What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2024-03-14 compared with 2023-03-16 · 136 added, 68 removed, 168 unchanged (55% of the section changed)

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Fiscal Year Ended December 31, 2022

First Fiscal Quarter $ 16.20 $ 14.98 $ 11.80 ( 7.5 ) % ( 27.2 ) % $ 0.28

Second Fiscal Quarter $ 15.89 $ 14.13 $ 7.98 ( 11.1 ) % ( 49.8 ) % $ 0.28

Third Fiscal Quarter $ 16.26 $ 10.85 $ 8.09 ( 33.3 ) % ( 50.2 ) % $ 0.31

Fourth Fiscal Quarter $ 15.98 $ 10.83 $ 8.36 ( 32.2 ) % ( 47.7 ) % $ 0.58

(1) NAV per share will be determined as of the last day in the relevant quarter and therefore may not reflect the NAV per share on the date of the high and low closing sales prices.

The NAV to be shown will be based on outstanding shares at the end of the relevant quarter.

(2) Will be c alculated as the respective high or low closing sales price less NAV divided by NAV as of the last day in the relevant quarter.

Fiscal Year Ended December 31, 2021

Fourth Fiscal Quarter $ 16.34 $ 14.86 $ 11.80 ( 9.1 ) % ( 27.8 ) % $ 0.46

(1) NAV per share is determined as of the last day in the relevant quarter and therefore may not reflect the NAV per share on the date of the high and low closing sales prices.

The NAV shown is based on outstanding shares at the end of the relevant quarter.

(2) C alculated as the respective high or low closing sales price less NAV divided by NAV as of the last day in the relevant quarter.

(3) Represents the distributions declared in the relevant quarter.

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At times, our shares of common stock may trade at a premium to NAV and at times our shares of common stock have traded at a discount to the net assets attributable to those shares.

It is not possible to predict whether shares of our common stock will trade at, above or below our net asset value in the future.

See “Risk Factors—Risks Related to an Investment in Our Common Stock—We cannot assure you that a market for shares of our common stock will be maintained or the market price of our shares will trade close to NAV."

It is not possible to predict whether shares of our common stock will trade at, above or below our NAV in the future.

As of March 6, 2024, we had 2,199 record holders of our common stock, which includes Cede & Co.

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Reverse Stock Split

Effective on September 21, 2021, every two shares of our common stock then issued and outstanding were automatically combined into one share of our common stock, with the number of issued and outstanding shares reduced from 113,916,869 to 56,958,440.

Effective on September 21, 2021, every two shares of our common stock then issued and outstanding were automatically combined into one share of our common stock, with the number of then issued and outstanding shares reduced from 113,916,869 to 56,958,440.

The reverse stock split amendment also provided that there was no change in the par value of $0.001 per share as a result of the reverse stock split.

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As approved by shareholders on September 7, 2021, the Listing was staggered such that (i) up to 1/3rd of shares held by all shareholders were available for trading upon Listing, (ii) up to 2/3rd of shares held by all shareholders were available for trading starting 180 days after Listing, or April 4, 2022, and (iii) all shares were available for trading starting 270 days after Listing, or July 5, 2022.

On February 26, 2023, our common stock also listed on the TASE under the ticker symbol “CION”.

On February 26, 2023, our common stock and our Series A Notes listed in Israel on the TASE under the ticker symbol “CION” and "CION B1", respectively.

Distributions and Distribution Reinvestment Plan

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Effective September 28, 2017, our board of directors delegated to management the authority to determine the amount, record dates, payment dates and other terms of distributions to shareholders, which are ratified by our 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.

Beginning on March 19, 2020, we 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.

On July 15, 2020, our board of directors determined to recommence the payment of distributions to shareholders in August 2020.

On September 15, 2021, management changed the timing of declaring and paying regular distributions to shareholders from monthly to quarterly commencing with the fourth quarter of 2021.

Distributions in respect of future quarters will be evaluated by management and the board of directors based on circumstances and expectations existing at the time of consideration.

On September 15, 2021, we changed the timing of declaring and paying regular distributions to shareholders from monthly to quarterly commencing with the fourth quarter of 2021.

Distributions in respect of future quarters and any supplemental or special distributions will be evaluated by management and the board of directors based on circumstances and expectations existing at the time of consideration.

Subject to our board of directors’ discretion and applicable legal restrictions, our management intends to continue to authorize and declare, and our board of directors intends to continue to ratify, a quarterly distribution amount per share of our common stock.

