 was 1 Month LIBOR and 3 Month LIBOR, respectively.

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Schedule of Investments

December 31, 2020

(in thousands)


Portfolio Company(a)	Index Rate(b)	Industry	Principal/ Par Amount/ Units(e)		Cost(d)		Fair Value(c)
Senior Secured First Lien Debt - 139.3%
1244311 B.C. LTD., L+500, 1.00% LIBOR Floor, 9/30/2025(s)	3 Month LIBOR	Chemicals, Plastics & Rubber	$	2,422	$	2,293	$	2,289
1244311 B.C. LTD., L+500, 1.00% LIBOR Floor, 9/30/2025(s)(v)	3 Month LIBOR	Chemicals, Plastics & Rubber	807		756		755
Adams Publishing Group, LLC, L+700, 1.75% LIBOR Floor, 7/2/2023(n)(o)	1 Month LIBOR	Media: Advertising, Printing & Publishing	12,318		12,243		12,041
Adapt Laser Acquisition, Inc., L+800, 1.00% LIBOR Floor, 12/31/2023(n)	3 Month LIBOR	Capital Equipment	11,280		11,280		9,715
Adapt Laser Acquisition, Inc., L+800, 1.00% LIBOR Floor, 12/31/2023	3 Month LIBOR	Capital Equipment	2,000		2,000		1,722
Aegis Toxicology Sciences Corp., L+550, 1.00% LIBOR Floor, 5/9/2025(n)	3 Month LIBOR	Healthcare & Pharmaceuticals	9,774		9,635		8,577
AIS Holdco, LLC, L+500, 0.00% LIBOR Floor, 8/15/2025(n)	3 Month LIBOR	Banking, Finance, Insurance & Real Estate	5,243		5,194		4,955
Alchemy US Holdco 1, LLC, L+550, 10/10/2025(n)	1 Month LIBOR	Construction & Building	12,959		12,826		12,505
Alert 360 Opco, Inc., L+600, 1.00% LIBOR Floor, 10/16/2025(n)	1 Month LIBOR	Services: Consumer	9,738		9,738		9,738
Allen Media, LLC, L+550, 0.00% LIBOR Floor, 2/10/2027(n)(o)	3 Month LIBOR	Media: Diversified & Production	24,809		24,809		24,747
ALM Media, LLC, L+650, 1.00% LIBOR Floor, 11/25/2024(n)(o)	3 Month LIBOR	Media: Advertising, Printing & Publishing	19,000		18,690		18,050
AMCP Staffing Intermediate Holdings III, LLC, L+675, 1.50% LIBOR Floor, 9/24/2025(n)	3 Month LIBOR	Services: Business	10,813		10,765		10,273
AMCP Staffing Intermediate Holdings III, LLC, L+675, 1.50% LIBOR Floor, 9/24/2025	3 Month LIBOR	Services: Business	228		228		217
AMCP Staffing Intermediate Holdings III, LLC, 0.50% Unfunded, 9/24/2025	None	Services: Business	1,370		—		(68)
American Clinical Solutions LLC, 7.00%, 12/31/2022(n)(s)	None	Healthcare & Pharmaceuticals	3,500		3,427		3,124
American Clinical Solutions LLC, 7.00%, 6/30/2021(n)(s)	None	Healthcare & Pharmaceuticals	250		250		242
American Consolidated Natural Resources, Inc., L+1300, 1.00% LIBOR Floor, 9/16/2025(n)(v)	1 Month LIBOR	Metals & Mining	780		551		754
American Media, LLC, L+775, 1.50% LIBOR Floor, 12/31/2023(n)	3 Month LIBOR	Media: Advertising, Printing & Publishing	11,077		10,894		10,952
American Media, LLC, L+775, 1.50% LIBOR Floor, 12/31/2023(n)	3 Month LIBOR	Media: Advertising, Printing & Publishing	1,702		1,677		1,683
American Teleconferencing Services, Ltd., L+650, 1.00% LIBOR Floor, 12/8/2021(n)	6 Month LIBOR	Telecommunications	19,514		18,792		15,904
Analogic Corp., L+525, 1.00% LIBOR Floor, 6/21/2024(n)(o)	1 Month LIBOR	Healthcare & Pharmaceuticals	4,950		4,885		4,851
Anthem Sports & Entertainment Inc., L+950, 1.00% LIBOR Floor, 9/9/2024(n)(v)	3 Month LIBOR	Media: Diversified & Production	13,815		13,647		13,642
Anthem Sports & Entertainment Inc., L+950, 1.00% LIBOR Floor, 9/9/2024(n)	3 Month LIBOR	Media: Diversified & Production	833		833		825
Anthem Sports & Entertainment Inc., 0.50% Unfunded, 9/9/2024	None	Media: Diversified & Production	1,333		—		(13)
APCO Holdings, LLC, L+550, 0.00% LIBOR Floor, 6/9/2025(n)	1 Month LIBOR	Banking, Finance, Insurance & Real Estate	9,436		9,368		8,935
Appalachian Resource Company, LLC, L+500, 1.00% LIBOR Floor, 9/10/2023	1 Month LIBOR	Metals & Mining	11,137		9,717		9,230
Appalachian Resource Company, LLC, 0.00% Unfunded, 9/10/2023(p)	None	Metals & Mining	2,500		—		—
Associated Asphalt Partners, LLC, L+525, 1.00% LIBOR Floor, 4/5/2024(n)(o)	1 Month LIBOR	Construction & Building	14,522		14,107		13,306
Avison Young (USA) Inc., L+500, 0.00% LIBOR Floor, 1/31/2026(h)(n)	3 Month LIBOR	Banking, Finance, Insurance & Real Estate	9,800		9,647		9,322
BK Medical Holding Company, Inc., L+525, 1.00% LIBOR Floor, 6/22/2024(n)(o)	1 Month LIBOR	Healthcare & Pharmaceuticals	4,963		4,926		4,690
Cadence Aerospace, LLC, L+850, 1.00% LIBOR Floor, 11/14/2023(n)(o)(v)	3 Month LIBOR	Aerospace & Defense	37,832		37,343		35,751
Cardinal US Holdings, Inc., L+500, 1.00% LIBOR Floor, 7/31/2023(n)	3 Month LIBOR	Services: Business	8,224		7,933		7,597
CB URS Holdings Corp., L+575, 1.00% LIBOR Floor, 9/1/2024(n)	6 Month LIBOR	Transportation: Cargo	15,882		15,818		14,631
Charming Charlie LLC, 20.00%, 4/24/2023(r)(s)	None	Retail	662		657		350
CHC Solutions Inc., 12.00%, 7/20/2023(o)(v)	None	Healthcare & Pharmaceuticals	7,651		7,651		7,498

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Schedule of Investments

December 31, 2020

(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(n)(o)(v)	1 Month LIBOR	Hotel, Gaming & Leisure	25,472	25,117	19,900
CircusTrix Holdings, LLC, L+550, 1.00% LIBOR Floor, 12/16/2021(n)(v)	1 Month LIBOR	Hotel, Gaming & Leisure	2,585	2,585	2,020
CircusTrix Holdings, LLC, 1.00% Unfunded, 12/16/2021	None	Hotel, Gaming & Leisure	2,898	—	—
Country Fresh Holdings, LLC, L+500, 1.00% LIBOR Floor, 4/29/2023	3 Month LIBOR	Beverage, Food & Tobacco	1,020	980	858
Country Fresh Holdings, LLC, 12.00%, 6/1/2022(v)	None	Beverage, Food & Tobacco	738	713	722
Country Fresh Holdings, LLC, L+500, 1.00% LIBOR Floor, 4/29/2023(n)	3 Month LIBOR	Beverage, Food & Tobacco	414	414	348
Coyote Buyer, LLC, L+600, 1.00% LIBOR Floor, 2/6/2026(n)(o)	3 Month LIBOR	Chemicals, Plastics & Rubber	34,738	34,453	34,564
Coyote Buyer, LLC, L+800, 1.00% LIBOR Floor, 8/6/2026(o)	3 Month LIBOR	Chemicals, Plastics & Rubber	6,250	6,128	6,250
Coyote Buyer, LLC, 0.50% Unfunded, 2/6/2025	None	Chemicals, Plastics & Rubber	2,500	—	(13)
David's Bridal, LLC, L+1000, 1.00% LIBOR Floor, 6/23/2023(v)	3 Month LIBOR	Retail	5,341	4,412	5,341
David's Bridal, LLC, L+600, 1.00% LIBOR Floor, 6/30/2023(v)	3 Month LIBOR	Retail	745	648	745
Deluxe Entertainment Services, Inc., L+650, 1.00% LIBOR Floor, 3/25/2024(n)(s)(v)	3 Month LIBOR	Media: Diversified & Production	3,978	4,057	3,978
DMT Solutions Global Corp., L+700, 0.00% LIBOR Floor, 7/2/2024(n)	3 Month LIBOR	Services: Business	17,500	17,167	16,844
Eagle Family Foods Group LLC, L+650, 1.00% LIBOR Floor, 6/14/2024(n)	3 Month LIBOR	Beverage, Food & Tobacco	14,375	14,171	14,159
Entertainment Studios P&A LLC, 6.30%, 5/18/2037(k)(n)	None	Media: Diversified & Production	13,990	13,889	12,871
Entertainment Studios P&A LLC, 5.00%, 5/18/2037(k)	None	Media: Diversified & Production	—	—	2,073
EnTrans International, LLC, L+600, 0.00% LIBOR Floor, 11/1/2024(n)	1 Month LIBOR	Capital Equipment	26,250	26,065	25,233
ES Chappaquiddick LLC, 10.00%, 5/18/2022(n)	None	Media: Diversified & Production	915	915	924
Extreme Reach, Inc., L+750, 1.50% LIBOR Floor, 3/29/2024(n)(o)	1 Month LIBOR	Media: Diversified & Production	20,402	20,233	20,096
Extreme Reach, Inc., 0.50% Unfunded, 3/29/2024(n)	None	Media: Diversified & Production	1,744	—	(26)
F+W Media, Inc., L+1000, 1.50% LIBOR Floor, 5/24/2022(r)(s)(v)	1 Month LIBOR	Media: Diversified & Production	1,174	1,115	—
Foundation Consumer Healthcare, LLC, L+575, 1.00% LIBOR Floor, 11/2/2023(n)(o)	3 Month LIBOR	Healthcare & Pharmaceuticals	43,350	43,127	43,350
Foundation Consumer Healthcare, LLC, 0.50% Unfunded, 11/2/2023	None	Healthcare & Pharmaceuticals	4,211	(15)	—
Genesis Healthcare, Inc., L+600, 0.50% LIBOR Floor, 3/6/2023(h)(n)	1 Month LIBOR	Healthcare & Pharmaceuticals	35,000	34,709	34,344
Geo Parent Corp., L+525, 0.00% LIBOR Floor, 12/19/2025(n)	1 Month LIBOR	Services: Business	14,738	14,622	14,701
Geon Performance Solutions, LLC, L+625, 1.63% LIBOR Floor, 10/25/2024(n)(o)	1 Month LIBOR	Chemicals, Plastics & Rubber	22,190	21,893	21,524
Geon Performance Solutions, LLC, 0.50% Unfunded, 10/25/2024	None	Chemicals, Plastics & Rubber	2,586	—	(78)
Harland Clarke Holdings Corp., L+475, 1.00% LIBOR Floor, 11/3/2023(n)	3 Month LIBOR	Services: Business	12,337	12,305	11,021
Healogics, Inc., L+425, 1.00% LIBOR Floor, 7/1/2021(n)	3 Month LIBOR	Healthcare & Pharmaceuticals	4,699	4,659	4,359
Hilliard, Martinez & Gonzales, LLP, L+1800, 2.00% LIBOR Floor, 12/17/2022(n)(v)	1 Month LIBOR	Services: Consumer	17,248	17,137	17,485
Homer City Generation, L.P., 15.00%, 4/5/2023(n)(v)	None	Energy: Oil & Gas	10,606	11,028	8,246
Hoover Group, Inc., L+850, 1.25% LIBOR Floor, 10/1/2024(o)	3 Month LIBOR	Services: Business	5,660	5,637	5,668
HUMC Holdco, LLC, 9.00%, 1/11/2021(n)	None	Healthcare & Pharmaceuticals	10,000	9,985	9,925
Hummel Station LLC, L+600, 1.00% LIBOR Floor, 10/27/2022(n)	1 Month LIBOR	Energy: Oil & Gas	9,432	9,237	9,066
Hyperion Materials & Technologies, Inc., L+550, 1.00% LIBOR Floor, 8/28/2026(n)	3 Month LIBOR	Chemicals, Plastics & Rubber	9,900	9,729	9,269
Independent Pet Partners Intermediate Holdings, LLC, 6.00%, 11/20/2023(n)(v)	None	Retail	9,680	9,587	7,974

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Schedule of Investments

December 31, 2020

(in thousands)


Portfolio Company(a)	Index Rate(b)	Industry	Principal/ Par Amount/ Units(e)		Cost(d)	Fair Value(c)
Independent Pet Partners Intermediate Holdings, LLC, PRIME+500, 12/22/2022(n)	Prime	Retail	1,970		1,970	1,967
Independent Pet Partners Intermediate Holdings, LLC, L+600, 0.00% LIBOR Floor, 12/22/2022(n)	3 Month LIBOR	Retail	252		252	252
Infinity Sales Group, LLC, L+1050, 1.00% LIBOR Floor, 11/23/2022(n)	1 Month LIBOR	Services: Business	6,820		6,736	6,820
InfoGroup Inc., L+500, 1.00% LIBOR Floor, 4/3/2023(n)(o)	3 Month LIBOR	Media: Advertising, Printing & Publishing	15,594		15,586	14,678
Instant Web, LLC, L+650, 1.00% LIBOR Floor, 12/15/2022(n)(o)	1 Month LIBOR	Media: Advertising, Printing & Publishing	37,379		37,326	35,136
Instant Web, LLC, 0.50% Unfunded, 12/15/2022	None	Media: Advertising, Printing & Publishing	2,704		—	—
Isagenix International, LLC, L+575, 1.00% LIBOR Floor, 6/14/2025(n)	3 Month LIBOR	Beverage, Food & Tobacco	13,002		12,910	9,361
Island Medical Management Holdings, LLC, L+650, 1.00% LIBOR Floor, 9/1/2022(n)(o)	3 Month LIBOR	Healthcare & Pharmaceuticals	11,188		11,132	10,488
Jenny C Acquisition, Inc., L+1050, 1.75% LIBOR Floor, 10/1/2024(n)(v)	6 Month LIBOR	Services: Consumer	11,089		11,018	9,993
JP Intermediate B, LLC, L+550, 1.00% LIBOR Floor, 11/20/2025(n)	3 Month LIBOR	Beverage, Food & Tobacco	15,273		15,019	13,669
KNB Holdings Corp., L+550, 1.00% LIBOR Floor, 4/26/2024(n)	6 Month LIBOR	Consumer Goods: Durable	8,073		7,966	6,741
Labvantage Solutions Inc., L+750, 1.00% LIBOR Floor, 3/31/2021(n)(o)	1 Month LIBOR	High Tech Industries	2,646		2,646	2,646
Labvantage Solutions Ltd., E+750, 1.00% EURIBOR Floor, 3/31/2021(h)	1 Month EURIBOR	High Tech Industries	€	2,912	3,273	3,557
LAV Gear Holdings, Inc., L+750, 1.00% LIBOR Floor, 10/31/2024(n)(o)(v)	3 Month LIBOR	Services: Business	25,338		24,940	24,072
LAV Gear Holdings, Inc., L+750, 1.00% LIBOR Floor, 10/31/2024(n)(o)(v)	3 Month LIBOR	Services: Business	4,375		4,326	4,156
LD Intermediate Holdings, Inc., L+588, 1.00% LIBOR Floor, 12/9/2022(n)	3 Month LIBOR	High Tech Industries	11,030		10,869	10,981
LGC US Finco, LLC, L+650, 1.00% LIBOR Floor, 12/20/2025(n)	1 Month LIBOR	Capital Equipment	9,800		9,537	9,396
Lift Brands, Inc., L+375, 0.50% LIBOR Floor, 6/29/2025(n)(o)(s)	1 Month LIBOR	Services: Consumer	23,642		23,642	23,642
Lift Brands, Inc., 9.50%, 6/29/2025(n)(o)(s)(v)	None	Services: Consumer	4,861		4,753	4,751
Lift Brands, Inc., 6/29/2025(n)(o)(q)(s)	None	Services: Consumer	5,296		4,685	4,687
Longview Power, LLC, L+1000, 1.50% LIBOR Floor, 7/30/2025(s)	3 Month LIBOR	Energy: Oil & Gas	2,355		631	2,414
Mimeo.com, Inc., L+700, 1.00% LIBOR Floor, 12/21/2023(n)(q)	3 Month LIBOR	Services: Business	23,373		23,373	22,584
Mimeo.com, Inc., L+1700, 1.00% LIBOR Floor, 12/21/2023(n)(v)	3 Month LIBOR	Services: Business	2,130		2,130	2,180
Mimeo.com, Inc., 1.00% Unfunded, 12/21/2023	None	Services: Business	1,000		—	24
Moss Holding Company, L+700, 1.00% LIBOR Floor, 4/17/2024(n)(o)(v)	3 Month LIBOR	Services: Business	19,535		19,349	17,630
Moss Holding Company, 7.00% Unfunded, 4/17/2024	None	Services: Business	106		—	—
Moss Holding Company, 0.50% Unfunded, 4/17/2024	None	Services: Business	2,126		—	—
NASCO Healthcare Inc., L+450, 1.00% LIBOR Floor, 6/30/2023(n)	3 Month LIBOR	Services: Business	13,189		13,189	13,189
NewsCycle Solutions, Inc., L+700, 1.00% LIBOR Floor, 12/29/2022(n)(o)	3 Month LIBOR	Media: Advertising, Printing & Publishing	12,186		12,098	12,079
One Call Corp., L+525, 1.00% LIBOR Floor, 11/25/2022(n)	3 Month LIBOR	Healthcare & Pharmaceuticals	3,858		3,747	3,732
Optio Rx, LLC, L+700, 0.00% LIBOR Floor, 6/28/2024(n)(o)	1 Month LIBOR	Healthcare & Pharmaceuticals	24,250		24,130	23,704
Optio Rx, LLC, L+1000, 0.00% LIBOR Floor, 6/28/2024(o)	1 Month LIBOR	Healthcare & Pharmaceuticals	2,515		2,492	2,685
Palmetto Solar, LLC, 12.00%, 12/12/2024(n)	None	High Tech Industries	16,738		16,320	16,696
Palmetto Solar, LLC, 0.75% Unfunded, 12/12/2021	None	High Tech Industries	3,262		—	(8)
PH Beauty Holdings III. Inc., L+500, 0.00% LIBOR Floor, 9/28/2025(n)	3 Month LIBOR	Consumer Goods: Non-Durable	9,775		9,152	9,189
Pixelle Specialty Solutions LLC, L+650, 1.00% LIBOR Floor, 10/31/2024(n)	1 Month LIBOR	Forest Products & Paper	21,686		21,368	21,686

