What changed in this filing

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Item 1. Business

2025-03-13 compared with 2024-03-14 · 44 added, 32 removed, 691 unchanged (10% of the section changed)

29 unchanged sentences

We have made and intend to make smaller investments in syndicated loan opportunities, which typically include investments in companies with annual EBITDA of greater than $75 million, subject to liquidity and diversification constraints.

In addition, we may selectively target higher return and special situation investments in the secondary loan market through the purchase of illiquid, lightly syndicated first lien loans offered at a discount due to credit rating or other technical considerations.

To enhance our opportunity for gain, we employ leverage as market conditions permit and at the discretion of CIM.

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(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.

Our Common Stock and Listings

Our Common Stock and Exchange Listings

On December 17, 2012, we met our minimum offering requirement of $2,500 in capital raised from persons not affiliated with us, admitted our initial public investors as shareholders and officially commenced operations.

Our initial continuous public offering ended on December 31, 2015, and our follow-on continuous public offering commenced on January 25, 2016 and ended on January 25, 2019, the date on which we closed the public offering of our shares.

Our initial continuous public offering commenced on July 2, 2012 and ended on December 31, 2015, and our follow-on continuous public offering commenced on January 25, 2016 and ended on January 25, 2019, the date on which we closed the public offering of our shares.

On October 5, 2021, our shares of common stock commenced trading on the NYSE under the ticker symbol “CION”, or the Listing.

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On February 26, 2023, our shares of common stock and our Series A Notes listed and commenced trading in Israel on the Tel Aviv Stock Exchange Ltd., or the TASE, under the ticker symbol “CION” and "CION B1", respectively.

For a detailed discussion of our Series A Notes, refer to Note 8 to our consolidated financial statements included in this report.

On September 15, 2023, our shareholders approved a proposal that authorizes us to issue shares of our common stock at prices below the then current NAV per share of our common stock in one or more offerings for a 12-month period following such shareholder approval.

On October 9, 2024, our 7.50% Notes due 2029 listed and commenced trading on the NYSE under the ticker symbol “CICB”.

For a detailed discussion of our Series A Notes and our 2029 Notes, refer to Note 8 to our consolidated financial statements included in this report.

On August 27, 2024, our shareholders approved a proposal that authorizes us to issue shares of our common stock at prices below the then current NAV per share of our common stock in one or more offerings for a 12-month period following such shareholder approval.

As of December 31, 2024, we had not issued any such shares.

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

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.

Declared regular distributions are paid quarterly.

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

Base 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.

Declared base distributions are paid quarterly.

Our management declared and our board of directors ratified distributions for 6, 7 and 5 record dates during the years ended December 31, 2024, 2023 and 2022, respectively.

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Three Months Ended Per Share Amount

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

June 30, 2021 (three record dates) 0.2648 15,000

September 30, 2021 (three record dates) 0.2648 15,027

December 31, 2021 (two record dates) 0.4648 26,474

Total distributions for the year ended December 31, 2021 $ 1.2592 $ 71,530

March 31, 2022 (one record date) $ 0.28 $ 15,948

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Total distributions for the year ended December 31, 2023 $ 1.61 $ 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.

March 31, 2024 (one record date) $ 0.34 $ 18,279

June 30, 2024 (two record dates) 0.41 21,960

September 30, 2024 (one record date) 0.36 19,234

December 31, 2024 (two record dates) 0.41 21,835

Total distributions for the year ended December 31, 2024 $ 1.52 $ 81,308

On March 10, 2025, our co-chief executive officers declared a quarterly base distribution of $0.36 per share for the first quarter of 2025 payable on April 11, 2025 to shareholders of record as of March 28, 2025.

We intend to pay distributions in an amount sufficient to maintain RIC status each year and to avoid any federal income taxes on income.

Therefore, subject to applicable legal restrictions and the sole discretion of our board of directors, we intend to authorize, declare, and pay regular cash distributions on a quarterly basis.

Therefore, subject to applicable legal restrictions and the sole discretion of our board of directors, we intend to authorize, declare, and pay base distributions on a quarterly basis.

However, there can be no assurances that we will maintain positive investment performance in future periods in order to sustain our distributions or be able to pay distributions at all.

We have adopted an “opt out” distribution reinvestment plan pursuant to which shareholders have the full amount of their cash distributions reinvested in additional common stock.

For a detailed discussion of our distributions, refer to Note 5 to our consolidated financial statements included in this report.

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We believe that CION Investments is a leading manager of alternative investment solutions that focuses on alternative credit strategies for individual investors.

CION Investments is headquartered in New York, with offices in Los Angeles and Boston.

CION Investments is headquartered in New York, with offices in Los Angeles.

Mark Gatto and Michael A.

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About CION Investments

CION Investments is a leading manager of investment solutions designed to redefine the way individual investors can build their portfolios and help meet their long-term investment goals.

