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 September 30, 2013 or [  ]
 Transition Report Pursuant
  to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from
______________to_________________ Commission File Number: 000-54755 CĪON Investment Corporation (Exact name of registrant as specified in its charter) Maryland
 
 45-3058280(State or other jurisdiction of incorporation or
  organization)
 
 (I.R.S. Employer Identification No.)3 Park Avenue, 36th Floor
  New York, New York
 
 10016(Address of principal executive offices)
 
 (Zip Code)
  (212) 418-4700(Registrant’s telephone number, including area code)Not applicable(Former name, former address and former fiscal year,
  if changed since last report)
  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 and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted 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 and post such files). Yes[  ]No[  ] Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,” “accelerated filer”
and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large
  Accelerated Filer[  ]
 
 Accelerated Filer[  ]Non-Accelerated Filer[x](Do not check if a smaller reporting company)
 
 Smaller
  Reporting Company[  ]
 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 November 8, 2013 was 11,399,542.


---



CĪON
INVESTMENT CORPORATION TABLE OF CONTENTS FORM 10-Q PagePART I -
  FINANCIAL INFORMATIONItem
  1.  Financial StatementsConsolidated
  Balance Sheets
 1Consolidated
  Statements of Operations
 2Consolidated
  Statements of Changes in Net Assets
 3Consolidated
  Statements of Cash Flows
 4Consolidated
  Schedule of Investments
 5Notes to
  Consolidated Financial Statements
 7Item 2.
  Management’s Discussion and Analysis of Financial Condition and Results of
  Operations
 25Item 3.
  Quantitative and Qualitative Disclosures About Market Risk
 39Item 4.
  Controls and Procedures
 40PART II – OTHER
  INFORMATIONItem 1. Legal
  Proceedings
 41Item
  1A. Risk Factors
 41Item 2.
  Unregistered Sales of Equity Securities and Use of Proceeds
 41Item 3.
  Defaults Upon Senior Securities
 41Item 4. Mine
  Safety Disclosures
 41Item 5. Other
  Information
 41Item 6.
  Exhibits
 42Signatures
 44


---



PART I – FINANCIAL INFORMATION  Item 1. Financial Statements CĪON Investment CorporationConsolidated Balance SheetsSeptember 30,
 
 December 31,2013
 
 2012(unaudited)AssetsInvestments, at
  fair value (amortized cost of $51,690,233 and $3,787,873, respectively)
 $
 52,235,327
 
 $
 3,797,806Cash
 
 91,806
 
 
 -Due from
  counterparty(2)
 
 19,810,924
 
 
 729,325Reimbursement
  from IIG, net(1)
 
 1,260,234
 
 
 25,807Deferred offering
  expenses, net
 
 210,959
 
 
 958,904Prepaid expenses
 
 158,019
 
 
 105,802Interest
  receivable on investments
 
 163,475
 
 
 187Receivable due
  on investments sold and repaid
 
 26,342
 
 
 -Unrealized
  appreciation on total return swap(2)
 
 879,402
 
 
 12,493Receivable due
  on total return swap(2)
 
 2,237,080
 
 
 -Total assets
 $
 77,073,568
 
 $
 5,630,324Liabilities and Shareholders' EquityLiabilitiesPayable for
  investments purchased
 $
 3,812,200
 
 $
 990,000Shareholders'
  distributions payable(3)
 
 447,039
 
 
 -Accounts payable
  and accrued expenses
 
 616,891
 
 
 57,427Due to IIG -
  offering expenses(1)
 
 550,000
 
 
 -Commissions
  payable
 
 -
 
 
 23,100Financing
  arrangement
 
 -
 
 
 72,682Total
  liabilities
 
 5,426,130
 
 
 1,143,209Commitments and
  contingencies (Note 10)Shareholders'
  EquityCommon stock,
  $0.001 par value; 500,000,000 shares authorized;7,715,146 and
  500,338 shares issued and outstanding, respectively(1)
 
 7,715
 
 
 500Capital in
  excess of par value
 
 70,206,374
 
 
 4,461,453Accumulated
  undistributed net investment income
 
 8,853
 
 
 2,692Accumulated
  undistributed net realized gain from investments
 
 -
 
 
 44Accumulated net
  unrealized appreciation on investments
 
 545,094
 
 
 9,933Accumulated net
  unrealized appreciation on total return swap(2)
 
 879,402
 
 
 12,493Total
  shareholders' equity
 
 71,647,438
 
 
 4,487,115Total
  liabilities and shareholders' equity
 $
 77,073,568
 
 $
 5,630,324Net asset value
  per share of common stock at end of period
 $
 9.29
 
 $
 8.97Shares of common
  stock outstanding
 
 7,715,146
 
 
 500,338(1) See Note 3
  for a discussion of expense reimbursements from ICON Investment Group, LLC,
  or IIG.(2) See Note 6
  for a discussion of the Company’s total return swap agreement.(3) See Note 4
  for a discussion of the source of distributions paid by the Company.See accompanying notes to consolidated
  financial statements.
  1


---



CĪON
Investment Corporation Consolidated Statements of Operations (unaudited)  Three Months Ended
  September 30,
 
 Nine Months Ended
  September 30,
 
 For the Period from
  January 31, 2012
  (Inception) through
  September 30, 20122013
 
 
 2012
 
 2013Investment
  incomeInterest income
 $
 494,701
 
 $
 -
 
 $
 808,321
 
 $
 -Operating
  expensesManagement fees
 
 248,225
 
 
 -
 
 
 413,748
 
 
 -Administrative
  services expense
 
 144,462
 
 
 -
 
 
 715,653
 
 
 -Capital gains
  incentive fee(1)
 
 128,766
 
 
 -
 
 
 303,494
 
 
 -General and
  administrative(2)
 
 667,704
 
 
 3,000
 
 
 1,928,582
 
 
 3,000Total expenses
 
 1,189,157
 
 
 3,000
 
 
 3,361,477
 
 
 3,000Less: expense
  reimbursement from IIG(3)
 
 (1,296,834)
 
 
 (3,000)
 
 
 (3,263,743)
 
 
 (3,000)Net operating
  expenses
 
 (107,677)
 
 
 -
 
 
 97,734
 
 
 -Net investment
  income
 
 602,378
 
 
 -
 
 
 710,587
 
 
 -Realized and
  unrealized gainsNet realized
  gain from investments
 
 1,381
 
 
 -
 
 
 16,352
 
 
 -Net change in
  unrealized appreciation on investments
 
 220,148
 
 
 -
 
 
 535,161
 
 
 -Net realized
  gain on total return swap(4)
 
 494,891
 
 
 -
 
 
 1,096,371
 
 
 -Net change in
  unrealized appreciation on total return swap(4)
 
 588,808
 
 
 -
 
 
 866,909
 
 
 -Total net
  realized and unrealized gains
 
 1,305,228
 
 
 -
 
 
 2,514,793
 
 
 -Net increase in
  net assets resulting from operations
 $
 1,907,606
 
 
 -
 
 $
 3,225,380
 
 $
 -Per share
  information—basic and dilutedNet increase in
  net assets per share resulting from operations
 $
 0.32
 
 
 -
 
 $
 0.96
 
 $
 -Weighted average
  shares of common stock outstanding
 
 6,019,520
 
 
 111
 
 
 3,371,894
 
 
 111(1)
 See Note 2 for a
  discussion of the methodology employed by the Company in calculating the
  capital gains incentive fee.(2)
 See Note 8 for
  details of the Company's general and administrative expense.(3)
 See Note 3 for a
  discussion of expense reimbursements from IIG.(4)
 See Note 6 for a
  discussion of the Company’s total return swap agreement.See accompanying notes to consolidated
  financial statements.
  2


---



CĪON
Investment Corporation Consolidated Statements of Changes in Net
Assets (unaudited)  For the Period fromJanuary 31, 2012Nine Months Ended
 
 (Inception) throughSeptember 30, 2013
 
 September 30, 2012Changes in
  net assets from operations:Net investment
  income
 $
 710,587
 
 $
 -Net realized
  gain from investments
 
 16,352
 
 
 -Net change in
  unrealized appreciation on investments
 
 535,161
 
 
 -Net realized
  gain on total return swap(1)
 
 1,096,371
 
 
 -Net change in
  unrealized appreciation on total return swap(1)
 
 866,909
 
 
 -Net increase in
  net assets resulting from operations
 
 3,225,380
 
 
 -Shareholder
  distributions:Distributions
  from net investment income(2)
 
 (704,426)
 
 
 -Distributions
  from net realized gains
 
 (1,112,767)
 
 
 -Net decrease in
  net assets from shareholder distributions
 
 (1,817,193)
 
 
 -Changes in
  net assets from capital share transactions:Issuance of
  common stock, net of issuance costs of $6,545,134 and $0, respectively
 
 65,858,114
 
 
 1,000Reinvestment of
  shareholder distributions
 
 641,967
 
 
 -Amortization of
  deferred offering expenses
 
 (747,945)
 
 
 -Net increase in
  net assets resulting from capital share transactions
 
 65,752,136
 
 
 1,000Total increase
  in net assets
 
 67,160,323
 
 
 1,000Net assets at
  beginning of period
 
 4,487,115
 
 
 -Net assets at
  end of period
 $
 71,647,438
 
 $
 1,000Net asset value
  per share of common stock at end of period
 $
 9.29
 
 $
 9.00Shares of common
  stock outstanding at end of period
 
 7,715,146
 
 
 111Undistributed
  net investment income at end of period
 $
 8,853
 
 $
 -(1) See Note 6
  for a discussion of the Company’s total return swap agreement.(2) See Note 4
  for a discussion of the source of distributions paid by the Company.See accompanying notes to consolidated
  financial statements.
 3


---



CĪON Investment
Corporation Consolidated Statements of Cash Flows (unaudited)  For the Period fromJanuary 31, 2012Nine Months Ended
 
 (Inception) throughSeptember 30, 2013
 
 September 30, 2012Operating
  activities:Net increase in
  net assets resulting from operations
 $
 3,225,380
 
 $
 -Adjustments to
  reconcile net increase in net assets resulting fromoperations to
  net cash (used in) provided by operating activities:Net accretion of
  discount on investments
 
 (14,225)
 
 
 -Proceeds from
  principal repayment of investments
 
 769,044
 
 
 -Purchase of
  investments
 
 (39,867,686)
 
 
 -Net change in
  short term investments
 
 (9,914,471)
 
 
 -Proceeds from
  sale of investments
 
 1,141,330
 
 
 -Net realized
  gain from investments
 
 (16,352)
 
 
 -Net change in
  unrealized appreciation on investments
 
 (535,161)
 
 
 -Net change in
  unrealized appreciation on total return swap(1)
 
 (866,909)
 
 
 -Due from
  counterparty
 
 (19,081,599)
 
 
 -Reimbursement
  from IIG, net(2)
 
 (1,234,427)
 
 
 -Prepaid expenses
 
 (52,217)
 
 
 -Interest
  receivable on investments
 
 (163,288)
 
 
 -Receivable due
  on investments sold and repaid
 
 (26,342)
 
 
 -Receivable due
  on total return swap(1)
 
 (2,237,080)
 
 
 -Payable for
  investments purchased
 
 2,822,200
 
 
 -Accounts payable
  and accrued expenses
 
 559,464
 
 
 -Due to IIG -
  offering expenses
 
 550,000
 
 
 -Other
  liabilities
 
 -
 
 
 23Net cash (used
  in) provided by operating activities
 
 (64,942,339)
 
 
 23Financing
  activities:Gross proceeds
  from issuance of common stock
 
 72,403,248
 
 
 1,000Commissions and
  dealer manager fees paid
 
 (6,568,234)
 
 
 -Reinvestment of
  shareholder distributions
 
 641,967
 
 
 -Shareholder
  distributions paid(3)
 
 (1,370,154)
 
 
 -Repayment of
  financing arrangement
 
 (72,682)
 
 
 -Net cash
  provided by financing activities
 
 65,034,145
 
 
 1,000Net increase in
  cash
 
 91,806
 
 
 1,023Cash, beginning
  of period
 
 -
 
 
 -Cash, end of
  period
 $
 91,806
 
 $
 1,023Supplemental
  non-cash financing activities:Deferred
  offering expenses charged to shareholders' equity
 $
 747,945
 
 $
 -Shareholders'
  distributions payable
 $
 447,039
 
 $
 -(1) See Note 6
  for a discussion of the Company’s total return swap agreement.(2) See Note 3
  for a discussion of expense reimbursements from IIG.(3) See Note 4
  for a discussion of the source of distributions paid by the Company.See accompanying notes to consolidated
  financial statements.
  4


---



CĪON Investment Corporation Consolidated Schedule of Investments September 30, 2013 (unaudited)  Portfolio
  Company(a)
 
 Industry
 
 Principal/Par
  Amount
 
 Amortized Cost
 
 Fair Value(b)Senior
  Secured First Lien Term Loans - 47.5%Captive
  Resources Midco, LLC, L+550, 1.25% LIBOR Floor, 10/31/2018
 
 Insurance
 
 $
 990,000
 
 $
 974,704
 
 $
 972,675CHI Overhead
  Doors, L+425, 1.25% LIBOR Floor, 3/18/2019
 
 Building
  Materials
 
 
 975,559
 
 
 971,035
 
 
 974,949Custom Ecology,
  Inc., L+550, 1.25% LIBOR Floor, 6/26/2019
 
 Environmental
  Services
 
 
 1,905,225
 
 
 1,886,591
 
 
 1,912,370Distribution
  International, Inc., L+650, 1.00% LIBOR Floor, 7/16/2019
 
 Construction
 
 
 2,493,750
 
 
 2,474,186
 
 
 2,482,777F+W Media, Inc.,
  L+650, 1.25% LIBOR Floor, 6/30/2019
 
 Media
 
 
 1,995,000
 
 
 1,839,601
 
 
 1,951,778Fender Musical
  Instruments Corp., L+450, 1.25% LIBOR Floor, 4/3/2019
 
 Entertainment
  & Leisure
 
 
 481,250
 
 
 476,724
 
 
 483,858H.D. Vest, Inc.,
  L+450, 1.25% LIBOR Floor, 12/18/2018(d)
 
 Financial
  Services
 
 
 601,219
 
 
 596,820
 
 
 598,213Landslide
  Holdings, Inc., L+425, 1.00% LIBOR Floor, 8/9/2019
 
 Computers &
  Electronics
 
 
 2,455,845
 
 
 2,431,477
 
 
 2,474,264Merrill Corp.,
  L+625, 1.00% LIBOR Floor, 3/8/2018
 
 Printing &
  Publishing
 
 
 697,496
 
 
 691,113
 
 
 702,727National
  Surgical Hospitals, Inc., L+450, 1.25% LIBOR Floor, 8/1/2019
 
 Healthcare
 
 
 3,500,000
 
 
 3,465,000
 
 
 3,500,000Plano Molding
  Co. Inc., L+425, 1.00% LIBOR Floor, 12/21/2017
 
 Chemicals
 
 
 962,500
 
 
 954,161
 
 
 962,500Prowler
  Acquisition Corp., L+475, 1.25% LIBOR Floor, 3/19/2019
 
 Oil & Gas
 
 
 1,950,000
 
 
 1,930,500
 
 
 1,940,250SK Spice
  S.Á.R.L, L+825, 1.25% LIBOR Floor, 9/30/2018(c)
 
 Textile &
  Apparel Mfg.
 