Declared distributions are paid quarterly.

Declared regular distributions are paid quarterly.

We will calculate each shareholder’s specific distribution amount for the period using record and declaration dates and each shareholder’s distributions will begin to accrue on the date such shareholder first owns shares of our common stock.

From time to time, we may also pay interim special distributions in the form of cash or shares of common stock at the discretion of our board of directors.

From time to time, we may also pay interim supplemental or special distributions in the form of cash or shares of common stock at the discretion of our board of directors.

As required under the 1940 Act, a quarterly estimate of the tax attributes of our distributions will be disclosed to our shareholders on our website at www.cionbdc.com ;

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We intend to continue to pay quarterly distributions to our shareholders out of assets legally available for distribution in an amount sufficient to maintain RIC status each year and to avoid any federal income taxes on income.

However, we can offer no assurance that (i) we will maintain results that will permit the payment of any distributions, and (ii) we will not be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if distributions are limited by the terms of any of our borrowings.

Our board of directors declared or ratified distributions for 5, 11 and 19 record dates during the years ended December 31, 2022, 2021 and 2020, respectively.

However, we can offer no assurance that (i) we will maintain results that will permit the payment of any distributions, and (ii) we will not be prohibited from paying distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if distributions are limited by the terms of any of our borrowings.

Our management declared and our board of directors ratified distributions for 7, 5 and 11 record dates during the years ended December 31, 2023, 2022 and 2021, respectively.

The following table presents distributions per share that were declared during the years ended December 31, 2023, 2022 and 2021:

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Three Months Ended Per Share(1) Amount

March 31, 2020 (thirteen record dates) $ 0.3657 $ 20,793

June 30, 2020 (no record dates) — —

September 30, 2020 (two record dates) 0.1765 10,011

December 31, 2020 (four record dates) 0.5684 32,479

Total distributions for the year ended December 31, 2020 $ 1.1106 $ 63,283

March 31, 2021 (three record dates) $ 0.2648 $ 15,029

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Total distributions for the year ended December 31, 2022 $ 1.4500 $ 81,575

(1) The per share distribution amount has been retroactively adjusted to reflect the Reverse Stock Split as discussed in Note 3 to the consolidated financial statements included within this report.

March 31, 2023 (one record date) $ 0.3400 $ 18,687

June 30, 2023 (one record date) 0.3400 18,614

September 30, 2023 (two record dates) 0.3900 21,276

December 31, 2023 (three record dates) 0.5400 29,290

Total distributions for the year ended December 31, 2023

$ 1.6100 $ 87,867

(1) The per share distribution amount for 2021 has been retroactively adjusted to reflect the Reverse Stock Split as discussed in Note 3 to the consolidated financial statements included within this report.

On March 11, 2024, our co-chief executive officers declared a regular quarterly distribution of $0.34 per share for the first quarter of 2024 payable on March 28, 2024 to shareholders of record as of March 22, 2024.

In connection with the Listing of our shares of common stock on the NYSE, on September 15, 2021, we terminated our previous fifth amended and restated distribution reinvestment plan, or the Old DRP.

The final distribution reinvestment under the Old DRP was made as part of the regular monthly distribution paid on September 14, 2021 to shareholders of record as of September 13, 2021.

On September 15, 2021, we adopted a new distribution reinvestment plan, or the New DRP, which became effective as of the Listing, and first applied to the reinvestment of distributions paid after October 5, 2021.

Under the Old DRP and prior to the Listing, distributions to participating shareholders who “opted in” to the Old DRP were reinvested in additional shares of our 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 final distribution reinvestment under the Old DRP was made as part of the regular monthly distribution paid on September 14, 2021.

On September 15, 2021, we adopted a new distribution reinvestment plan, or the New DRP, which became effective as of the Listing and first applied to the reinvestment of distributions paid on December 8, 2021.

Under the Old DRP and prior to the Listing, distributions to participating shareholders who “opted in” to the Old DRP were reinvested in additional shares of our common stock at a purchase price equal to the estimated NAV per share of common stock as of the date of issuance.

The New DRP is an “opt out” distribution reinvestment plan for our shareholders.

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If shareholders hold common stock in the name of a broker or financial intermediary, they should contact the broker or financial intermediary regarding their election to receive distributions in cash.