We believe that CION Investments is a leading manager of investment solutions designed to redefine the way individual investors can build their portfolios and help meet their long-term investment goals.

With more than 30 years of experience in the alternative asset management industry, CION Investments strives to level the playing field by giving investors direct access to asset management historically only available to the largest institutions.

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• The middle-market is a large addressable market that continues to grow .

Approximately 80% of U.S.

middle-market companies reported that overall company performance has improved year-over-year, with the U.S.

middle-market continuing to experience double-digit year-over-year revenue and employment growth.

According to the National Center for the Middle Market Year-End 2024 Middle Market Indicator, there are approximately 200,000 U.S.

middle-market companies employing approximately 48 million people.

Approximately 59% of middle market companies have increased their workforce by an average of 9.6%, which is well above the overall average middle market employment growth rate of 4.8%.

Approximately 63% of middle market companies have increased their workforce by an average of 10.3%, with a majority of such companies projecting a similar growth pace in 2025.

In addition, the U.S.

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middle market generates more than $10 trillion in annual revenue.

The year-over-year revenue growth rate realized by the middle market reached an all-time high of 12.4%, with 83% of middle market companies reporting revenue increases in 2023 and 55% of middle market companies experiencing double-digit growth compared to 2022.

The year-over-year revenue growth rate realized by the middle market reached an average of 12.1%, with 85% of middle market companies reporting revenue increases in 2024.

The National Center for the Middle Market defines middle-market companies as those with $10 million to $1 billion in annual revenue, which we believe has significant overlap with our definition of middle-market companies that generally possess EBITDA of $75 million or less.

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We also expect that private equity firms will continue to pursue acquisitions and will seek to leverage their equity investments with debt financing, including senior debt, unitranche debt, and mezzanine loans provided by companies such as ours.

According to Pitchbook, from 2020 to 2023, the aggregate assets under management in private debt funds, BDCs, and interval funds investing in middle-market companies have reached $869 billion.

According to Pitchbook’s Q3 2024 US PE Middle Market Report, middle-market dealmaking maintained strong momentum throughout 2024, reaching $352.3 billion in deal value by Q3 2024, which ranked as the third-highest total for middle-market buyouts.

Also, adding to the imbalance in the availability of credit is the significant amount of unallocated private equity capital raised since 2014 described above, much of which will require debt financing in the coming years.

As depicted in the chart below, almost $956 billion of unfunded private equity commitments were outstanding through the first quarter of 2023 (Source:

Pitchbook's Q3 2023 Global Private Credit Review).

As depicted in the chart below, almost $914 billion of unfunded private equity commitments were outstanding through the end of 2023 (Source:

Pitchbook's Q3 2024 US PE Breakdown Summary).

* As of 12/31/2023

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• Broad portfolio.

We seek to create a portfolio of companies engaged in a variety of industries and located in a variety of geographic locations, thereby potentially reducing the risk of a downturn in any one industry, including, without limitation, because of inflation, high interest rates, the risk of recession, or geographic location having a disproportionate impact on the value of our portfolio.

We seek to create a portfolio of companies engaged in a variety of industries and located in a variety of geographic locations, thereby potentially reducing the risk of a downturn in any one industry, including, without limitation, because of inflation, high interest rates, or geographic location having a disproportionate impact on the value of our portfolio.

We are not a “diversified company” as such term is defined under the 1940 Act.

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Although CIM will selectively target higher return/special situation investments in the secondary loan market through the purchase of illiquid, lightly syndicated loans, CIM focuses primarily on senior secured first lien loans to private U.S.

middle-market companies rather than relying on such borrower’s capital structure to generate risk-adjusted returns from junior debt or equity investments.

middle-market companies rather than reaching deeper into such borrower’s capital structure to generate risk-adjusted returns from junior debt or equity investments.

In addition to providing us with favorable returns, we believe that this first lien investment focus allows us to mitigate risk in the event of a borrower’s default since we will be in a senior secured first lien position with respect to such borrower’s assets.

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As part of its due diligence process, CIM may consider, alongside other relevant factors, ESG risks, events or conditions that have or could have a material negative impact on the operating and performance metrics of these borrowers in the portfolio.

Depending on the circumstances, examples of ESG risks can include physical environmental risks, climate change transition risks, supply chain disruptions, improper labor practices, lack of board diversity and corruption.

Depending on the circumstances, examples of ESG risks can include physical environmental risks, climate change transition risks, supply chain disruptions, improper labor practices and corruption.

CIM may utilize proprietary research to assess ESG risks that are relevant to our investment.

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To seek to enhance our returns, we employ leverage as market conditions permit and at the discretion of CIM.