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Schedule of Investments

December 31, 2020

(in thousands)


Portfolio Company(a)	Index Rate(b)	Industry	Principal/ Par Amount/ Units(e)	Cost(d)	Fair Value(c)
Plano Molding Company, LLC, L+900, 1.00% LIBOR Floor, 5/12/2022(n)(v)	3 Month LIBOR	Consumer Goods: Non-Durable	5,986	5,975	5,836
Plano Molding Company, LLC, L+900, 1.00% LIBOR Floor, 5/11/2022(n)(v)	3 Month LIBOR	Consumer Goods: Non-Durable	731	725	732
Polymer Additives, Inc., L+600, 0.00% LIBOR Floor, 7/31/2025(n)	3 Month LIBOR	Chemicals, Plastics & Rubber	19,600	19,313	16,497
Polymer Process Holdings, Inc., L+600, 0.00% LIBOR Floor, 5/1/2026(n)	1 Month LIBOR	Chemicals, Plastics & Rubber	24,625	24,271	24,471
Securus Technologies Holdings, Inc., L+450, 1.00% LIBOR Floor, 11/1/2024(n)	6 Month LIBOR	Telecommunications	3,949	3,039	3,949
SEK Holding Co LLC, L+1200, 1.00% LIBOR Floor, 3/14/2022(n)(v)	1 Month LIBOR	Banking, Finance, Insurance & Real Estate	16,227	16,068	15,590
Sequoia Healthcare Management, LLC, 12.75%, 8/21/2023(n)(o)(r)	None	Healthcare & Pharmaceuticals	8,525	8,457	6,905
SIMR, LLC, L+1700, 2.00% LIBOR Floor, 9/7/2023(n)(s)(v)	1 Month LIBOR	Healthcare & Pharmaceuticals	16,154	15,975	13,347
Smart & Final Inc., L+675, 0.00% LIBOR Floor, 6/20/2025(n)	1 Month LIBOR	Retail	7,805	7,227	7,888
Software Luxembourg Acquisitions S.À.R.L., L+750, 1.00% LIBOR Floor, 4/27/2025(h)(o)	3 Month LIBOR	High Tech Industries	3,011	2,905	3,015
Software Luxembourg Acquisitions S.À.R.L., L+750, 1.00% LIBOR Floor, 12/27/2024(h)(o)	1 Month LIBOR	High Tech Industries	807	783	815
Sorenson Communications, LLC, L+650, 0.00% LIBOR Floor, 4/30/2024(n)	3 Month LIBOR	Telecommunications	10,322	10,066	10,348
Spinal USA, Inc. / Precision Medical Inc., L+950, 10/1/2021(n)	12 Month LIBOR	Healthcare & Pharmaceuticals	12,562	12,486	11,965
Spinal USA, Inc. / Precision Medical Inc., L+950, 10/1/2021(n)(v)	12 Month LIBOR	Healthcare & Pharmaceuticals	1,116	1,104	1,109
Spinal USA, Inc. / Precision Medical Inc., L+950, 10/1/2021(n)(v)	12 Month LIBOR	Healthcare & Pharmaceuticals	603	493	574
Stats Intermediate Holdings, LLC, L+525, 0.00% LIBOR Floor, 7/12/2026(n)	3 Month LIBOR	High Tech Industries	9,900	9,719	9,850
Tenere Inc., L+850, 1.00% LIBOR Floor, 5/5/2025(n)(o)	3 Month LIBOR	Capital Equipment	18,080	18,020	18,080
Tensar Corp., L+675, 1.00% LIBOR Floor, 11/20/2025(n)	3 Month LIBOR	Chemicals, Plastics & Rubber	5,000	4,878	4,975
The Pasha Group, L+800, 1.00% LIBOR Floor, 1/26/2023(n)(o)	2 Month LIBOR	Transportation: Cargo	4,511	4,447	4,370
The Pay-O-Matic Corp., L+900, 1.00% LIBOR Floor, 10/29/2021(j)(n)	3 Month LIBOR	Services: Consumer	7,312	7,304	7,312
Volta Charging, LLC, 12.00%, 6/19/2024(n)	None	Media: Diversified & Production	15,000	15,000	16,013
Volta Charging, LLC, 12.00%, 6/19/2024(n)	None	Media: Diversified & Production	12,000	11,978	12,810
West Dermatology Management Holdings, LLC, L+600, 1.00% LIBOR Floor, 2/11/2025(n)(o)(v)	3 Month LIBOR	Healthcare & Pharmaceuticals	9,455	9,384	9,006
West Dermatology Management Holdings, LLC, L+600, 1.00% LIBOR Floor, 2/11/2025(n)	1 Month LIBOR	Healthcare & Pharmaceuticals	1,657	1,645	1,579
West Dermatology Management Holdings, LLC, L+750, 1.00% LIBOR Floor, 2/11/2025	3 Month LIBOR	Healthcare & Pharmaceuticals	1,185	1,182	1,170
West Dermatology Management Holdings, LLC, 0.75% Unfunded, 2/11/2022	None	Healthcare & Pharmaceuticals	7,655	(26)	(54)
Williams Industrial Services Group, Inc, L+900, 1.00% LIBOR Floor, 12/16/2025(o)	1 Month LIBOR	Services: Business	10,000	10,000	10,000
Williams Industrial Services Group, Inc, 0.50% Unfunded, 6/16/2022	None	Services: Business	5,000	—	—
Winebow Holdings, Inc., L+375, 1.00% LIBOR Floor, 7/1/2021(n)(o)	1 Month LIBOR	Beverage, Food & Tobacco	5,864	5,669	5,483
Wok Holdings Inc., L+625, 0.00% LIBOR Floor, 3/1/2026(n)	1 Month LIBOR	Beverage, Food & Tobacco	12,773	12,630	12,325





Total Senior Secured First Lien Debt				1,266,564	1,223,268
Senior Secured Second Lien Debt - 17.2%
Access CIG, LLC, L+775, 0.00% LIBOR Floor, 2/27/2026(n)(o)	3 Month LIBOR	Services: Business	17,250	17,139	16,840
Carestream Health, Inc., L+1250, 1.00% LIBOR Floor, 8/8/2023(n)(o)(v)	3 Month LIBOR	Healthcare & Pharmaceuticals	11,499	11,499	11,068
Country Fresh Holdings, LLC, L+850, 1.00% LIBOR Floor, 4/29/2024(n)(v)	3 Month LIBOR	Beverage, Food & Tobacco	2,239	2,239	1,573
Dayton Superior Corp., L+700, 2.00% LIBOR Floor, 12/4/2024(n)	3 Month LIBOR	Construction & Building	1,492	1,492	1,492

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Schedule of Investments

December 31, 2020

(in thousands)


Portfolio Company(a)	Index Rate(b)	Industry	Principal/ Par Amount/ Units(e)		Cost(d)	Fair Value(c)
Deluxe Entertainment Services, Inc., L+850, 1.00% LIBOR Floor, 9/25/2024(n)(r)(s)(v)	3 Month LIBOR	Media: Diversified & Production	10,271		10,017	—
Global Tel*Link Corp., L+825, 0.00% LIBOR Floor, 11/29/2026(n)(o)	1 Month LIBOR	Telecommunications	11,500		11,333	11,385
LSCS Holdings, Inc., L+825, 0.00% LIBOR Floor, 3/16/2026(n)	6 Month LIBOR	Services: Business	11,891		11,684	10,999
Medical Solutions Holdings, Inc., L+838, 1.00% LIBOR Floor, 6/16/2025(n)	6 Month LIBOR	Healthcare & Pharmaceuticals	10,000		9,895	9,250
MedPlast Holdings, Inc., L+775, 0.00% LIBOR Floor, 7/2/2026(n)	1 Month LIBOR	Healthcare & Pharmaceuticals	6,750		6,697	6,134
Ministry Brands, LLC, L+925, 1.00% LIBOR Floor, 6/2/2023(n)(o)	2 Month LIBOR	Services: Business	7,000		6,973	6,965
Niacet Corp., E+875, 1.00% EURIBOR Floor, 8/1/2024(h)	1 Month EURIBOR	Chemicals, Plastics & Rubber	€	6,263	6,708	7,651
Patterson Medical Supply, Inc., L+1050, 1.00% LIBOR Floor, 8/28/2023(n)(v)	3 Month LIBOR	Healthcare & Pharmaceuticals	14,536		14,472	13,972
PetroChoice Holdings, Inc., L+875, 1.00% LIBOR Floor, 8/21/2023(n)	3 Month LIBOR	Chemicals, Plastics & Rubber	15,000		14,282	13,500
Premiere Global Services, Inc., L+950, 1.00% LIBOR Floor, 6/6/2024(n)(v)	3 Month LIBOR	Telecommunications	3,415		3,339	2,305
Securus Technologies Holdings, Inc., L+825, 1.00% LIBOR Floor, 11/1/2025(n)	6 Month LIBOR	Telecommunications	2,942		2,920	2,747
TMK Hawk Parent, Corp., L+800, 1.00% LIBOR Floor, 8/28/2025(n)	1 Month LIBOR	Services: Business	13,393		13,158	9,860
Winebow Holdings, Inc., L+750, 1.00% LIBOR Floor, 1/2/2022(n)	1 Month LIBOR	Beverage, Food & Tobacco	12,823		12,747	11,477
Zest Acquisition Corp., L+750, 1.00% LIBOR Floor, 3/14/2026(n)(o)	1 Month LIBOR	Healthcare & Pharmaceuticals	15,000		14,886	14,288
Total Senior Secured Second Lien Debt					171,480	151,506



Collateralized Securities and Structured Products - Equity - 1.4%
APIDOS CLO XVI Subordinated Notes, 0.00% Estimated Yield, 1/19/2025(h)	(g)	Diversified Financials	9,000		3,019	1,372
CENT CLO 19 Ltd. Subordinated Notes, 0.00% Estimated Yield, 10/29/2025(h)	(g)	Diversified Financials	2,000		1,161	214
Galaxy XV CLO Ltd. Class A Subordinated Notes, 5.76% Estimated Yield, 4/15/2025(h)	(g)	Diversified Financials	4,000		2,007	1,617
Ivy Hill Middle Market Credit Fund VIII, Ltd. Subordinated Loan, 11.84% Estimated Yield, 2/2/2026(h)	(g)	Diversified Financials	10,000		9,118	8,928
Total Collateralized Securities and Structured Products - Equity					15,305	12,131
Unsecured Debt - 0.6%
WPLM Acquisition Corp., 15.00%, 11/24/2025(v)	None	Media: Advertising, Printing & Publishing	5,752		5,668	5,464
Total Unsecured Debt					5,668	5,464
Equity - 11.8%
1244301 B.C. LTD., Common Shares(p)(s)		Chemicals, Plastics & Rubber	807,268 Units		—	—
ACNR Holdings, Inc., Common Stock(p)		Metals & Mining	6,018 Units		90	45
ACNR Holdings, Inc., Preferred Stock(p)		Metals & Mining	1,890 Units		26	118
Alert 360 Topco, Inc., Common Stock(p)		Services: Consumer	465,053 Units		2,883	2,883
American Clinical Solutions LLC, Class A Membership Interests(p)(s)		Healthcare & Pharmaceuticals	6,030,384 Units		1,658	663
Anthem Sports and Entertainment Inc., Class A Preferred Stock Warrants(p)		Media: Diversified & Production	769 Units		205	138
Anthem Sports and Entertainment Inc., Class B Preferred Stock Warrants(p)		Media: Diversified & Production	135 Units		—	—
Anthem Sports and Entertainment Inc., Common Stock Warrants(p)		Media: Diversified & Production	2,508 Units		—	—
ARC Financial, LLC, Membership Interests (25% ownership)(p)(s)		Metals & Mining	N/A		—	—
Ascent Resources - Marcellus, LLC, Membership Units(p)		Energy: Oil & Gas	511,255 Units		1,642	419
Ascent Resources - Marcellus, LLC, Warrants(p)		Energy: Oil & Gas	132,367 Units		13	3

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Schedule of Investments

December 31, 2020

(in thousands)


Portfolio Company(a)	Industry	Principal/ Par Amount/ Units(e)	Cost(d)	Fair Value(c)
BCP Great Lakes Fund LP, Partnership Interests (11.4% ownership)(h)(s)	Diversified Financials	N/A	12,865	12,611
Carestream Health Holdings, Inc., Warrants(p)	Healthcare & Pharmaceuticals	233 Units	565	590
CHC Medical Partners, Inc., Series C Preferred Stock, 12% Dividend(u)	Healthcare & Pharmaceuticals	2,727,273 Units	5,471	6,927
CION SOF Funding, LLC, Membership Interests (87.5% ownership)(h)(t)	Diversified Financials	N/A	15,539	12,472
Conisus Holdings, Inc., Series B Preferred Stock, 12% Dividend(s)(u)	Healthcare & Pharmaceuticals	12,677,833 Units	15,143	16,481
Conisus Holdings, Inc., Common Stock(p)(s)	Healthcare & Pharmaceuticals	4,914,556 Units	200	12,401
Country Fresh Holdings, LLC, Membership Units(p)	Beverage, Food & Tobacco	2,985 Units	5,249	—
Dayton HoldCo, LLC, Membership Units(p)	Construction & Building	37,264 Units	4,136	7,350
DBI Investors, Inc., Series A1 Preferred Stock(p)	Retail	20,000 Units	802	—
DBI Investors, Inc., Series A Preferred Stock(p)	Retail	1,396 Units	140	—
DBI Investors, Inc., Series B Preferred Stock(p)	Retail	4,183 Units	410	—
DBI Investors, Inc., Common Stock(p)	Retail	39,423 Units	—	—
DBI Investors, Inc., Reallocation Rights(p)	Retail	7,500 Units	—	—
DESG Holdings, Inc., Common Stock(i)(p)(s)	Media: Diversified & Production	1,268,143 Units	13,675	—
HDNet Holdco LLC, Preferred Unit Call Option(p)	Media: Diversified & Production	1 Unit	—	—
Independent Pet Partners Intermediate Holdings, LLC, Class A Preferred Units(p)	Retail	1,000,000 Units	1,000	—
Independent Pet Partners Intermediate Holdings, LLC, Class B-2 Preferred Units(p)	Retail	2,632,771 Units	2,133	2,145
Independent Pet Partners Intermediate Holdings, LLC, Class C Preferred Units(p)	Retail	2,632,771 Units	2,633	2,633
Independent Pet Partners Intermediate Holdings, LLC, Warrants(p)	Retail	155,880 Units	—	—
Longview Intermediate Holdings C, LLC, Membership Units(p)(s)	Energy: Oil & Gas	589,487 Units	2,524	7,988
Mooregate ITC Acquisition, LLC, Class A Units(p)	High Tech Industries	500 Units	563	96
Mount Logan Capital Inc., Common Stock(h)(s)	Banking, Finance, Insurance & Real Estate	1,075,557 Units	3,534	2,409
NS NWN Acquisition, LLC, Voting Units(p)	High Tech Industries	346 Units	393	929
NS NWN Acquisition, LLC, Class A Preferred Units(p)	High Tech Industries	111 Units	110	332
NSG Co-Invest (Bermuda) LP, Partnership Interests(h)(p)	Consumer Goods: Durable	1,575 Units	1,000	676
Palmetto Clean Technology, Inc., Warrants(p)	High Tech Industries	693,387 Units	472	506
Phillips Pet Holding Corp., Common Stock(p)	Retail	235 Units	13	17
SIMR Parent, LLC, Class B Common Units(p)(s)	Healthcare & Pharmaceuticals	12,283,163 Units	8,002	—
Software Luxembourg Holding S.A., Class A Common Stock(h)(p)	High Tech Industries	28,202 Units	4,536	5,516
Software Luxembourg Holding S.A., Class B Common Stock(h)(p)	High Tech Industries	2,388 Units	384	688
Software Luxembourg Holding S.A., Class A Warrants(h)(p)	High Tech Industries	3,512 Units	117	—
Software Luxembourg Holding S.A., Class B Warrants(h)(p)	High Tech Industries	7,023 Units	220	—
Snap Fitness Holdings, Inc., Class A Stock(p)(s)	Services: Consumer	9,858 Units	3,078	3,389
Snap Fitness Holdings, Inc., Warrants(p)(s)	Services: Consumer	3,996 Units	1,247	1,374
Spinal USA, Inc. / Precision Medical Inc., Warrants(p)	Healthcare & Pharmaceuticals	14,181,915 Units	5,806	—
Tenere Inc., Warrants(p)	Capital Equipment	N/A	161	1,606
Total Equity			118,638	103,405
Short Term Investments - 8.4%(l)
First American Treasury Obligations Fund, Class Z Shares, 0.03% (m)			73,597	73,597
Total Short Term Investments			73,597	73,597

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Schedule of Investments

December 31, 2020

(in thousands)


	Cost(d)		Fair Value(c)
TOTAL INVESTMENTS - 178.7%	$	1,651,252	1,569,371
LIABILITIES IN EXCESS OF OTHER ASSETS - (78.7%)			(691,115)
NET ASSETS - 100%			$	878,256

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 h. below. Unless specifically identified in note v. below, investments do not contain a PIK interest provision.

b.The 1, 2, 3, 6 and 12 month LIBOR rates were 0.14%, 0.19%, 0.24%, 0.26% and 0.34%, respectively, as of December 31, 2020. The actual LIBOR rate for each loan listed may not be the applicable LIBOR rate as of December 31, 2020, as the loan may have been priced or repriced based on a LIBOR rate prior to or subsequent to December 31, 2020. The 1 month EURIBOR rate was (0.59%) as of December 31, 2020.

c.Fair value determined in good faith by the Company’s board of directors (see Note 9) 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.Fair value determined using level 1 inputs.

h.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, 2020, 93.4% of the Company’s total assets represented qualifying assets.

i.Position or a portion thereof unsettled as of December 31, 2020.

l.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.

m.7-day effective yield as of December 31, 2020.

n.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, 2020 (see Note 8).

o.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, 2020 (see Note 8).

p.Non-income producing security.

q.The ultimate interest earned on this loan will be determined based on the portfolio company’s EBITDA at a specified trigger event.

r.Investment or a portion thereof was on non-accrual status as of December 31, 2020.