The table below provides information concerning our purchases of shares of our common stock in the open market during the years ended December 31, 2022 and 2023 pursuant to the New DRP in order to satisfy the reinvestment portion of our distributions.

Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under Publicly Announced Plans or Programs

January 1 to January 31, 2022 — $ — — —

February 1 to February 28, 2022 — — — —

March 1 to March 31, 2022 54,613 14.77 54,613 ( 1 )

April 1 to April 30, 2022 — — — —

May 1 to May 31, 2022 — — — —

June 1 to June 30, 2022 155,800 10.06 155,800 ( 1 )

July 1 to July 31, 2022 — — — —

August 1 to August 31, 2022 — — — —

September 1 to September 30, 2022 207,602 10.14 207,602 ( 1 )

October 1 to October 31, 2022 — — — —

November 1 to November 30, 2022 — — — —

December 1 to December 31, 2022 182,234 10.78 182,234 ( 1 )

Total for the year ended December 31, 2022

600,249 $ 10.74 600,249 ( 1 )

January 1 to January 31, 2023 146,946 $ 11.19 146,946 (1)

February 1 to February 28, 2023 — — — —

March 1 to March 31, 2023 204,427 9.78 204,427 (1)

April 1 to April 30, 2023 — — — —

May 1 to May 31, 2023 — — — —

June 1 to June 30, 2023 174,424 10.71 174,424 (1)

July 1 to July 31, 2023 — — — —

August 1 to August 31, 2023 — — — —

September 1 to September 30, 2023 160,383 11.10 160,383 (1)

October 1 to October 31, 2023 25,764 10.30 25,764 (1)

November 1 to November 30, 2023 — — — —

December 1 to December 31, 2023 139,731 11.66 139,731 (1)

Total for the year ended December 31, 2023

851,675 $ 10.79 851,675 (1)

(1) See the description of the New DRP above.

Pursuant to an expense support and conditional reimbursement agreement entered into on January 2, 2018 between us and CIM, CIM agreed to provide expense support to us in an amount that was sufficient to:

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Under certain conditions, CIM would have been entitled to reimbursement of such expense support.

On December 9, 2020, we and CIM amended and restated the expense support and conditional reimbursement agreement to extend the termination date of such agreement from December 31, 2020 to December 31, 2021.

On December 31, 2021, we and CIM allowed the amended and restated expense support and conditional reimbursement agreement to expire in accordance with its terms.

For the years ended December 31, 2020 and 2021, none of our distributions resulted from expense support from CIM.

On December 31, 2021, we and CIM allowed the expense support and conditional reimbursement agreement to expire in accordance with its terms.

For the year ended December 31, 2021, none of our distributions resulted from expense support from CIM.

The following table reflects the sources of distributions on a GAAP basis that were declared during the years ended December 31, 2023, 2022 and 2021:

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Total distributions $ 1.6100 $ 87,867 100.0 % $ 1.4500 $ 81,575 100.0 % $ 1.2592 $ 71,530 100.0 %

(1) The per share amount has been retroactively adjusted to reflect the Reverse Stock Split as discussed in Note 3 to the consolidated financial statements included within this report.

(1) The per share amount for 2021 has been retroactively adjusted to reflect the Reverse Stock Split as discussed in Note 3 to the consolidated financial statements included within this report.

Issuing Shares Below NAV

We are generally not able to issue and sell our common stock at a price below NAV per share.

We may, however, sell our common stock, or warrants, options or rights to acquire our common stock, at a price below the then-current NAV of our common stock if our board of directors determines that such sale is in our best interests and the best interests of our shareholders, and our shareholders approve such sale.

In addition, we may generally issue new shares of our common stock at a price below NAV in rights offerings to existing shareholders, in payment of distributions and in certain other limited circumstances.

On September 15, 2023, our shareholders approved our ability to sell or otherwise issue during the next year shares of our common stock at a price below our then current NAV per share in one or more public or private offerings of our common stock not exceeding 25% of such then outstanding shares.

If we issue such shares and again receive such approval from shareholders in 2024 or otherwise in the future, we may issue shares of our common stock at a price below the then current NAV per share of common stock.

Recent Sales of Unregistered Equity Securities

We did not sell any securities during the period covered by this report that were not registered under the Securities Act.

We did not sell any equity securities during the period covered by this report that were not registered under the Securities Act.

Share Repurchases

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Prior to October 5, 2021, our common stock was not listed on any securities exchange.