 
 1,780,000
 
 
 1,744,400
 
 
 1,762,200Smile Brands
  Group Inc., L+625, 1.25% LIBOR Floor, 8/16/2019
 
 Healthcare
 
 
 5,000,000
 
 
 4,901,286
 
 
 4,939,075Sprint
  Industrial Holdings, LLC, L+575, 1.25% LIBOR Floor, 5/14/2019
 
 Oil & Gas
 
 
 1,197,000
 
 
 1,185,373
 
 
 1,206,726Telecommunications
  Management, LLC, L+400, 1.00% LIBOR Floor, 4/30/2020
 
 Telecommunications
 
 
 535,513
 
 
 533,064
 
 
 535,848The TOPPS
  Company, Inc., L+600, 1.25% LIBOR Floor, 10/2/2018(c)
 
 Entertainment
  & Leisure
 
 
 2,110,000
 
 
 2,067,800
 
 
 2,120,550Total Safety W3,
  L+450, 1.25% LIBOR Floor, 3/13/2020
 
 Professional
  & Business Services
 
 
 497,500
 
 
 495,094
 
 
 503,097Wastequip, LLC,
  L+450, 1.00% LIBOR Floor, 8/9/2019
 
 Manufacturing
 
 
 2,992,500
 
 
 2,977,587
 
 
 3,003,722Westway Group,
  L+400, 1.00% LIBOR Floor, 2/27/2020
 
 Food &
  Beverage
 
 
 995,000
 
 
 990,447
 
 
 1,002,467Total Senior
  Secured First Lien Term Loans
 
 
 
 
 
 
 
 33,586,963
 
 
 34,030,046Senior
  Secured Second Lien Term Loans - 9.0%Centaur Gaming,
  L+750, 1.25% LIBOR Floor, 2/20/2020
 
 Gaming &
  Hotels
 
 
 500,000
 
 
 495,213
 
 
 505,000GCA Services
  Group, Inc., L+800, 1.25% LIBOR Floor, 11/1/2020
 
 Professional
  & Business Services
 
 
 1,000,000
 
 
 995,298
 
 
 1,020,000H.D. Vest, Inc.,
  L+800, 1.25% LIBOR Floor, 6/18/2019(d)
 
 Financial
  Services
 
 
 854,000
 
 
 843,714
 
 
 845,460Healogics, Inc.,
  L+800, 1.25% LIBOR Floor, 2/5/2020
 
 Healthcare
 
 
 500,000
 
 
 495,373
 
 
 512,085LTS Buyer LLC,
  L+675, 1.25% LIBOR Floor, 4/12/2021
 
 Telecommunications
 
 
 500,000
 
 
 495,081
 
 
 507,500Securus
  Technologies Holdings, Inc., L+775, 1.25% LIBOR Floor, 4/30/2021
 
 Telecommunications
 
 
 500,000
 
 
 495,103
 
 
 490,314SESAC Holdco II,
  LLC, L+875, 1.25% LIBOR Floor, 8/8/2019
 
 Media
 
 
 1,500,000
 
 
 1,522,947
 
 
 1,537,500Sprint
  Industrial Holdings, LLC, L+1000, 1.25% LIBOR Floor, 11/14/2019
 
 Oil & Gas
 
 
 500,000
 
 
 490,231
 
 
 503,750Telecommunications
  Management, LLC, L+800, 1.00% LIBOR Floor, 10/30/2020
 
 Telecommunications
 
 
 543,290
 
 
 538,077
 
 
 551,439Total Senior
  Secured Second Lien Term Loans
 
 
 
 
 
 
 
 6,371,037
 
 
 6,473,048Short Term
  Investments - 16.4%(e)First American
  Treasury Obligations Fund, Class Z Shares(f)
 
 
 
 
 11,732,233
 
 
 11,732,233
 
 
 11,732,233Total Short
  Term Investments
 
 
 
 
 
 
 
 11,732,233
 
 
 11,732,233TOTAL
  INVESTMENTS - 72.9%
 
 
 
 
 
 
 $
 51,690,233
 
 $
 52,235,327OTHER ASSETS
  IN EXCESS OF LIABILITIES - 27.1%
 
 
 
 
 
 
 
 
 
 $
 19,412,111NET ASSETS -
  100%
 
 
 
 
 
 
 
 
 
 $
 71,647,438TOTAL RETURN
  SWAP - 1.2%
 
 
 
 Notional Amount
 
 
 
 
 Unrealized AppreciationCitibank TRS
  Facility (see Note 6)
 
 
 
 $
 71,875,170
 
 
 
 
 $
 879,402(a)
 All of the Company's debt 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. The Company does not control and is not an affiliate of
  any of the portfolio companies in its investment portfolio.(b)
 Fair value determined by the Company’s board of directors (see
  Note 7).(c)
 Position or portion thereof unsettled as of September 30, 2013.(d)
 The investment 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 that company’s total assets as defined under
  Section 55 of the 1940 Act. As of September 30, 2013, 98.0% of the Company’s
  total assets represented qualifying assets. In addition, as described in Note
  6, the Company calculates its compliance with the qualifying asset test on a
  “look through” basis by treating each loan underlying the total return swap
  as either a qualifying asset or non-qualifying asset based on whether the
  obligor is an eligible portfolio company. On this basis, 75.6% of the
  Company’s total assets represented qualifying assets as of September 30,
  2013.(e)
 Short term investments represent highly liquid investments with
  original maturity dates of three months or less.(f)
 Effective yield as of September 30, 2013 is <0.01%.See accompanying notes to consolidated
  financial statements.
 5


---



CĪON Investment Corporation Consolidated Schedule of Investments December 31, 2012  Portfolio
  Company(a)
 
 Industry
 
 Principal/Par
  Amount
 
 Amortized
  Cost
 
 Fair Value(b)Senior
  Secured First Lien Term Loans - 44.1%Captive
  Resources Midco, LLC, L+550, 1.25% LIBOR Floor, 10/31/2018
 
 Insurance
 
 $
 997,500
 
 $
 980,111
 
 $
 980,044Plano Molding
  Co. Inc., L+450, 1.25% LIBOR Floor, 12/21/2017(c)
 
 Chemicals
 
 
 1,000,000
 
 
 990,000
 
 
 1,000,000Total Senior
  Secured First Lien Term Loans
 
 
 
 
 
 
 
 1,970,111
 
 
 1,980,044Short Term
  Investments - 40.5%(d)First American
  Treasury Obligations Fund, Class Z Shares(e)
 
 
 
 
 1,817,762
 
 
 1,817,762
 
 
 1,817,762Total Short
  Term Investments
 
 
 
 
 
 
 
 1,817,762
 
 
 1,817,762TOTAL
  INVESTMENTS - 84.6%
 
 
 
 
 
 
 $
 3,787,873
 
 $
 3,797,806OTHER ASSETS
  IN EXCESS OF LIABILITIES - 15.4%
 
 
 
 
 
 
 
 
 
 $
 689,309NET ASSETS -
  100%
 
 
 
 
 
 
 
 
 
 $
 4,487,115TOTAL RETURN
  SWAP - 0.3%
 
 
 
 Notional Amount
 
 
 
 
 Unrealized AppreciationCitibank TRS
  Facility (see Note 6)
 
 
 
 $
 2,883,100
 
 
 
 
 $
 12,493(a)
 All of the
  Company's debt investments are issued by eligible U.S. portfolio companies,
  as defined in the 1940 Act. The Company does not control and is not an
  affiliate of any of the portfolio companies in its investment portfolio.(b)
 Fair value
  determined by the Company’s board of directors (see Note 7).(c)
 Position or
  portion thereof unsettled as of December 31, 2012.(d)
 Short term
  investments represent highly liquid investments with original maturity dates
  of three months or less.(e)
 Effective yield
  as of December 31, 2012 is <0.01%.See accompanying notes to consolidated
  financial statements.
 6


---



CĪON INVESTMENT CORPORATION NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS September 30, 2013 (unaudited)
 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
$2,500,000, or the minimum offering requirement, and commenced operations. The
Company is a newly organized, 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 anticipates that its portfolio
will be comprised primarily of investments in senior secured loans and, to a
lesser extent, second lien loans and long-term subordinated loans, referred to
as mezzanine loans, of private and thinly traded U.S. middle-market companies. The Company is
managed by CĪON Investment Management, LLC, or CIM, a registered
investment adviser and an affiliate of the Company. CIM oversees the management
of the Company’s activities and is responsible for making investment decisions
for the Company’s investment portfolio. The Company and CIM have engaged Apollo
Investment Management, L.P., or AIM, a subsidiary of Apollo Global Management,
LLC, or, together with its subsidiaries, Apollo, a leading global alternative
investment manager, to act as the Company’s investment sub-adviser. As of September
30, 2013, the Company had sold 7,715,146 shares for gross proceeds of
approximately $77,684,000 at an average price per share of $10.07. The gross
proceeds received include reinvested shareholder distributions of $641,967, for
which the Company issued 65,909 shares of common stock. Since commencing its
continuous public offering on July 2, 2012 and through November 8, 2013, the
Company had sold 11,399,542 shares of common stock for gross proceeds of
approximately $115,158,000 at an average price per share of $10.10. The gross
proceeds received include reinvested shareholder distributions of $1,143,524,
for which the Company issued 119,898 shares of common stock.  On December 28, 2012, January 31, 2013,
March 14, 2013, May 15, 2013 and August 15, 2013, the Company’s board of
directors increased the public offering price per share of common stock under
the Company’s offering to $10.04, $10.13, $10.19, $10.24 and $10.32 per share,
respectively, to ensure that the associated offering price per share, net of
sales commissions and dealer manager fees, equaled or exceeded the net asset
value per share on each subsequent subscription closing date and distribution
reinvestment date.  Note 2. Summary of Significant Accounting
Policies Basis of Presentation 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 with 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, 2012 and for the period from January
31, 2012 (Inception) through December 31, 2012 included in the Company’s Annual
Report on Form 10-K/A. Operating results for the three and nine months ended September
30, 2013 are not necessarily indicative of the results that may be expected for
the full year ending December 31, 2013. The December 31, 2012
consolidated balance sheet and the consolidated schedule of investments are
derived from the 2012 audited consolidated financial statements. From January 31,
2012 (Inception) until satisfying the minimum offering requirement on December
17, 2012, the Company had no operating activities except for matters relating
to its organization and registration as a non-diversified, closed-end
management investment company. As a result, there are no material consolidated
statements of operations data for the three months ended September 30, 2012 or
for the period from January 31, 2012 (Inception) through September 30, 2012. Certain
reclassifications have been made to the accompanying consolidated financial
statements in prior periods to conform to the current period presentation. 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.  7


---



CĪON INVESTMENT CORPORATION NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS September 30, 2013 (unaudited)
 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 $11,732,233 of such investments at September 30,
2013, which are included in investments, at fair value on the accompanying
consolidated balance sheets and on the consolidated schedule of investments. Organization Costs Organization
costs include, among other things, the cost of organizing the Company as a
Maryland corporation, including the cost of legal services and other fees
pertaining to the organization of the Company. All organization costs have been
funded by IIG and its affiliates and there is no liability for these
organization costs to the Company until IIG and its affiliates submit such
costs for reimbursement. The Company will expense organization costs when
incurred, if and when IIG and its affiliates submit such costs for reimbursement.
At September 30, 2013, IIG and its affiliates had previously incurred
approximately $192,000 of organization costs, which may be subject to
reimbursement by the Company. No additional organization costs have been
incurred subsequent to September 30, 2013 (see Note 3). Offering Expenses Offering expenses include, among other
things, legal fees and other costs pertaining to the preparation of the
Company’s registration statement in connection with the continuous public
offering of the Company’s shares. Certain offering expenses have been funded by
IIG and its affiliates and there is no liability for these offering expenses to
the Company until IIG and its affiliates submit such costs for reimbursement.
Upon meeting the minimum offering requirement on December 17, 2012, the Company
incurred and capitalized offering expenses of $1,000,000 that were submitted
for reimbursement by IIG (see Note 3). These expenses are amortized over a
twelve month period as an adjustment to capital in excess of par value. The unamortized
balance of these expenses is reflected in the consolidated balance sheets as
deferred offering expenses, net. The Company will expense any additional
offering expenses incurred by IIG and its affiliates if and when IIG and its
affiliates submit such costs for reimbursement. During the three and nine
months ended September 30, 2013, the Company directlyincurred
$403,786 and $1,023,105, respectively, inoffering expenses included in
general and administrative expense in the consolidated statements of
operations. At September 30, 2013, IIG and its affiliates have incurred approximately $825,000 of unreimbursedoffering
expenses, which may be subject to reimbursement by the Company. No additional
offering expenses have been incurred by IIG and its affiliates subsequent to
September 30, 2013 (see Note 3).  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 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 qualifies as a RIC and satisfies the annual distribution
requirement, the Company will not have to pay 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% of net ordinary income, 98.2% of any capital gains,
if any, and any recognized and undistributed income from prior years for which
it paid no federal income taxes. Book and tax basis 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. During the
three and nine months ended September 30, 2013, the Company declared
distributions of approximately $1,090,000 and $1,817,000, respectively.  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. As of and for the three and nine
months ended September 30, 2013, the Company did not have any uncertain tax
positions. Use of Estimates The preparation
of the consolidated financial statements in conformity with GAAP requires the
Company to makeestimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results may materially
differ from those estimates. 8


---



CĪON INVESTMENT CORPORATION NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS September 30, 2013 (unaudited)
 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.
Accounting Standards Codification Topic 820, Fair Value Measurements and
Disclosure, or ASC Topic 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
Topic 820 also establishes a three-tier fair value hierarchy, which prioritizes
the inputs used in measuring fair value. These tiers include: Level 1, defined
as observable inputs such as quoted prices in active markets; Level 2, defined
as observable inputs such as quoted prices for similar securities in active
markets and quoted prices for identical securities where there is little or no
activity in the market; and Level 3, defined as unobservable inputs for which
little or no market data exists, therefore requiring an entity to develop its
own assumptions. For each investment, CIM will attempt to obtain the
most recent closing public market price. If no sales of such investment
occurred on the determination date, such investment will be valued at the
midpoint of the “bid” and the “ask” price at the close of business on such day.
Portfolio securities that carry certain restrictions on sale will typically be
consistently valued at a discount from the public market value of the security.
Loans or investments traded over-the-counter and not listed on an exchange are
valued at a price obtained from third-party pricing services, including, where
appropriate, multiple broker dealers, as determined by CIM. Notwithstanding the foregoing, if in the reasonable judgment
of CIM, the price for any securities held by the Company and determined in the
manner described above does not accurately reflect the fair value of such
security, CIM will value such security at a price that reflects such security’s
fair value and report such change in the valuation to the board of directors or
its designee as soon as practicable. Any securities or other assets that are not publicly
traded or for which a market price is not otherwise readily available will be
valued at a price that reflects its fair value. With respect to such
investments, the investments will be reviewed and valued using one or more of
the following types of analyses: i.Market comparable statistics and
public trading multiples discounted for illiquidity, minority ownership and
other factors for companies with similar characteristics. ii.Valuations implied by third-party
investments in the applicable portfolio companies. iii.Discounted cash flow analysis,
including a terminal value or exit multiple.  Determination of fair value involves subjective
judgments and estimates. Accordingly, these notes to the Company’s consolidated
financial statements refer to the uncertainty with respect to the possible
effect of such valuations, and any change in such valuations, on the Company’s
consolidated financial statements. Below is a description of factors that the
Company’s board of directors may consider when valuing the Company’s equity and
debt investments where a market price is not readily available: ·the size and scope
of a portfolio company and its specific strengths and weaknesses; ·prevailing
interest rates for like securities; ·expected
volatility in future interest rates; ·leverage; ·call features, put
features and other relevant terms of the debt; ·the borrower’s
ability to adequately service its debt; ·the fair market
value of the portfolio company in relation to the face amount of its
outstanding debt; ·the quality of
collateral securing the Company’s debt investments; ·multiples of earnings before
interest, taxes, depreciation and amortization, or EBITDA, cash flows, net
income, revenues or, in some cases, book value or liquidation value; and ·other factors
deemed applicable. 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. 9


---



CĪON INVESTMENT CORPORATION NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS September 30, 2013 (unaudited)
 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. Given the
expected types of investments, excluding short term investments that are
classified as Level 1, the Company expects portfolio holdings to be classified
as Level 2 or Level 3. Due to the uncertainty inherent in the valuation
process, particularly for Level 2 and Level 3 investments, such fair value
estimates may differ materially from the values that would have been used had
an active market for the securities 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 the Company ultimately realizes on these
investments to materially differ from the valuations currently assigned. 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. The Company does not accrue as a receivable interest or
dividends on loans and debt securities if it has reason to doubt the ability to
collect such income. Loan origination fees, original issue discounts, and
market discounts/premiums are recorded and such amounts are amortized as
adjustments to interest income over the respective term of the loan. Upon the
prepayment of a loan or debt security, any unamortized loan origination fees
are recorded as interest income. The Company records prepayment premiums on
loans and debt securities as interest income when it receives such amounts. 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 specific identification method. The Company measures realized gains or
losses by the difference between the net proceeds from the repayment or sale
and the amortized cost basis of the investment, without regard to unrealized
appreciation or depreciation previously recognized, but considering unamortized
upfront fees and prepayment penalties. 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. Derivative Instrument The Company’s
only derivative instrument is a total return swap, or TRS. The Company marks
its derivative to market through net changes in unrealized appreciation on the
TRS in the consolidated statements of operations. 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 will equal 20% of the Company’s incentive fee capital gains (i.e., the
Company’s realized capital gains on a cumulative basis from inception,
calculated as of the end of each calendar year, computed net of all realized
capital losses and unrealized capital depreciation on a cumulative basis), less
the aggregate amount of any previously paid capital gains incentive fees. On a
cumulative basis and to the extent that all realized capital losses and
unrealized capital depreciation exceed realized capital gains as well as the
aggregate realized net capital gains for which a fee has previously been paid,
the Company would not be required to pay CIM a capital gains incentive fee. On
a quarterly basis, the Company accrues for the capital gains incentive fee by
calculating such fee as if it were due and payable as of the end of such
period. While the investment advisory agreement
with CIM neither includes nor contemplates the inclusion of unrealized gains in
the calculation of the capital gains incentive fee, pursuant to an
interpretation of the American Institute for Certified Public Accountants, or
AICPA, Technical Practice Aid for investment companies, the Company accrues
capital gains incentive fees on unrealized gains. This accrual reflects the
incentive fees that would be payable to CIM if the Company’s entire investment
portfolio was liquidated at its fair value as of the balance sheet date even
though CIM is not entitled to an incentive fee with respect to unrealized gains
unless and until such gains are actually realized. Net Increase in Net Assets per Share Net increase in
net assets per share is calculated based upon the daily weighted average number
of shares of common stock outstanding during the reporting period. Distributions Distributions to
shareholders are recorded as of the record date. The amount to be paid as a
distribution is determined by the board of directors on a monthly basis. Net
realized capital gains, if any, are distributed or deemed distributed at least
annually. 10