See accompanying notes to consolidated financial statements

CĪON Investment Corporation

Consolidated Schedule of Investments

December 31, 2020

(in thousands)

s.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 portfolio company. Fair value as of December 31, 2019 and 2020, along with transactions during the year ended December 31, 2020 in these affiliated investments, were as follows:


			Year Ended December 31, 2020								Year Ended December 31, 2020
Non-Controlled, Affiliated Investments	Fair Value at December 31, 2019		Gross Additions (Cost)(1)		Gross Reductions (Cost)(2)		Net Unrealized Gain (Loss)		Fair Value at December 31, 2020		Net Realized Gain (Loss)		Interest Income(3)		Dividend Income
1244301 B.C. LTD.
First Lien Term Loan A	$	—	$	2,293	$	—	$	(4)	$	2,289	$	—	$	42	$	—
First Lien Term Loan B	—		757		—		(2)		755		—		15		—
Common Shares	—		—		—		—		—		—		—		—
American Clinical Solutions LLC
Tranche I Term Loan	3,395		32		—		(303)		3,124		—		282		—
First Amendment Tranche I Term Loan	—		250		—		(8)		242		—		13		—
Class A Membership Interests	—		1,658		—		(995)		663		—		—		—
ARC Financial, LLC
Membership Interests	—		—		—		—		—		—		—		—
BCP Great Lakes Fund LP
Membership Interests	14,238		2,195		(3,538)		(284)		12,611		—		—		1,039
Charming Charlie, LLC
First Lien Term Loan B1	—		—		—		—		—		—		—		—
First Lien Term Loan B2	—		—		—		—		—		—		(1)		—
Vendor Payment Financing Facility	472		—		(97)		(25)		350		—		7		—
Conisus Holdings, Inc.
Series B Preferred Stock	13,270		1,928		—		1,283		16,481		—		—		1,928
Common Stock	1,426		—		—		10,975		12,401		—		—		—
DESG Holdings, Inc.
Bridge Loan	—		4,256		(4,256)		—		—		—		600		—
First Lien Term Loan	28,978		844		(20,443)		(5,401)		3,978		—		4,278		—
Second Lien Term Loan	9,717		342		—		(10,059)		—		—		784		—
Common Stock	14,763		13		—		(14,776)		—		—		—		—
F+W Media, Inc.
First Lien Term Loan B-1	—		—		(11)		11		—		—		1		—
Lift Brands, Inc.
Term Loan A	—		23,642		—		—		23,642		—		519		—
Term Loan B	—		4,753		—		(2)		4,751		—		236		—
Term Loan C	—		4,685		—		2		4,687		—		64		—
Longview Power, LLC
First Lien Term Loan	—		634		(2)		1,782		2,414		—		169		—
Longview Intermediate Holdings C, LLC
Membership Units	—		2,524		—		5,464		7,988		—		—		—
Mount Logan Capital Inc.
Common Stock	2,505		199		—		(295)		2,409		—		—		45
Petroflow Energy Corp.
First Lien Term Loan	10		—		(223)		213		—		(211)		—		—
SIMR, LLC
First Lien Term Loan	14,205		1,121		—		(1,979)		13,347		—		2,956		—
SIMR Parent, LLC
Class B Membership Units	3,980		—		—		(3,980)		—		—		—		—
Snap Fitness Holdings, Inc.
Class A Stock	—		3,078		—		311		3,389		—		—		—
Warrants	—		1,247		—		127		1,374		—		—		—
Totals	$	106,959	$	56,451	$	(28,570)	$	(17,945)	$	116,895	$	(211)	$	9,965	$	3,012

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Schedule of Investments

December 31, 2020

(in thousands)

(3)Includes PIK interest income.

t.Investment determined to be a controlled investment as defined in the 1940 Act as the Company is deemed to exercise a controlling influence over the management or policies of the portfolio company due to beneficially owning, either directly or through one or more controlled companies, more than 25% of the outstanding voting securities of such portfolio company. Fair value as of December 31, 2019 and 2020, along with transactions during the year ended December 31, 2020 in these controlled investments, were as follows:


			Year Ended December 31, 2020								Year Ended December 31, 2020
Controlled Investments	Fair Value at December 31, 2019		Gross Additions (Cost)(1)		Gross Reductions (Cost)(2)		Net Unrealized Gain (Loss)		Fair Value at December 31, 2020		Net Realized Gain (Loss)		Interest Income(3)		Dividend Income
CION SOF Funding, LLC
Membership Interests	$	31,265	$	—	$	(15,750)	$	(3,043)	$	12,472	$	—	$	—	$	3,518
Totals	$	31,265	$	—	$	(15,750)	$	(3,043)	$	12,472	$	—	$	—	$	3,518

(3)Includes PIK interest income.

u.For the year ended December 31, 2020, non-cash dividend income of $1,928 and $332 was recorded on the Company's investment in Conisus Holdings, Inc. and CHC Medical Partners, Inc., respectively.

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Consolidated Schedule of Investments

December 31, 2020

(in thousands)

v.As of December 31, 2020, 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
Portfolio Company	Investment Type	Cash	PIK	All-in-Rate
1244311 B.C. LTD.	Senior Secured First Lien Debt	—	6.00%	6.00%
American Consolidated Natural Resources, Inc.	Senior Secured First Lien Debt	11.00%	3.00%	14.00%
Anthem Sports & Entertainment Inc.	Senior Secured First Lien Debt	7.75%	2.75%	10.50%
Cadence Aerospace, LLC	Senior Secured First Lien Debt	4.25%	5.25%	9.50%
Carestream Health, Inc.	Senior Secured Second Lien Debt	5.50%	8.00%	13.50%
CHC Solutions Inc.	Senior Secured First Lien Debt	8.00%	4.00%	12.00%
CircusTrix Holdings, LLC	Senior Secured First Lien Debt	—	6.50%	6.50%
Country Fresh Holdings, LLC	Senior Secured First Lien Debt	8.00%	4.00%	12.00%
Country Fresh Holdings, LLC	Senior Secured Second Lien Debt	—	9.50%	9.50%
David's Bridal, LLC	Senior Secured First Lien Debt	6.00%	5.00%	11.00%
David's Bridal, LLC	Senior Secured First Lien Debt	6.00%	1.00%	7.00%

Deluxe Entertainment Services, Inc.	Senior Secured First Lien Debt	6.00%	1.50%	7.50%
Deluxe Entertainment Services, Inc.	Senior Secured Second Lien Debt	7.00%	2.50%	9.50%
F+W Media, Inc.	Senior Secured First Lien Debt	—	11.50%	11.50%

Hilliard, Martinez & Gonzales, LLP	Senior Secured First Lien Debt	—	20.00%	20.00%
Homer City Generation, L.P.	Senior Secured First Lien Debt	—	15.00%	15.00%
Independent Pet Partners Intermediate Holdings, LLC	Senior Secured First Lien Debt	—	6.00%	6.00%
Jenny C Acquisition, Inc.	Senior Secured First Lien Debt	—	12.25%	12.25%
LAV Gear Holdings, Inc.	Senior Secured First Lien Debt	3.50%	5.00%	8.50%
Lift Brands, Inc.	Senior Secured First Lien Debt	—	9.50%	9.50%
Mimeo.com, Inc.	Revolving Term Loan	8.00%	10.00%	18.00%
Moss Holding Company	Senior Secured First Lien Debt	7.50%	0.50%	8.00%
Patterson Medical Supply, Inc.	Senior Secured Second Lien Debt	1.00%	10.50%	11.50%

Plano Molding Company, LLC	Senior Secured First Lien Debt	8.50%	1.50%	10.00%
Premiere Global Services, Inc.	Senior Secured Second Lien Debt	0.50%	10.00%	10.50%
SEK Holding Co LLC	Senior Secured First Lien Debt	9.00%	4.00%	13.00%
SIMR, LLC	Senior Secured First Lien Debt	12.00%	7.00%	19.00%
Spinal USA, Inc. / Precision Medical Inc.	Senior Secured First Lien Debt	—	10.47%	10.47%

West Dermatology Management Holdings, LLC	Senior Secured First Lien Debt	6.25%	0.75%	7.00%
WPLM Acquisition Corp.	Unsecured Note	—	15.00%	15.00%

See accompanying notes to consolidated financial statements.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(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, unsecured debt, 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 13, 2020, 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, 2020. On April 5, 2021, the board of directors of the Company, including a majority of the board of directors who are not interested persons, approved the amended and restated investment advisory agreement with CIM, which was subsequently approved by shareholders on August 9, 2021 (as described in further detail below). The Company and CIM previously engaged Apollo Investment Management, L.P., or AIM, a subsidiary of Apollo Global Management, Inc., 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 personnel.

On April 5, 2021, the Company’s board of directors unanimously approved a number of steps in connection with the commencement of plans to pursue a potential listing of the Company’s shares of common stock on a national securities exchange. The Company has been cleared to file an application, and has applied, to list its shares of common stock on the New York Stock Exchange, or the NYSE, under the symbol “CION”. Subject to market conditions, final board approvals and NYSE approval, the Company currently expects to seek the commencement of trading of its shares of common stock on the NYSE, or the Listing, in the period following receipt of shareholder approval of the proposals to be considered at the Company’s reconvened annual meeting, as described in the Company’s definitive proxy statement filed on May 13, 2021. There can be no assurance that the Company will be able to complete the Listing in any certain timeframe or at all.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

In connection with the potential Listing, the Board also approved an amended and restated investment advisory agreement with CIM. A description of the amended and restated investment advisory agreement is set forth in Proposal 3 in the Company’s definitive proxy statement filed on May 13, 2021. The amended and restated investment advisory agreement is effective upon the Listing, except for the change to the calculation of the subordinated incentive fee payable to CIM that expresses the hurdle rate required for CIM to earn, and be paid, the incentive fee as a percentage of the Company’s net assets rather than adjusted capital, which is not dependent upon the Listing. The amended and restated investment advisory agreement was approved by shareholders on August 9, 2021 at the Company’s reconvened 2021 annual meeting of shareholders. As a result, on August 10, 2021, the Company and CIM entered into the amended and restated investment advisory agreement in order to implement this change to the calculation of the subordinated incentive fee payable to CIM.

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, 2020 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, 2021. The consolidated balance sheet and the consolidated schedule of investments as of December 31, 2020 and the consolidated statements of operations, changes in net assets, and cash flows for the year ended December 31, 2020 are derived from the 2020 audited consolidated financial statements and include the accounts of the Company’s wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company did not consolidate its interest in CION SOF Funding, LLC, or CION SOF. See Note 7 for a description of the Company’s investment in CION SOF.

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

Recently Announced Accounting Standards

In March 2020, the Financial Accounting Standards Board, or the FASB, issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, or ASU 2020-04, which provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued because of the reference rate reform. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is evaluating the potential impact that the adoption of this guidance will have on the Company’s 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 $48,484 and $73,597 of such investments at June 30, 2021 and December 31, 2020, respectively, which are included in investments, at fair value on the accompanying consolidated balance sheets and on the consolidated schedules of investments.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

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.

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, 2021.

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 2017, 2018, and 2019.

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 and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

During the first half of 2020, there was a global outbreak of a novel coronavirus, or COVID-19, which spread to over 100 countries, including the United States, and spread to every state in the United States. The World Health Organization designated COVID-19 as a pandemic, and numerous countries, including the United States, declared national emergencies with respect to COVID-19. The global impact of the outbreak has been rapidly evolving, and as cases of COVID-19 continued to be identified in additional countries, many countries reacted by instituting quarantines and restrictions on travel, closing financial markets and/or restricting trading, and limiting operations of non-essential businesses. Although countries, including the United States, have slowly started to loosen these restrictions, such actions created and will continue to create disruption in global supply chains, and adversely impacted many industries. In addition, certain European countries instituted another lockdown during the fourth quarter of 2020 as a second wave of the outbreak occurred. The outbreak could have a continued adverse impact on economic and market conditions and trigger a period of global economic slowdown. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of COVID-19 on economic and market conditions. The Company believes the estimates and assumptions underlying the consolidated financial statements are reasonable and supportable based on the information available as of June 30, 2021; however, uncertainty over the ultimate impact COVID-19 will have on the global economy generally, and the Company’s business in particular, makes any estimates and assumptions as of June 30, 2021 inherently less certain than they would be absent the current and potential impacts of COVID-19. Actual results may materially differ from those estimates.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

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.

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 consolidated 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.

A portion of the Company’s investments consist 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 typically uses the average midpoint of the broker bid/ask price 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. As these quotes are only indicative of fair value, CIM benchmarks the implied fair value yield and leverage against what has been observed in the market. If the implied fair value yield and leverage fall within the range of CIM's market pricing matrix, the quotes are deemed to be reliable and used to determine the investment's fair value.

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.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

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.

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 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 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.

As a practical expedient, the Company uses net asset value, or NAV, as the fair value for its equity investments in CION SOF and BCP Great Lakes Fund LP. CION SOF and BCP Great Lakes Fund LP record their underlying investments at fair value on a quarterly basis in accordance with ASC 820.

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, original issue discounts, or 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/premiums are recorded as interest income.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

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, 2021 and December 31, 2020.

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.

The Company may receive fees for capital structuring services that are fixed based on contractual terms, are normally paid at the closing of the investments, are generally non-recurring and non-refundable and are recognized as revenue when earned upon closing of the investment. The services that CIM provides vary by investment, but generally include reviewing existing credit facilities, arranging bank financing, arranging equity financing, structuring financing from multiple lenders, structuring financing from multiple equity investors, restructuring existing loans, raising equity and debt capital, and providing general financial advice, which concludes upon closing of the investment. In certain instances where the Company is invited to participate as a co-lender in a transaction and does not provide significant services in connection with the investment, a portion of loan fees paid to the Company in such situations will be deferred and amortized over the estimated life of the loan as interest income.

Other income includes amendment fees that are fixed based on contractual terms and are generally non-recurring and non-refundable and are recognized as revenue when earned upon closing of the transaction. Other income also includes fees for managerial assistance and other consulting services, loan guarantees, commitments, and other services rendered by the Company to its portfolio companies. Such fees are fixed based on contractual terms and are recognized as fee income when earned.

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.

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. Pursuant to the amended and restated investment advisory agreement, the incentive fee on capital gains will be reduced to 17.5%, which will be effective on the Listing. A description of the amended and restated investment advisory agreement is set forth in Proposal 3 in the Company’s definitive proxy statement filed on May 13, 2021. There can be no assurance that the Company will be able to complete the Listing in any certain timeframe or at all.

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.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

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 (Decrease) in Net Assets per Share

Net increase (decrease) 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, 2021 and 2020 and the year ended December 31, 2020:


	Six Months Ended June 30,						Year Ended December 31,
	2021			2020			2020
	Shares	Amount		Shares	Amount		Shares	Amount
Gross shares/proceeds from the offering	—	$	—	—	$	—	—	$	—
Reinvestment of distributions	1,319,183	10,424		1,008,204	8,070		2,992,532	23,298
Total gross shares/proceeds	1,319,183	10,424		1,008,204	8,070		2,992,532	23,298
Sales commissions and dealer manager fees	—	—		—	—		—	—
Net shares/proceeds	1,319,183	10,424		1,008,204	8,070		2,992,532	23,298
Share repurchase program	(1,315,717)	(10,454)		(1,077,994)	(8,085)		(3,079,954)	(23,300)
Net shares/proceeds from (for) share transactions	3,466	$	(30)	(69,790)	$	(15)	(87,422)	$	(2)

Since commencing its initial continuous public offering on July 2, 2012 and through June 30, 2021, the Company sold 113,297,189 shares of common stock for net proceeds of $1,155,255 at an average price per share of $10.20. The net proceeds include gross proceeds received from reinvested shareholder distributions of $232,386, for which the Company issued 26,425,715 shares of common stock, and gross proceeds paid for shares of common stock tendered for repurchase of $232,417, for which the Company repurchased 26,620,271 shares of common stock.