In order to provide shareholders with a measure of liquidity, beginning in the first quarter of 2014, we began offering to repurchase common stock on such terms as were determined by our board of directors in its complete and absolute discretion unless, in the judgment of the independent directors of our board of directors, such repurchases would not have been in the best interests of our shareholders or would have violated applicable law.

In order to provide shareholders with a measure of liquidity, beginning in the first quarter of 2014, we began offering to repurchase common stock on a quarterly basis on such terms as were determined by our board of directors in its complete and absolute discretion unless, in the judgment of the independent directors of our board of directors, such repurchases would not have been in the best interests of our shareholders or would have violated applicable law.

We conducted such repurchase offers in accordance with the requirements of Rule 13e-4 of the Exchange Act and the 1940 Act.

In months in which we repurchased common stock, we generally conducted repurchases on the last Wednesday in a calendar month.

The offer to repurchase common stock was conducted solely through tender offer materials made available to each shareholder.

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• the condition of the securities markets.

On March 19, 2020, our board of directors, including the independent directors, temporarily suspended our share repurchase program commencing with the second quarter of 2020 and included the third quarter of 2020.

On November 13, 2020, we recommenced our share repurchase program for the fourth quarter of 2020.

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 and the concurrent enhanced liquidity the Listing was expected to provide.

The share repurchase program ultimately terminated upon the Listing.

We limited the number of shares of common stock to be repurchased during any calendar year to the number of shares of common stock we could repurchase with the proceeds we received from the issuance of shares of our common stock pursuant to the Old DRP.

On July 30, 2021, our board of directors, including the independent directors, determined to suspend our pre-Listing share repurchase program commencing with the third quarter of 2021 in anticipation of the Listing and the concurrent enhanced liquidity the Listing was expected to provide.

The pre-Listing share repurchase program ultimately terminated upon the Listing.

We limited the number of shares of common stock to be repurchased during any calendar year to the number of shares of common stock we could have repurchased with the proceeds we received from the issuance of shares of our common stock pursuant to the Old DRP.

At the discretion of our board of directors, we could have used cash on hand, cash available from borrowings and cash from liquidation of investments as of the end of the applicable period to repurchase common stock.

We offered to repurchase such common stock on each date of repurchase at a price equal to the estimated net asset value per share on each date of repurchase.

We offered to repurchase such common stock on each date of repurchase at a price equal to the estimated NAV per share on each date of repurchase.

Post-Listing Share Repurchase Policy

On September 15, 2021, our board of directors, including the independent directors, approved a share repurchase policy, or the Post-Listing Share Repurchase Policy.

Under the Post-Listing Share Repurchase Policy, we are authorized to repurchase up to $50 million of our outstanding common stock through various means such as open market transactions, including block purchases, and privately negotiated transactions.

Under the Post-Listing Share Repurchase Policy, we were authorized to repurchase up to $50 million of our outstanding common stock through various means such as open market transactions, including block purchases, and privately negotiated transactions.

On June 24, 2022, our board of directors, including the independent directors, increased the amount of shares of common stock that may be repurchased under the Post-Listing Share Repurchase Policy by $10 million to up to an aggregate of $60 million.

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The Post-Listing Share Repurchase Policy may be suspended or discontinued at any time and does not obligate us to acquire any specific number of shares of our common stock.

On August 16, 2022, a s part of the Post-Listing Share Repurchase Policy, we entered into a trading plan with an independent broker, Wells Fargo Securities, LLC, in accordance with Rule 10b5-1 of the Exchange Act, based in part on historical trading data with respect to our common stock.

On August 29, 2023, a s part of the Post-Listing Share Repurchase Policy, we entered into a new trading plan with an independent broker, Wells Fargo Securities, LLC, in accordance with Rule 10b5-1 of the Exchange Act, based in part on historical trading data with respect to our common stock.

The 10b5-1 trading plan permits common stock to be repurchased at a time that we might otherwise be precluded from doing so under insider trading laws or self-imposed trading restrictions.

The 10b5-1 trading plan is subject to price, market volume and timing restrictions.

The following table summarizes the share repurchases completed during the years ended December 31, 2021 and 2022:

Three Months Ended Repurchase Date Shares Repurchased(1) Percentage of Shares Tendered That Were Repurchased Repurchase Price Per Share(1) Aggregate Consideration for Repurchased Shares

March 31, 2021 March 24, 2021 337,731 6% $ 15.67 $ 5,291

June 30, 2021 June 23, 2021 320,127 7% 16.13 5,163

September 30, 2021(2) N/A 792 N/A 16.13 13

December 31, 2021 N/A — N/A N/A —

The 10b5-1 trading plan expires on August 29, 2024, and is subject to price, market volume and timing restrictions.