---



CĪON INVESTMENT CORPORATION NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS September 30, 2013 (unaudited)
 Note 3. Transactions with Related Parties  The Company has entered into an investment
advisory agreement with CIM. Pursuant to the investment advisory agreement, CIM
will be 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. The incentive fee consists of two
parts. The first part, which is referred to as the subordinated incentive fee
on income, will be calculated and payable quarterly in arrears based on
“pre-incentive fee net investment income” for the immediately preceding quarter
and will be 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
second part of the incentive fee, which is referred to as the incentive fee on
capital gains, is described in Note 2.  The Company began accruing fees under the
investment advisory agreement on December 17, 2012, upon the commencement of
the Company’s operations. For the three and nine months ended September 30,
2013, CIM earned $248,225 and $413,748, respectively, in management fees. For
the three and nine months ended September 30, 2013, all management fees were
reimbursed to the Company by IIG in accordance with the expense support and
conditional reimbursement agreement entered into with IIG, or the expense
support and conditional reimbursement agreement.  The Company accrues the capital gains
incentive fee based on net realized and unrealized gains; however, under the
terms of the investment advisory agreement, the fee payable to CIM is based on
net realized gains and no such fee is payable with respect to unrealized gains
unless and until such gains are actually realized. For the three months ended
September 30, 2013, the Company recorded capital gains incentive fees of
$128,766 based on the performance of its investment portfolio, of which
$100,829 was based on net unrealized gains and $27,937 was based on realized
gains. For the nine months ended September 30, 2013, the Company recorded
capital gains incentive fees of $303,494 based on the performance of its
investment portfolio, of which $181,326 was based on net unrealized gains and
$122,168 was based on realized gains. For the three and nine months ended
September 30, 2013, all incentive fees were reimbursed to the Company by IIG in
accordance with the expense support and conditional reimbursement agreement.  On January 30, 2013, the Company entered
into the expense support and conditional reimbursement agreement with IIG,
whereby IIG agreed to reimburse the Company for expenses 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. Pursuant to the expense support and
conditional reimbursement agreement, the Company will have a conditional
obligation to reimburse IIG for any amounts funded by IIG under such agreement
if, during any fiscal quarter occurring within three years of the date on which
IIG funded such amount, 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
exceeds the distributions paid by the Company to its shareholders. For the
three and nine months ended September 30, 2013, the total expense reimbursement
from IIG was $1,296,834 and $3,263,743, respectively, relating to certain
operating expenses.  The Company may fund its cash distributions
to shareholders from any sources of funds available to the Company, including
offering proceeds, 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
reimbursements from IIG, which are subject to recoupment. The Company has not
established limits on the amount of funds it may use from available sources to
make distributions. For a significant time after the commencement of its
offering, a substantial portion of the Company’s distributions may result from
expense reimbursements from IIG, which are subject to repayment by the Company
within three years. The purpose of this arrangement is to avoid such
distributions being characterized as returns of capital. Shareholders should
understand that any such distributions are not based on the Company’s
investment performance, and can only be sustained if the Company achieves
positive investment performance in future periods and/or IIG continues to make
such expense reimbursements. Shareholders should also understand that the
Company’s future repayments will reduce the distributions that they would
otherwise receive.  There can be no assurance that the Company will
achieve such performance in order to sustain these distributions, or be able to
pay distributions at all.  IIG has no obligation to provide expense
reimbursements to the Company in future periods. For the three and nine months
ended September 30, 2013, if expense reimbursements from IIG were not
supported, some or all of the distributions may be a return of capital.  The table below presents a summary of all
expenses supported by IIG and the associated dates through which such expenses
are eligible for reimbursement by the Company for each of the three months
ended December 31, 2012, March 31, 2013, June 30, 2013, and September 30, 2013.  Three Months
  Ended
 
 Expense Support Received from IIG
 
 Expense Support Reimbursed to IIG
 
 Unreimbursed Expense Support
 
 Ratio of Operating Expense to Average Net
  Assets for the Period(1)
 
 Annualized Distribution Rate for the
  Period(3)
 
 
 Eligible for Reimbursement throughDecember 31,
  2012
 
 $
 116,706
 
 $
 -
 
 $
 116,706
 
 0.93%
 
 0.00%
 (2)
 
 December 31, 2015March 31, 2013
 
 
 819,373
 
 
 -
 
 
 819,373
 
 2.75%
 
 7.00%
 
 
 March 31, 2016June 30, 2013
 
 
 1,147,536
 
 
 -
 
 
 1,147,536
 
 1.43%
 
 7.00%
 
 
 June 30, 2016September 30,
  2013
 
 
 1,296,834
 
 
 -
 
 
 1,296,834
 
 0.49%
 
 7.00%
 
 
 September 30, 2016Total
 
 $
 3,380,449
 
 $
 -
 
 $
 3,380,449(1)
 Operating expenses include all expenses borne by the Company,
  except for organizational and offering expenses, base management fees,
  incentive fees, administrative services expenses and other general and
  administrative expenses owed to CIM and its affiliates and interest expense.(2)
 The Company did not declare any distributions during the three
  months ended December 31, 2012.(3)
 Annualized Distribution Rate equals the annualized rate of
  distributions paid to shareholders based on the amount of the regular cash
  distributions paid immediately prior to the date the expense support payment
  obligation was incurred by CIM. Annualized Distribution Rate does not include
  special cash or stock distributions paid to shareholders.
 11


---



CĪON INVESTMENT CORPORATION NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS September 30, 2013 (unaudited)
  Reimbursement of such costs will be
determined as appropriate to meet the objectives of the expense support and
conditional reimbursement agreement. As a result, the Company may or may not be
requested to reimburse any of these costs by IIG. As of September 30, 2013, the
net reimbursement from IIG was $1,260,234.  The Company or IIG may terminate the
expense support and conditional reimbursement agreement at any time. IIG has
indicated that it expects to continue such reimbursements until it deems that
the Company has achieved economies of scale sufficient to ensure that it 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 IIG all reimbursements funded by IIG within three years of
the date of termination. The specific amount of expenses reimbursed by IIG, 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 IIG will reimburse any portion of the Company’s expenses in
future quarters.  The Company entered into an administration
agreement with CIM’s affiliate, ICON Capital, LLC, formerly known as ICON
Capital Corp., or ICON Capital, pursuant to which ICON Capital furnishes the
Company with administrative services including accounting, investor relations
and other administrative services necessary to conduct its day-to-day
operations. ICON Capital is reimbursed for administrative expenses it incurs on
the Company’s behalf in performing its obligations, provided that such
reimbursement will be for the lower of ICON Capital’s actual costs or the
amount that the Company would be required to pay for comparable administrative
services in the same geographic location. Such costs will be reasonably
allocated to the Company on the basis of assets, revenues, time records or other
reasonable methods. The Company will not reimburse ICON Capital 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 ICON Capital. For the three and nine
months ended September 30, 2013, the Company incurred administrative services
expense from ICON Capital of $144,462 and $715,653, respectively, of which the
majority related to the allocation of costs of administrative personnel for
services rendered to the Company and the remainder related to other
reimbursable expenses. For the three and nine months ended September 30, 2013,
all administrative expenses were reimbursed by IIG in accordance with the
expense support and conditional reimbursement agreement.  The Company’s payment of organization costs
and offering expenses (including reimbursement of costs incurred by IIG and its
affiliates) is capped at 1.5% of the gross proceeds from the offering. If the
Company sells the maximum number of shares at its latest public offering price
of $10.32 per share, then the Company estimates that it may incur up to
approximately $15,480,000 of expenses. Under the terms of the investment
advisory agreement, CIM and certain of its affiliates, which includes IIG, will
become entitled to receive reimbursement of up to 1.5% of the gross proceeds
raised until all organization costs and offering expenses have been reimbursed.
Previously, the Company interpreted “raised” to mean all gross proceeds that
the Company expected to raise through the completion of the offering of its
shares, rather than actual gross proceeds raised through the date of
reimbursement.  Consistent with such application and since the
Company believed it would raise at least $100 million through the completion of
the offering of its shares, upon commencement of operations on December 17,
2012, the Company issued 111,111 shares of the Company’s common stock at $9.00
per share to IIG in lieu of payment of $1,000,000 for organization and offering
expenses submitted for reimbursement.  The transaction satisfied an
independent obligation of IIG to invest $1,000,000 in the Company’s
shares.  Through that date, the Company had raised gross proceeds
from unaffiliated outside investors of $2,639,439 and from affiliated
investors of $2,000,000, which, applying 1.5% of actual proceeds raised through
the date of reimbursement, would have resulted in CIM being entitled to
$69,592.  With respect to any future reimbursements
for organization and offering costs, the Company will interpret the 1.5% cap
based on actual gross proceeds raised at the time of such
reimbursement.  In addition, the Company will not issue any of its
shares or other securities for services or for property other than cash or
securities except as a dividend or distribution to its security holders or in
connection with a reorganization.  Consistent with this
interpretation, on May 30, 2013, IIG paid the Company $1,000,000, plus interest
accrued at a rate of 7% per year. From inception through September 30, 2013,
IIG and its affiliates incurred organization costs and offering expenses of
approximately $2,017,000, of which $1,000,000 has been submitted to the Company
for reimbursement. As of September 30, 2013, the Company had an outstanding
payable to IIG for offering costs of $550,000. No additional material
organization costs or offering expenses have been incurred by IIG or its
affiliates subsequent to September 30, 2013. The decision to fund the Company’s
organization costs and offering expenses and the decision to seek reimbursement
for such costs is solely at the discretion of IIG and its affiliates. As a
result, the Company may or may not be requested to reimburse any costs funded
by IIG and its affiliates. 12


---



CĪON INVESTMENT CORPORATION NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS September 30, 2013 (unaudited)
 The
Company has entered into certain agreements with CIM’s affiliate, ICON
Securities, LLC, formerly known as ICON Securities Corp., or ICON Securities,
whereby the Company pays certain fees and reimbursements. ICON Securities is entitled
to receive a 3% dealer manager fee from gross offering proceeds from the sale
of the Company’s shares. The selling dealers are entitled to receive a sales
commission of up to 7% of gross offering proceeds. Such costs are charged
against capital in excess of par value when incurred. For the three months
ended September 30, 2013, the Company paid or accrued commissions of $2,378,910
to the selling dealers and $1,127,837 to ICON Securities. For the nine months
ended September 30, 2013, the Company paid or accrued commissions of $4,442,027
to the selling dealers and $2,103,107 to ICON Securities. Since commencing its
continuous public offering on July 2, 2012 and through November 8, 2013, the
Company paid or accrued commissions of $6,713,751 to the selling dealers and
$3,214,305 to ICON Securities.  Fees and other expenses incurred by the
Company related to CIM and its affiliates were as follows:  Three Months Ended
 
 Nine Months EndedEntity
 
 Capacity
 
 Description
 
 September 30, 2013
 
 September 30, 2013ICON Securities
 
 Dealer manager
 
 Dealer manager
  fees(1)
 
 $
 1,127,837
 
 $
 2,103,107CIM
 
 Investment
  adviser
 
 Management
  fees(2)(3)
 
 
 248,225
 
 
 413,748CIM
 
 Investment
  adviser
 
 Incentive
  fees(2)(3)
 
 
 128,766
 
 
 303,494ICON Capital
 
 Administrative
  services provider
 
 Administrative
  services expense(2)(3)
 
 
 144,462
 
 
 715,653$
 1,649,290
 
 $
 3,536,002(1)   Amount
  charged directly to equity.(2)   Amount
  charged directly to operations.(3)   Amount has
  been supported in connection with the expense support and conditional
  reimbursement agreement.
  Because CIM’s senior management team is
comprised of substantially the same personnel as the senior management team of
the Company’s affiliate, ICON Capital, which is the investment manager to certain
equipment finance funds, or equipment funds, such members of senior management
provide investment advisory and management services to the equipment funds in
addition to the Company. In the event that CIM undertakes to provide investment
advisory services to other clients in the future, it will strive to allocate
investment opportunities in a fair and equitable manner consistent with the
Company’s investment objective and strategies so that the Company will not be
disadvantaged in relation to any other client of the investment adviser or its
senior management team. However, it is currently possible that some investment
opportunities will be provided to the equipment funds or other clients of CIM
rather than to the Company.  Indemnifications  The investment advisory agreement, the
investment sub-advisory agreement, the administration agreement and the dealer manager
agreement each provide certain indemnifications from the Company to the other
relevant parties to such agreements.  The Company’s maximum exposure under
these agreements is unknown. However, the Company has not experienced claims or
losses pursuant to these agreements and believes the risk of loss related to
such indemnifications to be remote.  Note 4. Distributions  The Company’s board of directors declared
distributions for eighteen record dates in the nine months ended September 30,
2013. Declared distributions are paid monthly. The following table presents
cash distributions per share that were declared during the nine months ended September
30, 2013:  DistributionsThree Months
  Ended
 
 Per Share
 
 AmountMarch 31,
  2013 (six record dates)
 
 $
 0.1769
 
 $
 208,766June 30,
  2013 (six record dates)
 
 
 0.1788
 
 
 518,630September
  30, 2013 (six record dates)
 
 
 0.1799
 
 
 1,089,797Total
  distributions for the nine months ended September 30, 2013
 
 $
 0.5356
 
 $
 1,817,193
  On October 15, 2013, the Company’s
board of directors declared two regular semi-monthly cash distributions of $0.030100
per share each, which were paid on November 1, 2013 to shareholders of record
on October 15, 2013 and October 31, 2013, respectively. The timing and amount
of any future distributions to shareholders are subject to applicable legal
restrictions and the sole discretion of the Company’s board of directors.  13


---



CĪON INVESTMENT CORPORATION NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS September 30, 2013 (unaudited)
 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 amended and
restated distribution reinvestment plan so as to have their cash distributions
reinvested in additional shares of the Company’s common stock.  The Company may fund cash distributions to
shareholders in the future from any sources of funds available, including
offering proceeds, 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 the Company on account
of preferred and common equity investments in portfolio companies and expense
reimbursements from IIG, which are subject to recoupment. 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 that the Company has declared on its shares of common stock
during the nine months ended September 30, 2013:  Source of
  Distribution
 
 Distribution Amount
 
 PercentageRealized gain on
  investments and total return swap(1)
 
 $
 1,112,767
 
 61.2%Expense
  reimbursement from IIG
 
 
 704,426
 
 38.8%Total
 
 $
 1,817,193
 
 100.0%(1)
 Includes interest income and fees, net of financing amounts paid
  to Citibank, N.A., or Citibank, generated on the loans underlying the TRS of
  $501,883.
 The Company’s net investment income on a
tax basis for the nine months ended September 30, 2013 was $710,587. As of
September 30, 2013, the Company has undistributed tax-basis net investment
income of $8,853.  There were no
differences between the Company’s GAAP-basis net investment income and the
Company’s tax-basis net investment income. The above sources are not currently
estimated to be characterized as long-term capital gains distributions.  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. Therefore, a determination made on a
quarterly basis may not be representative of the actual tax attributes of the
Company’s distributions for a full year. The actual tax characteristics of
distributions to shareholders are reported to shareholders annually on Form
1099-DIV.  As of September 30, 2013 and December 31,
2012, the components of accumulated earnings on a tax basis were as follows:  September 30, 2013
  (unaudited)
 
 December 31, 2012Undistributed
  net investment income
 
 $
 8,853
 
 $
 2,692Undistributed
  net realized gain from investments
 
 
 -
 
 
 44Net unrealized
  appreciation on investments and total return swap(1)
 
 
 1,424,496
 
 
 22,426$
 1,433,349
 
 $
 25,162(1)
 As of September 30, 2013 and December 31, 2012, the gross
  unrealized appreciation on the Company’s investments and the underlying loans
  of the TRS was $1,730,178 and $28,051, respectively, which included interest
  income and fees, net of financing amounts paid to Citibank, generated on the
  loans underlying the TRS of $495,438 and $98, respectively.  As of September
  30, 2013 and December 31, 2012, the gross unrealized depreciation on the
  Company’s investments and the underlying loans of the TRS was $305,682 and
  $5,625, respectively.
 The aggregate cost of the Company’s
investments for federal income tax purposes totaled $51,690,233 and $3,787,873
as of September 30, 2013 and December 31, 2012, respectively. The aggregate net
unrealized appreciation on a tax basis, including the Company’s TRS, was $1,424,496
and $22,426 as of September 30, 2013 and December 31, 2012, respectively.  Note 5. Investments  The composition of the Company’s investment
portfolio as of September 30, 2013 and December 31, 2012 at amortized cost and
fair value was as follows:  September 30, 2013
  (unaudited)
 
 December 31, 2012Amortized
  Cost(1)
 
 Fair Value
 
 Percentage of
  Investment
  Portfolio
 
 Amortized
  Cost(1)
 
 Fair Value
 
 Percentage of
  Investment
  PortfolioSenior secured term loans - first lien(2)
 
 $
 33,586,963
 
 $
 34,030,046
 
 65.1%
 
 $
 1,970,111
 
 $
 1,980,044
 
 52.1%Senior secured
  term loans - second lien(2)
 
 
 6,371,037
 
 
 6,473,048
 
 12.4%
 
 
 -
 
 
 -
 
 -Short term
  investments(3)
 
 
 11,732,233
 
 
 11,732,233
 
 22.5%
 
 
 1,817,762
 
 
 1,817,762
 
 47.9%Total
  investments
 
 $
 51,690,233
 
 $
 52,235,327
 
 100.0%
 
 $
 3,787,873
 
 $
 3,797,806
 
 100.0%(1)
 Amortized cost represents the original cost adjusted for the
  amortization of premiums and/or accretion of discounts, as applicable, on the
  Company’s investments.(2)
 The Company does not control and is not an affiliate of any of
  the portfolio companies in its investment portfolio.(3)
 Short term investments represent highly liquid investments with
  original maturity dates of three months or less.
 14


---



CĪON INVESTMENT CORPORATION NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS September 30, 2013 (unaudited)
  The table below shows the composition of
the Company’s investment portfolio by industry classification and the
percentage, by fair value, of the total investment portfolio assets in such
industries as of September 30, 2013 and December 31, 2012:  September 30, 2013
  (unaudited)
 
 December 31, 2012Investments at
  Fair Value
 
 Percentage of
  Investment Portfolio
 
 Investments at
  Fair Value
 
 Percentage of
  Investment PortfolioHealthcare
 
 $
 8,951,160
 
 17.1%
 
 $
 -
 
 -Oil & Gas
 
 
 3,650,726
 
 7.0%
 
 
 -
 
 -Media
 
 
 3,489,278
 
 6.7%
 
 
 -
 
 -Manufacturing
 
 
 3,003,722
 
 5.8%
 
 
 -
 
 -Entertainment & Leisure
 
 
 2,604,408
 
 5.0%
 
 
 -
 
 -Construction
 
 
 2,482,777
 
 4.7%
 
 
 -
 
 -Computers & Electronics
 
 
 2,474,264
 
 4.7%
 
 
 -
 
 -Telecommunications
 
 
 2,085,102
 
 3.9%
 
 
 -
 
 -Environmental Services
 
 
 1,912,369
 
 3.7%
 
 
 -
 
 -Textile &
  Apparel Mfg.
 