During the period from July 1, 2021 to August 10, 2021, the Company received gross proceeds of $1,689 from reinvested shareholder distributions, for which the Company issued 208,197 shares of common stock.

Since commencing its initial continuous public offering on July 2, 2012 and through August 10, 2021, the Company sold 113,505,009 shares of common stock for net proceeds of $1,156,943 at an average price per share of $10.19. The net proceeds include gross proceeds received from reinvested shareholder distributions of $234,075, for which the Company issued 26,633,912 shares of common stock, and gross proceeds paid for shares of common stock tendered for repurchase of $232,421, for which the Company repurchased 26,620,648 shares of common stock.

In August 2020, the Company obtained approval from its shareholders authorizing the Company to issue shares of its common stock at prices below the then current NAV per share of the Company’s common stock in one or more offerings for a 12-month period. The Company has not issued any such shares as of the date of these notes to consolidated financial statements and does not currently intend to do so through August 2021 (the 12-month anniversary of such shareholder approval). On August 9, 2021, the Company's shareholders approved a proposal that again authorizes the Company to issue shares of its common stock at prices below the then current NAV per share of the Company’s common stock in one or more offerings for a 12-month period following shareholder approval, which will be conditioned upon the occurrence of the Listing.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

Share Repurchase Program

The Company offered to repurchase shares on such terms as 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 have been in the best interests of the Company’s shareholders or would have violated applicable law.

On March 19, 2020, the Company's board of directors, including the independent directors, temporarily suspended the Company's share repurchase program commencing with the second quarter of 2020 and included the third quarter of 2020. On November 13, 2020, the Company recommenced its share repurchase program for the fourth quarter of 2020.

On July 30, 2021, the Company's board of directors, including the independent directors, determined to suspend the Company's share repurchase program commencing with the third quarter of 2021 in anticipation of the Listing and the concurrent enhanced liquidity the Listing is expected to provide. The share repurchase program will ultimately terminate upon the Listing. For a detailed discussion of the potential Listing, refer to Note 1 to these notes to consolidated financial statements.

The Company limited the number of shares to be repurchased during any calendar year to the number of shares it could have repurchased with the proceeds it received 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 could have also used 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 offered 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 were 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 conducted quarterly tender offers as described above, it was not required to do so and had the authority to suspend or terminate the share repurchase program at any time, upon 30 days’ notice.

The following table summarizes the share repurchases completed during the year ended December 31, 2020 and the six months ended June 30, 2021:


Three Months Ended	Repurchase Date	Shares Repurchased	Percentage of Shares Tendered That Were Repurchased	Repurchase Price Per Share		Aggregate Consideration for Repurchased Shares
2020
March 31, 2020	March 30, 2020	1,076,229	13%	$	7.50	$	8,071
June 30, 2020(1)	N/A	1,765	N/A	7.50		14
September 30, 2020	N/A	—	N/A	N/A		—
December 31, 2020	December 30, 2020	2,001,960	20%	7.60		15,215
Total for the year ended December 31, 2020		3,079,954				$	23,300

2021
March 31, 2021	March 24, 2021	675,440	6%	$	7.83	$	5,291
June 30, 2021	June 23, 2021	640,277	7%	8.07		5,163
Total for the six months ended June 30, 2021		1,315,717				$	10,454

(1) Represents an adjustment made during the three months ended June 30, 2020 to shares repurchased during the three months ended March 31, 2020.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

Note 4. Transactions with Related Parties

For the three and six months ended June 30, 2021 and 2020 and the year ended December 31, 2020, 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,				Year Ended December 31,
Entity	Capacity	Description	2021		2020		2021		2020		2020

CIM	Investment adviser	Management fees(1)	$	8,243	$	7,929	16,026		16,380		$	31,828
CIM	Investment adviser	Incentive fees(1)	—		—		—		3,308		7,631
CIM	Administrative services provider	Administrative services expense(1)	697		806		1,381		1,200		2,465
Apollo Investment Administration, L.P.	Administrative services provider	Transaction costs(1)	38		(12)		85		(5)		56


			$	8,978	$	8,723	$	17,492	$	20,883	$	41,980

(1)Amounts charged directly to operations.

The Company has entered into an investment advisory agreement with CIM. On November 13, 2020, 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, 2020. On April 5, 2021, the board of directors of the Company, including a majority of the board of directors who are not interested persons, approved the amended and restated investment advisory agreement with CIM, which was subsequently approved by shareholders on August 9, 2021. 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. Pursuant to the amended and restated investment advisory agreement, the annual base management fee will be reduced to 1.5% of the average value of the Company’s gross assets (including cash pledged as collateral for the Company’s secured financing arrangements, but excluding other cash and cash equivalents so that investors do not pay the base management fee on such assets), to the extent that the Company’s asset coverage ratio is greater than or equal to 200% (i.e., $1 of debt outstanding for each $1 of equity); provided that, the annual base management fee would be reduced further to 1.0% for any such gross assets purchased with leverage resulting in the Company’s asset coverage ratio dropping below 200%. Under the 1940 Act, the Company is not currently permitted to incur indebtedness that would cause its asset coverage ratio to drop below 200%. These changes to the base management fee are effective upon the Listing, if and when the potential Listing occurs. 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%. The Company pays to CIM 100% of pre-incentive fee net investment income once the hurdle rate is exceeded until the annualized rate of 9.375% is exceeded, at which point the Company pays to CIM 20% of all pre-incentive fee net investment income that exceeds the annualized rate of 9.375%. Under the amended and restated investment advisory agreement, the hurdle rate would be reduced to 1.625% per quarter, or an annualized rate of 6.5%, and the Company would pay to CIM 100% of pre-incentive fee net investment income once the hurdle rate is exceeded until the annualized rate of 7.879% is exceeded, at which point the Company would pay to CIM 17.5% of all pre-incentive fee net investment income. These changes to the subordinated incentive fee on income are effective upon the Listing, except for the change to the calculation of the subordinated incentive fee payable to CIM that expresses the hurdle rate required for CIM to earn, and be paid, the incentive fee as a percentage of the Company’s net assets rather than adjusted capital, which was effective on August 10, 2021. For the three months ended June 30, 2021 and 2020, the Company did not record any liabilities for subordinated incentive fees. 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, 2021 and 2020 and the year ended December 31, 2020, the Company had no liability for and did not record any capital gains incentive fees.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

On April 1, 2018, the Company entered into an administration agreement with CIM pursuant to which CIM furnishes the Company with administrative services including accounting, investor relations and other administrative services necessary to conduct its day-to-day operations. CIM is reimbursed for administrative expenses it incurs on the Company’s behalf in performing its obligations, provided that such reimbursement is for the lower of CIM’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 are reasonably allocated to the Company on the basis of assets, revenues, time records or other reasonable methods. The Company does not reimburse CIM for any services for which it receives a separate fee or for rent, depreciation, utilities, capital equipment or other administrative items allocated to a person with a controlling interest in CIM. On November 13, 2020, 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, 2020. This administration agreement with CIM replaced the prior administration agreement with CIM's affiliate, ICON Capital, LLC, or ICON Capital, in which ICON Capital provided the same administrative services to the Company under the same terms and conditions.

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.

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, the Company further amended and restated the expense support and conditional reimbursement agreement for purposes of including AIM as a party to the agreement. On January 2, 2018, the Company entered into an expense support and conditional reimbursement agreement with CIM for purposes of, among other things, replacing CIG and AIM with CIM as the expense support provider pursuant to the terms of the expense support and conditional reimbursement agreement. On December 9, 2020, the Company and CIM further amended the expense support and conditional reimbursement agreement to extend the termination date of such agreement from December 31, 2020 to December 31, 2021.

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. For the three and six months ended June 30, 2021 and 2020 and the year ended December 31, 2020, the Company did not receive any expense support from CIM. See Note 5 for additional information on the sources of the Company’s distributions. The Company did not record any obligation to repay expense support from CIM and the Company did not repay any expense support to CIM during the three and six months ended June 30, 2021 and 2020 and the year ended December 31, 2020. 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, 2021 and December 31, 2020, the total liability payable to CIM and its affiliates was $9,208 and $13,275, respectively, which primarily related to fees earned by CIM during the three months ended June 30, 2021 and December 31, 2020, respectively.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

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 with CIM and CION Securities, LLC (formerly, ICON Securities, LLC), or CION Securities, 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.

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. Beginning on March 19, 2020, management changed the timing of declaring distributions from quarterly to monthly and temporarily suspended the payment of distributions to shareholders commencing with the month ended April 30, 2020, whether in cash or pursuant to the Company's distribution reinvestment plan, as amended and restated. On July 15, 2020, the board of directors determined to recommence the payment of distributions to shareholders in August 2020. Distributions in respect of future months will be evaluated by management and the board of directors based on circumstances and expectations existing at the time of consideration. Declared distributions are paid monthly.

The Company’s board of directors declared or ratified distributions for 19 and 6 record dates during the year ended December 31, 2020 and the six months ended June 30, 2021, respectively.

The following table presents cash distributions per share that were declared during the year ended December 31, 2020 and the six months ended June 30, 2021:


	Distributions
Three Months Ended	Per Share		Amount
2020
March 31, 2020 (thirteen record dates)	$	0.1829	$	20,793
June 30, 2020 (no record dates)	—		—
September 30, 2020 (two record dates)	0.0883		10,011
December 31, 2020 (four record dates)	0.2842		32,479
Total distributions for the year ended December 31, 2020	$	0.5554	$	63,283

2021
March 31, 2021 (three record dates)	$	0.1324	$	15,029
June 30, 2021 (three record dates)	0.1324		15,000
Total distributions for the six months ended June 30, 2021	$	0.2648	$	30,029

On June 15, 2021, the Company's co-chief executive officers declared regular monthly cash distributions of $0.04413 per share for July 2021. The distributions were paid on July 28, 2021 to shareholders of record as of July 27, 2021. Shareholders who previously elected to receive distributions in additional shares of the Company's common stock pursuant to the Company’s distribution reinvestment plan were issued additional shares for the July 2021 distributions on July 28, 2021.

On July 15, 2021, the Company's co-chief executive officers declared regular monthly cash distributions of $0.04413 per share for August 2021. The distributions will be paid on September 1, 2021 to shareholders of record as of August 31, 2021. Shareholders who previously elected to receive distributions in additional shares of the Company's common stock pursuant to the Company’s distribution reinvestment plan will be issued additional shares for the August 2021 distributions on September 1, 2021.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(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 purpose of this arrangement is to avoid such distributions being characterized as a return of capital. Shareholders should understand that any distributions funded by expense support from CIM are not based on the Company’s investment performance, and any such distributions can only be sustained if the Company maintains 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 assurances that the Company will maintain 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. For the three months ended June 30, 2021 and 2020 and the year ended December 31, 2020, none of the Company's distributions resulted from expense support from CIM. The Company has not established limits on the amount of funds it may use from available sources to make distributions.

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, 2021 and 2020 and the year ended December 31, 2020:


	Six Months Ended June 30,												Year Ended December 31,
	2021						2020						2020
Source of Distribution	Per Share		Amount		Percentage		Per Share		Amount		Percentage		Per Share		Amount		Percentage
Net investment income	$	0.2648	$	30,029	100.0	%	$	0.1829	$	20,793	100.0	%	$	0.5554	$	63,283	100.0	%





Total distributions	$	0.2648	$	30,029	100.0	%	$	0.1829	$	20,793	100.0	%	$	0.5554	$	63,283	100.0	%

It is the Company's policy to comply with all requirements of the Code applicable to RICs and to distribute at least 90% of its taxable income to its shareholders. In addition, by distributing during each calendar year at least 90% of its “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, the Company intends not to be subject to corporate level federal income tax. Accordingly, no federal income tax provision was required for the year ended December 31, 2020. 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.

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.

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 2020 were characterized as ordinary income distributions for federal income tax purposes.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

The tax components of accumulated earnings for the current year will be determined at year end. As of December 31, 2020, the components of accumulated losses on a tax basis were as follows:


	December 31, 2020
Undistributed ordinary income	$	5,950
Other accumulated losses	(1,793)

Net unrealized depreciation on investments	(161,664)
Total accumulated losses	$	(157,507)

As of June 30, 2021, the aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost was $48,764; the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value was $159,934; the net unrealized depreciation was $111,170; and the aggregate cost of securities for Federal income tax purposes was $1,835,208.

As of December 31, 2020, the aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost was $31,815; the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value was $193,479; the net unrealized depreciation was $161,664; and the aggregate cost of securities for Federal income tax purposes was $1,731,035.

Note 6. Investments

The composition of the Company’s investment portfolio as of June 30, 2021 and December 31, 2020 at amortized cost and fair value was as follows:


	June 30, 2021						December 31, 2020
	Cost(1)		Fair Value		Percentage of Investment Portfolio		Cost(1)		Fair Value		Percentage of Investment Portfolio
Senior secured first lien debt	$	1,430,846	$	1,407,224	84.0	%	$	1,266,564	$	1,223,268	81.8	%
Senior secured second lien debt	160,631		141,710		8.5	%	171,480		151,506		10.1	%

Collateralized securities and structured products - equity	14,487		14,095		0.8	%	15,305		12,131		0.8	%
Unsecured debt	5,675		5,508		0.3	%	5,668		5,464		0.4	%
Equity	100,712		107,017		6.4	%	118,638		103,405		6.9	%
Subtotal/total percentage	1,712,351		1,675,554		100.0	%	1,577,655		1,495,774		100.0	%
Short term investments(2)	48,484		48,484				73,597		73,597
Total investments	$	1,760,835	$	1,724,038			$	1,651,252	$	1,569,371

(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.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(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, 2021 and December 31, 2020:


	June 30, 2021				December 31, 2020
Industry Classification	Investments at Fair Value		Percentage of Investment Portfolio		Investments at Fair Value		Percentage of Investment Portfolio
Healthcare & Pharmaceuticals	$	283,126	16.9	%	$	298,944	19.9	%
Services: Business	268,849		16.0	%	211,572		14.0	%
Media: Diversified & Production	127,105		7.6	%	108,078		7.2	%
Chemicals, Plastics & Rubber	124,017		7.4	%	141,654		9.5	%
Services: Consumer	112,840		6.7	%	85,254		5.7	%
Media: Advertising, Printing & Publishing	107,481		6.4	%	110,083		7.4	%
High Tech Industries	73,265		4.4	%	55,619		3.7	%
Beverage, Food & Tobacco	64,626		3.9	%	69,975		4.7	%
Capital Equipment	63,679		3.8	%	65,752		4.4	%
Banking, Finance, Insurance & Real Estate	53,168		3.2	%	41,211		2.8	%
Retail	45,543		2.7	%	29,312		2.0	%
Aerospace & Defense	42,331		2.5	%	35,751		2.4	%
Consumer Goods: Durable	42,219		2.5	%	7,417		0.5	%
Telecommunications	41,975		2.5	%	46,638		3.1	%
Energy: Oil & Gas	41,543		2.5	%	28,136		1.9	%
Construction & Building	41,064		2.5	%	34,653		2.3	%
Hotel, Gaming & Leisure	33,523		2.0	%	21,920		1.5	%
Consumer Goods: Non-Durable	32,534		1.9	%	15,757		1.1	%
Diversified Financials	25,710		1.5	%	37,214		2.5	%
Forest Products & Paper	21,699		1.3	%	21,686		1.4	%
Transportation: Cargo	17,960		1.1	%	19,001		1.3	%
Metals & Mining	11,297		0.7	%	10,147		0.7	%





Subtotal/total percentage	1,675,554		100.0	%	1,495,774		100.0	%
Short term investments	48,484				73,597
Total investments	$	1,724,038			$	1,569,371

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)


	June 30, 2021				December 31, 2020
Geographic Dispersion(1)	Investments at Fair Value		Percentage of Investment Portfolio		Investments at Fair Value		Percentage of Investment Portfolio
United States	$	1,626,284	97.1	%	$	1,446,950	96.8	%
Canada	20,890		1.3	%	14,775		1.0	%
Cayman Islands	14,095		0.8	%	12,131		0.8	%
Netherlands	7,426		0.4	%	7,651		0.5	%
Luxembourg	3,809		0.2	%	10,034		0.7	%
Cyprus	2,278		0.1	%	3,557		0.2	%
Bermuda	772		0.1	%	676		—




Subtotal/total percentage	1,675,554		100.0	%	1,495,774		100.0	%
Short term investments	48,484				73,597
Total investments	$	1,724,038			$	1,569,371

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

As of June 30, 2021 and December 31, 2020, investments on non-accrual status represented 0.4% and 0.5%, 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, 2021 and December 31, 2020, the Company’s unfunded commitments amounted to $80,283 and $43,130, respectively. As of August 5, 2021, the Company’s unfunded commitments amounted to $85,059. 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 11 for further details on the Company’s unfunded commitments.

Note 7. CION SOF

CION SOF was organized on May 21, 2019 as a Delaware limited liability company and commenced operations on October 2, 2019 when the Company and BCP Special Opportunities Fund I, LP, or BCP, entered into the limited liability company agreement of CION SOF for purposes of establishing the manner in which the parties would invest in and co-manage CION SOF. CION SOF invested primarily in senior secured loans of U.S. middle-market companies. The Company and BCP contributed a portfolio of loans to CION SOF representing membership equity of $31,289 and $4,470, respectively, in exchange for 87.5% and 12.5% of the membership interests of CION SOF, respectively.