The table below provides information concerning our repurchases of shares of our common stock in the open market during the years ended December 31, 2022 and 2023 pursuant to our Post-Listing Share Repurchase Policy.

Period Total Number of Shares Repurchased Average Price Paid per Share Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Repurchased Under Publicly Announced Plans or Programs(1)

January 1 to January 31, 2022 — N/A — —

February 1 to February 28, 2022 — N/A — —

March 1 to March 31, 2022 — N/A — —

April 1 to April 30, 2022 — N/A — —

May 1 to May 31, 2022 — N/A — —

June 1 to June 30, 2022 — N/A — —

July 1 to July 31, 2022 — N/A — —

August 1 to August 31, 2022 170,424 $ 10.52 170,424 $ 58,210

September 1 to September 30, 2022 525,052 9.37 525,052 53,303

October 1 to October 31, 2022 738,221 8.91 738,221 46,740

November 1 to November 30, 2022 225,259 9.57 225,259 44,589

December 1 to December 31, 2022 — N/A — 44,589

Total for the year ended December 31, 2022 1,658,956 1,658,956

March 31, 2022 N/A — N/A N/A $ —

June 30, 2022 N/A — N/A N/A —

September 30, 2022 Various 695,476 N/A $ 9.65 6,711

December 31, 2022 Various 963,480 N/A 9.06 8,733

January 1 to January 31, 2023 129,873 $ 10.58 129,873 43,218

February 1 to February 28, 2023 114,733 11.06 114,733 41,951

March 1 to March 31, 2023 93,423 10.17 93,423 41,003

April 1 to April 30, 2023 126,980 9.69 126,980 39,775

May 1 to May 31, 2023 86,950 9.34 86,950 38,964

June 1 to June 30, 2023 114,698 10.31 114,698 37,784

July 1 to July 31, 2023 54,048 10.74 54,048 37,205

August 1 to August 31, 2023 18,518 10.96 18,518 37,002

September 1 to September 30, 2023 95,457 10.65 95,457 35,988

October 1 to October 31, 2023 145,599 10.08 145,599 34,056

November 1 to November 30, 2023 45,556 10.26 45,556 34,056

December 1 to December 31, 2023 89,013 10.84 89,013 33,093

Total for the year ended December 31, 2023 1,114,848 1,114,848

(1) Shares repurchased and repurchase price per share have been retroactively adjusted to reflect the two to one reverse stock split as discussed above.

(2) Represents an adjustment made during the three months ended September 30, 2021 to shares repurchased during the three months ended June 30, 2021.

We suspended our pre-listing share repurchase program on July 30, 2021 as discussed above.

(1) - Amounts do not include any commissions paid to W ells Fargo Securities, LLC on shares repurchased.

From January 1, 2024 to March 6, 2024, we repurchased 340,505 shares of common stock under the 10b5-1 trading plan for an aggregate purchase price of $3,750, or an average purchase price of $11.01 per share.

As of March 6, 2024, 16,084,731 shares of common stock repurchased by us had been retired.

Stock Performance Graph

The following stock performance graph compares the cumulative shareholder return assuming that, on October 5, 2021, which was the date on which our common stock listed and commenced trading on the NYSE, a person invested $100 in each of our common stock, the S&P BDC Index and the S&P 500 Index.

The graph also assumes the reinvestment of all cash distributions on the respective distribution payment dates prior to any tax effect.

This graph and other information furnished under Part II.

Item 5 of this Annual Report on Form 10-K shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act.

The stock price performance included in the above graph is not necessarily indicative of, or intended to forecast, future stock price performance.

Fees and Expenses

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Total estimated annual expenses (9)

(1) In the event that the securities are sold to or through underwriters or agents, a prospectus supplement and any related free writing prospectus will disclose the applicable sales load (underwriting discount or commission) and the example will be updated accordingly.

(1) In the event that the securities are sold to or through underwriters or agents, a corresponding prospectus supplement and any related free writing prospectus will disclose the applicable sales load (underwriting discount or commission) and the example will be updated accordingly.