Our (i) $675 million senior secured credit facility, or the JPM Credit Facility, with JPMorgan Chase Bank, National Association, or JPM, (ii) $150 million repurchase agreement, or the UBS Facility, with UBS AG, or UBS, (iii) $125 million senior unsecured notes due in 2026, or the 2026 Notes, (iv) $100 million senior unsecured notes due in 2027, or the 2027 Notes, (v) $30 million unsecured term loan, or the 2021 More Term Loan, with More Provident Funds Ltd., or More, (vi) $50 million unsecured term loan, or the 2022 More Term Loan, with More, and (vii) approximately $114.8 million in Series A unsecured notes due in 2026, or the Series A Notes, allow us to borrow money and lever our investment portfolio, subject to the limitations of the 1940 Act, with the objective of increasing our yield.

Our (i) $406.2 million senior secured credit facility, or the JPM Credit Facility, with JPMorgan Chase Bank, National Association, or JPM, (ii) $125 million senior secured credit facility, or the 2025 UBS Credit Facility, with UBS AG, London Branch, or UBS, (iii) $125 million senior unsecured notes due in 2026, or the 2026 Notes, (iv) $200 million senior unsecured notes due in 2027, or the 2027 Notes, (v) $30 million unsecured term loan, or the 2024 Term Loan, with an Israeli institutional investor, (vi) $50 million unsecured term loan, or the 2022 Term Loan, with an Israeli institutional investor, (vii) approximately $114.8 million in Series A unsecured notes due in 2026, or the Series A Notes, and (viii) $172.5 million unsecured notes due in 2029, or the 2029 Notes, allow us to borrow money and lever our investment portfolio, subject to the limitations of the 1940 Act, with the objective of increasing our yield.

This is known as “leverage” and could increase or decrease returns to our shareholders.

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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.

On August 27, 2024, 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 through August 27, 2025, or receive such approval from shareholders in the future, we may issue shares of our common stock at a price below the then current NAV per share of common stock.

As a BDC, we are subject to certain regulatory restrictions in negotiating or investing in certain investments.

150 unchanged sentences

We intend to monitor our compliance with all regulations that are adopted under the Sarbanes-Oxley Act and will take actions necessary to ensure that we are in compliance.

Due to our Listing, we are no longer a “non-accelerated filer” as defined in Rule 12b-2 of the Exchange Act and as a result, we are required to comply with the independent auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, which requires our independent registered public accounting firm to provide an attestation report on the effectiveness of our internal control over financial reporting.

We are required to comply with the independent auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, which requires our independent registered public accounting firm to provide an attestation report on the effectiveness of our internal control over financial reporting.

Complying with Section 404(b) requires a rigorous compliance program as well as adequate time and resources.

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Compliance with Exchange Listing Requirements

Our common stock is listed on the NYSE under the symbol “CION”.

Our common stock and our 2029 Notes are listed on the NYSE under the symbol “CION” and "CICB", respectively.

As a listed company on the NYSE, we are subject to various listing standards including corporate governance listing standards.

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Recent Developments

Q1 2024 Regular Distribution

2025 UBS Credit Facility

On February 13, 2025, Murray Hill Funding II, LLC, or Murray Hill Funding II, our wholly owned, special purpose financing subsidiary, entered into a Termination Agreement with UBS, as lender, Murray Hill Funding, LLC, CIM, as collateral manager, US Bank Trust Company National Association, as trustee, collateral administrator and revolving note agent, and US Bank National Association, as account bank, or together, US Bank, under which the parties agreed to terminate the existing senior secured repurchase facility with UBS, including, without limitation, the Global Master Repurchase Agreement (2000 version) dated as of May 15, 2017, as well as the annexes thereto and each confirmation and transaction supplement thereunder, the Second Amended and Restated Indenture dated as of December 17, 2020, and the Class A-1 Notes and the Class A-R Notes previously purchased by UBS from Murray Hill Funding II under such agreements.

Simultaneously with terminating the senior secured repurchase facility, Murray Hill Funding II, as borrower, entered into a Loan and Security Agreement, or the 2025 UBS Credit Facility, with UBS, as administrative agent, Murray Hill Funding, LLC, as equity holder, CIM, as collateral manager, each of the lenders from time-to-time party thereto, and US Bank, as collateral agent and document custodian.

Under the 2025 UBS Credit Facility, the floating interest rate payable by Murray Hill Funding II on all advances of up to $125,000 was reduced by 0.45% per year, from the three-month SOFR plus a credit spread of 3.20% per year to SOFR plus a credit spread of 2.75% per year.

All outstanding advances must be repaid by Murray Hill Funding II on or prior to the maturity date of February 13, 2028.

Murray Hill Funding II may prepay advances pursuant to the terms and conditions of the 2025 UBS Credit Facility, subject to a 2.0% premium in certain circumstances.

In addition, Murray Hill Funding II will be subject to a non-usage fee of 0.75% per year on the amount, if any, of the aggregate principal amount available under the 2025 UBS Credit Facility that has not been borrowed up to the minimum utilization amount of $100,000.

Q1 2025 Base Distribution

Available Information

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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 1. Business