 
 1,762,200
 
 3.4%
 
 
 -
 
 -Professional & Business Services
 
 
 1,523,097
 
 2.9%
 
 
 -
 
 -Financial
  Services
 
 
 1,443,673
 
 2.8%
 
 
 -
 
 -Food & Beverage
 
 
 1,002,467
 
 1.9%
 
 
 -
 
 -Building
  Materials
 
 
 974,949
 
 1.9%
 
 
 -
 
 -Insurance
 
 
 972,675
 
 1.9%
 
 
 980,044
 
 25.8%Chemicals
 
 
 962,500
 
 1.8%
 
 
 1,000,000
 
 26.3%Printing & Publishing
 
 
 702,727
 
 1.3%
 
 
 -
 
 -Gaming &
  Hotels
 
 
 505,000
 
 1.0%
 
 
 -
 
 -U.S. Treasury Securities
 
 
 11,732,233
 
 22.5%
 
 
 1,817,762
 
 47.9%Total
 
 $
 52,235,327
 
 100.0%
 
 $
 3,797,806
 
 100.0%
  Note 6. Total Return Swap  On December 17, 2012, the Company, through
its wholly-owned subsidiary, Flatiron Funding, LLC, or Flatiron, entered into a
TRS with Citibank.  The agreements between Flatiron and Citibank, which
collectively establish the TRS, are referred to as the TRS Agreement.  A TRS is a contract in which one party
agrees to make periodic payments to another party based on the change in the
market value of the assets underlying the TRS and interest payments in return
for periodic payments based on a fixed or variable interest rate. A TRS
effectively adds leverage to a portfolio by providing investment exposure to a
security or market without owning or taking physical custody of such security
or investing directly in such market. Because of the unique structure of a TRS,
a TRS typically offers lower financing costs than are offered through more
traditional borrowing arrangements.  The TRS with Citibank enables the Company,
through its ownership of Flatiron, to obtain the economic benefit of owning the
loans subject to the TRS, without actually owning them, in return for an
interest-type payment to Citibank. As such, the TRS is analogous to Flatiron
borrowing funds to acquire loans and incurring interest expense to a lender. 15


---



CĪON INVESTMENT CORPORATION NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS September 30, 2013 (unaudited)
 The obligations of Flatiron under the TRS are non-recourse to the
Company and the Company’s exposure under the TRS is limited to the value of the
Company’s investment in Flatiron, which generally will equal the value of cash
collateral provided by Flatiron under the TRS. Pursuant to the terms of the TRS,
Flatiron may select loans with a maximum aggregate market value (determined at
the time each such loan becomes subject to the TRS) of the lesser of (a)
$150,000,000 and (b) 140% of the aggregate amount of cash contributed to the
equity capital of the Company during the first nine months of the TRS and not
withdrawn during that period, or the maximum portfolio amount. Flatiron is
required to initially cash collateralize a specified percentage of each loan
(generally 25% of the market value of such loan) included under the TRS in
accordance with margin requirements described in the TRS Agreement. Under the
terms of the TRS, Flatiron agreed not to draw upon, or post as collateral, such
cash collateral in respect of other financings or operating requirements prior
to the termination of the TRS. Neither the cash collateral required to be
posted with Citibank nor any other assets of Flatiron are available to pay the
debts of the Company.  Each individual loan must meet criteria
described in the TRS Agreement, including a requirement that substantially all
of the loans be rated by Moody’s and S&P and quoted by a
nationally-recognized pricing service. Under the terms of the TRS, Citibank, as
calculation agent, determines whether there has been a failure to satisfy the
portfolio criteria in the TRS. If such failure continues for 30 days following
the delivery of notice thereof, then Citibank has the right, but not the
obligation, to terminate the TRS. Flatiron receives from Citibank all interest
and fees payable in respect of the loans included in the TRS. Flatiron pays to
Citibank interest at a rate equal to, in respect of each loan included in the
TRS, the floating rate index specified for such loan plus 1.25% per year. In
addition, upon the termination or repayment of any loan subject to the TRS,
Flatiron will either receive from Citibank the appreciation in the value of
such loan or pay to Citibank any depreciation in the value of such loan.  Under the terms of the TRS, Flatiron may be
required to post additional cash collateral, on a dollar-for-dollar basis, in
the event of depreciation in the value of the underlying loans after such value
decreases below a specified amount. The limit on the additional collateral that
Flatiron may be required to post pursuant to the TRS is equal to the difference
between the full notional amount of the loans underlying the TRS and the amount
of cash collateral already posted by Flatiron. The amount of collateral
required to be posted by Flatiron is determined primarily on the basis of the
aggregate value of the underlying loans.  The Company has no contractual obligation
to post any such additional collateral or to make any interest payments to
Citibank on behalf of Flatiron. The Company may, but is not obligated to,
increase its investment in Flatiron for the purpose of funding any additional
collateral or payment obligations for which Flatiron may become obligated
during the term of the TRS. If the Company does not make any such additional
investment in Flatiron and Flatiron fails to meet its obligations under the
TRS, then Citibank will have the right to terminate the TRS and seize the cash
collateral posted by Flatiron under the TRS. In the event of an early
termination of the TRS, Flatiron would be required to pay an early termination
fee.  Citibank may terminate the TRS on or after
December 17, 2013, or the call date. Flatiron may terminate the TRS at any time
upon providing no more than 30 days prior notice to Citibank. Any termination
prior to the call date will result in payment of an early termination fee to
Citibank based on the maximum portfolio amount of the TRS. Under the terms of
the TRS, the early termination fee will equal the present value of a stream of
monthly payments that would be owed by Flatiron to Citibank for the period from
the termination date through and including the call date. Such monthly payments
will equal the product of 60% of the maximum portfolio amount, multiplied by
1.25% per year. The Company estimates the early termination fee would have been
approximately $204,000 at September 30, 2013. Other than during the first nine
months and last 180 days of the term of the TRS, Flatiron may be required to
pay a minimum usage fee in connection with the TRS. At September 30, 2013,
Flatiron was not subject to a minimum usage fee.  In connection with the TRS, Flatiron is
required to comply with various covenants and reporting requirements as defined
in the TRS Agreement. As of September 30, 2013, Flatiron was in compliance with
all covenants and reporting requirements.  For purposes of computing the capital gains
incentive fee, the Company treats net realized gains or losses on the sale or
maturity of the underlying TRS loans as realized gains or losses on the TRS. 
For purposes of computing the subordinated incentive fee on income, the Company
treats the interest spread, which represents the difference between (i) the
interest and fees received on the underlying TRS loans and (ii) the interest
paid to Citibank on the settled notional value of the TRS loans, as
pre-incentive fee net investment income on the TRS. Accordingly, all net
realized economic benefits associated with the underlying TRS loans, if any,
are included in the computation of either the capital gains incentive fee or
the subordinated incentive fee on income. Any unrealized appreciation on the
TRS is reflected in total assets on the Company’s consolidated balance sheets
and included in the computation of the base management fee.  For purposes of the asset coverage ratio
test applicable to the Company as a BDC, the Company will treat the outstanding
notional amount of the TRS, less the initial amount of any cash collateral
required to be posted by Flatiron under the TRS, as a senior security for the
life of that instrument. The Company may, however, accord different treatment
to the TRS in the future in accordance with any applicable new rules or
interpretations adopted by the staff of the Securities and Exchange Commission,
or SEC.  Further, for purposes of Section 55(a)
under the 1940 Act, the Company will treat each loan underlying the TRS as a
qualifying asset if the obligor on such loan is an eligible portfolio company
and as a non-qualifying asset if the obligor is not an eligible portfolio
company. The Company may, however, accord different treatment to the TRS in the
future in accordance with any applicable new rules or interpretations adopted
by the staff of the SEC. 16


---



CĪON INVESTMENT CORPORATION NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS September 30, 2013 (unaudited)
 As of September 30, 2013, the fair value of the TRS was $879,402.
The fair value of the TRS is reflected as unrealized appreciation on total
return swap on the Company’s consolidated balance sheets. The change in value
of the TRS is reflected in the Company’s consolidated statements of operations
as net change in unrealized appreciation on total return swap. As of September
30, 2013, Flatiron had selected 46 underlying loans with a total notional
amount of $71,875,170 and posted $21,977,017 in cash collateral held by
Citibank (of which only $19,810,924 was required to be posted, which is
reflected in due from counterparty on the Company’s consolidated balance
sheets). 17


---



CĪON INVESTMENT CORPORATION NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS September 30, 2013 (unaudited)
 The
following is a summary of the underlying loans subject to the TRS as of September
30, 2013:  Underlying
  Loans(a)
 
 Industry
 
 Notional
  Amount
 
 Market
  Value(b)
 
 Unrealized
  Appreciation /
  (Depreciation)Senior
  Secured First Lien Term LoansABB Concise
  Optical Group, LLC, L+350, 1.00% LIBOR Floor, 2/6/2019
 
 Healthcare
 
 $
 1,490,025
 
 $
 1,488,769
 
 $
 (1,256)ATI Holdings,
  Inc., L+450, 1.25% LIBOR Floor, 12/21/2019
 
 Healthcare
 
 
 491,287
 
 
 499,972
 
 
 8,685Avaya Inc.,
  L+675, 1.25% LIBOR Floor, 3/31/2018
 
 Telecommunications
 
 
 1,999,239
 
 
 1,871,392
 
 
 (127,847)BBTS Borrower
  LP, L+650, 1.25% LIBOR Floor, 6/4/2019
 
 Oil & Gas
 
 
 1,858,848
 
 
 1,892,575
 
 
 33,727Caraustar
  Industries, Inc., L+625, 1.25% LIBOR Floor, 5/1/2019
 
 Packaging
 
 
 736,786
 
 
 749,777
 
 
 12,991Centaur Gaming,
  L+400, 1.25% LIBOR Floor, 2/20/2019
 
 Gaming &
  Hotels
 
 
 495,012
 
 
 498,535
 
 
 3,523Cyanco
  Intermediate Corp., L+450, 1.00% LIBOR Floor, 5/1/2020
 
 Chemicals
 
 
 1,257,830
 
 
 1,269,281
 
 
 11,451Grande
  Communications Networks LLC, L+350, 1.00% LIBOR Floor, 5/31/2020
 
 Telecommunications
 
 
 1,993,920
 
 
 2,002,275
 
 
 8,355Hemisphere Media
  Holdings, LLC, L+500, 1.25% LIBOR Floor, 7/30/2020(d)
 
 Media
 
 
 2,320,684
 
 
 2,338,265
 
 
 17,581Herff Jones
  Inc., L+450, 1.00% LIBOR Floor, 6/25/2019
 
 Textile &
  Apparel Mfg.
 
 
 1,978,691
 
 
 2,043,661
 
 
 64,970HUB
  International Limited, L+375, 1.00% LIBOR Floor, 10/2/2020(c)
 
 Insurance
 
 
 3,980,000
 
 
 3,995,000
 
 
 15,000Information
  Resources, Inc., L+375, 1.00% LIBOR Floor, 9/30/2020(c)
 
 Professional
  & Business Services
 
 
 894,505
 
 
 899,000
 
 
 4,495Integra Telecom,
  Inc., L+400, 1.25% LIBOR Floor, 2/22/2019
 
 Telecommunications
 
 
 492,524
 
 
 499,988
 
 
 7,464KCG Holdings,
  Inc., L+450, 1.25% LIBOR Floor, 12/5/2017(d)
 
 Financial
  Services
 
 
 2,000,000
 
 
 1,993,760
 
 
 (6,240)Lineage
  Logistics, LLC, L+350, 1.00% LIBOR Floor, 4/26/2019
 
 Diversified
  Support Services
 
 
 1,510,385
 
 
 1,510,419
 
 
 34OCI Beaumont
  LLC, L+500, 1.25% LIBOR Floor, 8/20/2019 (B1 Term Loan)
 
 Chemicals
 
 
 673,766
 
 
 684,028
 
 
 10,262OCI Beaumont
  LLC, L+500, 1.25% LIBOR Floor, 8/20/2019 (B2 Term Loan)
 
 Chemicals
 
 
 1,266,683
 
 
 1,285,972
 
 
 19,289Packaging
  Coordinators, Inc., L+425, 1.25% LIBOR Floor, 5/10/2020
 
 Packaging
 
 
 1,990,000
 
 
 2,000,000
 
 
 10,000Peppermill
  Casinos, L+600, 1.25% LIBOR Floor, 11/9/2018
 
 Gaming &
  Hotels
 
 
 980,101
 
 
 1,008,608
 
 
 28,507Photonis
  Technologies SAS, L+750, 1.00% LIBOR Floor, 9/18/2019(c)(d)
 
 Manufacturing
 
 
 4,765,610
 
 
 4,863,870
 
 
 98,260Polyconcept
  Finance B.V., L+475, 1.25% LIBOR Floor, 6/28/2019(d)
 
 Professional
  & Business Services
 
 
 2,481,299
 
 
 2,503,454
 
 
 22,155Safe-Guard
  Products International, LLC, L+600, 1.25% LIBOR Floor, 12/21/2018
 
 Financial
  Services
 
 
 893,846
 
 
 938,538
 
 
 44,692Sears Holdings
  Corp., L+450, 1.00% LIBOR Floor, 6/30/2018(c)(d)
 
 Retail
 
 
 2,494,800
 
 
 2,499,538
 
 
 4,738SESAC Holdco II,
  LLC, L+475, 1.25% LIBOR Floor, 2/8/2019
 
 Media
 
 
 491,288
 
 
 497,491
 
 
 6,203SRA
  International, L+525, 1.25% LIBOR Floor, 7/20/2018
 
 Computers &
  Electronics
 
 
 1,957,500
 
 
 1,975,000
 
 
 17,500Steward Health
  Care System LLC, L+550, 1.25% LIBOR Floor, 4/10/2020
 
 Healthcare
 
 
 493,763
 
 
 487,528
 
 
 (6,235)Sutherland
  Global Services, L+600, 1.25% LIBOR Floor, 3/6/2019(d)
 
 Professional
  & Business Services
 
 
 1,939,559
 
 
 1,939,773
 
 
 214Tech Finance
  & Co S.C.A., L+600, 1.25% LIBOR Floor, 7/11/2020(d)
 
 Computers &
  Electronics
 
 
 1,967,500
 
 
 1,945,000
 
 
 (22,500)Tervita, L+500,
  1.25% LIBOR Floor, 5/15/2018(d)
 
 Ecological
 
 
 2,534,733
 
 
 2,489,208
 
 
 (45,525)Travelport LLC,
  L+500, 1.25% LIBOR Floor, 6/26/2019(d)
 
 Entertainment
  & Leisure
 
 
 1,589,385
 
 
 1,622,035
 
 
 32,650TriNet HR Corp.,
  L+400, 1.00% LIBOR Floor, 8/20/2020
 
 Professional
  & Business Services
 
 
 1,653,300
 
 
 1,642,863
 
 
 (10,437)U.S. Renal Care,
  Inc., L+425, 1.00% LIBOR Floor, 7/3/2019
 
 Healthcare
 
 
 523,710
 
 
 534,290
 
 
 10,580VFH Parent LLC,
  L+450, 1.25% LIBOR Floor, 7/8/2016
 
 Financial
  Services
 
 
 478,210
 
 
 482,285
 
 
 4,075Washington
  Inventory Services, L+450, 1.25% LIBOR Floor, 12/20/2018
 
 Professional
  & Business Services
 
 
 493,769
 
 
 494,702
 
 
 933W/S Packaging
  Group, Inc., L+400, 1.00% LIBOR Floor, 8/9/2019
 
 Packaging
 
 
 2,487,500
 
 
 2,493,750
 
 
 6,250Total Senior
  Secured First Lien Term Loans
 
 
 
 
 55,656,058
 
 
 55,940,602
 
 
 284,544Senior
  Secured Second Lien Term LoansArysta
  LifeScience SPC, LLC, L+700, 1.25% LIBOR Floor, 11/30/2020(d)
 
 Chemicals
 
 
 1,160,540
 
 
 1,167,581
 
 
 7,041Carestream
  Health, Inc., L+850, 1.00% LIBOR Floor, 12/7/2019(d)
 
 Healthcare
 
 
 980,000
 
 
 990,830
 
 
 10,830Deltek Inc.,
  L+875, 1.25% LIBOR Floor, 10/10/2019
 
 Computers &
  Electronics
 
 
 1,619,640
 
 
 1,641,121
 
 
 21,481Ion Trading
  Technologies S.Á R.L., L+700, 1.25% LIBOR Floor, 5/22/2021(d)
 