Purchases of shares of our common stock on the secondary market are not subject to sales charges but may be subject to brokerage commissions or other charges.

This table does not include any sales load that shareholders may have paid in connection with their purchase of shares of our common stock.

(2) The applicable prospectus supplement and any related free writing prospectus will disclose the applicable amount of offering costs and total shareholder transaction expenses that will supersede the information included in this report.

(3) The expenses of the distribution reinvestment plan are included in “Other expenses” in the table.

The plan administrator’s fees are paid by us.

There will be no brokerage charges or other charges to shareholders who participate in the distribution reinvestment plan.

(4) Average net assets attributable to common stock used to calculate the percentages in this table equals our average net assets of approximately $882 million for the year ended December 31, 2023.

(4) Effective upon the Listing on October 5, 2021, our base management fee payable to CIM pursuant to our investment advisory agreement was reduced from an annual rate of 2.0% to an annual rate of 1.5% of the average value of our gross assets (including cash pledged as collateral for our 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 our 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 is further reduced to 1.0% of the average value of our gross assets (including cash pledged as collateral for our secured financing arrangements, but excluding other cash and cash equivalents so that investors do not pay the base management fee on such assets) purchased with leverage resulting in our asset coverage ratio dropping below 200%.

At our Special Meeting of Shareholders on December 30, 2021, shareholders approved a proposal to reduce our asset coverage ratio to 150% (i.e., $2 of debt outstanding for each $1 of equity).

Such asset coverage ratio became effective on December 31, 2021.

(5) The base management fees referenced in the table above are based upon the actual amounts incurred during the year ended December 31, 2023.

Our annual base management fee payable to CIM pursuant to our investment advisory agreement is calculated at a rate of 1.5% of the average value of our gross assets (including cash pledged as collateral for our 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 our 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 is reduced to 1.0% of the average value of our gross assets (including cash pledged as collateral for our secured financing arrangements, but excluding other cash and cash equivalents so that investors do not pay the base management fee on such assets) purchased with leverage resulting in our asset coverage ratio dropping below 200%.

At our Special Meeting of Shareholders on December 30, 2021, shareholders approved a proposal to reduce our asset coverage ratio to 150% (i.e., $2 of debt outstanding for each $1 of equity), which became effective on December 31, 2021.

The annual base management fee is payable to CIM quarterly in arrears and is calculated based on the two most recently completed calendar quarters.

The base management fee for any partial quarter will be appropriately prorated based on the actual number of days elapsed relative to the total number of days in such calendar quarter.

The base management fee referenced in the table above is based upon the actual amounts incurred during the year ended December 31, 2022.

For more detailed information about our base management fee payable to CIM under the terms of the investment advisory agreement, please also see Note 4 “Transactions with Related Parties” of our consolidated financial statements included in this report.

(5) The incentive fees payable to CIM are based on the actual amount of the subordinated incentive fee on income recorded during the year ended December 31, 2022.

(6) The incentive fees payable to CIM referenced in the table above are based on the actual amount of the subordinated incentive fee on income recorded during the year ended December 31, 2023.

For the year ended December 31, 2023, we had no liability for and did not record any capital gains incentive fees.

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The incentive fee consists of two parts.

Effective upon the Listing on October 5, 2021, the hurdle rate was reduced from 1.875% per quarter to 1.625% per quarter, or from an annualized hurdle rate of 7.5% to an annualized hurdle rate of 6.5%.

The first part, which we refer to as the subordinated incentive fee on income, is calculated and payable to CIM quarterly in arrears based upon our “pre-incentive fee net investment income” for the immediately preceding quarter and is subject to a hurdle rate, m easured qu arterly and expressed as a rate of return on our net assets at the beginning of the calendar quarter, equal to 1.625% per quarter, or an annualized hurdle rate of 6.5%.

We pay to CIM (x) 100.0% of our pre-incentive fee net investment income, if any, that exceeds the hurdle rate, but is less than or equal to 1.970% in any calendar quarter (7.879% annualized) and (y) 17.5% of the amount of our pre-incentive fee net investment income, if any, that exceeds 1.970% in any calendar quarter (7.879% annualized).

The subordinated incentive fee on income for any partial quarter will be appropriately prorated based on the actual number of days elapsed relative to the total number of days in such calendar quarter.

The amount in the table is based on our most recent financial performance for the year ended December 31, 2023.