In December 2020, the Company and BCP elected to wind-down the operations of CION SOF. On January 28, 2021, CION SOF sold all of its remaining debt and equity investments to the Company. On March 18, 2021, CION SOF declared final cash distributions and on March 19, 2021, distributed all remaining capital to the Company and BCP.

The Company and BCP were not required to make any additional capital contributions to CION SOF. The Company’s equity investment in CION SOF was not redeemable. All portfolio and other material decisions regarding CION SOF required approval of its board of managers, which was comprised of four members, two of whom were selected by the Company and the other two were selected by BCP. Further, all portfolio and other material decisions required the affirmative vote of at least one board member from the Company and one board member from BCP.

The Company also served as administrative agent to CION SOF to provide loan servicing functions and other administrative services. In certain cases, these loan servicing functions and other administrative services were performed by CIM.

On October 2, 2019, CION SOF entered into a senior secured credit facility with MS, or the SOF Credit Facility, for borrowings of up to a maximum amount of $75,000. Advances under the SOF Credit Facility were available through October 2, 2022 and bore interest at a floating rate equal to the three-month LIBOR, plus a spread of (i) 3.0% per year through October 1, 2022 and (i) 3.5% per year thereafter through October 2, 2024. CION SOF's obligations to MS under the SOF Credit Facility were secured by a first priority security interest in all of the assets of CION SOF. The obligations of CION SOF under the SOF Credit Facility were non-recourse to the Company. On October 2, 2019, CION SOF drew down $64,702 of borrowings under the SOF Credit Facility. On December 14, 2020, CION SOF repaid to MS all amounts outstanding under the SOF Credit Facility.

For the six months ended June 30, 2020 and the year ended December 31, 2020, the Company recorded dividend income from its equity interest in CION SOF of $2,487 and $3,518, respectively. The Company did not record any dividend income from its equity interest in CION SOF for the six months ended June 30, 2021.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

In accordance with ASU 2015-02, Consolidation, the Company determined that CION SOF was a variable interest entity, or VIE. However, the Company was not the primary beneficiary and therefore did not consolidate CION SOF. The Company's maximum exposure to losses from CION SOF was limited to its equity contribution to CION SOF.

The following table sets forth the individual investments in CION SOF's portfolio as of December 31, 2020:


Portfolio Company	Index Rate(a)	Industry	Principal/ Par Amount/ Units		Cost(b)		Fair Value
Senior Secured First Lien Debt
Alert 360 Opco, Inc., L+600, 1.00% LIBOR Floor, 10/16/2025	1 Month LIBOR	Services: Consumer	$	2,501	$	2,501	$	2,501
Total Senior Secured First Lien Debt					2,501		2,501
Equity
Alert 360 Topco, Inc., Common Stock		Services: Consumer	119,445 Units		741		741
Total Equity					741		741
Short Term Investments(c)
First American Treasury Obligations Fund, Class Z Shares, 0.03%(d)					10,591		10,591
Total Short Term Investments					10,591		10,591
TOTAL INVESTMENTS					$	13,833	$	13,833

a.The 1 month LIBOR rate was 0.14% as of December 31, 2020. The actual LIBOR rate for the loan listed may not be the applicable LIBOR rate as of December 31, 2020, as the loan may have been priced or repriced based on a LIBOR rate prior to or subsequent to December 31, 2020.

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

c.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.

d.7-day effective yield as of December 31, 2020.

The following table includes selected balance sheet information for CION SOF as of December 31, 2020:


Selected Balance Sheet Information:	December 31, 2020
Investments, at fair value (amortized cost of $13,833)	$	13,833
Cash and other assets	41

Interest receivable on investments	454
Total assets	$	14,328


Other liabilities	$	75
Total liabilities	75
Members' capital	14,253
Total liabilities and members' capital	$	14,328

The following table includes selected statement of operations information for CION SOF for the six months ended June 30, 2021 and 2020 and the year ended December 31, 2020:


	Three Months Ended June 30,				Six Months Ended June 30,				Year Ended December 31,
Selected Statement of Operations Information:	2021		2020		2021		2020		2020
Total revenues	$	—	$	2,001	$	29	$	4,590	$	7,874
Total expenses	—		832		29		1,775		3,934
Net realized loss on investments	—		(337)		—		(337)		(3,427)
Net change in unrealized appreciation (depreciation) on investments	—		542		—		(3,564)		28
Net increase (decrease) in net assets	$	—	$	1,374	$	—	$	(1,086)	$	541

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

Note 8. Financing Arrangements

The following table presents summary information with respect to the Company’s outstanding financing arrangements as of June 30, 2021:


Financing Arrangement	Type of Financing Arrangement	Rate	Amount Outstanding		Amount Available		Maturity Date
JPM Credit Facility	Term Loan Credit Facility	L+3.10%	$	550,000	$	25,000	May 15, 2024
2026 Notes(1)	Note Purchase Agreement	4.50%	125,000		—		February 11, 2026
UBS Facility	Repurchase Agreement	L+3.375%	100,000		50,000		November 19, 2023
More Term Loan(2)	Term Loan Facility Agreement	5.20%	30,000		—		September 30, 2024
			$	805,000	$	75,000

(1)As of June 30, 2021, the fair value of the 2026 Notes was $125,000, which was based on a yield analysis and discount rate commensurate with the market yields for similar types of debt. The fair value of these debt obligations would be categorized as Level 3 under ASC 820 as of June 30, 2021.

(2)As of June 30, 2021, the fair value of the More Term Loan was $30,000, which was based on a yield analysis and discount rate commensurate with the market yields for similar types of debt. The fair value of these debt obligations would be categorized as Level 3 under ASC 820 as of June 30, 2021.

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 could have been 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 could have been 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, (i) 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, (ii) the reinvestment period was extended until August 24, 2020 and (iii) the maturity date was extended to August 24, 2021.

On May 15, 2020, 34th Street amended and restated the Amended JPM Credit Facility, or the Second Amended JPM Credit Facility, with JPM in order to fully repay all amounts outstanding under the Citibank Credit Facility and the MS Credit Facility and repay $100,000 of advances outstanding under the UBS Facility (as described below). Under the Second Amended JPM Credit Facility, the aggregate principal amount available for borrowings was increased from $275,000 to $700,000, of which $75,000 may be funded as a revolving credit facility, subject to conditions described in the Second Amended JPM Credit Facility, during the reinvestment period. Under the Second Amended JPM Credit Facility, the reinvestment period was extended until May 15, 2022 and the maturity date was extended to May 15, 2023. Advances under the Second Amended JPM Credit Facility bore interest at a floating rate equal to the three-month LIBOR, plus a spread of 3.25% per year.

On February 26, 2021, 34th Street amended and restated the Second Amended JPM Credit Facility, or the Third Amended JPM Credit Facility, with JPM. Under the Third Amended JPM Credit Facility, the aggregate principal amount available for borrowings was reduced from $700,000 to $575,000, subject to conditions described in the Third Amended JPM Credit Facility. In addition, under the Third Amended JPM Credit Facility, the reinvestment period was extended from May 15, 2022 to May 15, 2023 and the maturity date was extended from May 15, 2023 to May 15, 2024. Advances under the Third Amended JPM Credit Facility bear interest at a floating rate equal to the three-month LIBOR, plus a spread of 3.10% per year, which was reduced from a spread of 3.25% per year. 34th Street incurred certain customary costs and expenses in connection with the Third Amended JPM Credit Facility. No other material terms of the Second JPM Credit Facility were revised in connection with the Third Amended JPM Credit Facility. On February 17, 2021, 34th Street repaid $125,000 of borrowings under the Third Amended JPM Credit Facility.

On June 2, 2021, 34th Street drew down $50,000 of borrowings under the Third Amended JPM Credit Facility.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

Interest is payable quarterly in arrears. 34th Street may prepay advances pursuant to the terms and conditions of the Third 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 Third Amended JPM Credit Facility that has not been borrowed through May 14, 2023. The non-usage fees, if any, are payable quarterly in arrears.

As of June 30, 2021 and December 31, 2020, the principal amount outstanding on the Third Amended JPM Credit Facility and the Second Amended JPM Credit Facility, respectively, was $550,000 and $625,000, respectively.

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 Third 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 Third Amended JPM Credit Facility are non-recourse to the Company, and the Company’s exposure under the Third Amended JPM Credit Facility is limited to the value of the Company’s investment in 34th Street.

In connection with the Third Amended JPM Credit Facility, 34th Street has made certain representations and warranties and is required to comply with a borrowing base requirement, various covenants, reporting requirements and other customary requirements for similar facilities. As of and for the three months ended June 30, 2021, 34th Street was in compliance with all covenants and reporting requirements.

Through June 30, 2021, the Company incurred debt issuance costs of $11,402 in connection with obtaining and amending the JPM Credit Facility, which were recorded as a direct reduction to the outstanding balance of the Third Amended JPM Credit Facility, which is included in the Company’s consolidated balance sheet as of June 30, 2021 and will amortize to interest expense over the term of the Third Amended JPM Credit Facility. At June 30, 2021, the unamortized portion of the debt issuance costs was $5,606.

For the three and six months ended June 30, 2021 and 2020 and the year ended December 31, 2020, the components of interest expense, average borrowings, and weighted average interest rate for the Third Amended JPM Credit Facility and the Second Amended JPM Credit Facility, as applicable, were as follows:


	Three Months Ended June 30,						Six Months Ended June 30,						Year Ended December 31,
	2021			2020			2021			2020			2020
Stated interest expense	$	4,275		$	4,685		$	9,093		$	7,721		$	19,069
Amortization of deferred financing costs	487			357			1,164			509			1,582
Non-usage fee	149			74			368			137			509
Total interest expense	$	4,911		$	5,116		$	10,625		$	8,367		$	21,160
Weighted average interest rate(1)	3.40		%	4.04		%	3.48		%	4.34		%	3.90		%
Average borrowings	$	515,934		$	465,205		$	540,470		$	357,603		$	493,122

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

2026 Notes

On February 11, 2021, the Company entered into a Note Purchase Agreement with certain purchasers, or the Note Purchase Agreement, in connection with the Company’s issuance of $125,000 aggregate principal amount of its 4.50% senior unsecured notes due in 2026, or the 2026 Notes. The net proceeds to the Company were approximately $122,300, after the deduction of placement agent fees and other financing expenses, which the Company used to repay debt under its secured financing arrangements.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

The 2026 Notes mature on February 11, 2026. The 2026 Notes bear interest at a rate of 4.50% per year payable semi-annually on February 11th and August 11th of each year, commencing on August 11, 2021. The Company has the right to, at its option, redeem all or a part that is not less than 10% of the 2026 Notes (i) on or before February 11, 2024, at a redemption price equal to 100% of the principal amount of 2026 Notes to be redeemed plus an applicable “make-whole” amount equal to (x) the discounted value of the remaining scheduled payments with respect to the principal of such 2026 Note that is to be prepaid or becomes due and payable pursuant to the Note Purchase Agreement over (y) the amount of such called principal, plus accrued and unpaid interest, if any, (ii) after February 11, 2024 but on or before February 11, 2025, at a redemption price equal to 102% of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest, if any, (iii) after February 11, 2025 but on or before August 11, 2025, at a redemption price equal to 101% of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest, if any, and (iv) after August 11, 2025, at a redemption price equal to 100% of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest, if any. For any redemptions occurring on or before February 11, 2024, the discounted value portion of the “make whole amount” is calculated by applying a discount rate on the same periodic basis as that on which interest on the 2026 Notes is payable equal to the sum of 0.50% plus the yield to maturity of the most recently issued U.S. Treasury securities having a maturity equal to the remaining average life of the 2026 Notes, or if there are no such U.S. Treasury securities, using such implied yield to maturity determined in accordance with the terms of the Note Purchase Agreement.

The 2026 Notes are general unsecured obligations of the Company that rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by certain of the Company’s subsidiaries, financing vehicles or similar facilities.

The Note Purchase Agreement contains other terms and conditions, including, without limitation, affirmative and negative covenants such as (i) information reporting, (ii) maintenance of the Company’s status as a BDC, (iii) minimum shareholders’ equity of 60% of the Company’s net asset value as of the year ended December 31, 2020 plus 50% of the net cash proceeds of the sale of certain equity interests by the Company after February 11, 2021, if any, (iv) a minimum asset coverage ratio of not less than 200%, or 150% if the Company obtains the requisite shareholder approval and the Company's common stock is listed for trading on a national securities exchange, (v) a minimum interest coverage ratio of 1.25 to 1.00 and (vi) an unencumbered asset coverage ratio of 1.25 to 1.00, provided that (a) first lien senior secured loans and cash represent more than 65% of the total value of unencumbered assets used by the Company for purposes of the ratio and (b) equity interests or structured products in the aggregate represent less than 15% of the total value of unencumbered assets used by the Company for purposes of the ratio. As of and for the three months ended June 30, 2021, the Company was in compliance with all reporting requirements.

The Note Purchase Agreement also contains a “most favored lender” provision in favor of the purchasers in respect of any new unsecured credit facilities, loans or indebtedness in excess of $25,000 incurred by the Company, which indebtedness contains a financial covenant not contained in, or more restrictive against the Company than those contained, in the Note Purchase Agreement. In addition, the Note Purchase Agreement contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under other indebtedness or derivative securities of the Company in an outstanding aggregate principal amount of at least $25,000, certain judgments and orders, and certain events of bankruptcy.

As of June 30, 2021, the aggregate principal amount of 2026 Notes outstanding was $125,000.

Through June 30, 2021, the Company incurred debt issuance costs of $2,669 in connection with issuing the 2026 Notes, which were recorded as a direct reduction to the outstanding balance of the 2026 Notes, which is included in the Company’s consolidated balance sheet as of June 30, 2021 and will amortize to interest expense over the term of the 2026 Notes. At June 30, 2021, the unamortized portion of the debt issuance costs was $2,464.

For the three months ended June 30, 2021 and for the period from February 11, 2021 through June 30, 2021, the components of interest expense, average borrowings, and weighted average interest rate for the 2026 Notes were as follows:


	Three Months Ended June 30, 2021			For the Period from February 11, 2021 through June 30, 2021

Stated interest expense	$	1,422		$	2,188
Amortization of deferred financing costs	132			204

Total interest expense	$	1,554		$	2,392
Weighted average interest rate(1)	4.50		%	4.50		%
Average borrowings	$	125,000		$	125,000

(1) Includes the stated interest expense on the 2026 Notes and is annualized for periods covering less than one year.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

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 was required to 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)). The financing fee under the UBS Facility was equal to the three-month LIBOR plus a spread of up to 3.50% per year for the relevant period.

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, or the Amended UBS Facility.

On May 19, 2020, Murray Hill Funding entered into a Second Amended and Restated Master Confirmation to the Global Master Repurchase Agreement, or the Second Amended Master Confirmation, which extended the date that Murray Hill Funding will be required to repurchase the Notes sold to UBS under the Amended UBS Facility from May 19, 2020 to November 19, 2020 and increased the spread on the financing fee from 3.50% to 3.90% per year.

On May 19, 2020, Murray Hill Funding also repurchased Notes in the aggregate principal amount of $133,333 from UBS for an aggregate repurchase price of $100,000, which was then repaid by Murray Hill Funding II. The repurchase of the Notes on May 19, 2020 resulted in a repayment of one-half of the outstanding amount of borrowings under the Amended UBS Facility as of May 19, 2020. As of December 31, 2020, Notes remained outstanding in the aggregate principal amount of $133,333, which was purchased by Murray Hill Funding from Murray Hill Funding II and subsequently sold to UBS under the Amended UBS Facility for aggregate proceeds of $100,000.

On November 12, 2020, Murray Hill Funding entered into a Third Amended and Restated Master Confirmation to the Global Master Repurchase Agreement, or the Third Amended Master Confirmation, to further extend the date that Murray Hill Funding will be required to repurchase the Notes to December 18, 2020.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

On December 17, 2020, Murray Hill Funding entered into a Fourth Amended and Restated Master Confirmation to the Global Master Repurchase Agreement, or the Fourth Amended Master Confirmation, which further extended the date that Murray Hill Funding will be required to repurchase the Notes sold to UBS under the Amended UBS Facility from December 18, 2020 to November 19, 2023, and decreased the spread on the financing fee from 3.90% to 3.375% per year. No other material terms of the Amended UBS Facility were revised in connection with the Fourth Amended Master Confirmation.

On December 17, 2020, Murray Hill Funding also entered into a Revolving Credit Note Agreement, or the Revolving Note Agreement, with Murray Hill Funding II, UBS and U.S. Bank, as note agent and trustee, which provides for a revolving credit facility in an aggregate principal amount of $50,000, subject to compliance with a borrowing base. Murray Hill Funding II will issue Class A-R Notes, or the Class A-R Notes, in exchange for advances under the Revolving Note Agreement. Principal on the Class A-R Notes will be due and payable on the stated maturity date of May 19, 2027, which is the same stated maturity date as the Notes.

The Class A-R Notes will be issued pursuant to a Second Amended and Restated Indenture, dated December 17, 2020, between Murray Hill Funding II and U.S. Bank, as trustee, or the Second Amended Indenture. Under the Second Amended Indenture, the aggregate principal amount of Notes and Class A-R Notes that may be issued by Murray Hill Funding II from time to time is $150,000. Murray Hill Funding, in turn, entered into a repurchase transaction with UBS pursuant to the terms of the related Annex and Master Confirmation, dated December 17, 2020, to the Global Master Repurchase Agreement, dated May 19, 2017, related to the Class A-R Notes. Murray Hill Funding is required to repurchase the Class A-R Notes that will be sold to UBS by no later than November 19, 2023. The financing fee for the funded Class A-R Notes is equal to the three-month LIBOR plus a spread of 3.375% per year while the financing fee for the unfunded Class A-R Notes is equal to 0.75% per year.

Pursuant to the Amended UBS Facility, on July 1, 2021, UBS purchased Class A-R Notes held by Murray Hill Funding for an aggregate purchase price equal to 100% of the principal amount of Class A-R Notes purchased which was $21,000.

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 Amended 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 a borrowing base requirement, 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 amortized to interest expense over the term of the Amended UBS Facility. At June 30, 2021, all upfront fees and other expenses were fully amortized.

As of June 30, 2021, Notes in the aggregate principal amount of $100,000 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 $100,000. 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, 2021, the amount due at maturity under the Amended UBS Facility was $100,000. 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, 2021, the fair value of assets held by Murray Hill Funding II was $227,154.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)


	Three Months Ended June 30,						Six Months Ended June 30,						Year Ended December 31,
	2021			2020			2021			2020			2020
Stated interest expense	$	893		$	1,908		$	1,795		$	4,611		$	6,732
Non-usage fee	95			—			189			—			16
Amortization of deferred financing costs	—			125			—			359			360
Total interest expense	$	988		$	2,033		$	1,984		$	4,970		$	7,108
Weighted average interest rate(1)	3.98		%	4.92		%	3.94		%	5.17		%	4.81		%
Average borrowings	$	100,000		$	152,747		$	100,000		$	176,374		$	137,978

(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.

More Term Loan

On April 14, 2021, the Company entered into an Unsecured Term Loan Facility Agreement, or the Term Loan Agreement, with More Provident Funds Ltd., or More, as lender. The Term Loan Agreement with More, or the More Term Loan, provided for an unsecured term loan to the Company in an aggregate principal amount of $30,000. On April 20, 2021, the Company drew down $30,000 of borrowings under the More Term Loan. After the deduction of fees and other financing expenses, the Company received net borrowings of approximately $29,000, which the Company used for working capital and other general corporate purposes.

Advances under the More Term Loan mature on September 30, 2024, and bear interest at a rate of 5.20% per year payable quarterly in arrears. The Company has the right to, at its option, prepay all or any portion of advances then outstanding together with a prepayment fee equal to the higher of (i) zero, or (ii) the discounted present value of all remaining interest payments that would have been paid by the Company through the maturity date with respect to the principal amount of such advance that is to be prepaid or becomes due and payable pursuant to the Term Loan Agreement. The discounted present value portion of the prepayment fee is calculated by applying a discount rate on the same periodic basis as that on which interest on advances is payable equal to the sum of 2.00% plus the yield to maturity of the most recently issued U.S. Treasury securities having a maturity equal to the remaining average life of the More Term Loan, or if there are no such U.S. Treasury securities, using such implied yield to maturity determined in accordance with the terms of the Term Loan Agreement.

Advances under the More Term Loan are general unsecured obligations of the Company that rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to the Company's secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by certain of the Company's subsidiaries, financing vehicles or similar facilities.

The Term Loan Agreement contains other terms and conditions, including, without limitation, affirmative and negative covenants such as (i) information reporting, (ii) maintenance of the Company's status as a BDC within the meaning of the 1940 Act, (iii) minimum shareholders’ equity of 60% of the Company’s net asset value as of the year ended December 31, 2020 plus 50% of the net cash proceeds of the sale of certain equity interests by the Company after April 14, 2021, if any, (iv) a minimum asset coverage ratio of not less than 200%, or 150% subject to certain U.S. SEC relief actions and the Company's common stock being listed for trading on a national securities exchange, and (v) an unencumbered asset coverage ratio of 1.25 to 1.00, provided that (a) first lien senior secured loans and cash represent more than 65% of the total value of unencumbered assets used by the Company for purposes of the ratio and (b) equity interests or structured products in the aggregate represent less than 15% of the total value of unencumbered assets used by the Company for purposes of the ratio. In addition, the Term Loan Agreement contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross default under other indebtedness or derivative securities of the Company in an outstanding aggregate principal amount of at least $25,000, certain judgments and orders, and certain events of bankruptcy.

Through June 30, 2021, the Company incurred debt issuance costs of $992 in connection with obtaining the More Term Loan, which were recorded as a direct reduction to the outstanding balance of the More Term Loan, which is included in the Company’s consolidated balance sheet as of June 30, 2021 and will amortize to interest expense over the term of the More Term Loan. At June 30, 2021, the unamortized portion of the debt issuance costs was $929.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

For the period from April 14, 2021 through June 30, 2021, the components of interest expense, average borrowings, and weighted average interest rate for the More Term Loan were as follows:


	For the Period from April 14, 2021 through June 30, 2021

Stated interest expense	$	312

Amortization of deferred financing costs	63
Total interest expense	$	375
Weighted average interest rate(1)	5.20		%
Average borrowings	$	30,000

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

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.

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, 2019, the principal amount outstanding on the Second Amended Citibank Credit Facility was $278,542. On May 15, 2020, Flatiron Funding II repaid all amounts outstanding on the Second Amended Citibank Credit Facility using a portion of the proceeds from the Second Amended JPM Credit Facility (described above).

Advances under the Second Amended Citibank Credit Facility bore 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 2% per year. In addition, Flatiron Funding II was subject to a non-usage fee of 0.75% per year of the amount of the aggregate principal amount available under the Second Amended Citibank Credit Facility that had not been borrowed. 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 was included in the Company’s consolidated balance sheets and amortized to interest expense over the term of the Second Amended Citibank Credit Facility. All unamortized debt issuance costs were expensed upon the repayment of all amounts outstanding on the Second Amended Citibank Credit Facility on May 15, 2020.

Flatiron Funding II’s obligations to Citibank under the Second Amended Citibank Credit Facility were 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 were non-recourse to the Company, and the Company’s exposure under the Second Amended Citibank Credit Facility was limited to the value of the Company’s investment in Flatiron Funding II.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

For the three and six months ended June 30, 2021 and 2020 and the year ended December 31, 2020, 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,					Year Ended December 31,
	2021		2020			2021		2020			2020
Stated interest expense	$	—	$	802		$	—	$	3,171		$	3,171
Non-usage fee	—		111			—		288			288
Amortization of deferred financing costs	—		1,379			—		1,551			1,551
Total interest expense	$	—	$	2,292		$	—	$	5,010		$	5,010
Weighted average interest rate(1)	—		3.13		%	—		3.72		%	3.72		%
Average borrowings	$	—	$	110,939		$	—	$	183,774		$	91,385

(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.

MS Credit Facility

On December 19, 2017, 33rd Street 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.

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

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

As of December 31, 2019, the principal amount outstanding on the Amended MS Credit Facility was $112,500. On May 15, 2020, 33rd Street repaid all amounts outstanding on the Amended MS Credit Facility using a portion of the proceeds from the Second Amended JPM Credit Facility.

Advances under the Amended MS Credit Facility were available through December 19, 2020 and bore interest at a floating rate equal to the three-month LIBOR, plus a spread of 3.0% per year through December 19, 2020. All advances under the Amended MS Credit Facility and all accrued and unpaid interest thereunder were due and payable by no later than December 19, 2022. 33rd Street incurred certain customary costs and expenses in connection with obtaining and amending the MS Credit Facility.

33rd Street's obligations to MS under the Amended MS Credit Facility were secured by a first priority security interest in all of the assets of 33rd Street. The obligations of 33rd Street under the Amended MS Credit Facility were non-recourse to the Company, and the Company's exposure under the Amended MS Credit Facility was limited to the value of the Company's investment in 33rd Street. 33rd Street appointed CIM to manage its portfolio.

33rd Street 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 amortized 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 in the Company’s consolidated balance sheet. All unamortized debt issuance costs were expensed upon the repayment of all amounts outstanding on the Amended MS Credit Facility on May 15, 2020.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)


	Three Months Ended June 30,					Six Months Ended June 30,					Year Ended December 31,
	2021		2020			2021		2020			2020
Stated interest expense	$	—	$	566		$	—	$	1,928		$	1,928
Amortization of deferred financing costs	—		1,415			—		1,544			1,544
Non-usage fee	—		20			—		87			87
Total interest expense	$	—	$	2,001		$	—	$	3,559		$	3,559
Weighted average interest rate(1)	—		3.81		%	—		4.50		%	4.50		%
Average borrowings	$	—	$	61,609		$	—	$	88,451		$	43,984

(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 9. Fair Value of Financial Instruments

The following table presents fair value measurements of the Company’s portfolio investments as of June 30, 2021 and December 31, 2020, according to the fair value hierarchy:


	June 30, 2021(1)								December 31, 2020(2)
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Senior secured first lien debt	$	—	$	—	$	1,407,224	$	1,407,224	$	—	$	—	$	1,223,268	$	1,223,268
Senior secured second lien debt	—		—		141,710		141,710		—		—		151,506		151,506

Collateralized securities and structured products - equity	—		—		14,095		14,095		—		—		12,131		12,131
Unsecured debt	—		—		5,508		5,508		—		—		5,464		5,464
Equity	3,045		—		92,357		95,402		2,409		—		75,913		78,322
Short term investments	48,484		—		—		48,484		73,597		—		—		73,597
Total Investments	$	51,529	$	—	$	1,660,894	$	1,712,423	$	76,006	$	—	$	1,468,282	$	1,544,288

(1)Excludes the Company's $11,615 investment in BCP Great Lakes Fund LP, which was measured at NAV.

(2)Excludes the Company's $12,472 investment in CION SOF and $12,611 investment in BCP Great Lakes Fund LP, which were measured at NAV.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(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, 2021 and 2020:


	Three Months Ended June 30, 2021
	Senior Secured First Lien Debt		Senior Secured Second Lien Debt		Collateralized Securities and Structured Products - Equity		Unsecured Debt		Equity		Total
Beginning balance, March 31, 2021	$	1,255,426	$	154,626	$	13,840	$	5,493	$	91,409	$	1,520,794
Investments purchased(2)(3)	224,407		614		—		—		2,843		227,864
Net realized (loss) gain	(341)		—		—		—		805		464
Net change in unrealized appreciation (depreciation)	4,756		(877)		920		11		3,362		8,172
Accretion of discount	2,555		174		—		4		—		2,733
Sales and principal repayments(3)	(79,579)		(12,827)		(665)		—		(6,062)		(99,133)
Ending balance, June 30, 2021	$	1,407,224	$	141,710	$	14,095	$	5,508	$	92,357	$	1,660,894
Change in net unrealized appreciation (depreciation) on investments still held as of June 30, 2021(1)	$	6,482	$	(815)	$	920	$	11	$	4,076	$	10,674

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

(2)Investments purchased includes PIK interest.

(3)Includes non-cash restructured securities.


	Six Months Ended June 30, 2021
	Senior Secured First Lien Debt		Senior Secured Second Lien Debt		Collateralized Securities and Structured Products - Equity		Unsecured Debt		Equity		Total
Beginning balance, December 31, 2020	$	1,223,268	$	151,506	$	12,131	$	5,464	$	75,913	$	1,468,282
Investments purchased(2)(3)	413,433		1,641		—		—		4,141		419,215
Net realized (loss) gain	(1,414)		—		—		—		805		(609)
Net change in unrealized appreciation	19,674		1,053		2,782		37		17,560		41,106
Accretion of discount	5,557		341		—		7		—		5,905
Sales and principal repayments(3)	(253,294)		(12,831)		(818)		—		(6,062)		(273,005)
Ending balance, June 30, 2021	$	1,407,224	$	141,710	$	14,095	$	5,508	$	92,357	$	1,660,894
Change in net unrealized appreciation (depreciation) on investments still held as of June 30, 2021(1)	$	17,778	$	(218)	$	2,782	$	37	$	18,507	$	38,886

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

(2)Investments purchased includes PIK interest.

(3)Includes non-cash restructured securities.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)


	Three Months Ended June 30, 2020
	Senior Secured First Lien Debt		Senior Secured Second Lien Debt		Collateralized Securities and Structured Products - Equity		Unsecured Debt		Equity		Total
Beginning balance, March 31, 2020	$	1,274,325	$	201,165	$	10,972	$	4,800	$	46,455	$	1,537,717
Investments purchased(2)(3)	59,458		558		—		—		8,106		68,122
Net realized loss	(10,290)		(2)		—		—		—		(10,292)
Net change in unrealized appreciation (depreciation)	11,588		1,408		733		(4)		(3,869)		9,856
Accretion of discount	1,580		252		—		4		—		1,836

Sales and principal repayments(3)	(98,405)		(10,183)		(413)		—		—		(109,001)
Ending balance, June 30, 2020	$	1,238,256	$	193,198	$	11,292	$	4,800	$	50,692	$	1,498,238
Change in net unrealized appreciation (depreciation) on investments still held as of June 30, 2020(1)	$	1,623	$	1,408	$	733	$	(4)	$	(3,869)	$	(109)

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

(2)Investments purchased includes PIK interest.

(3)Includes non-cash restructured securities.


	Six Months Ended June 30, 2020
	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, 2019	$	1,351,767	$	248,253	$	7,212	$	14,182	$	4,900	$	56,886	$	1,683,200
Investments purchased(2)(3)	236,612		912		—		—		—		8,717		246,241
Net realized loss	(14,485)		(1)		—		—		—		—		(14,486)
Net change in unrealized depreciation	(73,442)		(15,807)		—		(2,287)		(108)		(14,911)		(106,555)
Accretion of discount	6,269		740		—		—		8		—		7,017

Sales and principal repayments(3)	(268,465)		(40,899)		(7,212)		(603)		—		—		(317,179)
Ending balance, June 30, 2020	$	1,238,256	$	193,198	$	—	$	11,292	$	4,800	$	50,692	$	1,498,238
Change in net unrealized depreciation on investments still held as of June 30, 2020(1)	$	(74,886)	$	(15,261)	$	—	$	(2,287)	$	(108)	$	(14,911)	$	(107,453)

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

(2)Investments purchased includes PIK interest.

(3)Includes non-cash restructured securities.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(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, 2021 and December 31, 2020 were as follows:

June 30, 2021

Fair Value

Valuation Techniques/
Methodologies

Unobservable
Inputs

Range

Weighted Average(1)

Senior secured first lien debt

1,068,244

Discounted Cash Flow

Discount Rates

5.5%

—

30.7%

10.1%

276,321

Broker Quotes

N/A

26,496

Market Comparable Approach

Revenue Multiple

1.90x

N/A

25,827

EBITDA Multiple

4.50x

—

10.50x

8.09x

10,336

Other(2)

N/A

Senior secured second lien debt

115,064

Discounted Cash Flow

Discount Rates

8.0%

—

18.0%

10.5%

26,538

Broker Quotes

N/A

108

Market Comparable Approach

EBITDA Multiple

7.75x

N/A

Collateralized securities and structured products - equity

14,095

Discounted Cash Flow

Discount Rates

10.5%

—

17.0%

12.3%

Unsecured debt

5,508

Discounted Cash Flow

Discount Rates

16.4%

N/A

Equity

21,604

Market Comparable Approach

EBITDA Multiple

4.50x

—

32.50x

12.73x

19,077

Revenue Multiple

0.60x

—

2.29x

1.46x

10,422

$ per kW

$325.00

N/A

38,627

Other(2)

N/A

2,286

Discount for Lack of Marketability

Expected Volatility

30.0%

N/A

339

Broker Quotes

N/A

Options Pricing Model

Expected Volatility

70.0%

—

85.0%

70%

Total

1,660,894

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

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

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

December 31, 2020

Fair Value

Valuation Techniques/
Methodologies

Unobservable
Inputs

Range

Weighted Average(1)

Senior secured first lien debt

881,684

Discounted Cash Flow

Discount Rates

5.5%

—

36.2%

11.0%

305,974

Broker Quotes

N/A

21,920

Market Comparable Approach

Revenue Multiple

2.33x

N/A

9,361

EBITDA Multiple

2.50x

N/A

4,329

Other(2)

N/A

Senior secured second lien debt

121,865

Discounted Cash Flow

Discount Rates

8.7%

—

17.3%

11.9%

25,763

Broker Quotes

N/A

2,305

Market Comparable Approach

EBITDA Multiple

4.75x

N/A

1,573

Revenue Multiple

0.20x

N/A

Collateralized securities and structured products - equity

12,131

Discounted Cash Flow

Discount Rates

12.0%

—

18.0%

13.5%

Unsecured debt

5,464

Discounted Cash Flow

Discount Rates

16.5%

N/A

Equity

39,644

Market Comparable Approach

EBITDA Multiple

3.00x

—

18.50x

10.13x

11,634

Revenue Multiple

0.20x

—

2.33x

1.56x

7,988

$ per kW

$271.50

N/A

16,481

Discounted Cash Flow

Discount Rates

18.5%

N/A

163

Broker Quotes

N/A

Options Pricing Model

Expected Volatility

60.0%

—

70.0%

Total

1,468,282

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

(2)Fair value is based on the 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, unsecured debt 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 10. General and Administrative Expense

General and administrative expense consisted of the following items for the three and six months ended June 30, 2021 and 2020 and the year ended December 31, 2020:


	Three Months Ended June 30,				Six Months Ended June 30,				Year Ended December 31,
	2021		2020		2021		2020		2020
Professional fees	$	1,213	$	613	$	2,478	$	910	$	1,490
Transfer agent expense	253		260		675		655		1,189
Valuation expense	269		285		521		561		999
Accounting and administration costs	175		137		412		283		680
Printing and marketing expense	355		103		399		118		378
Insurance expense	137		115		269		223		489
Director fees and expenses	111		113		214		229		450
Dues and subscriptions	27		67		196		149		342

Other expenses	27		22		92		57		336
Total general and administrative expense	$	2,567	$	1,715	$	5,256	$	3,185	$	6,353

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

Note 11. Commitments and Contingencies

The Company entered into certain contracts with related and 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, 2021 and December 31, 2020, the Company’s unfunded commitments were as follows:


Unfunded Commitments	June 30, 2021(1)		December 31, 2020(1)
Genesis Healthcare, Inc.	$	35,000	$	—
West Dermatology Management Holdings, LLC	7,655		7,655
Williams Industrial Services Group, Inc.	5,000		5,000
Rogers Mechanical Contractors, LLC	4,808		—
BCP Great Lakes Fund LP	3,406		2,135
Instant Web, LLC	2,704		2,704
Geon Performance Solutions, LLC	2,586		2,586
Coyote Buyer, LLC	2,500		2,500
Appalachian Resource Company, LLC	2,500		2,500
Moss Holding Company	2,232		2,232
Foundation Consumer Healthcare, LLC	2,094		4,211
NWN Parent Holdings LLC	1,800		—
Anthem Sports & Entertainment Inc.	1,750		1,333
Extreme Reach, Inc.	1,744		1,744
Mimeo.com, Inc.	1,250		1,000
AMCP Staffing Intermediate Holdings III, LLC	1,142		1,370
RA Outdoors, LLC	1,049		—
Invincible Boat Company	798		—
CircusTrix Holdings, LLC	180		2,898
American Media, LLC	85		—
Palmetto Solar, LLC	—		3,262



Total	$	80,283	$	43,130

(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, 2021 and December 31, 2020, refer to the table above and the consolidated schedules of investments. As of August 5, 2021, the Company was committed, upon the satisfaction of certain conditions, to fund an additional $85,059.

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.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

Note 12. Fee Income

Fee income consists of amendment fees, capital structuring and other fees, and administrative agent fees. The following table summarizes the Company’s fee income for the three and six months ended June 30, 2021 and 2020 and the year ended December 31, 2020:


	Three Months Ended June 30,				Six Months Ended June 30,				Year Ended December 31,
	2021		2020		2021		2020		2020
Capital structuring and other fees	$	790	$	109	$	1,084	$	224	$	968
Amendment fees	90		628		674		1,117		3,550
Administrative agent fees	—		—		55		—		25
Total	$	880	$	737	$	1,813	$	1,341	$	4,543

Administrative agent fees are recurring income as long as the Company remains the administrative agent for the related investment. Income from all other fees was non-recurring.

Note 13. Financial Highlights

The following is a schedule of financial highlights as of and for the six months ended June 30, 2021 and 2020 and the year ended December 31, 2020:


	Six Months Ended June 30,						Year Ended December 31,
	2021			2020			2020
Per share data:(1)
Net asset value at beginning of period	$	7.75		$	8.40		$	8.40
Results of operations:
Net investment income	0.32			0.31			0.69
Net realized and net change in unrealized gains (losses)(2)	0.36			(1.10)			(0.78)
Net increase (decrease) in net assets resulting from operations(2)	0.68			(0.79)			(0.09)
Shareholder distributions:
Distributions from net investment income	(0.26)			(0.18)			(0.56)



Net decrease in net assets resulting from shareholders' distributions	(0.26)			(0.18)			(0.56)
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	$	8.17		$	7.43		$	7.75
Shares of common stock outstanding at end of period	113,297,189			113,311,355			113,293,723
Total investment return-net asset value(5)	9.00		%	(9.47)		%	(0.94)		%
Net assets at beginning of period	$	878,256		$	952,563		$	952,563
Net assets at end of period	$	925,880		$	842,430		$	878,256
Average net assets	$	903,354		$	882,484		$	875,846
Ratio/Supplemental data:
Ratio of net investment income to average net assets(6)	4.02		%	4.03		%	8.99		%
Ratio of gross operating expenses to average net assets(6)(7)	4.21		%	5.21		%	9.72		%
Ratio of net operating expenses to average net assets(6)	4.21		%	5.21		%	9.72		%
Portfolio turnover rate(8)	18.43		%	12.42		%	22.99		%
Asset coverage ratio(9)	2.15			2.13			2.21

(1)The per share data for the six months ended June 30, 2021 and 2020 and the year ended December 31, 2020 was derived by using the weighted average shares of common stock outstanding during each period.

CĪON Investment Corporation

Notes to Consolidated Financial Statements (unaudited)

June 30, 2021

(in thousands, except share and per share amounts)

(2)The amount shown for net realized and net change in unrealized gains (losses) 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 (decrease) 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 have caused 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, 2021 and 2020 and the year ended December 31, 2020. The Company's follow-on continuous public offering ended on January 25, 2019.

(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, 2021 and 2020 and the year ended December 31, 2020.

(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. 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 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.

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. In addition, the term "portfolio companies" refers to companies in which we have invested, either directly or indirectly through our 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, 2020. 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, including our and their ability to achieve our respective objectives as a result of COVID-19;

•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, including COVID-19 and the related economic disruptions caused thereby;

•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, pandemics, 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.

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, unsecured debt, 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 13, 2020, 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, 2020. On April 5, 2021, our board of directors, including a majority of directors who are not interested persons, approved the amended and restated investment advisory agreement with CIM, which was subsequently approved by shareholders on August 9, 2021 (as described in further detail below). 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 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 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.

On April 5, 2021, our board of directors unanimously approved a number of steps in connection with the commencement of plans to pursue a potential listing of our shares of common stock on a national securities exchange. We have been cleared to file an application, and have applied, to list our shares of common stock on the NYSE under the symbol “CION”. Subject to market conditions, final board approvals and NYSE approval, we currently expect to seek the commencement of trading as part of the Listing in the period following receipt of shareholder approval of the proposals to be considered at our reconvened annual meeting, as described in our definitive proxy statement filed on May 13, 2021. There can be no assurance that we will be able to complete the Listing in any certain timeframe or at all.

In connection with the potential Listing, our board of directors also approved an amended and restated investment advisory agreement with CIM. A description of the amended and restated investment advisory agreement is set forth in Proposal 3 in our definitive proxy statement filed on May 13, 2021. The amended and restated investment advisory agreement is effective upon the Listing, except for the change to the calculation of the subordinated incentive fee payable to CIM that expresses the hurdle rate required for CIM to earn, and be paid, the incentive fee as a percentage of our net assets rather than adjusted capital, which is not dependent upon the Listing. The amended and restated investment advisory agreement was approved by shareholders on August 9, 2021 at our reconvened 2021 annual meeting of shareholders. As a result, on August 10, 2021, we and CIM entered into the amended and restated investment advisory agreement in order to implement this change to the calculation of the subordinated incentive fee payable to CIM.

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 $75 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 and capital structuring 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 and subordinated incentive fees on income 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.

Recent Developments

COVID-19

The rapid spread of COVID-19, and associated impacts on the U.S. and global economies and the financial and credit markets, initially had negatively impacted, and may again negatively impact, our business operations and the business operations of some of our portfolio companies. We cannot at this time fully predict the impact of COVID-19 on our business or the business of our portfolio companies, its duration or magnitude or the extent to which it will negatively impact our portfolio companies’ operating results or our own results of operations or financial condition, including, without limitation, our ability to pay distributions to our shareholders. We expect that certain of our portfolio companies will continue to experience economic distress for the foreseeable future and may significantly limit business operations if subjected to prolonged economic distress. These developments could result in a decrease in the value of certain of our investments.

COVID-19 initially had adverse effects on our investment income and may again have adverse effects in the future. These adverse effects may require us to restructure certain of our investments, which could result in further reductions to our investment income or in impairments on our investments. In addition, disruptions in the capital markets have resulted in illiquidity in certain market areas. These market disruptions and illiquidity initially had an adverse effect on our business, financial condition, results of operations and cash flows. Unfavorable economic conditions caused by COVID-19 can also be expected to increase our funding costs and limit our access to the capital markets. These events initially limited our investment originations, which may occur again in the future, and may also have a material negative impact on our operating results.

We will continue to carefully monitor the impact of COVID-19 on our business and the business of our portfolio companies. Because the full effects of COVID-19 are not capable of being known at this time, we cannot estimate the impacts of COVID-19 on our future financial condition, results of operations or cash flows, including its effects on us with respect to our compliance with covenants in our financing arrangements with lenders. We do, however, expect that it will continue to have a negative impact on our business and the financial condition of certain of our portfolio companies.

Portfolio Investment Activity for the Three Months Ended June 30, 2021 and 2020 and the Year Ended December 31, 2020

The following table summarizes our investment activity, excluding short term investments and PIK securities, for the three months ended June 30, 2021 and 2020 and the year ended December 31, 2020:


	Three Months Ended June 30,		Year Ended December 31,
Net Investment Activity	2021			2020		2020
Purchases and drawdowns
Senior secured first lien debt	$	221,361		$	24,246	$	347,992
Senior secured second lien debt	—			—		4,375


Equity	737			1,626		7,266
Sales and principal repayments	(96,828)			(74,851)		(543,167)
Net portfolio activity	$	125,270		$	(48,979)	$	(183,534)

The following tables summarize the composition of our investment portfolio at amortized cost and fair value as of June 30, 2021 and December 31, 2020:


	June 30, 2021
	Investments Cost(1)		Investments Fair Value		Percentage of Investment Portfolio
Senior secured first lien debt	$	1,430,846	$	1,407,224	84.0	%
Senior secured second lien debt	160,631		141,710		8.5	%

Collateralized securities and structured products - equity	14,487		14,095		0.8	%
Unsecured debt	5,675		5,508		0.3	%
Equity	100,712		107,017		6.4	%
Subtotal/total percentage	1,712,351		1,675,554		100.0	%
Short term investments(2)	48,484		48,484
Total investments	$	1,760,835	$	1,724,038
Number of portfolio companies					132
Average annual EBITDA of portfolio companies			$61.1 million
Median annual EBITDA of portfolio companies			$49.0 million
Purchased at a weighted average price of par					97.91	%
Gross annual portfolio yield based upon the purchase price(3)					8.50	%

(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.


	December 31, 2020
	Investments Cost(1)		Investments Fair Value		Percentage of Investment Portfolio
Senior secured first lien debt	$	1,266,564	$	1,223,268	81.8	%
Senior secured second lien debt	171,480		151,506		10.1	%

Collateralized securities and structured products - equity	15,305		12,131		0.8	%
Unsecured debt	5,668		5,464		0.4	%
Equity	118,638		103,405		6.9	%
Subtotal/total percentage	1,577,655		1,495,774		100.0	%
Short term investments(2)	73,597		73,597
Total investments	$	1,651,252	$	1,569,371
Number of portfolio companies					119
Average annual EBITDA of portfolio companies			$67.3 million
Median annual EBITDA of portfolio companies			$53.2 million
Purchased at a weighted average price of par					98.18	%
Gross annual portfolio yield based upon the purchase price(3)					8.28	%

(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.

The following table summarizes the composition of our investment portfolio by the type of interest rate as of June 30, 2021 and December 31, 2020, excluding short term investments of $48,484 and $73,597, respectively:


	June 30, 2021						December 31, 2020
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	$	1,504,684	$	1,465,704	87.5	%	$	1,347,194	$	1,284,282	85.9	%
Fixed interest rate investments	109,169		110,355		6.6	%	126,962		124,816		8.3	%
Non-income producing equity	63,856		65,231		3.9	%	66,086		52,505		3.5	%
Other income producing investments	34,642		34,264		2.0	%	37,413		34,171		2.3	%
Total investments	$	1,712,351	$	1,675,554	100.0	%	$	1,577,655	$	1,495,774	100.0	%

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, 2021 and December 31, 2020:


	June 30, 2021				December 31, 2020
Industry Classification	Investments Fair Value		Percentage of Investment Portfolio		Investments Fair Value		Percentage of Investment Portfolio
Healthcare & Pharmaceuticals	$	283,126	16.9	%	$	298,944	19.9	%
Services: Business	268,849		16.0	%	211,572		14.0	%
Media: Diversified & Production	127,105		7.6	%	108,078		7.2	%
Chemicals, Plastics & Rubber	124,017		7.4	%	141,654		9.5	%
Services: Consumer	112,840		6.7	%	85,254		5.7	%
Media: Advertising, Printing & Publishing	107,481		6.4	%	110,083		7.4	%
High Tech Industries	73,265		4.4	%	55,619		3.7	%
Beverage, Food & Tobacco	64,626		3.9	%	69,975		4.7	%
Capital Equipment	63,679		3.8	%	65,752		4.4	%
Banking, Finance, Insurance & Real Estate	53,168		3.2	%	41,211		2.8	%
Retail	45,543		2.7	%	29,312		2.0	%
Aerospace & Defense	42,331		2.5	%	35,751		2.4	%
Consumer Goods: Durable	42,219		2.5	%	7,417		0.5	%
Telecommunications	41,975		2.5	%	46,638		3.1	%
Energy: Oil & Gas	41,543		2.5	%	28,136		1.9	%
Construction & Building	41,064		2.5	%	34,653		2.3	%
Hotel, Gaming & Leisure	33,523		2.0	%	21,920		1.5	%
Consumer Goods: Non-Durable	32,534		1.9	%	15,757		1.1	%
Diversified Financials	25,710		1.5	%	37,214		2.5	%
Forest Products & Paper	21,699		1.3	%	21,686		1.4	%
Transportation: Cargo	17,960		1.1	%	19,001		1.3	%
Metals & Mining	11,297		0.7	%	10,147		0.7	%



Subtotal/total percentage	1,675,554		100.0	%	1,495,774		100.0	%
Short term investments	48,484				73,597
Total investments	$	1,724,038			$	1,569,371

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, 2021 and December 31, 2020, our unfunded commitments amounted to $80,283 and $43,130, respectively. As of August 5, 2021, our unfunded commitments amounted to $85,059. 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.

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, 2021 and December 31, 2020, excluding short term investments of $48,484 and $73,597, respectively:


	June 30, 2021				December 31, 2020
Investment Rating	Investments Fair Value		Percentage of Investment Portfolio		Investments Fair Value		Percentage of Investment Portfolio
1	$	122,894	7.3	%	$	2,997	0.2	%
2	1,265,640		75.5	%	1,173,191		78.5	%
3	279,814		16.7	%	309,930		20.7	%
4	6,394		0.4	%	9,210		0.6	%
5	812		0.1	%	446		—
	$	1,675,554	100.0	%	$	1,495,774	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.

Current Investment Portfolio

The following table summarizes the composition of our investment portfolio at fair value as of August 5, 2021:


	Investments Fair Value		Percentage of Investment Portfolio
Senior secured first lien debt	$	1,403,204	87.7	%
Senior secured second lien debt	106,698		6.7	%

Collateralized securities and structured products - equity	13,597		0.9	%
Unsecured debt	5,508		0.3	%
Equity	69,610		4.4	%
Subtotal/total percentage	1,598,617		100.0	%
Short term investments(2)	141,386
Total investments	$	1,740,003
Number of portfolio companies			128
Average annual EBITDA of portfolio companies	$62.3 million
Median annual EBITDA of portfolio companies	$49.0 million
Purchased at a weighted average price of par			97.24	%
Gross annual portfolio yield based upon the purchase price(2)			8.28	%

(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, 2021 and 2020

Our results of operations for the three months ended June 30, 2021 and 2020 were as follows:


	Three Months Ended June 30,
	2021		2020
Investment income	$	38,021	$	35,808
Net operating expenses	19,335		21,892
Net investment income	18,686		13,916
Net realized gain (loss) on investments and foreign currency	441		(10,986)
Net change in unrealized appreciation on investments	8,842		13,657


Net increase in net assets resulting from operations	$	27,969	$	16,587

Investment Income

For the three months ended June 30, 2021 and 2020, we generated investment income of $38,021 and $35,808, respectively, consisting primarily of interest income on investments in senior secured debt, collateralized securities and structured products, and unsecured debt of 123 and 122 portfolio companies held during each respective period. Our average investment portfolio size, excluding our short term investments, increased $44,289, from $1,560,512 for the three months ended June 30, 2020 to $1,604,801 for the three months ended June 30, 2021. Additionally, investments on non-accrual status represented 0.4% of the Company's investment portfolio on a fair value basis as of June 30, 2021 compared to 3.0% as of June 30, 2020.

Operating Expenses

The composition of our operating expenses for the three months ended June 30, 2021 and 2020 was as follows:


	Three Months Ended June 30,
	2021		2020
Management fees	$	8,243	$	7,929
Administrative services expense	697		806

General and administrative	2,567		1,715
Interest expense	7,828		11,442
Total operating expenses	$	19,335	$	21,892

The decrease in interest expense during the three months ended June 30, 2021 was primarily the result of all remaining unamortized debt issuance costs related to the Second Amended Citibank Credit Facility and the Amended MS Credit Facility being expensed upon the repayment of all amounts outstanding on these facilities during the three months ended June 30, 2020.

The composition of our general and administrative expenses for the three months ended June 30, 2021 and 2020 was as follows:


	Three Months Ended June 30,
	2021		2020
Professional fees	$	1,213	$	613
Printing and marketing expense	355		103
Valuation expense	269		285
Transfer agent expense	253		260
Accounting and administration costs	175		137
Insurance expense	137		115
Director fees and expenses	111		113
Dues and subscriptions	27		67

Other expenses	27		22
Total general and administrative expense	$	2,567	$	1,715

The increase in general and administrative expenses was primarily the result of higher professional fees incurred during the three months ended June 30, 2021 associated with the potential Listing and higher printing and marketing expense incurred during the three months ended June 30, 2021 associated with shareholder proxy solicitation costs.

Net Investment Income

Our net investment income totaled $18,686 and $13,916 for the three months ended June 30, 2021 and 2020, respectively. The increase in our net investment income was primarily the result of higher investment income and lower interest expense, partially offset by higher general and administrative expenses, during the three months ended June 30, 2021 as compared to the three months ended June 30, 2020.

Net Realized Gain (Loss) on Investments and Foreign Currency

Our net realized gain (loss) on investments and foreign currency totaled $441 and $(10,986) for the three months ended June 30, 2021 and 2020, respectively, which were driven primarily by realized losses on the restructure of certain investments during the three months ended June 30, 2020.

Net Change in Unrealized Appreciation on Investments

The net change in unrealized appreciation on our investments totaled $8,842 and $13,657 for the three months ended June 30, 2021 and 2020, respectively. We observed tightening credit spreads and increased multiples in equity markets that positively impacted the fair value of certain of our investments during the three months ended June 30, 2021 and 2020.

Net Increase in Net Assets Resulting from Operations

For the three months ended June 30, 2021 and 2020, we recorded a net increase in net assets resulting from operations of $27,969 and $16,587, respectively, as a result of our operating activity for the respective periods.

This “Results of Operations” discussion should also be read in conjunction with “Recent Developments - COVID-19” above.

Results of Operations for the Six Months Ended June 30, 2021 and 2020

Our results of operations for the six months ended June 30, 2021 and 2020 were as follows:


	Six Months Ended June 30,
	2021		2020
Investment income	$	74,324	$	81,556
Net operating expenses	38,039		45,979
Net investment income	36,285		35,577
Net realized loss on investments and foreign currency	(3,687)		(15,182)
Net change in unrealized appreciation (depreciation) on investments	45,085		(109,720)


Net increase (decrease) in net assets resulting from operations	$	77,683	$	(89,325)

Investment Income

For the six months ended June 30, 2021 and 2020, we generated investment income of $74,324 and $81,556, respectively, consisting primarily of interest income on investments in senior secured debt, collateralized securities and structured products, and unsecured debt of 127 and 134 portfolio companies held during each respective period. Our average investment portfolio size, excluding our short term investments, decreased $52,139, from $1,637,803 for the six months ended June 30, 2020 to $1,585,664 for the six months ended June 30, 2021. Additionally, the decrease in LIBOR during the six months ended June 30, 2021 as compared to the six months ended June 30, 2020 also contributed to the decrease in interest income generated on our investments.

Operating Expenses

The composition of our operating expenses for the six months ended June 30, 2021 and 2020 was as follows:


	Six Months Ended June 30,
	2021		2020
Management fees	$	16,026	$	16,380
Administrative services expense	1,381		1,200
Subordinated incentive fee on income	—		3,308
General and administrative	5,256		3,185
Interest expense	15,376		21,906
Total operating expenses	$	38,039	$	45,979

The decrease in interest expense during the six months ended June 30, 2021 was primarily the result of all remaining unamortized debt issuance costs related to the Second Amended Citibank Credit Facility and the Amended MS Credit Facility being expensed upon the repayment of all amounts outstanding on these facilities during the three months ended June 30, 2020. The decrease in interest expense was also the result of a decrease in LIBOR during the six months ended June 30, 2021 as compared to the six months ended June 30, 2020. The decrease in subordinated incentive fee on income was primarily due to the decrease in interest income during the three months ended March 31, 2021 as compared to the three months ended March 31, 2020.

The composition of our general and administrative expenses for the six months ended June 30, 2021 and 2020 was as follows:


	Six Months Ended June 30,
	2021		2020
Professional fees	$	2,478	$	910
Transfer agent expense	675		655
Valuation expense	521		561
Accounting and administration costs	412		283
Printing and marketing expense	399		118
Insurance expense	269		223
Director fees and expenses	214		229
Dues and subscriptions	196		149

Other expenses	92		57
Total general and administrative expense	$	5,256	$	3,185

The increase in general and administrative expenses was primarily the result of higher professional fees incurred during the six months ended June 30, 2021 associated with the potential Listing and higher printing and marketing expense incurred during the six months ended June 30, 2021 associated with shareholder proxy solicitation costs.

Net Investment Income

Our net investment income totaled $36,285 and $35,577 for the six months ended June 30, 2021 and 2020, respectively. The increase in our net investment income was primarily the result of lower interest expense and lower subordinated incentive fee on income, partially offset by lower investment income and higher general and administrative expenses, during the six months ended June 30, 2021 as compared to the six months ended June 30, 2020.

Net Realized Loss on Investments and Foreign Currency

Our net realized loss on investments and foreign currency totaled $(3,687) and $(15,182) for the six months ended June 30, 2021 and 2020, respectively, which were driven primarily by realized losses on the restructure of certain investments during the six months ended June 30, 2020.

Net Change in Unrealized Appreciation (Depreciation) on Investments

The net change in unrealized appreciation (depreciation) on our investments totaled $45,085 and $(109,720) for the six months ended June 30, 2021 and 2020, respectively. This change was driven primarily by tightening credit spreads and increased multiples in equity markets during the six months ended June 30, 2021 that positively impacted the fair value of certain of our investments, as compared to the outbreak and spread of COVID-19 around the world during the six months ended June 30, 2020, which caused significant uncertainty and volatility in the U.S. and global economies as well as in the financial and credit markets and negatively impacted the fair value of certain of our investments.

Net Increase (Decrease) in Net Assets Resulting from Operations

For the six months ended June 30, 2021 and 2020, we recorded a net increase (decrease) in net assets resulting from operations of $77,683 and $(89,325), respectively, as a result of our operating activity for the respective periods.

This “Results of Operations” discussion should also be read in conjunction with “Recent Developments - COVID-19” above.

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

Our net asset value per share was $8.17 and $7.75 on June 30, 2021 and December 31, 2020, respectively. After considering (i) the overall changes in net asset value per share, (ii) paid distributions of approximately $0.2648 per share during the six months ended June 30, 2021, 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 9.00% for the six-month period ended June 30, 2021. 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 13 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 6.88% and a cumulative total return of 76.57% through June 30, 2021 (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 5.57% and a cumulative total return of 58.91% through June 30, 2021. 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 4.25% and a cumulative total return of 42.72%. 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 5.92% and a cumulative total return of 63.49% over the same period.

(1) Cumulative performance: December 17, 2012 to June 30, 2021

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.

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 from 200% to 150% and, as a result, to potentially increase the ratio of a BDC's debt to equity from a maximum of 1-to-1 to a maximum of 2-to-1, so long as certain approval and disclosure requirements are satisfied. We intend to seek the approval of our shareholders to reduce our minimum “asset coverage” ratio from 200% to 150% in accordance with the 1940 Act.

The outbreak and spread of COVID-19 have caused severe stress and uncertainty in the U.S. and global economies as well as in the financial and credit markets. Given the uncertainty as to the full severity and duration of the pandemic and its effects on us with respect to our compliance with covenants in our loan facilities with lenders and our borrowers’ ability to timely meet their financial obligations to us, management and our board of directors determined that it was in the best interest of our company and all of our shareholders to take certain steps during the three months ended March 31, 2020 that were necessary to improve our cash position and preserve financial flexibility in the short term. This “Financial Condition, Liquidity and Capital Resources” discussion should also be read in conjunction with “Recent Developments - COVID-19” above.

On March 19, 2020, our co-chief executive officers determined to (i) change the timing of declaring distributions to shareholders from quarterly to monthly; and (ii) temporarily suspend the payment of distributions to shareholders commencing with the month ended April 30, 2020, whether in cash or pursuant to our distribution reinvestment plan, as amended and restated. On July 15, 2020, our board of directors determined to recommence the payment of distributions to shareholders in August 2020. Distributions in respect of future months will be evaluated by management and our board of directors based on circumstances and expectations existing at the time of consideration.

On July 30, 2021, our board of directors, including the independent directors, determined to suspend our share repurchase program commencing with the third quarter of 2021 in anticipation of the potential Listing. The share repurchase program will ultimately terminate upon the Listing, which is subject to market conditions, final approval by our board of directors and other factors.

As further described in Note 1 and Note 4 to the notes to the consolidated financial statements included in this report, the recent amended and restated investment advisory agreement will (i) reduce the annual base management fees payable by us to CIM and (ii) amend the way the subordinated incentive fee on income and the capital gains incentive fee is payable by us to CIM by reducing the hurdle and incentive fee rates and express the hurdle rate as a percentage of our net assets rather than our adjusted capital. These changes are effective upon the Listing of our shares on a national securities exchange, except for the change to the calculation of the subordinated incentive fee payable to CIM that expresses the hurdle rate required for CIM to earn, and be paid, the incentive fee as a percentage of our net assets rather than adjusted capital, which was effective upon shareholder approval and not dependent upon the Listing. These changes, in the aggregate, may lead to the payment of higher advisory fees to CIM depending upon our performance. There can be no assurance that we will be able to complete the Listing in any certain timeframe or at all.

Our board of directors also intends to declare a special cash distribution to shareholders payable during the fourth quarter of 2021 in an amount not to exceed our estimated undistributed investment company taxable income, in addition to any regular cash distributions that our board may declare. The declaration, payment and terms of this special cash distribution, like all future distributions, are subject to applicable legal restrictions and the sole discretion of our board of directors.

As of June 30, 2021 and December 31, 2020, we had $48,484 and $73,597 in short term investments, respectively, invested in a fund that primarily invests in U.S. government securities.

JPM Credit Facility

As of June 30, 2021 and August 5, 2021, our outstanding borrowings under the Third Amended JPM Credit Facility were $550,000, and the aggregate unfunded principal amount in connection with the Third Amended JPM Credit Facility was $25,000. For a detailed discussion of our Third Amended JPM Credit Facility, refer to Note 8 to our consolidated financial statements included in this report.

UBS Facility

As of June 30, 2021 and August 5, 2021, our outstanding borrowings under the Amended UBS Facility were $100,000 and $121,000, respectively, and the aggregate unfunded principal amount in connection with the Amended UBS Facility was $50,000 and $29,000, respectively. For a detailed discussion of our Amended UBS Facility, refer to Note 8 to our consolidated financial statements included in this report.

2026 Notes

As of June 30, 2021 and August 5, 2021, we had $125,000 in aggregate principal amount of 2026 Notes outstanding. For a detailed discussion of our 2026 Notes, refer to Note 8 to our consolidated financial statements included in this report.

More Term Loan

As of June 30, 2021 and August 5, 2021, our outstanding borrowings under the More Term Loan were $30,000 and there was no unfunded principal amount in connection with the More Term Loan. For a detailed discussion of our More Term Loan, refer to Note 8 to our consolidated financial statements included in this report.

Unfunded Commitments

As of June 30, 2021 and August 5, 2021, our unfunded commitments amounted to $80,283 and $85,059, respectively. For a detailed discussion of our unfunded commitments, refer to Note 11 to our consolidated financial statements included in this report.

RIC Status and Distributions

To qualify for and maintain RIC tax treatment, we must, among other things, distribute in respect of each taxable year at least 90% of our net ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any. We will incur certain excise taxes imposed on RICs to the extent we do not distribute in respect of each calendar year an amount at least equal to the sum of (1) 98.0% of our net ordinary income (taking into account certain deferrals and elections) for the calendar year, (2) 98.2% of our capital gains in excess of capital losses, or capital gain net income (adjusted for certain ordinary losses), for the one-year period ending on October 31 of the calendar year and (3) any net ordinary income and capital gain net income from preceding years that were not distributed during such years and on which we paid no federal income tax.

For an additional discussion of our RIC status and distributions, refer to Note 2 and Note 5, respectively, of 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.

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.

Related Party Transactions

For a discussion of our relationship with related parties including CION Securities, CIM, 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, May 23, 2018, May 15, 2020 and February 26, 2021. See Note 8 to our consolidated financial statements for a more detailed description of the JPM Credit Facility.

On May 19, 2017, Murray Hill Funding II entered into the UBS Facility with UBS, as amended on December 1, 2017, May 19, 2020, November 12, 2020 and December 17, 2020. See Note 8 to our consolidated financial statements for a more detailed description of the UBS Facility.

On February 11, 2021, we entered into the Note Purchase Agreement with purchasers of the 2026 Notes. See Note 8 to our consolidated financial statements for a more detailed description of the 2026 Notes.

On April 14, 2021, we entered into the More Term Loan with More. See Note 8 to our consolidated financial statements for a more detailed description of the More Term Loan.

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 11 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 11 to our consolidated financial statements included in this report.

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, 2021, 87.5% 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.

As of June 30, 2021, under the terms of the Third Amended JPM Credit Facility, advances bear interest at a floating rate equal to the three-month LIBOR, plus a spread of 3.10% per year. 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 3.375% 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 Third Amended JPM Credit Facility or the Amended UBS Facility in effect as of June 30, 2021:


Basis Point Change in Interest Rates	(Decrease) Increase in Net Interest Income(1)	Percentage Change in Net Interest Income



No change to current base rate (0.13% as of June 30, 2021)	—	—
Up 50 basis points	(1,875)	(1.8)	%
Up 100 basis points	(2,224)	(2.2)	%
Up 200 basis points	5,069	5.0	%
Up 300 basis points	13,255	13.0	%

(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, our fixed rate borrowings (the 2026 Notes and the More Term Loan), or the net asset value of our common stock in the event of sudden changes in interest rates. Approximately 6.6% of our investments paid fixed interest rates as of June 30, 2021. Rising market interest rates will most likely lead to fair value declines for fixed interest rate investments and fixed interest rate borrowings 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 fixed interest rate borrowings 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.

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, 2021, 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, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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, 2020.

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

We did not engage in any unregistered sales of equity securities during the three months ended June 30, 2021.

The table below provides information concerning our repurchases of shares of our common stock during the three months ended June 30, 2021 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, 2021	—	$	—	—	—
May 1 to May 31, 2021	—	—		—	—
June 1 to June 30, 2021	640,277	8.07		640,277	(1)
Total	640,277	$	8.07	640,277	(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.

On July 30, 2021, our board of directors, including the independent directors, determined to suspend our share repurchase program commencing with the third quarter of 2021 in anticipation of the Listing. The share repurchase program will ultimately terminate upon the Listing. There can be no assurance that we will be able to complete the Listing in any certain timeframe or at all.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

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						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)).
3.2						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)).
4.3						Description of Registrant’s Securities (Incorporated by reference to Exhibit 4.3 to Registrant’s Annual Report on Form 10-K filed with the SEC on March 17, 2020 (File No. 814-00941)).
10.1						Amended and Restated Investment Advisory Agreement, dated as of August 10, 2021, 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 August 11, 2021 (File No. 814-00941)).
10.2						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)).
10.3						Third Amended and Restated Expense Support and Conditional Reimbursement Agreement, dated as of December 9, 2020, 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 15, 2020 (File No. 814-00941)).
10.4						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)).
10.5						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)).
10.6						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)).
10.7						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)).
10.8						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)).
10.9						Credit and Security Agreement, dated as of March 29, 2017, by and among Flatiron Funding II, LLC, CION Investment Management, LLC, CĪON Investment Corporation, 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 April 4, 2017 (File No. 814-00941)).
10.10						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)).


Exhibit Number						Description of Document
10.11						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)).
10.12						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)).
10.13						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)).
10.14						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)).
10.15						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)).
10.16						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)).
10.17						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)).
10.18						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)).
10.19						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)).
10.20						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)).
10.21						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)).
10.22						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)).
10.23						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)).
10.24						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)).


Exhibit Number						Description of Document
10.25						Second Amended and Restated Loan and Security Agreement, dated as of May 15, 2020, 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 21, 2020 (File No. 814-00941)).
10.26						Fourth Amended and Restated Master Confirmation to the Global Master Repurchase Agreement, dated as of December 17, 2020, by and between Murray Hill Funding, LLC and UBS AG (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the SEC on December 23, 2020 (File No. 814-00941)).
10.27						Revolving Credit Note Agreement, dated as of December 17, 2020, by and among Murray Hill Funding II, LLC, Murray Hill Funding, LLC, U.S. Bank National Association, and the Class A-R Noteholders (Incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed with the SEC on December 23, 2020 (File No. 814-00941)).
10.28						Murray Hill Funding II, LLC Class A-R Notes Due 2027 (Incorporated by reference to Exhibit 10.3 to Registrant’s Current Report on Form 8-K filed with the SEC on December 23, 2020 (File No. 814-00941)).
10.29						Second Amended and Restated Indenture, dated as of December 17, 2020, by and between Murray Hill Funding II, LLC and U.S. Bank National Association (Incorporated by reference to Exhibit 10.4 to Registrant’s Current Report on Form 8-K filed with the SEC on December 23, 2020 (File No. 814-00941)).
10.30						Master Confirmation to the Global Master Repurchase Agreement (Class A-R Notes), dated as of December 17, 2020, by and between Murray Hill Funding, LLC and UBS AG (Incorporated by reference to Exhibit 10.5 to Registrant’s Current Report on Form 8-K filed with the SEC on December 23, 2020 (File No. 814-00941)).
10.31						Note Purchase Agreement of CĪON Investment Corporation related to the 2026 Notes, dated as of February 11, 2021 (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the SEC on February 16, 2021 (File No. 814-00941)).
10.32						Third Amended and Restated Loan and Security Agreement, dated as of February 26, 2021, 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 March 1, 2021 (File No. 814-00941)).
10.33						Unsecured Term Loan Facility Agreement, dated as of April 14, 2021, by and between CĪON Investment Corporation and More Provident Funds Ltd. (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the SEC on April 20, 2021 (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.

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 12, 2021

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)