 Financial
  Services
 
 
 993,125
 
 
 998,750
 
 
 5,625Oxbow Carbon
  LLC, L+700, 1.00% LIBOR Floor, 1/19/2020(d)
 
 Mining
 
 
 1,485,000
 
 
 1,530,000
 
 
 45,000Performance Food
  Group, Inc., L+525, 1.00% LIBOR Floor, 11/14/2019
 
 Food &
  Beverage
 
 
 1,873,644
 
 
 1,853,450
 
 
 (20,194)Securus
  Technologies Holdings, Inc., L+775, 1.25% LIBOR Floor, 4/30/2021
 
 Telecommunications
 
 
 1,001,875
 
 
 980,630
 
 
 (21,245)TriNet HR Corp.,
  L+775, 1.00% LIBOR Floor, 2/20/2021(c)
 
 Professional
  & Business Services
 
 
 2,465,510
 
 
 2,428,125
 
 
 (37,385)U.S. Renal Care,
  Inc., L+750, 1.00% LIBOR Floor, 1/3/2020
 
 Healthcare
 
 
 676,200
 
 
 691,152
 
 
 14,952TWCC Holding
  Corp., L+600, 1.00% LIBOR Floor, 6/26/2020
 
 Media
 
 
 2,039,400
 
 
 2,111,500
 
 
 72,100Total Senior
  Secured Second Lien Term Loans
 
 
 
 
 14,294,934
 
 
 14,393,139
 
 
 98,205Subordinated Unsecured Term LoansCatalent Pharma
  Solutions Inc., L+525, 1.25% LIBOR Floor, 12/31/2017(d)
 
 Healthcare
 
 
 1,924,178
 
 
 1,925,393
 
 
 1,215Total
 
 
 
 $
 71,875,170
 
 $
 72,259,134
 
 
 383,964Total interest
  income, net of expenses on TRS
 
 
 495,438Total fair
  value of TRS
 
 $
 879,402(a)
 All of the Company's debt investments are issued by eligible
  U.S. portfolio companies, as defined in the 1940 Act, except for investments
  specifically identified as non-qualifying. The Company does not control and
  is not an affiliate of any of the companies that are issuers of the
  underlying loans subject to the TRS.(b)
 Fair value determined by the Company’s board of directors (see
  Note 7).(c)
 Position or portion thereof unsettled as of September 30, 2013.(d)
 The investment 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 that company’s total assets as defined under
  Section 55 of the 1940 Act. As of September 30, 2013, 98.0% of the Company’s
  total assets represented qualifying assets. In addition, as described in Note
  6, the Company calculates its compliance with the qualifying asset test on a
  “look through” basis by treating each loan underlying the total return swap
  as either a qualifying asset or non-qualifying asset based on whether the
  obligor is an eligible portfolio company. On this basis, 75.6% of the
  Company’s total assets represented qualifying assets as of September 30,
  2013.
 18


---



CĪON INVESTMENT CORPORATION NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS September 30, 2013 (unaudited)
  The following is a summary of the
underlying loans subject to the TRS as of December 31, 2012: Underlying Loans(a)
 
 Industry
 
 Notional
  Amount
 
 Market
  Value(b)
 
 Unrealized
  Appreciation /
  (Depreciation)Senior
  Secured First Lien Term LoansPeppermill Casinos Inc., L+600, 1.25% LIBOR Floor, 11/9/2018
 
 Gaming &
  Hotels
 
 $
 492,500
 
 $
 486,875
 
 $
 (5,625)Safe-Guard
  Products International, LLC, L+600, 1.25% LIBOR Floor, 12/21/2018
 
 Financial
  Services
 
 
 900,600
 
 
 905,340
 
 
 4,740Sequa Corporation, L+400, 1.25% LIBOR Floor, 6/19/2017
 
 Aerospace/Defense
 
 
 497,500
 
 
 502,655
 
 
 5,155TransFirst Holdings, Inc., L+500, 1.25% LIBOR Floor, 12/27/2017
 
 Computers &
  Electronics
 
 
 495,000
 
 
 500,000
 
 
 5,000Washington Inventory Service, L+450, 1.25% LIBOR Floor, 12/20/2018
 
 Professional
  & Business Services
 
 
 497,500
 
 
 500,625
 
 
 3,125Total
 
 
 
 $
 2,883,100
 
 $
 2,895,495
 
 
 12,395Total
  interest income, net of expenses on TRS
 
 
 98Total fair
  value of TRS
 
 $
 12,493(a)
 All of the Company's debt investments are issued by eligible
  U.S. portfolio companies, as defined in the 1940 Act. The Company does not
  control and is not an affiliate of any of the  companies that are issuers of
  the underlying loans subject to the TRS.(b)
 Fair value determined by the Company’s board of directors (see
  Note 7).
  Note 7. Fair Value of Financial
Instruments  The Company determines the fair value of
all portfolio investments in accordance with ASC Topic 820. ASC Topic 820
requires enhanced disclosures about assets and liabilities that are measured
and reported at fair value. As defined in ASC Topic 820, fair value is the
price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date.  ASC Topic 820 establishes a hierarchical
disclosure framework that prioritizes and ranks the level of market price
observability of inputs used in measuring investments at fair value. 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.
Investments carried at fair value are classified and disclosed in one of the
following three categories:  ·Level 1—Valuations based on quoted
prices in active markets for identical assets or liabilities that the Company
has the ability to access. The Company’s short term investments are included in
this category.  ·Level 2—Valuations based on inputs
other than quoted prices in active markets, which are either directly or
indirectly observable.  ·Level 3—Valuations based on inputs
that are unobservable and significant to the overall fair value measurement.
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.  19


---



CĪON INVESTMENT CORPORATION NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS September 30, 2013 (unaudited)
 The following
table presents fair value measurements of the Company’s portfolio investments
and TRS as of September 30, 2013, according to the fair value hierarchy:  Valuation
  Inputs
 
 First Lien Senior
  Secured Term Loans
 
 Second Lien Senior
  Secured Term Loans
 
 Short Term
  Investments
 
 Total Return
  SwapLevel 1—Price
  quotations in active markets
 
 $
 -
 
 $
 -
 
 $
 11,732,233
 
 $
 -Level
  2—Significant other observable inputs
 
 
 -
 
 
 -
 
 
 -
 
 
 -Level
  3—Significant unobservable inputs
 
 
 34,030,046
 
 
 6,473,048
 
 
 -
 
 
 879,402$
 34,030,046
 
 $
 6,473,048
 
 $
 11,732,233
 
 $
 879,402
  The following table presents fair value
measurements of the Company’s portfolio investments and TRS as of December 31,
2012, according to the fair value hierarchy:  Valuation
  Inputs
 
 First Lien Senior
  Secured Term Loans
 
 Short Term
  Investments
 
 Total Return
  SwapLevel 1—Price
  quotations in active markets
 
 $
 -
 
 $
 1,817,762
 
 $
 -Level
  2—Significant other observable inputs
 
 
 -
 
 
 -
 
 
 -Level
  3—Significant unobservable inputs
 
 
 1,980,044
 
 
 -
 
 
 12,493$
 1,980,044
 
 $
 1,817,762
 
 $
 12,493
  The Company’s investments as of September
30, 2013, excluding short term investments, primarily consisted of debt
securities that are traded on a private over-the-counter market for
institutional investors. Except for investments specifically identified, the
Company valued its portfolio investments by using market comparables,
discounted cash flow models and independent third-party pricing services, which
provided prevailing bid and ask prices that were screened for validity by the
pricing service from dealers on the determination date of the relevant period
end. The Company’s
investments as of December 31, 2012, excluding short term investments,
primarily consisted of debt securities that are traded on a private
over-the-counter market for institutional investors. Except for investments
specifically identified, the Company valued its portfolio investments by using
market comparables, discounted cash flow models and independent third-party
pricing services, which provided prevailing bid and ask prices that were
screened for validity by the pricing service from dealers on the determination
date of the relevant period end. One senior secured loan that was purchased
near December 31, 2012 was valued at cost, as the Company determined that
the cost of the investment was the best indication of its fair value.  The discounted cash flow model deemed
appropriate by CIM is prepared for the applicable investments and reviewed by
the Company’s valuation committee consisting of senior management. Such models
are prepared quarterly or on an as needed basis. The model uses the estimated
cash flow projections for the underlying investments and an appropriate
discount rate is determined based on the latest financial information available
for the borrower, prevailing market trends, comparable analysis and other
inputs. The model, key assumptions, inputs, and results are reviewed by the
Company’s valuation committee with final approval from the board of directors.  The Company periodically benchmarks the bid
and ask prices received from the third-party pricing services against the
actual prices at which it purchases and sells its investments. Based on the
results of the benchmark analysis and the Company’s experience in purchasing
and selling these investments, the Company believes that these prices are
reliable indicators of fair value. However, because of the private nature of
this marketplace (meaning actual transactions are not publicly reported), the
Company believes that these valuation inputs are classified as Level 3 within
the fair value hierarchy. The Company may also use other methods to determine
fair value for securities for which it cannot obtain prevailing bid and ask
prices through third-party pricing services or independent dealers, including
the use of an independent valuation firm. The Company periodically benchmarks
the valuations provided by the independent valuation firm against the actual
prices at which it purchases and sells its investments. The Company’s valuation
committee and board of directors intend to review and approve the valuation determinations
made with respect to these investments in a manner consistent with the
Company’s valuation process.  The Company valued its TRS in accordance
with the TRS Agreement. Pursuant to the TRS Agreement, the fair value of the
TRS is based on the increase or decrease in the value of the loans underlying
the TRS, together with accrued interest income, interest expense and certain
other expenses incurred under the TRS. The loans underlying the TRS are valued
by Citibank. Citibank bases its valuation primarily on the indicative bid
prices provided by an independent third-party pricing service. Bid prices
reflect a price that market participants may be willing to pay for an
investment. These valuations are sent to the Company for review and testing.
The Company reviews and approves the value of the TRS, as well as the value of
the loans underlying the TRS, on a quarterly basis as part of the quarterly
valuation process. To the extent the Company has any questions or concerns
regarding the valuation of the loans underlying the TRS, such valuations will
be discussed or challenged pursuant to the terms of the TRS. As a result of the
private nature of this marketplace (meaning actual transactions are not
publicly reported), the Company believes that 20


---



CĪON INVESTMENT CORPORATION NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS September 30, 2013 (unaudited)
 the
total fair value of the TRS should be classified as Level 3 within the fair
value hierarchy. The Company did not have any transfers between Level 1, Level
2, and Level 3 of the fair value hierarchy for the three and nine months ended September
30, 2013. The Company’s policy is to recognize transfers in and out as of the
actual date of the event or change in circumstances that causes the transfer.  The following table provides a
reconciliation of the beginning and ending balances for investments that use Level
3 inputs for the nine months ended September 30, 2013:  First Lien Senior
  Secured Term Loans
 
 Second Lien Senior
  Secured Term Loans
 
 Total Return
  Swap
 
 TotalBalance, as of
  December 31, 2012
 $
 1,980,044
 
 $
 -
 
 $
 12,493
 
 $
 1,992,537Investments
  purchased
 33,498,788
 
 6,368,898
 
 -
 
 39,867,686Net realized
  gain
 16,352
 
 -
 
 -
 
 16,352Net change in
  unrealized appreciation(1)
 433,150
 
 102,011
 
 866,909
 
 1,402,070Accretion of
  discount
 12,086
 
 2,139
 
 -
 
 14,225Sales and
  redemptions
 (1,910,374)
 
 -
 
 -
 
 (1,910,374)Balance, as of
  September 30, 2013
 $
 34,030,046
 
 $
 6,473,048
 
 $
 879,402
 
 $
 41,382,496(1)
 Represents the amount of total gains/losses for the period
  included in the change in unrealized appreciation (depreciation) on
  investments and change in unrealized appreciation (depreciation) on total
  return swap still held at the reporting date.
  Significant Unobservable Inputs  The valuation techniques and significant
unobservable inputs used in recurring Level 3 fair value measurements of assets
as of September 30, 2013 were as follows:  Fair Value(1)
 
 Valuation Technique
 
 Unobservable
  Inputs
 
 Range
  (Weighted Average)Senior secured
  term loans - first lien
 $
 34,030,046
 
 Discounted cash flow
 
 Discount rates
 
 4.75%-10.00%
  (6.64%)Senior secured
  term loans - second lien
 $
 6,473,048
 
 Discounted cash flow
 
 Discount rates
 
 7.73%-11.25%
  (9.15%)(1)   The TRS
  was valued in accordance with the TRS Agreement as discussed above.
  The significant unobservable inputs used in
the fair value measurement of the Company’s senior secured first lien and
second lien term loans are the discount rates. A significant increase or
decrease in the discount rates would result in a significantly lower or higher
fair value measurement, respectively.  Note 8. General and Administrative Expense  General and administrative expense consists
of the following items for the three and nine months ended September 30, 2013:  Three Months Ended
  September 30, 2013
 
 Nine Months Ended
  September 30, 2013Professional
  fees expense
 $
 291,083
 
 $
 978,732Marketing
  expense
 192,498
 
 375,897Insurance
  expense
 53,011
 
 158,813Printing and
  mailing expense
 212
 
 98,838Transfer agent
  expense
 46,412
 
 85,378Filing fees
 19,623
 
 77,173Dues and
  subscriptions
 31,715
 
 54,681Director fees
  and expenses
 8,118
 
 24,142Other expenses
 25,032
 
 74,928Total general
  and administrative expense
 $
 667,704
 
 $
 1,928,582
 21


---



CĪON INVESTMENT CORPORATION NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS September 30, 2013 (unaudited)
 Note 9.
Borrowings  In 2012, the Company entered into an
unsecured financing arrangement with Flatiron Capital, an unaffiliated third
party, for directors and officers insurance in an amount of approximately
$179,000. Payments under the financing arrangement were due in 10 equal
installments, with final payment made on April 19, 2013.  Note 10. Commitments and Contingencies  The Company entered into certain contracts
with other parties that contain a variety of indemnifications. The Company’s
maximum exposure under these arrangements is unknown. However, the Company has
not experienced claims or losses pursuant to these contracts and believes the
risk of loss related to such indemnifications to be remote. 22


---



CĪON INVESTMENT CORPORATION NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS September 30, 2013 (unaudited)
 Note 11. Financial Highlights  The following is a schedule of financial
highlights as of and for the nine months ended September 30, 2013 and as of
December 31, 2012 and for the period from January 31, 2012 (Inception) through
December 31, 2012: For the Period fromJanuary 31, 2012Nine Months Ended
 
 (Inception) throughSeptember 30, 2013
 
 December 31, 2012Per share
  data:(1)Net asset value
  at beginning of period
 $
 8.97
 
 $
 -Results of
  operations:Net investment
  income(2)
 
 0.21
 
 
 0.01Net realized
  gain and net change in unrealized appreciation on investments
 
 0.16
 
 
 0.02Net realized
  gain and net change in unrealized appreciation on total return swap
 
 0.59
 
 
 0.02Net increase in
  net assets resulting from operations
 
 0.96
 
 
 0.05Shareholder
  distributions:Distributions
  from net investment income
 
 (0.21)
 
 
 -Distributions
  from net realized gains
 
 (0.33)
 
 
 -Net decrease in
  net assets from shareholder distributions
 
 (0.54)
 
 
 -Capital share
  transactions:Issuance of
  common stock above net asset value(3)
 
 0.12
 
 
 9.00Amortization of
  deferred offering expenses
 
 (0.22)
 
 
 (0.08)Net (decrease) increase
  in net assets resulting from capital share transactions
 
 (0.10)
 
 
 8.92Net asset value
  at end of period
 $
 9.29
 
 $
 8.97Shares of common
  stock outstanding at end of period
 
 7,715,146
 
 
 500,338Total investment
  return-net asset value(4)
 
 9.42%
 
 
 (0.35%)Net assets at
  beginning of period(5)
 $
 4,487,115
 
 $
 4,503,049Net assets at
  end of period
 $
 71,647,438
 
 $
 4,487,115Average net
  assets
 $
 31,111,908
 
 $
 4,495,082
  Ratio/Supplemental
  data:(5)Ratio of net
  investment income to average net assets(6)
 
 2.28%
 
 
 0.06%Ratio of net
  operating expenses to average net assets(6)
 
 0.31%
 
 
 0.00%Ratio of gross operating
  expenses to average net assets(7)
 
 2.91%
 
 
 0.93%Ratio of
  expenses reimbursed from IIG to average net assets
 
 10.49%
 
 
 2.60%Portfolio
  turnover rate(8)
 
 10.76%
 
 
 0.13%Asset coverage
  ratio(9)
 
 2.38
 
 
 3.02(1)
 The per share data for the period from January 31, 2012
  (Inception) through December 31, 2012 was derived by using the weighted
  average shares of common stock outstanding from the commencement of
  operations on December 17, 2012, through December 31, 2012.(2)
 Net investment income per share includes the expense
  reimbursement from IIG of $0.97 and $0.23 per share for the nine months ended
  September 30, 2013 and the period from January 31, 2012 (Inception) through
  December 31, 2012, respectively.(3)
 The continuous issuance of shares of common stock may cause an
  incremental increase in net asset value per share due to the sale of shares
  at the then prevailing public offering price and the receipt of net proceeds
  per share by the Company in excess of net asset value per share on each
  subscription closing date.(4)
 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 (i) monthly cash
  distributions are reinvested in accordance with the Company’s distribution
  reinvestment plan and (ii) the fractional shares issued pursuant to the
  distribution reinvestment plan are issued at 95% of the then public offering
  price on the date of purchase. Monthly cash distributions reinvested
  subsequent to September 30, 2013 will be issued at 90% of the then public
  offering price on the date of purchase in accordance with the amended and
  restated distribution reinvestment plan. The total investment return-net
  asset value for the period from January 31, 2012 (Inception) through December
  31, 2012 was calculated by taking the difference between (i) the net asset
  value per share as of December 31, 2012 and (ii) the net asset value per
  share on the day the Company commenced operations (December 17, 2012), and
  dividing such difference by the net asset value per share on the day the
  Company commenced operations. The total investment return-net asset value
  does not consider the effect of the sales load from the sale of the Company’s
  common stock. The total investment return-net asset value includes the effect
  of the issuance of shares at a net offering price that is greater than net
  asset value per share, which causes an increase in net asset value per share.
  Total returns covering less than a full period are not annualized.
 23


---



CĪON INVESTMENT CORPORATION NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS September 30, 2013 (unaudited)
  (5)
 For the period from January 31, 2012 (Inception) through
  December 31, 2012, the net assets at the beginning of the period were derived
  from the net assets from the commencement of operations on December 17, 2012.(6)
 Excluding the expense reimbursement from IIG during the period,
  the ratios of net investment (loss) income and net operating expenses to
  average net assets would have been (8.21%) and 10.80%, respectively, for the
  nine months ended September 30, 2013, and (2.54%) and 2.60%, respectively,
  for the period from January 31, 2012 (Inception) through December 31, 2012.(7)
 Operating expenses include all expenses borne by the Company,
  except for organizational and offering expenses, base management fees,
  incentive fees, administrative services expenses and other general and
  administrative expenses owed to CIM and its affiliates, and interest expense.(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 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, divided by (ii) total senior securities outstanding at the
  end of the period. For purposes of the asset coverage ratio test applicable
  to the Company as a BDC, the Company treats the outstanding TRS notional
  amount at the end of the period, less the total amount of cash collateral
  posted by Flatiron under the TRS, as a senior security for the life of the
  TRS.
 24


---



Item 2.
Management’s Discussion and
Analysis of Financial Condition andResults of Operations  As used in this Quarterly Report on Form
10-Q, “we,” “us,” “our” or similar terms include CĪON Investment
Corporation and its consolidated subsidiaries.  The following discussion should be read in
conjunction with our unaudited consolidated financial statements and related
notes appearing elsewhere in this Quarterly Report on Form 10-Q and the
audited consolidated financial statements and related notes included in our
Annual Report on Form 10-K/A for the period from January 31, 2012 (Inception)
through December 31, 2012. 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.  Forward-Looking Statements  Some of the statements within this Quarterly Report on Form 10-Q
may 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 the companies in
which we may invest; ·the impact of the investments that we expect to make; ·the ability of our portfolio companies to achieve their
objectives; ·our 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 and AIM to locate suitable investments
for us and the ability of CIM to monitor and administer our investments; ·the ability of CIM and AIM and their respective 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; ·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 may invest; and ·the timing and amount of distributions and dividends from
the companies in which we may invest. In addition, words such as “anticipate,” “believe,” “expect” and
“intend” indicate a forward-looking statement, although not all forward-looking
statements include these words. The forward-looking statements contained in
this Quarterly Report on Form 10-Q involve risks and uncertainties. Our actual
results could differ materially from those implied or expressed in the
forward-looking statements for any reason, including the factors set forth in
“Risk Factors” in Item 1A of Part II of this Quarterly Report on Form 10-Q.
Other factors that could cause actual results to differ materially include: ·changes in the economy; ·risks associated with possible disruption in our operations
or the economy generally due to terrorism or natural disasters; and ·future changes in laws or regulations and conditions in our
operating areas. We have based the
forward-looking statements on information available to us on the date of this
Quarterly Report on Form 10-Q. Except as required by the federal securities
laws, we undertake no obligation to revise or update any forward-looking
statements, whether as a result of new information, future events or otherwise.
You are advised to review any additional disclosures that we may make directly
to you or through reports that we in the future may file with the SEC,
including annual reports on Form 10-K, quarterly reports on Form 10-Q and
current reports on Form 8-K. The forward-looking statements contained in this
Quarterly Report on Form 10-Q are excluded from the safe harbor protection
provided by Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. 25


---



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 $2,500,000 from persons not affiliated with
us, CIM or Apollo. We are a newly organized, 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. We anticipate that
our portfolio will be comprised primarily of investments in senior secured
loans and, to a lesser extent, second lien loans and long-term subordinated
loans, referred to as mezzanine loans, 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 minority interests in the form of common or
preferred equity in our target companies, either in conjunction with one of our
debt investments or through a co-investment with a financial sponsor. In
addition, a portion of our portfolio may be comprised of corporate bonds and
other debt securities. However, such investments are not expected to comprise a
significant portion of our portfolio.  We are managed by CIM, our affiliate and a registered
investment adviser. CIM will oversee the management of our activities and will
be responsible for making investment decisions for our portfolio. We and CIM
have engaged AIM to act as our investment sub-adviser.  We will seek to meet our investment objective by
utilizing the experienced management teams of both CIM and AIM, which includes
their access to the relationships and human capital of Apollo, IIG and ICON
Capital, in sourcing, evaluating and structuring transactions. We intend to
focus primarily on the senior secured debt of private and thinly traded U.S.
middle-market companies, which we define as companies that generally possess
annual EBITDA of $50 million or less, with experienced management teams, significant
free cash flow, strong competitive positions and potential for growth.  Revenue  We primarily generate revenue in the form of interest
income on the debt securities that we hold and capital gains on debt or other
equity interests that we acquire in portfolio companies. Our senior debt
investments bear interest at a floating rate. Interest on debt securities is
generally payable quarterly or semiannually. In some cases, some of our
investments may provide for deferred interest payments or “payment-in-kind” 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, origination, structuring or
diligence fees, monitoring fees, fees for providing managerial assistance and
possibly consulting fees and performance-based fees. Any such fees generated in
connection with our investments will be recognized when earned.  Operating Expenses  Our primary operating expenses are the
payment of advisory fees and other expenses under the investment advisory and
administration agreements. Our investment advisory fee compensates CIM for its
work in identifying, evaluating, negotiating, executing, monitoring and
servicing our investments. CIM is responsible for compensating AIM for its
services pursuant to the investment sub-advisory agreement. We bear all other
expenses of our operations and transactions, including, without limitation: •
 corporate
  expenses relating to borrowings and costs associated with the offering of our
  common stock, subject to limitations included in the administration
  agreement;•
 the
  costs of calculating our net asset value, including the cost of any
  third-party valuation services;•
 investment
  advisory fees;•
 fees
  payable to third parties relating to, or associated with, making, monitoring
  and disposing of investments and valuing investments and enforcing our
  contractual rights, including fees and expenses associated with performing due
  diligence reviews of prospective investments;•
 transfer
  agent and custodial fees;•
 fees
  and expenses associated with our marketing efforts;•
 interest
  payable on debt, if any, incurred to finance our investments;•
 federal
  and state registration fees;
  26


---



•
 federal, state and local taxes;•
 independent directors’ fees and expenses;•
 costs of proxy statements, shareholders’ reports and
  notices;•
 fidelity bond, directors and officers/errors and
  omissions liability insurance and other insurance premiums;•
 direct costs such as printing, mailing, long distance
  telephone and staff;•
 fees
  and expenses associated with independent audits and outside legal costs,
  including compliance with the Sarbanes-Oxley Act of 2002;•
 costs
  associated with our reporting and compliance obligations under the 1940 Act
  and applicable federal and state securities laws;•
 brokerage commissions for our investments; and•
 all other expenses incurred by CIM, AIM or us in
  connection with administering our business, including expenses incurred by
  CIM or AIM in performing its obligations, and the reimbursement of the
  compensation of our chief financial officer and chief compliance officer and
  their respective staffs paid by CIM, to the extent that they are not a person
  with a controlling interest in CIM or any of its affiliates, in each case subject
  to the limitations included in the investment advisory and administration
  agreements, as applicable.
 Portfolio
Investment Activity for the Nine Months Ended September 30, 2013 and the Period
from January 31, 2012 (Inception) through December 31, 2012 For the nine months ended September 30, 2013, we made
investments in portfolio companies totaling $39,867,686. During the same
period, we sold investments totaling $1,141,330, received principal repayments
of $769,044, and recorded realized gains of $16,352. In addition, unrealized
appreciation on our investments increased by $535,161. As of September 30, 2013, our investment
portfolio, excluding our short term investments and TRS, consisted of interests
in 26 portfolio companies (84% in first lien senior secured term loans and 16%
in second lien senior secured term loans) with a total fair value of $40,503,094
and an average and median annual EBITDA of $54.4 million and $43.2 million,
respectively, at initial investment. As of September 30, 2013, the investments
in our portfolio were purchased at a weighted average price of 98.60% of par
value. Our estimated gross annual yield on our investments was 7.33% based upon
the purchase price of our investments. As of December 31, 2012, our investment portfolio,
excluding our short term investments and TRS, consisted of interests in two
portfolio companies (100% in first lien senior secured term loans) with a total
fair value of $1,980,044 and an average and median annual EBITDA of $26.6
million and $26.5 million, respectively, at initial investment. As of
December 31, 2012, the investments in our portfolio were purchased at a
weighted average price of 98.63% of par value. Our estimated gross annual yield
on our investments was 6.55% based upon the purchase price of our investments. The portfolio yield does not represent an actual
investment return to shareholders.  As of September 30, 2013 and December 31, 2012, our
short term investments included an investment in a U.S. Treasury Obligations
Fund of $11,732,233 and $1,817,762, respectively, which is included in
investments, at fair value on the accompanying consolidated balance sheets and
on the consolidated schedule of investments. Further, through a TRS (described further under
“Financial Condition, Liquidity and Capital Resources” below), we obtained the
economic benefit of owning investments primarily in first lien senior secured
and second lien senior secured floating-rate term loans of 43 and 5 portfolio
companies as of September 30, 2013 and December 31, 2012, respectively. The TRS
held one investment position in common with our investment portfolio at September
30, 2013. 27


---



The following table summarizes the
composition of our investment portfolio at amortized cost and fair value as of
September 30, 2013 and December 31, 2012:  September 30, 2013
  (unaudited)
 
 December 31, 2012Amortized
  Cost(1)
 
 Fair Value
 
 Percentage of
  Investment
  Portfolio
 
 Amortized
  Cost(1)
 
 Fair Value
 
 Percentage of
  Investment
  PortfolioSenior secured
  term loans - first lien(2)
 
 $
 33,586,963
 
 $
 34,030,046
 
 65.1%
 
 $
 1,970,111
 
 $
 1,980,044
 
 52.1%Senior secured
  term loans - second lien(2)
 
 
 6,371,037
 
 
 6,473,048
 
 12.4%
 
 
 -
 
 
 -
 
 -Short term
  investments(3)
 
 
 11,732,233
 
 
 11,732,233
 
 22.5%
 
 
 1,817,762
 
 
 1,817,762
 
 47.9%Total
  investments
 
 $
 51,690,233
 
 $
 52,235,327
 
 100.0%
 
 $
 3,787,873
 
 $
 3,797,806
 
 100.0%(1)
 Amortized cost represents the original cost adjusted for the
  amortization of premiums and/or accretion of discounts, as applicable, on our
  investments.(2)
 We do not control and are not an affiliate of any of the
  portfolio companies in our investment portfolio.(3)
 Short term investments represent highly liquid investments with
  original maturity dates of three months or less.
  The following table summarizes the
composition of our underlying TRS loans at cost and fair value as of September
30, 2013 and December 31, 2012:  September 30, 2013
  (unaudited)
 
 December 31, 2012Cost
 
 Fair Value
 
 Percentage of
  Underlying
  TRS Loans
 
 Cost
 
 Fair Value
 
 Percentage of
  Underlying
  TRS LoansSenior secured
  term loans - first lien(1)
 
 $
 55,656,058
 
 $
 55,940,602
 
 77.4%
 
 $
 2,883,100
 
 $
 2,895,495
 
 100.0%Senior secured
  term loans - second lien(1)
 
 
 14,294,934
 
 
 14,393,139
 
 19.9%
 
 
 -
 
 
 -
 
 -Subordinated
  debt(1)
 
 
 1,924,178
 
 
 1,925,393
 
 2.7%
 
 
 -
 
 
 -
 
 -Total
  investments
 
 $
 71,875,170
 
 $
 72,259,134
 
 100.0%
 
 $
 2,883,100
 
 $
 2,895,495
 
 100.0%(1)
 We do not
  control and are not an affiliate of any of the companies of the loans
  underlying the TRS.
  The following table summarizes the
composition of our investment portfolio by the type of interest rate as of September
30, 2013 and December 31, 2012, excluding short term investments of $11,732,233
and $1,817,762, respectively:  September 30, 2013
  (unaudited)
 
 December 31, 2012Interest Rate
  Allocation
 
 Fair Value
 
 Percentage of
  Investment Portfolio
 
 Fair Value
 
 Percentage of
  Investment PortfolioFloating
  interest rate investments
 
 $
 40,503,094
 
 100%
 
 $
 1,980,044
 
 100%Fixed interest
  rate investments
 
 
 -
 
 -
 
 
 -
 
 -Total
 
 $
 40,503,094
 
 100%
 
 $
 1,980,044
 
 100%
  We do not “control” and are not an
“affiliate” of any of our portfolio companies, each as defined in the 1940 Act.
In general, under the 1940 Act, we would be presumed to “control” a portfolio
company if we owned more than 25% of its voting securities and would be an
“affiliate” of a portfolio company if we owned 5% or more of its voting
securities.  The following table summarizes the
composition of our underlying TRS loans by the type of interest rate as of September
30, 2013 and December 31, 2012:  September 30, 2013
  (unaudited)
 
 December 31, 2012Interest Rate
  Allocation
 
 Fair Value of
  Underlying
  TRS Loans
 
 Percentage of
  Underlying
  TRS Loans
 
 Fair Value of
  Underlying
  TRS Loans
 
 Percentage of
  Underlying
  TRS LoansFloating
  interest rate investments
 
 $
 72,259,134
 
 100%
 
 $
 2,895,495
 
 100%Fixed interest
  rate investments
 
 
 -
 
 -
 
 
 -
 
 -Total
 
 $
 72,259,134
 
 100%
 
 $
 2,895,495
 
 100%
  28


---



The table below
shows the composition of our investment portfolio by industry classification
and the percentage, by fair value, of the total investment portfolio assets in
such industries as of September 30, 2013 and December 31, 2012:  September 30, 2013
  (unaudited)
 
 December 31, 2012Investments at
  Fair Value
 
 Percentage of
  Investment Portfolio
 
 Investments at
  Fair Value
 
 Percentage of
  Investment PortfolioHealthcare
 
 $
 8,951,160
 
 17.1%
 
 $
 -
 
 -Oil & Gas
 
 
 3,650,726
 
 7.0%
 
 
 -
 
 -Media
 
 
 3,489,278
 
 6.7%
 
 
 -
 
 -Manufacturing
 
 
 3,003,722
 
 5.8%
 
 
 -
 
 -Entertainment & Leisure
 
 
 2,604,408
 
 5.0%
 
 
 -
 
 -Construction
 
 
 2,482,777
 
 4.7%
 
 
 -
 
 -Computers & Electronics
 
 
 2,474,264
 
 4.7%
 
 
 -
 
 -Telecommunications
 
 
 2,085,102
 
 3.9%
 
 
 -
 
 -Environmental Services
 
 
 1,912,369
 
 3.7%
 
 
 -
 
 -Textile &
  Apparel Mfg.
 
 
 1,762,200
 
 3.4%
 
 
 -
 
 -Professional & Business Services
 
 
 1,523,097
 
 2.9%
 
 
 -
 
 -Financial
  Services
 
 
 1,443,673
 
 2.8%
 
 
 -
 
 -Food & Beverage
 
 
 1,002,467
 
 1.9%
 
 
 -
 
 -Building
  Materials
 
 
 974,949
 
 1.9%
 
 
 -
 
 -Insurance
 
 
 972,675
 
 1.9%
 
 
 980,044
 
 25.8%Chemicals
 
 
 962,500
 
 1.8%
 
 
 1,000,000
 
 26.3%Printing & Publishing
 
 
 702,727
 
 1.3%
 
 
 -
 
 -Gaming &
  Hotels
 
 
 505,000
 
 1.0%
 
 
 -
 
 -U.S. Treasury Securities
 
 
 11,732,233
 
 22.5%
 
 
 1,817,762
 
 47.9%Total
 
 $
 52,235,327
 
 100.0%
 
 $
 3,797,806
 
 100.0%
  The table below summarizes the composition
of our underlying TRS loans by industry classification and the percentage, by
fair value, of the underlying TRS loans in such industries as of September 30,
2013 and December 31, 2012:  September 30, 2013
  (unaudited)
 
 December 31, 2012Fair Value of
  Underlying
  TRS Loans
 
 Percentage of
  Underlying
  TRS Loans
 
 Fair Value of
  Underlying
  TRS Loans
 
 Percentage of
  Underlying
  TRS LoansProfessional & Business Services
 
 $
 9,907,917
 
 13.7%
 
 $
 500,625
 
 17.3%Healthcare
 
 
 6,617,934
 
 9.2%
 
 
 -
 
 -Computers & Electronics
 
 
 5,561,121
 
 7.7%
 
 
 500,000
 
 17.3%Telecommunications
 
 
 5,354,285
 
 7.4%
 
 
 -
 
 -Packaging
 
 
 5,243,527
 
 7.3%
 
 
 -
 
 -Media
 
 
 4,947,256
 
 6.9%
 
 
 -
 
 -Manufacturing
 
 
 4,863,870
 
 6.7%
 
 
 -
 
 -Financial Services
 
 
 4,413,333
 
 6.1%
 
 
 905,340
 
 31.3%Chemicals
 
 
 4,406,862
 
 6.1%
 
 
 -
 
 -Insurance
 
 
 3,995,000
 
 5.5%
 
 
 -
 
 -Retail
 
 
 2,499,538
 
 3.5%
 
 
 -
 
 -Ecological
 
 
 2,489,208
 
 3.4%
 
 
 -
 
 -Textile & Apparel Mfg.
 
 
 2,043,661
 
 2.8%
 
 
 -
 
 -Oil & Gas
 
 
 1,892,575
 
 2.6%
 
 
 -
 
 -Food & Beverage
 
 
 1,853,450
 
 2.6%
 
 
 -
 
 -Entertainment & Leisure
 
 
 1,622,035
 
 2.2%
 
 
 -
 
 -Mining
 
 
 1,530,000
 
 2.1%
 
 
 -
 
 -Diversified Support Services
 
 
 1,510,419
 
 2.1%
 
 
 -
 
 -Gaming & Hotels
 
 
 1,507,143
 
 2.1%
 
 
 486,875
 
 16.8%Aerospace/Defense
 
 
 -
 
 0.0%
 
 
 502,655
 
 17.3%Total
 
 $
 72,259,134
 
 100.0%
 
 $
 2,895,495
 
 100.0%
 29


---



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 grades 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 Grade
 Description1
 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
  grade 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 graded
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 September 30, 2013 and December 31, 2012, excluding short term
investments of $11,732,233 and $1,817,762, respectively:  September 30, 2013
  (unaudited)
 
 December 31, 2012Investment Rating
 
 Investments at
  Fair Value
 
 Percentage of
  Investment Portfolio
 
 Investments at
  Fair Value
 
 Percentage of
  Investment Portfolio1
 
 $
 -
 
 -
 
 $
 -
 
 -2
 
 
 40,503,094
 
 100%
 
 
 1,980,044
 
 100%3
 
 
 -
 
 -
 
 
 -
 
 -4
 
 
 -
 
 -
 
 
 -
 
 -5
 
 
 -
 
 -
 
 
 -
 
 -$
 40,503,094
 
 100%
 
 $
 1,980,044
 
 100%
 30


---



The following table summarizes the composition of our underlying
TRS loans based on the 1 to 5 investment rating scale at fair value as of September
30, 2013 and December 31, 2012:  September 30, 2013
  (unaudited)
 
 December 31, 2012Investment Rating
 
 Fair Value of Underlying
  TRS Loans
 
 Percentage of
  Underlying TRS Loans
 
 Fair Value of Underlying
  TRS Loans
 
 Percentage of
  Underlying TRS Loans1
 
 $
 -
 
 -
 
 $
 -
 
 -2
 
 
 72,259,134
 
 100%
 
 
 2,895,495
 
 100%3
 
 
 -
 
 -
 
 
 -
 
 -4
 
 
 -
 
 -
 
 
 -
 
 -5
 
 
 -
 
 -
 
 
 -
 
 -$
 72,259,134
 
 100%
 
 $
 2,895,495
 
 100%
  The amount of the portfolio and underlying
TRS loans in each grading category may vary substantially from period to period
resulting primarily from changes in the composition of the investment portfolio
as a result of new investments, repayment and exit activities. In addition,
changes in the grade of investments may be made to reflect our expectation of
performance and changes in investment values.  Current Investment Portfolio  As of November 8, 2013, our investment
portfolio, excluding our short term investments and TRS, consisted of interests
primarily in first lien senior secured and second lien senior secured
floating-rate loans of 31 portfolio companies with an average and median annual
EBITDA of $58.4 million and $50.2 million, respectively, at initial investment.
The investments were purchased at a weighted average price of 98.37% of par
value and our estimated gross annual portfolio yield was 7.82%. The portfolio
yield does not represent an actual investment return to shareholders.  As of November 8, 2013, our short term
investments included an investment in a U.S. Treasury Obligations Fund of $25,778,415.  Further, as of November 8, 2013,
through a TRS (described further under “Financial Condition, Liquidity and
Capital Resources” below), we obtained the economic benefit of owning
investments in first lien senior secured and second lien senior secured
floating-rate loans of 58 portfolio companies.  Results of Operations for the Three Months
Ended September 30, 2013  On December 17, 2012, we raised proceeds of
$2,500,000 from persons not affiliated with us or CIM and commenced operations.
Prior to satisfying the minimum offering requirement, we had no operations
except for immaterial matters relating to our organization and registration as
a non-diversified, closed-end management investment company. As a result, no
comparisons with the comparable 2012 period have been included.  Our results of operations for the three
months ended September 30, 2013 were as follows:  Investment income
 $
 494,701Net operating expenses
 (107,677)Net investment income
 602,378Net realized gain from investments
 1,381Net change in unrealized appreciation on investments
 220,148Net realized gain on total return swap
 494,891Net change in unrealized appreciation on total return swap
 588,808Net increase in net assets resulting from operations
 $
 1,907,606
 31


---



Investment Income  For the three months ended September 30,
2013, we generated investment income of $494,701, consisting primarily of
interest income on investments in senior secured loans of 27 portfolio
companies held during the period. Our investment portfolio, excluding short
term investments and the TRS, increased approximately $18,675,000 during the
period as we continued to deploy the net proceeds from our continuous offering
during the three months ended September 30, 2013. We expect our investment
portfolio to continue to grow due to the anticipated increase in equity
available to us for investment from our offering. As a result, we believe that
reported investment income for the three months ended September 30, 2013 is not
representative of our stabilized or future performance. Interest income earned
by loans underlying the TRS is not included in investment income in the consolidated
statements of operations, but rather it is included in the fair value of the
TRS, and eventually recorded as part of realized gain or loss on total return
swap.  Operating expenses   The composition of our operating expenses
for the three months ended September 30, 2013 was as follows:  Management fees
 $
 248,225Administrative services expense
 144,462Capital gains incentive fee
 128,766General and administrative
 667,704Total expenses
 1,189,157Less: expense reimbursement from IIG
 (1,296,834)Net operating expenses
 $
 (107,677)
  Expense Reimbursement  Our affiliate, IIG, has agreed to reimburse
us commencing with the quarter ended December 31, 2012 for certain expenses pursuant
to the expense support and conditional reimbursement agreement. Refer to the
discussion under “Related Party Transactions” below for further details about
the expense support and conditional reimbursement agreement. Also, see Note 3
to our consolidated financial statements for additional disclosures regarding
the expense reimbursements from IIG.  For the three months ended September 30,
2013, we recorded $1,296,834 of expense reimbursement from IIG in connection
with the expense support and conditional reimbursement agreement.  Reimbursement of such costs will be
determined as appropriate to meet the objectives of the expense support and
conditional reimbursement agreement. As a result, we may or may not be
requested to reimburse any such costs by IIG.  The table below presents a summary of all
expenses supported by IIG and the associated dates through which such expenses
are eligible for reimbursement by us for the three months ended December 31,
2012, March 31, 2013, June 30, 2013, and September 30, 2013.  Three Months
  Ended
 
 Expense Support Received from IIG
 
 Expense Support Reimbursed to IIG
 
 Unreimbursed Expense Support
 
 Ratio of Operating Expense to Average Net
  Assets for the Period(1)
 
 Annualized Distribution Rate for the
  Period(3)
 
 
 Eligible for Reimbursement throughDecember 31,
  2012
 
 $
 116,706
 
 $
 -
 
 $
 116,706
 
 0.93%
 
 0.00%
 (2)
 
 December 31, 2015March 31, 2013
 
 
 819,373
 
 
 -
 
 
 819,373
 
 2.75%
 
 7.00%
 
 
 March 31, 2016June 30, 2013
 
 
 1,147,536
 
 
 -
 
 
 1,147,536
 
 1.43%
 
 7.00%
 
 
 June 30, 2016September 30,
  2013
 
 
 1,296,834
 
 
 -
 
 
 1,296,834
 
 0.49%
 
 7.00%
 
 
 September 30, 2016Total
 
 $
 3,380,449
 
 $
 -
 
 $
 3,380,449(1)
 Operating expenses include all expenses borne by us, except for
  organizational and offering expenses, base management fees, incentive fees,
  administrative services expenses and other general and administrative
  expenses owed to CIM and its affiliates and interest expense.(2)
 We did not declare any distributions during the three months
  ended December 31, 2012.(3)
 Annualized Distribution Rate equals the annualized rate of distributions
  paid to shareholders based on the amount of the regular cash distributions
  paid immediately prior to the date the expense support payment obligation was
  incurred by CIM. Annualized Distribution Rate does not include special cash
  or stock distributions paid to shareholders.
 32


---



Net Investment Income  Our net investment income totaled $602,378
for the three months ended September 30, 2013.  Net Realized Gain from Investments  For the three months ended September 30,
2013, we recorded a net realized gain from investments of $1,381, which was due
to scheduled repayments on owned investments.  Net Change in Unrealized Appreciation on
Investments  For the three months ended September 30,
2013, the net change in unrealized appreciation on our investments totaled
$220,148. This change was predominantly driven by primary investments, sourced
with the assistance of AIM, made available to us at advantageous purchase
prices.  Net Realized Gain on TRS  For the three months ended September 30,
2013, we recorded a net realized gain on the TRS of $494,891.  This realized
gain was primarily due tointerest
income and fees, net of expenses, of $356,589 earned during the period.  Net Change in Unrealized Appreciation on
TRS  For the three months ended September 30,
2013, the net change in unrealized appreciation on the TRS was $588,808. This change
was driven by a tightening of credit spreads during the quarter and an increase
ininterest income and fees, net of
financing amounts paid to Citibank.  Net Increase in Net Assets Resulting from
Operations  For the three months ended September 30,
2013, we recorded a net increase in net assets resulting from operations of $1,907,606. 33


---



Results of Operations for the Nine Months Ended
September 30, 2013  On December 17, 2012, we raised proceeds of
$2,500,000 from persons not affiliated with us or CIM and commenced operations.
Prior to satisfying the minimum offering requirement, we had no operations
except for immaterial matters relating to our organization and registration as
a non-diversified, closed-end management investment company. As a result, no
comparisons with the comparable 2012 period have been included.  Our results of operations for the nine
months ended September 30, 2013 were as follows:  Investment income
 $
 808,321Net operating expenses
 97,734Net investment income
 710,587Net realized gain from investments
 16,352Net change in unrealized appreciation on investments
 535,161Net realized gain on total return swap
 1,096,371Net change in unrealized appreciation on total return swap
 866,909Net increase in net assets resulting from operations
 $
 3,225,380
  Investment Income  For the nine months ended September 30,
2013, we generated investment income of $808,321, consisting primarily of
interest income on investments in senior secured loans of 29 portfolio
companies held during the period. Our investment portfolio, excluding short
term investments and the TRS, increased approximately $38,523,000 during the
period as we continued to deploy the net proceeds from our continuous offering
during the nine months ended September 30, 2013. We expect our investment
portfolio to continue to grow due to the anticipated increase in equity available
to us for investment from our offering. As a result, we believe that reported
investment income for the nine months ended September 30, 2013 is not
representative of our stabilized or future performance. The interest income
earned by the loans underlying the TRS is not included in investment income in
the consolidated statements of operations, but rather it is included in the
fair value of the TRS, and eventually recorded as part of realized gain or loss
on total return swap.  Operating expenses   The composition of our operating expenses
for the nine months ended September 30, 2013 was as follows:  Management fees
 $
 413,748Administrative services expense
 715,653Capital gains incentive fee
 303,494General and administrative
 1,928,582Total expenses
 3,361,477Less: expense reimbursement from IIG
 (3,263,743)Net operating expenses
 $
 97,734
  Expense Reimbursement  Our affiliate, IIG, has agreed to reimburse
us commencing with the quarter ended December 31, 2012 for certain expenses pursuant
to the expense support and conditional reimbursement agreement. Refer to the
discussion under “Related Party Transactions” below for further details about
the expense support and conditional reimbursement agreement. Also, see Note 3
to our consolidated financial statements for additional disclosures regarding
the expense reimbursements from IIG.  For the nine months ended September 30,
2013, we recorded $3,263,743 of expense reimbursement from IIG in connection
with the expense support and conditional reimbursement agreement.  Reimbursement of such costs will be
determined as appropriate to meet the objectives of the expense support and
conditional reimbursement agreement. As a result, we may or may not be
requested to reimburse any such costs by IIG. 34


---



Net Investment Income  Our net investment income totaled $710,587
for the nine months ended September 30, 2013.  Net Realized Gain from Investments  For the nine months ended September 30,
2013, we recorded a net realized gain from investments of $16,352, which was
primarily due to the sale of investments for a gain of $14,375.  Net Change in Unrealized Appreciation on
Investments  For the nine months ended September 30,
2013, the net change in unrealized appreciation on our investments totaled $535,161.
This change was driven by a tightening of credit spreads during the period and
primary investments, sourced with the assistance of AIM, made available to us
at advantageous purchase prices.  Net Realized Gain on TRS  For the nine months ended September 30,
2013, we recorded a net realized gain on the TRS of $1,096,371.  This realized
gain was primarily due to the sale of underlying loans subject to the TRS for a
gain of approximately $594,000. The remainder of the realized gain on TRS was a
result of interest earned on the underlying TRS investments, net of expenses to
Citibank.  Net Change in Unrealized Appreciation on TRS  For the nine months ended September 30,
2013, the net change in unrealized appreciation on the TRS was $866,909. This
change was driven by tightening of credit spreads during the period and an
increase in interest income, net of expenses on the TRS.  Net Increase in Net Assets Resulting from
Operations  For the nine months ended September 30,
2013, we recorded a net increase in net assets resulting from operations of $3,225,380.  Financial Condition, Liquidity and Capital Resources  We generate cash primarily from the net
proceeds of our continuous public offering and from cash flows from fees,
interest and dividends earned from our investments as well as principal
repayments and proceeds from sales of our investments. We are engaged in a
continuous offering of shares of our common stock. We accept subscriptions on a
continuous basis and issue shares at semi-monthly closings at prices that,
after deducting selling commissions and dealer manager fees, are at or above
our net asset value per share.  We will sell our shares on a continuous basis
at our latest public offering price of $10.32 per share; however, to the extent
that our net asset value increases, we will sell at a price necessary to ensure
that shares are not sold at a price, after deduction of selling commissions and
dealer manager fees, that is below net asset value. In the event of a material
decline in our net asset value per share, which we consider to be a 2.5%
decrease below our current net offering price, and subject to certain
conditions, we will reduce our offering price accordingly. Therefore, persons
who tender subscriptions for shares of our common stock in the offering must
submit subscriptions for a certain dollar amount, rather than a number of
shares of common stock and, as a result, may receive fractional shares of our
common stock. In connection with each semi-monthly closing on the sale of
shares of our common stock, our board of directors or a committee thereof is
required to make the determination that we are not selling shares of our common
stock at a price below our then current net asset value no later than 48 hours
prior to the time that we price our shares. In connection with each
semi-monthly closing, we will, in each case if necessary, update the
information contained in our prospectus by filing a prospectus supplement with
the SEC and post any updated information to our website.  As of September 30, 2013, we had sold
7,715,146 shares for gross proceeds of approximately $77,684,000 at an average
price per share of $10.07. The gross proceeds received include reinvested
shareholder distributions of $641,967, for which we issued 65,909 shares of
common stock. Since commencing our continuous public offering on July 2, 2012
and through September 30, 2013, sales commissions and dealer manager fees
related to the sale of our common stock were $4,535,717 and $2,145,807,
respectively. Since commencing our continuous public offering on July 2, 2012
and through November 8, 2013, we have sold 11,399,542 shares of common stock
for gross proceeds of approximately $115,158,000 at an average price per share
of $10.10.  The net proceeds from our continuous
offering will be invested primarily in cash, cash equivalents, U.S. government
securities, repurchase agreements and high-quality debt instruments maturing in
one year or less prior to being invested in debt securities of private U.S.
companies. As of September
30, 2013, we had $11,732,233 in short term investments, primarily invested in
U.S. government securities. 35


---



We
may borrow funds to make investments, to the extent we determine that
additional capital would allow us to take advantage of additional investment
opportunities, if the market for debt financing presents attractively priced
debt financing opportunities, or if our board of directors determines that
leveraging our portfolio would be in our best interests and the best interests
of our shareholders. Any borrowings we make are required to be in compliance
with the provisions of the 1940 Act. We do not currently anticipate issuing any
preferred stock.  Total Return Swap For a detailed discussion of our TRS, refer
to Note 6 of our consolidated financial statements included in this report.  RIC Status and Distributions For a detailed discussion of our RIC status
and distributions, refer to Note 2 and Note 4, respectively, of our
consolidated financial statements included in this report.  Recent Accounting Pronouncements  We do not believe any recently issued, but
not yet effective, accounting pronouncements, if currently adopted, would have
a material adverse effect on our consolidated financial statements. Critical Accounting Policies  For a detailed discussion of our critical
accounting policies, refer to “Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations – Critical Accounting Policies” included in
our Annual Report on Form 10-K/A for the period from January 31, 2012
(Inception) through December 31, 2012.  We consider these accounting policies
critical because they involve management judgments and assumptions, require
estimates about matters that are inherently uncertain and because they are
important for understanding and evaluating our reported financial results.
These judgments will affect the reported amounts of assets and liabilities and
our disclosure of contingent assets and liabilities at the dates of the
financial statements and the reported amounts of revenue and expenses during
the reporting periods. With different estimates or assumptions, materially
different amounts could be reported in our financial statements.  Related Party Transactions  We have entered into an agreement with CIM
to provide us with investment advisory services. Payments for investment
advisory services under the investment advisory agreement in future periods
will be equal to (a) an annual base management fee of 2.0% of the average value
of our gross assets, excluding cash and cash equivalents, and (b) an incentive
fee based on our performance, as described below. ICON Capital and, to the
extent requested to provide such services and such services are so provided,
CIM and AIM and their respective affiliates, may be reimbursed for
administrative expenses incurred on our behalf.  The incentive fee
consists of two parts. The first part, which we refer to as the subordinated
incentive fee on income, will be calculated and payable quarterly in arrears
based upon our “pre-incentive fee net investment income” for the immediately
preceding quarter and will be subject to a hurdle rate, measured quarterly and
expressed as a rate of return on adjusted capital, as defined in our investment
advisory agreement, equal to 1.875% per quarter, or an annualized rate of 7.5%.
The second part of the incentive fee, which we refer to as the incentive fee on
capital gains, is an incentive fee on capital gains earned on liquidated
investments from the portfolio and is determined and payable in arrears as of
the end of each calendar year (or upon termination of the investment advisory
agreement). This fee is equal 20% of our realized capital gains on a cumulative
basis from inception, calculated as of the end of each calendar year, computed
net of all realized capital losses and unrealized capital depreciation on a
cumulative basis, less the aggregate amount of any previously paid capital
gains incentive fees.  On a cumulative basis and to the extent that all
realized capital losses and unrealized capital depreciation exceed realized
capital gains as well as the aggregate realized net capital gains for which a
fee has previously been paid, we would not be required to pay CIM a capital
gains incentive fee.  We and CIM have engaged AIM to act as our
investment sub-adviser, as AIM possesses skills that we believe will aid us in
achieving our investment objective. AIM will only assist CIM with identifying
investment opportunities and will make investment recommendations for approval
by CIM according to pre-established investment guidelines. On an annualized
basis, AIM will receive 50% of the fees payable to CIM under the investment
advisory agreement with respect to each year, which fees are payable to AIM
quarterly in arrears.  ICON Capital provides us with accounting,
investor relations and other administrative services. We entered into an
administration agreement with ICON Capital pursuant to which ICON Capital furnishes
us with administrative services necessary to conduct our day-to-day operations.
ICON Capital is reimbursed for administrative expenses it incurs on our behalf
in performing its obligations. Such costs will be reasonably allocated to us on
the basis of assets, revenues, time records or other reasonable methods. We
will not reimburse ICON Capital 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 ICON
Capital. 36


---



Our payment of organization costs and offering expenses (including
reimbursement of costs incurred by IIG and its affiliates) is capped at 1.5% of
the gross proceeds raised from our offering. If we sell the maximum number of
shares at our latest public offering price of $10.32 per share, then we estimate
that we may incur up to approximately $15,480,000 of expenses. Under the terms
of the investment advisory agreement, CIM and certain of its affiliates, which
includes IIG, will become entitled to receive reimbursement of up to 1.5% of
the gross proceeds raised until all organization costs and offering expenses
have been reimbursed. Previously, we interpreted “raised” to mean all gross
proceeds that we expected to raise through the completion of the offering of
our shares, rather than actual gross proceeds raised through the date of
reimbursement.  Consistent with such application and since we
believed we would raise at least $100 million through the completion of the
offering of our shares, upon commencement of operations on December 17, 2012,
we issued the IIG Shares to IIG in lieu of payment of $1,000,000 for
organization and offering expenses submitted for reimbursement.  The
transaction satisfied an independent obligation of IIG to invest $1,000,000 in
our shares.  Through that date, we had raised gross proceeds from
unaffiliated outside investors of $2,639,439 and from affiliated investors
of $2,000,000, which, applying 1.5% of actual proceeds raised through the date
of reimbursement, would have resulted in CIM being entitled to $69,592.  With respect to any future reimbursements
for organization and offering costs, we will interpret the 1.5% cap based on
actual gross proceeds raised at the time of such reimbursement.  In
addition, we will not issue any of our shares or other securities for services
or for property other than cash or securities except as a dividend or
distribution to our security holders or in connection with a
reorganization.  Consistent with this interpretation, on May 30,
2013, IIG paid us $1,000,000, plus interest accrued at a rate of 7% per year.
From inception through September 30, 2013, IIG and its affiliates incurred
organization costs and offering expenses of approximately $2,017,000, of which
$1,000,000 has been submitted to us for reimbursement. As of September 30,
2013, we had an outstanding payable to IIG for offering costs of $550,000. No
additional material organization costs or offering expenses have been incurred
by IIG or its affiliates subsequent to September 30, 2013. The decision to fund
our organization costs and offering expenses and the decision to seek
reimbursement for such costs is solely at the discretion of IIG and its
affiliates. As a result, we may or may not be requested to reimburse any costs
funded by IIG and its affiliates.  On January 30, 2013 we entered into the
expense support and conditional reimbursement agreement with IIG, whereby IIG
agreed to reimburse us for expenses in an amount that is sufficient to: (1)
ensure that no portion of our distributions to shareholders will be paid from
our offering proceeds or borrowings, and/or (2) reduce our operating expenses
until we have achieved economies of scale sufficient to ensure that we bear a
reasonable level of expense in relation to our investment income. Pursuant to
the expense support and conditional reimbursement agreement, we will have a
conditional obligation to reimburse IIG for any amounts funded by IIG under
such agreement if, during any fiscal quarter occurring within three years of
the date on which IIG funded such amount, the sum of our net investment income
for tax purposes, net capital gains and the amount of any dividends and other
distributions paid to us 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 us to shareholders. For the three
and nine months ended September 30, 2013, we recorded $1,296,834 and $3,263,743,
respectively of expense reimbursement from IIG in connection with the expense
support and conditional reimbursement agreement.  During the nine month period ended September
30, 2013, expense reimbursements of $1,629,316 from IIG were offset on our
consolidated balance sheets against amounts due to affiliates of IIG for management
fees, administrative services expense, incentive fees, and certain general and
administrative expenses. As of September 30, 2013, the net reimbursement from
IIG was $1,260,234.  The table below presents a summary of all
expenses supported by IIG and the associated dates through which such expenses
are eligible for reimbursement by us for the three months ended December 31,
2012, March 31, 2013, June 30, 2013, and September 30, 2013.  Three Months
  Ended
 
 Expense Support Received from IIG
 
 Expense Support Reimbursed to IIG
 
 Unreimbursed Expense Support
 
 Ratio of Operating Expense to Average Net
  Assets for the Period(1)
 
 Annualized Distribution Rate for the
  Period(3)
 
 
 Eligible for Reimbursement throughDecember 31,
  2012
 
 $
 116,706
 
 $
 -
 
 $
 116,706
 
 0.93%
 
 0.00%
 (2)
 
 December 31, 2015March 31, 2013
 
 
 819,373
 
 
 -
 
 
 819,373
 
 2.75%
 
 7.00%
 
 
 March 31, 2016June 30, 2013
 
 
 1,147,536
 
 
 -
 
 
 1,147,536
 
 1.43%
 
 7.00%
 
 
 June 30, 2016September 30,
  2013
 
 
 1,296,834
 
 
 -
 
 
 1,296,834
 
 0.49%
 
 7.00%
 
 
 September 30, 2016Total
 
 $
 3,380,449
 
 $
 -
 
 $
 3,380,449(1)
 Operating expenses include all expenses borne by us, except for
  organizational and offering expenses, base management fees, incentive fees,
  administrative services expenses and other general and administrative
  expenses owed to CIM and its affiliates and interest expense.(2)
 We did not declare any distributions during the three months
  ended December 31, 2012.(3)
 Annualized Distribution Rate equals the annualized rate of
  distributions paid to shareholders based on the amount of the regular cash
  distributions paid immediately prior to the date the expense support payment
  obligation was incurred by CIM. Annualized Distribution Rate does not include
  special cash or stock distributions paid to shareholders.
 37


---



Reimbursement of such costs will be determined as appropriate to
meet the objectives of the expense support and conditional reimbursement
agreement. As a result, we may or may not be requested to reimburse any such
costs funded by IIG.  We or IIG may terminate the expense support
and conditional reimbursement agreement at any time. IIG has indicated that it
expects to continue such reimbursements until it deems that we have achieved
economies of scale sufficient to ensure that we bear a reasonable level of
expenses in relation to our income. If we terminate the investment advisory
agreement with CIM, we may be required to repay IIG all reimbursements funded
by IIG within three years of the date of termination. The specific amount of
expenses reimbursed by IIG, 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 IIG will reimburse any
portion of our expenses in future quarters.  The investment advisory agreement, the
investment sub-advisory agreement, the administration agreement and the dealer manager
agreement each provide certain indemnifications from us to the other relevant
parties to such agreements.  Our maximum exposure under these agreements is
unknown. However, we have not experienced claims or losses pursuant to these
agreements and believe the risk of loss related to such indemnifications to be
remote.  If any of our contractual obligations
discussed above are terminated, our costs may increase under any new agreements
that we enter into as replacements. We would also likely incur expenses in
locating alternative parties to provide the services that we expect to receive
pursuant to our investment advisory agreement, the investment sub-advisory
agreement, the administration agreement and the dealer manager agreement. Any
new investment advisory agreement would also be subject to approval by our
shareholders.  Contractual Obligations  As of and for the three months ended
September 30, 2013, we had no contractual obligations outstanding except for
matters already disclosed in this report.  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.  Off-Balance Sheet Arrangements  As of September 30, 2013, we did not have
any off-balance sheet arrangements.  38


---



Item 3.    Quantitative and Qualitative
Disclosures about Market Risk  We are subject to financial market risks,
including changes in interest rates. As of September 30, 2013, 100% of our
portfolio investments and underlying loans subject to the TRS paid variable
interest rates, except for our short term investments, which are invested in
U.S. Treasury securities and repurchase agreements and have fixed 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 preferred
return, as defined in our investment advisory agreement, and may result in a
substantial increase in our net investment income, and also to the amount of
incentive fees payable to CIM with respect to our pre-incentive fee net
investment income.  Under the terms of the TRS with Citibank,
we pay fees to Citibank at a floating rate based on LIBOR (and some cases prime
rate) in exchange for the right to receive the economic benefit of a pool of
loans. In addition, in the future we may seek to borrow funds in order to make
additional investments. Our net investment income will depend, in part, upon
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
materially 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
and TRS Agreement in effect as of September 30, 2013: LIBOR Basis
  Point Change
 
 Increase (Decrease) in Net Interest
  Income(1)
 
 Percentage Change in Net Interest IncomeDown 24 basis
  points
 
 $
 174,734
 2.7%Current LIBOR
 
 
 -
 0.0%Up 100 basis
  points
 
 
 (610,682)
 (9.3%)Up 200 basis
  points
 
 
 (206,186)
 (3.1%)Up 300 basis
  points
 
 
 206,833
 3.2%(1)
 Includes the net effect of the change in interest rates on the
  unrealized appreciation (depreciation) on the TRS. Pursuant to the TRS, we
  receive from Citibank all interest payable in respect of the loans subject to
  the TRS and pay to Citibank interest at a rate equal to the floating rate
  index specified for each loan (typically LIBOR of varying maturities) plus
  1.25% per year on the full notional amount of the loans subject to the TRS.
  As of September 30, 2013, all of the loans subject to the TRS paid variable
  interest rates. This table assumes no change in defaults or prepayments by
  portfolio companies over the next twelve months.
 In addition, we may have risk regarding
portfolio valuation as discussed in Note 2 to our consolidated financial
statements included in this Quarterly Report on Form 10-Q. 39


---



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 September 30, 2013, 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 September 30,
2013 that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting. 40


---



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, 2012.  Item 2. Unregistered
Sales of Equity Securities and Use of Proceeds  Our registration
statement on Form N-2, as amended, was declared effective by the SEC on July 2,
2012 (SEC File No. 333-178646). Our offering period commenced on July 2, 2012.  We did not engage
in any unregistered sales of equity securities during the three months ended September
30, 2013.  Item 3. Defaults Upon Senior Securities  Not applicable.  Item 4. Mine Safety Disclosures  Not applicable.  Item 5. Other Information  Not applicable.  41


---



Item
6. Exhibits  Exhibit
  Number
 
 Description of Document3.1
 
 Articles of Amendment and Restatement of the Articles of
  Incorporation of CĪON Investment Corporation (Incorporated by reference
  to Exhibit (A)(2) to Pre-Effective Amendment No. 4 to Registrant’s
  Registration Statement on Form N-2 filed with the SEC on June 29, 2012 (File
  No. 333-178646)).3.2
 
 Second Articles of Amendment and Restatement of the Articles of Incorporation
  of CĪON Investment Corporation (Incorporated by reference to Exhibit 3.1
  to Registrant’s Current Report on Form 8-K filed with the SEC on August 27,
  2012 (File No. 814-00941)).3.3
 
 Bylaws of CĪON Investment Corporation (Incorporated by reference
  to Exhibit (B) to Pre-Effective Amendment No. 4 to Registrant’s Registration
  Statement on Form N-2 filed with the SEC on June 29, 2012 (File No.
  333-178646)).4.1
 
 Form of Subscription Agreement (Incorporated by reference to the
  Form of Subscription Agreement included in Registrant’s  Prospectus
  Supplement No. 2 filed with the SEC on July 19, 2013 (File No. 333-178646)).4.2
 
 Distribution Reinvestment Plan (Incorporated by reference to
  Exhibit (E) to Pre-Effective Amendment No. 1 to the Registrant’s Registration
  Statement on Form N-2 filed with the SEC on February 17, 2012 (File No.
  333-178646)).4.3
 
 Amended and Restated Distribution Reinvestment Plan (Incorporated
  by reference to Exhibit 4.1 to Registrant's Current Report on Form 8-K filed
  with the SEC on September 18, 2013 (File No. 814-00941)).10.1
 
 Investment Advisory Agreement Between CĪON Investment
  Corporation and CĪON Investment Management, LLC (Incorporated by
  reference to Exhibit (G)(1) to Pre-Effective Amendment No. 4 to Registrant’s
  Registration Statement on Form N-2 filed with the SEC on June 29, 2012 (File
  No. 333-178646)).10.2
 
 Investment Sub-Advisory Agreement by and among CĪON
  Investment Management, LLC, CĪON Investment Corporation and Apollo
  Investment Management, L.P. (Incorporated by reference to Exhibit (G)(2) to
  Pre-Effective Amendment No. 4 to Registrant’s Registration Statement on Form
  N-2 filed with the SEC on June 29, 2012 (File No. 333-178646)).10.3
 
 Administration Agreement by and between CĪON Investment
  Corporation and ICON Capital Corp. (Incorporated by reference to Exhibit
  (K)(2) to Pre-Effective Amendment No. 4 to Registrant’s Registration Statement
  on Form N-2 filed with the SEC on June 29, 2012 (File No. 333-178646)).10.4
 
 Custody Agreement by and between CĪON Investment
  Corporation and U.S. Bank National Association (Incorporated by reference to
  Exhibit (J) to Pre-Effective Amendment No. 4 to Registrant’s Registration
  Statement on Form N-2 filed with the SEC on June 29, 2012 (File No.
  333-178646)).10.5
 
 Escrow Agreement by and among CĪON Investment Corporation,
  UMB Bank, N.A., and ICON Securities Corp. (Incorporated by reference to
  Exhibit (K)(1) to Pre-Effective Amendment No. 4 to Registrant’s Registration
  Statement on Form N-2 filed with the SEC on June 29, 2012 (File No.
  333-178646)).10.6
 
 Dealer Manager Agreement by and among CĪON Investment
  Corporation, CĪON Investment Management, LLC, and ICON Securities Corp.
  (Incorporated by reference to Exhibit (H)(1) to Pre-Effective Amendment No. 4
  to Registrant’s Registration Statement on Form N-2 filed with the SEC on June
  29, 2012 (File No. 333-178646)).10.7
 
 ISDA 2002 Master Agreement, together with the Schedule thereto
  and Credit Support Annex to such Schedule, each dated as of December 17,
  2012, by and between Flatiron Funding, LLC and Citibank, N.A. (Incorporated
  by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K
  filed with the SEC on December 19, 2012).10.8
 
 Confirmation Letter Agreement, dated as of December 17, 2012, by
  and between Flatiron Funding, LLC and Citibank, N.A. (Incorporated by
  reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K
  filed with the SEC on December 19, 2012).
  42


---



Exhibit Number
 
 Description of Document10.9
 
 Expense Support and Conditional Reimbursement Agreement dated as
  of January 30, 2013, by and between CĪON Investment Corporation and ICON
  Investment Group, LLC (Incorporated by reference to Exhibit (K)(5) to
  Post-Effective Amendment No.1 to Registrant’s Registration Statement on Form
  N-2 filed with the SEC on January 31, 2013 (File No. 333-178646)).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.
 43


---



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:
  November 13, 2013CĪON
  Investment Corporation
  (Registrant)By
 /s/
  Michael A. ReisnerMichael
  A. ReisnerCo-Chief
  Executive Officer and Co-President
  (Principal
  Executive Officer)By
 /s/
  Mark GattoMark
  GattoCo-Chief
  Executive Officer and Co-President
  (Principal
  Executive Officer)By
 /s/
  Keith S. FranzKeith
  S. FranzChief
  Financial Officer
  (Principal
  Financial and Accounting Officer)
  44


---