The second part of the incentive fee, which we refer to as the incentive fee on capital gains, is determined and payable to CIM in arrears as of the end of each calendar year (or upon termination of the investment advisory agreement).

Effective upon the Listing on October 5, 2021, this fee was reduced from 20.0% to 17.5% of our incentive fee capital gains, which equal our realized capital gains on a cumulative basis from inception, calculated as of the end of the applicable period, 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.

The second part of the incentive fee, which we refer to as the incentive fee on capital gains, is earned on liquidated investments from our investment portfolio during operations and is determined and payable to CIM in arrears as of the end of each calendar year (or upon termination of the investment advisory agreement).

This fee equals 17.5% of our incentive fee capital gains, which is our realized capital gains on a cumulative basis from inception, calculated as of the end of the applicable period, 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.

The amount in the table assumes that the incentive fee on capital gains will be 0.0% of average net assets and is based on actual and projected realized capital gains on our investments through December 31, 2023 and the unrealized appreciation or depreciation of our investments and assumed converted to realized capital gains or losses on such date.

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Interest payments on borrowed funds includes our interest expense based on borrowings under our $125 million 2026 Notes and our $30 million 2021 More Term Loan for the twelve months ended December 31, 2023, which pay interest at 4.5% and 5.2% per year, respectively.

In addition, interest payments on borrowed funds includes our interest expense based on borrowings under our $675 million JPM Credit Facility, our $150 million UBS Facility and our $50 million 2022 More Term Loan for the twelve months ended December 31, 2022, which bore weighted average interest rates of 4.99%, 5.29% and 5.86%, respectively.

In addition, interest payments on borrowed funds includes our interest expense based on borrowings under our $675 million JPM Credit Facility, our $150 million UBS Facility, our $115 million Series A Notes, our $100 million 2027 Notes and our $50 million 2022 More Term Loan for the twelve months ended December 31, 2023, which bore weighted average interest rates of 8.45%, 8.76%, 8.98 %, 9.97 % and 8.54%, respectively.

We may borrow additional funds from time to time to make investments to the extent we determine that the economic situation is conducive to doing so.

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Our ability to incur additional leverage during 2024 depends, in large part, on our ability to locate additional debt financing on attractive terms or at all, and there is no guarantee we will do so or that such financing will be at the cost noted in the table above.

(7) Other expenses include accounting, legal and auditing fees as well as the reimbursement of the compensation of our chief financial officer, chief compliance officer and their respective staff and other administrative personnel and fees payable to our independent directors.

(8) Other expenses include our overhead expenses, including payments under the administration agreement based on our allocable portion of overhead and other expenses incurred by CIM in performing its obligations under the administration agreement.

Other expenses also include accounting, legal and auditing fees as well as the reimbursement of the compensation of our chief financial officer, chief compliance officer and their respective staff and other administrative personnel and fees payable to our independent directors.

Our short-term investments consist of an investment in the First American Treasury Obligations Fund, Class Z Shares, in which we paid manager fees and expenses equal to 0.18% of our total investment in the fund during the year ended December 31, 2023, which are "acquired fund fees and expenses" and are included within Other expenses in the table above.

The amount presented in the table includes the amounts incurred during 2023.

There have been no “acquired fund fees and expenses.”

For more detailed information about the terms of the administration agreement, please see Note 4 “Transactions with Related Parties” of our consolidated financial statements included in this report.

(9) Total estimated annual expenses as a percentage of average net assets attributable to common stock are higher than the total estimated annual expenses percentage would be for a company that is not leveraged.

We borrow money to leverage our net assets and increase our total assets.

The reason for presenting expenses as a percentage of average net assets attributable to common stock is that our common shareholders bear all our fees and expenses.

The below example demonstrates the projected dollar amount of total cumulative expenses that would be incurred over various periods with respect to a hypothetical investment in our common stock.

In calculating the below expense amounts, we have assumed our annual operating expenses would remain at the percentage levels set forth in the table above and have excluded the subordinated incentive fee on income.

In the event that shares are sold to or through underwriters or agents, a corresponding prospectus supplement and any related free writing prospectus will restate this example to reflect the applicable sales load.

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In addition, the example assumes no sales load.

Also, while the example assumes reinvestment of all distributions at NAV, participants in our distribution reinvestment plan will receive a number of shares of our common stock, determined by dividing the total dollar amount of the distribution payable to a participant by the market price per share of our common stock at the close of trading on the distribution payment date, which may be at, above or below net asset value.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity