UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington,
D.C. 20549 FORM10-Q [x]
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
  THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period endedJune 30,
2014 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 August 11, 2014 was 36,981,292.


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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
 9Item
  2. Management’s Discussion and Analysis of Financial Condition and Results of
  Operations
 37Item
  3. Quantitative and Qualitative Disclosures About Market Risk
 57Item
  4. Controls and Procedures
 58PART II – OTHER INFORMATIONItem 1. Legal Proceedings
 59Item
  1A. Risk Factors
 59Item
  2. Unregistered Sales of Equity Securities and Use of Proceeds
 59Item
  3. Defaults Upon Senior Securities
 59Item
  4. Mine Safety Disclosures
 59Item 5.
  Other Information
 59Item 6.
  Exhibits
 60Signatures
 62


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PART I – FINANCIAL INFORMATION Item 1. Financial Statements CĪON
Investment Corporation Consolidated Balance Sheets June 30,
 
 December 31,2014
 
 2013(unaudited)AssetsInvestments, at
  fair value (amortized cost of $244,969,933and
  $103,414,685, respectively)
 $
 247,287,810
 
 $
 104,518,913Cash
 
 1,782,912
 
 
 449,912Due from
  counterparty(1)
 
 79,705,510
 
 
 40,703,777Reimbursement
  from IIG, net(2)
 
 -
 
 
 545,593Due from IIG -
  other
 
 86,073
 
 
 -Prepaid expenses
 
 -
 
 
 98,990Interest
  receivable on investments
 
 1,114,170
 
 
 415,416Receivable due
  on investments sold
 
 1,365,718
 
 
 535,513Unrealized
  appreciation on total return swap(1)
 
 1,571,894
 
 
 1,548,617Receivable due
  on total return swap(1)
 
 4,568,689
 
 
 1,801,665Total assets
 $
 337,482,776
 
 $
 150,618,396Liabilities and Shareholders' EquityLiabilitiesPayable for
  investments purchased
 $
 24,148,055
 
 $
 3,462,700Shareholders'
  distributions payable(3)
 
 -
 
 
 895,704Accounts payable
  and accrued expenses
 
 776,992
 
 
 608,938Accrued
  management fees
 
 1,303,206
 
 
 -Accrued
  administrative services expense
 
 430,220
 
 
 -Due to IIG -
  offering expenses
 
 -
 
 
 550,000Accrued
  recoupment of expense reimbursements from IIG(2)
 
 599,626
 
 
 -Accrued capital
  gains incentive fee(4)
 
 1,136,972
 
 
 530,569Total
  liabilities
 
 28,395,071
 
 
 6,047,911Commitments and
  contingencies (Note 4 and Note 10)Shareholders'
  EquityCommon stock,
  $0.001 par value; 500,000,000 shares authorized;32,949,270
  and 15,510,178 shares issued and outstanding, respectively
 
 32,949
 
 
 15,510Capital in
  excess of par value
 
 306,137,742
 
 
 142,402,255Accumulated
  distributions in excess of net investment income
 
 (972,757)
 
 
 (500,125)Accumulated net
  unrealized appreciation on investments
 
 2,317,877
 
 
 1,104,228Accumulated net
  unrealized appreciation on total return swap(1)
 
 1,571,894
 
 
 1,548,617Total
  shareholders' equity
 
 309,087,705
 
 
 144,570,485Total
  liabilities and shareholders' equity
 $
 337,482,776
 
 $
 150,618,396Net asset value
  per share of common stock at end of period
 $
 9.38
 
 $
 9.32Shares of common
  stock outstanding
 
 32,949,270
 
 
 15,510,178(1)See Note 7 for a discussion of the
  Company’s total return swap agreement.(2)See Note 4 for a discussion of expense
  reimbursements from ICON Investment Group, LLC, or IIG, and recoupment of
  expense reimbursements.(3)See Note 5 for a discussion of the
  sources of distributions paid by the Company.(4)See Note 2 and Note 4 for a discussion
  of the methodology employed by the Company in calculating the capital gains
  incentive fee.See accompanying notes to consolidated
  financial statements.
 1


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CĪON Investment
Corporation Consolidated Statements of Operations (unaudited)  Three Months Ended
  June 30,
 
 Six Months Ended
  June 30,2014
 
 2013
 
 2014
 
 2013Investment
  incomeInterest income
 $
 3,634,027
 
 $
 245,494
 
 $
 5,834,808
 
 $
 313,620Operating
  expensesManagement fees
 
 1,303,206
 
 
 120,781
 
 
 2,212,013
 
 
 165,523Administrative
  services expense
 
 430,220
 
 
 307,636
 
 
 845,615
 
 
 571,191Capital gains
  incentive fee(1)
 
 219,747
 
 
 57,705
 
 
 745,073
 
 
 174,728Offering expense
  - IIG
 
 -
 
 
 -
 
 
 591,475
 
 
 -General and
  administrative(2)
 
 1,017,487
 
 
 752,015
 
 
 2,075,615
 
 
 1,260,878Total expenses
 
 2,970,660
 
 
 1,238,137
 
 
 6,469,791
 
 
 2,172,320Expense
  reimbursement from IIG(3)
 
 -
 
 
 (1,147,536)
 
 
 (1,048,858)
 
 
 (1,966,909)Recoupment of
  expense reimbursement from IIG(3)
 
 599,626
 
 
 -
 
 
 599,626
 
 
 -Net operating
  expenses
 
 3,570,286
 
 
 90,601
 
 
 6,020,559
 
 
 205,411Net investment
  income (loss)
 
 63,741
 
 
 154,893
 
 
 (185,751)
 
 
 108,209Realized and
  unrealized gainsNet realized
  gain on investments
 
 210,391
 
 
 10,438
 
 
 384,105
 
 
 14,971Net change in
  unrealized appreciation on investments
 
 602,756
 
 
 190,731
 
 
 1,213,649
 
 
 315,013Net realized
  gain on total return swap(4)
 
 4,800,062
 
 
 505,676
 
 
 7,763,541
 
 
 792,013Net change in
  unrealized (depreciation) appreciation on total return swap(4)
 
 (1,184,648)
 
 
 (163,108)
 
 
 23,277
 
 
 87,568Total net
  realized and unrealized gains
 
 4,428,561
 
 
 543,737
 
 
 9,384,572
 
 
 1,209,565Net increase in
  net assets resulting from operations
 $
 4,492,302
 
 $
 698,630
 
 $
 9,198,821
 
 $
 1,317,774Per share
  information—basic and dilutedNet increase in
  net assets per share resulting from operations
 $
 0.16
 
 $
 0.24
 
 $
 0.38
 
 $
 0.65Weighted average
  shares of common stock outstanding
 
 28,393,882
 
 
 2,878,270
 
 
 24,318,604
 
 
 2,026,081(1)
 See Note 2 and Note 4 for a discussion of the methodology
  employed by the Company in calculating the capital gains incentive fee.(2)
 See Note 9 for details of the Company's general and
  administrative expense. See Note 2 for details of the Company's organization
  costs and offering expenses included in general and administrative expense.(3)
 See Note 4 for a discussion of expense reimbursements from IIG
  and recoupment of expense reimbursements.(4)
 See Note 7 for a discussion of the Company’s total return swap
  agreement.See accompanying notes to consolidated
  financial statements.
  2


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CĪON Investment Corporation Consolidated Statements of Changes in Net
Assets (unaudited)  Six Months Ended
  June 30,2014
 
 2013Changes in
  net assets from operations:Net investment
  (loss) income
 $
 (185,751)
 
 $
 108,209Net realized
  gain on investments
 
 384,105
 
 
 14,971Net change in
  unrealized appreciation on investments
 
 1,213,649
 
 
 315,013Net realized
  gain on total return swap(1)
 
 7,763,541
 
 
 792,013Net change in
  unrealized appreciation on total return swap(1)
 
 23,277
 
 
 87,568Net increase in
  net assets resulting from operations
 
 9,198,821
 
 
 1,317,774Shareholder
  distributions:(2)Net realized
  gain on total return swapNet
  interest and other income from TRS portfolio
 
 (5,686,805)
 
 
 (335,925)Net
  gain on TRS loan sales
 
 (2,076,736)
 
 
 (265,555)Net realized
  gain on investments
 
 (384,105)
 
 
 (15,015)Other sources
 
 (286,881)
 
 
 (110,901)Net decrease in
  net assets from shareholder distributions
 
 (8,434,527)
 
 
 (727,396)Changes in
  net assets from capital share transactions:Issuance of
  common stock, net of issuance costs of $15,432,857 and $3,038,387, respectively
 
 158,669,249
 
 
 30,527,165Reinvestment of
  shareholder distributions
 
 5,129,582
 
 
 213,150Repurchase of
  common stock
 
 (45,905)
 
 
 -Amortization of
  deferred offering expenses
 
 -
 
 
 (495,890)Net increase in
  net assets resulting from capital share transactions
 
 163,752,926
 
 
 30,244,425Total increase
  in net assets
 
 164,517,220
 
 
 30,834,803Net assets at
  beginning of period
 
 144,570,485
 
 
 4,487,115Net assets at
  end of period
 $
 309,087,705
 
 $
 35,321,918Net asset value
  per share of common stock at end of period
 $
 9.38
 
 $
 9.17Shares of common
  stock outstanding at end of period
 
 32,949,270
 
 
 3,853,304(1)See Note 7 for a discussion of the
  Company’s total return swap agreement.(2)See Note 5 for a discussion of the
  sources of distributions paid by the Company.See accompanying notes to consolidated
  financial statements.
  3


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CĪON Investment Corporation Consolidated Statements of Cash Flows (unaudited)  Six Months Ended
  June 30,2014
 
 2013Operating
  activities:Net increase in
  net assets resulting from operations
 $
 9,198,821
 
 $
 1,317,774Adjustments to
  reconcile net increase in net assets resulting fromoperations to
  net cash used in operating activities:Net accretion of
  discount on investments
 
 (123,739)
 
 
 (7,011)Proceeds from principal
  repayment of investments
 
 5,543,499
 
 
 642,548Purchase of
  investments
 
 (159,809,294)
 
 
 (20,658,178)Increase in
  short term investments, net
 
 (27,011,997)
 
 
 (6,826,208)Proceeds from
  sale of investments
 
 40,230,388
 
 
 504,375Net realized
  gain on investments
 
 (384,105)
 
 
 (14,971)Net unrealized
  appreciation on investments
 
 (1,213,649)
 
 
 (315,013)Net unrealized
  appreciation on total return swap(1)
 
 (23,277)
 
 
 (87,568)Increase in due
  from counterparty
 
 (39,001,733)
 
 
 (9,567,714)Decrease
  (increase) in reimbursement from IIG, net(2)
 
 545,593
 
 
 (965,347)Increase in due
  from IIG - other
 
 (86,073)
 
 
 -Decrease in
  prepaid expenses
 
 98,990
 
 
 96,134Increase in
  interest receivable on investments
 
 (698,754)
 
 
 (71,250)Increase in
  receivable due on investments sold
 
 (830,205)
 
 
 (25,000)Increase in
  receivable due on total return swap(1)
 
 (2,767,024)
 
 
 (361,679)Increase in
  payable for investments purchased
 
 20,685,355
 
 
 4,720,900Increase in
  accounts payable and accrued expenses
 
 168,054
 
 
 491,838Increase in
  accrued management fees
 
 1,303,206
 
 
 -Increase in
  accrued administrative services expense
 
 430,220
 
 
 -(Decrease)
  increase in due to IIG - offering expenses
 
 (550,000)
 
 
 1,000,000Increase in
  accrued recoupment of expense reimbursements from IIG(2)
 
 599,626
 
 
 -Increase in
  accrued capital gains incentive fee
 
 606,403
 
 
 -Net cash used in
  operating activities
 
 (153,089,695)
 
 
 (30,126,370)Financing
  activities:Gross proceeds
  from issuance of common stock
 
 174,102,106
 
 
 33,565,552Commissions and
  dealer manager fees paid
 
 (15,432,857)
 
 
 (3,061,487)Repurchase of
  common stock
 
 (45,905)
 
 
 -Shareholder
  distributions paid(3)
 
 (4,200,649)
 
 
 (293,194)Repayment of
  financing arrangement
 
 -
 
 
 (72,682)Net cash
  provided by financing activities
 
 154,422,695
 
 
 30,138,189Net increase in
  cash
 
 1,333,000
 
 
 11,819Cash, beginning
  of period
 
 449,912
 
 
 -Cash, end of
  period
 $
 1,782,912
 
 $
 11,819Supplemental
  non-cash financing activities:Deferred
  offering expenses charged to shareholders' equity
 $
 -
 
 $
 495,890Reinvestment of
  shareholder distributions
 $
 5,129,582
 
 $
 213,150Shareholders'
  distributions payable
 $
 -
 
 $
 221,052(1)See Note 7 for a discussion of the
  Company’s total return swap agreement.(2)See Note 4 for a discussion of expense
  reimbursements from IIG and recoupment of expense reimbursements.(3)See Note 5 for a discussion of the
  sources of distributions paid by the Company.See accompanying notes to consolidated
  financial statements.
  4


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CĪON Investment Corporation Consolidated Schedule of Investments June 30, 2014 (unaudited)  Portfolio
  Company(a)
 
 Index Rate(b)
 
 Industry
 
 Principal/Par
  Amount
 
 Amortized
  Cost
 
 Fair
  Value(c)Senior
  Secured First Lien Term Loans - 24.8%ABRA, Inc.,
  L+600, 1.25% LIBOR Floor, 5/10/2018
 
 3 Month LIBOR
 
 Automotive
 
 $
 8,427,849
 
 $
 8,369,671
 
 $
 8,427,848Accruent, LLC,
  L+450, 1.25% LIBOR Floor, 11/25/2019
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 4,477,500
 
 
 4,467,329
 
 
 4,466,306Collision
  Holding Company, LLC, L+775, 1.25% LIBOR Floor, 5/10/2018
 
 3 Month LIBOR
 
 Automotive
 
 
 1,568,044
 
 
 1,553,878
 
 
 1,568,044Distribution
  International, Inc., L+650, 1.00% LIBOR Floor, 7/16/2019
 
 3 Month LIBOR
 
 Construction
  & Building
 
 
 2,475,000
 
 
 2,457,835
 
 
 2,481,188ECI Acquisition
  Holdings, Inc., L+625, 1.00% LIBOR Floor, 3/11/2019(d)
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 8,255,310
 
 
 8,207,406
 
 
 8,214,033F+W Media, Inc.,
  L+650, 1.25% LIBOR Floor, 6/30/2019
 
 3 Month LIBOR
 
 Media:
  Diversified & Production
 
 
 9,609,642
 
 
 9,251,268
 
 
 9,609,642ILC Industries,
  LLC, L+650, 1.50% LIBOR Floor, 7/11/2018
 
 1 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 4,259,911
 
 
 4,273,872
 
 
 4,270,561Infogroup Inc.,
  L+600, 1.50% LIBOR Floor, 5/26/2018(e)
 
 3 Month LIBOR
 
 Media:
  Advertising, Printing & Publishing
 
 
 4,583,042
 
 
 4,324,225
 
 
 4,328,134SK Spice
  S.Á.R.L, L+825, 1.25% LIBOR Floor, 9/30/2018(f)
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 1,766,652
 
 
 1,732,343
 
 
 1,786,526Smile Brands
  Group, Inc., L+625, 1.25% LIBOR Floor, 8/16/2019(e)
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 5,359,500
 
 
 5,258,185
 
 
 5,185,316Sprint
  Industrial Holdings, LLC, L+575, 1.25% LIBOR Floor, 5/14/2019
 
 3 Month LIBOR
 
 Energy: Oil
  & Gas
 
 
 1,449,240
 
 
 1,438,494
 
 
 1,460,110Survey Sampling
  International, LLC, L+450, 1.00% LIBOR Floor, 12/12/2019
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 3,229,688
 
 
 3,199,843
 
 
 3,213,539TOPPS Company,
  Inc., L+600, 1.25% LIBOR Floor, 10/2/2018
 
 3 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 2,099,450
 
 
 2,063,029
 
 
 2,057,461Travel Leaders
  Group, LLC, L+600, 1.00% LIBOR Floor, 12/5/2018
 
 3 Month LIBOR
 
 Services:
  Consumer
 
 
 4,777,500
 
 
 4,516,693
 
 
 4,771,528Trimark USA,
  LLC, L+625, 1.00% LIBOR Floor, 5/11/2019
 
 1 Month LIBOR
 
 Beverage, Food
  & Tobacco
 
 
 4,987,500
 
 
 4,940,264
 
 
 4,999,969US Joiner
  Holding Company, L+600, 1.00% LIBOR Floor, 4/16/2020
 
 3 Month LIBOR
 
 Capital
  Equipment
 
 
 9,975,000
 
 
 9,829,318
 
 
 9,950,063Total Senior
  Secured First Lien Term Loans
 
 
 
 
 
 
 
 
 
 75,883,653
 
 
 76,790,268Senior
  Secured Second Lien Term Loans - 32.8%Active Network,
  Inc., L+850, 1.00% LIBOR Floor, 11/15/2021
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 2,647,347
 
 
 2,634,897
 
 
 2,657,274American
  Residential Services LLC, L+800, 1.00% LIBOR Floor, 12/31/2021(e)
 
 3 Month LIBOR
 
 Construction
  & Building
 
 
 3,700,000
 
 
 3,663,000
 
 
 3,663,000Camp
  International Holding Company, L+725, 1.00% LIBOR Floor, 11/30/2019
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 2,029,000
 
 
 2,029,000
 
 
 2,074,653Chief
  Exploration & Development LLC, P+550, 2.00% Rate Floor, 5/16/2021
 
 PRIME
 
 Energy: Oil
  & Gas
 
 
 5,940,000
 
 
 5,880,875
 
 
 6,088,500Dialysis Newco,
  Inc., L+675, 1.00% LIBOR Floor, 10/22/2021
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 7,200,000
 
 
 7,171,491
 
 
 7,254,000Drew Marine
  Group, Inc., L+700, 1.00% LIBOR Floor, 5/19/2021(f)
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 5,000,000
 
 
 5,003,164
 
 
 5,075,000Elements
  Behavioral Health, Inc., L+825, 1.00% LIBOR Floor, 2/11/2020
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 5,000,000
 
 
 4,952,624
 
 
 4,950,000Emerald 3
  Limited, L+700, 1.00% LIBOR Floor, 5/16/2022(e)(f)
 
 3 Month LIBOR
 
 Environmental
  Industries
 
 
 5,000,000
 
 
 4,950,000
 
 
 4,993,750GCA Services
  Group, Inc., L+800, 1.25% LIBOR Floor, 11/1/2020
 
 3 Month LIBOR
 
 Services:
  Consumer
 
 
 800,000
 
 
 796,537
 
 
 811,500Genex Holdings,
  Inc., L+775, 1.00% LIBOR Floor, 5/30/2022(e)
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 7,910,000
 
 
 7,868,400
 
 
 7,994,044Global Tel*Link
  Corporation, L+775, 1.25% LIBOR Floor, 11/23/2020(e)
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 5,500,000
 
 
 5,480,022
 
 
 5,481,658H.D. Vest, Inc.,
  L+800, 1.25% LIBOR Floor, 6/18/2019
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 854,000
 
 
 845,119
 
 
 845,460Institutional
  Shareholder Services Inc., L+750, 1.00% LIBOR Floor, 4/30/2022
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 3,860,000
 
 
 3,821,744
 
 
 3,893,775Landslide
  Holdings, Inc., L+725, 1.00% LIBOR Floor, 2/25/2021
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 7,330,121
 
 
 7,342,178
 
 
 7,372,892Learfield
  Communications, Inc., L+775, 1.00% LIBOR Floor, 10/9/2021
 
 3 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 1,417,333
 
 
 1,403,881
 
 
 1,446,565Mergermarket
  USA, Inc., L +650, 1.00% LIBOR Floor, 2/4/2022(f)
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 2,000,000
 
 
 1,990,011
 
 
 1,983,760MSC.Software
  Corporation, L+750, 1.00% LIBOR Floor, 5/29/2021
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 6,820,000
 
 
 6,752,287
 
 
 6,888,200Securus
  Technologies Holdings, Inc., L+775, 1.25% LIBOR Floor, 4/30/2021
 
 3 Month LIBOR
 
 Telecommunications
 
 
 3,500,000
 
 
 3,464,558
 
 
 3,543,750SI Organization,
  Inc., L+800, 1.00% LIBOR Floor, 5/23/2020(e)
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 1,511,000
 
 
 1,495,890
 
 
 1,515,729SMG, L+825,
  1.00% LIBOR Floor, 2/27/2021
 
 3 Month LIBOR
 
 Hotel, Gaming
  & Leisure
 
 
 6,220,000
 
 
 6,220,000
 
 
 6,328,850TASC, Inc,
  12.00%, 5/23/2021
 
 None
 
 Services:
  Business
 
 
 3,141,620
 
 
 2,985,722
 
 
 3,110,204Tectum Holdings,
  Inc., P+700, 2.00% Base Rate Floor, 3/12/2019
 
 PRIME
 
 Automotive
 
 
 4,650,000
 
 
 4,627,170
 
 
 4,638,375Telecommunications
  Management, LLC, L+800, 1.00% LIBOR Floor, 10/30/2020
 
 3 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 675,178
 
 
 670,280
 
 
 682,774Trimark USA,
  LLC, L+900, 1.00% LIBOR Floor, 8/12/2019
 
 3 Month LIBOR
 
 Beverage, Food
  & Tobacco
 
 
 5,000,000
 
 
 4,904,871
 
 
 5,050,000Winebow
  Holdings, Inc., L+750, 1.00% LIBOR Floor, 1/2/2022(e)
 
 1 Month LIBOR
 
 Beverage, Food
  & Tobacco
 
 
 1,724,489
 
 
 1,711,555
 
 
 1,728,800WP CPP Holdings,
  LLC, L+775, 1.00% LIBOR Floor, 4/30/2021
 
 3 Month LIBOR
 
 Aerospace &
  Defense
 
 
 1,435,000
 
 
 1,428,489
 
 
 1,452,041Total Senior
  Secured Second Lien Term Loans
 
 
 
 
 
 
 
 
 
 100,093,765
 
 
 101,524,554See accompanying notes to consolidated
  financial statements.
  5


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CĪON
Investment Corporation Consolidated Schedule of Investments June 30, 2014 (unaudited)  Portfolio
  Company(a)
 
 Index Rate(b)
 
 Industry
 
 Principal/Par
  Amount
 
 Amortized
  Cost
 
 Fair
  Value(c)Collateralized
  Securities - 9.9%Deutsche Bank AG
  Frankfurt CRAFT 2013-1A Class Credit Linked Note, L+925, 4/17/2020(f)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 2,000,000
 
 
 2,038,862
 
 
 2,035,000Deutsche Bank AG
  Frankfurt CRAFT 2013-1X Class Credit Linked Note, L+925, 4/17/2020(f)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 610,000
 
 
 620,443
 
 
 620,675Deutsche Bank AG
  Frankfurt CRAFT 2014-1 Class Credit Linked Note, L+965, 5/15/2019(f)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 5,400,000
 
 
 5,400,000
 
 
 5,400,000Great Lakes CLO
  2014-1, Ltd. Class E Notes, L+525, 4/15/2025(f)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 5,000,000
 
 
 4,498,525
 
 
 4,500,000Ivy Hill Middle
  Market Credit Fund VII, Ltd. Class E Notes, L+565, 10/20/2025(f)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 2,000,000
 
 
 1,855,959
 
 
 1,900,000Ivy Hill Middle
  Market Credit Fund VII, Ltd. Subordinated Notes, Residual, 10/20/2025(f)
 
 N/A
 
 Diversified
  Financials
 
 
 2,000,000
 
 
 1,899,972
 
 
 1,863,600JFIN CLO 2014,
  Ltd. Class E Notes, L+500, 4/20/2025(f)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 2,500,000
 
 
 2,298,095
 
 
 2,250,000JPMorgan Chase
  Bank, N.A. Credit Link Note, L+1,225, 12/20/2021
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 5,000,000
 
 
 5,000,000
 
 
 5,029,500NXT Capital CLO
  2014-1, LLC, Class E Notes, L+550, 4/23/2026(f)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 7,500,000
 
 
 6,984,993
 
 
 6,978,547Total
  Collateralized Securities
 
 
 
 
 
 
 
 
 
 30,596,849
 
 
 30,577,322Short Term
  Investments - 12.5%(g)First American
  Treasury Obligations Fund, Class Z Shares(h)
 
 
 
 
 
 
 38,395,666
 
 
 38,395,666
 
 
 38,395,666Total Short
  Term Investments
 
 
 
 
 
 
 
 
 
 38,395,666
 
 
 38,395,666TOTAL
  INVESTMENTS - 80.0%
 
 
 
 
 
 
 
 
 $
 244,969,933
 
 $
 247,287,810OTHER ASSETS
  IN EXCESS OF LIABILITIES - 20.0%
 
 
 
 
 
 
 
 
 
 
 
 $
 61,799,895NET ASSETS -
  100%
 
 
 
 
 
 
 
 
 
 
 
 $
 309,087,705TOTAL RETURN
  SWAP - 0.5%
 
 
 
 
 
 Notional
  Amount
 
 
 
 
 Unrealized AppreciationCitibank TRS
  Facility (see Note 7)
 
 
 
 
 
 $
 275,947,739
 
 
 
 
 $
 1,571,894(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 per
  note (f) below. The Company does not control and is not an affiliate of any
  of the portfolio companies in its investment portfolio.(b)
 The 1 and 3
  month London Interbank Offered Rate, or LIBOR, rates were 0.16% and 0.23%,
  respectively, as of June 30, 2014. The prime rate was 3.25% as of June 30,
  2014. The applicable LIBOR rate as of June 30, 2014 for the loan listed may
  not be the applicable LIBOR rate, as the loan may have been priced or
  repriced based on a LIBOR rate prior to June 30, 2014.(c)
 Fair value
  determined by the Company’s board of directors (see Note 8).(d)
 The Company is
  committed to fund an additional $1,724,000 as of June 30, 2014 and August 11,
  2014 (see Note 6 and Note 10).(e)
 Position or
  portion thereof unsettled as of June 30, 2014.(f)
 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
  June 30, 2014, 87.3% of the Company’s total assets represented qualifying
  assets. In addition, as described in Note 7, 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, 79.4% of the Company’s total assets represented
  qualifying assets as of June 30, 2014.(g)
 Short term
  investments represent an investment in a fund that invests in highly liquid
  investments with original maturity dates of three months or less.(h)
 Effective yield
  as of June 30, 2014 is <0.01%.See accompanying notes to consolidated
  financial statements.
  6


---

CĪON
Investment Corporation Consolidated Schedule of Investments December 31, 2013  Portfolio
  Company(a)
 
 Index Rate(b)
 
 Industry
 
 Principal/Par
  Amount
 
 Amortized
  Cost
 
 Fair
  Value(c)Senior
  Secured First Lien Term Loans - 42.7%ABRA, Inc.,
  L+600, 1.25% LIBOR Floor, 5/10/2018(d)
 
 3 Month LIBOR
 
 Automotive
 
 $
 5,980,924
 
 $
 5,921,292
 
 $
 5,921,115Captive
  Resources Midco, LLC, L+550, 1.25% LIBOR Floor, 10/31/2018
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 987,500
 
 
 972,809
 
 
 987,500CHI Overhead
  Doors, L+425, 1.25% LIBOR Floor, 3/18/2019
 
 3 Month LIBOR
 
 Construction
  & Building
 
 
 936,944
 
 
 932,772
 
 
 938,701Collision
  Holding Company, LLC, L+775, 1.25% LIBOR Floor, 5/10/2018
 
 3 Month LIBOR
 
 Automotive
 
 
 1,568,127
 
 
 1,552,492
 
 
 1,552,445Custom Ecology,
  Inc., L+550, 1.25% LIBOR Floor, 6/26/2019
 
 3 Month LIBOR
 
 Environmental
  Industries
 
 
 1,900,450
 
 
 1,882,554
 
 
 1,909,952Distribution
  International, Inc., L+650, 1.00% LIBOR Floor, 7/16/2019
 
 3 Month LIBOR
 
 Construction
  & Building
 
 
 2,487,500
 
 
 2,468,327
 
 
 2,476,555F+W Media, Inc.,
  L+650, 1.25% LIBOR Floor, 6/30/2019
 
 3 Month LIBOR
 
 Media:
  Diversified & Production
 
 
 1,990,000
 
 
 1,839,629
 
 
 1,920,350Fender Musical
  Instruments Corp., L+450, 1.25% LIBOR Floor, 4/3/2019
 
 6 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 447,500
 
 
 443,456
 
 
 455,193H.D. Vest, Inc.,
  L+450, 1.25% LIBOR Floor, 12/18/2018
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 597,438
 
 
 593,254
 
 
 594,450ILC Industries,
  LLC, L+650, 1.50% LIBOR Floor, 7/11/2018
 
 3 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 4,456,187
 
 
 4,471,616
 
 
 4,467,327Landslide
  Holdings, Inc., L+425, 1.00% LIBOR Floor, 8/9/2019
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 2,449,690
 
 
 2,426,101
 
 
 2,469,594Merrill Corp.,
  L+625, 1.00% LIBOR Floor, 3/8/2018
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 649,021
 
 
 643,301
 
 
 661,729National
  Surgical Hospitals, Inc., L+450, 1.25% LIBOR Floor, 8/1/2019
 
 1 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 3,491,250
 
 
 3,456,338
 
 
 3,526,163Packaging
  Coordinators, Inc., L+425, 1.25% LIBOR Floor, 5/10/2020
 
 6 Month LIBOR
 
 Containers,
  Packaging & Glass
 
 
 1,500,000
 
 
 1,492,500
 
 
 1,500,000Plano Molding
  Co., Inc., L+425, 1.00% LIBOR Floor, 10/11/2018
 
 3 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 2,500,000
 
 
 2,484,517
 
 
 2,500,000Prowler
  Acquisition Corp., L+475, 1.25% LIBOR Floor, 3/19/2019
 
 3 Month LIBOR
 
 Energy: Oil
  & Gas
 
 
 1,925,000
 
 
 1,905,750
 
 
 1,915,375SK Spice
  S.Á.R.L, L+825, 1.25% LIBOR Floor, 9/30/2018(e)
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 1,775,550
 
 
 1,740,993
 
 
 1,760,014Smile Brands
  Group, Inc., L+625, 1.25% LIBOR Floor, 8/16/2019
 
 12 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 4,987,500
 
 
 4,892,609
 
 
 4,931,391Sprint
  Industrial Holdings, LLC, L+575, 1.25% LIBOR Floor, 5/14/2019
 
 3 Month LIBOR
 
 Energy: Oil
  & Gas
 
 
 1,194,000
 
 
 1,182,670
 
 
 1,208,925Survey Sampling
  International, LLC, L+450, 1.00% LIBOR Floor, 12/12/2019
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 9,250,000
 
 
 9,158,059
 
 
 9,157,500The TOPPS
  Company, Inc., L+600, 1.25% LIBOR Floor, 10/2/2018
 
 3 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 2,110,000
 
 
 2,068,064
 
 
 2,104,725Travel Leaders
  Group, LLC, L+600, 1.00% LIBOR Floor, 12/5/2018
 
 3 Month LIBOR
 
 Services:
  Consumer
 
 
 4,900,000
 
 
 4,607,683
 
 
 4,814,250Wastequip, LLC,
  L+450, 1.00% LIBOR Floor, 8/9/2019
 
 6 Month LIBOR
 
 Capital
  Equipment
 
 
 2,985,000
 
 
 2,970,869
 
 
 3,014,850Westway Group,
  L+400, 1.00% LIBOR Floor, 2/27/2020
 
 6 Month LIBOR
 
 Services:
  Business
 
 
 992,500
 
 
 988,030
 
 
 999,326Total Senior
  Secured First Lien Term Loans
 
 
 
 
 
 
 
 
 
 61,095,685
 
 
 61,787,430Senior
  Secured Second Lien Term Loans - 15.6%The Active
  Network, Inc., L+850, 1.00% LIBOR Floor, 11/15/2021
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 2,820,000
 
 
 2,805,900
 
 
 2,876,400Camp
  International Holding Company, L+725, 1.00% LIBOR Floor, 11/30/2019
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 2,029,000
 
 
 2,029,000
 
 
 2,073,384Centaur Gaming,
  L+750, 1.25% LIBOR Floor, 2/20/2020
 
 6 Month LIBOR
 
 Hotel, Gaming
  & Leisure
 
 
 500,000
 
 
 495,297
 
 
 515,000Digital Insight
  Corporation, L+775, 1.00% LIBOR Floor, 10/16/2020
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 385,000
 
 
 381,237
 
 
 393,181Drew Marine
  Group, Inc., L+700, 1.00% LIBOR Floor, 5/19/2021(e)
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 5,000,000
 
 
 5,003,467
 
 
 5,037,500GCA Services
  Group, Inc., L+800, 1.25% LIBOR Floor, 11/1/2020
 
 6 Month LIBOR
 
 Services:
  Consumer
 
 
 800,000
 
 
 796,341
 
 
 813,876H.D. Vest, Inc.,
  L+800, 1.25% LIBOR Floor, 6/18/2019
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 854,000
 
 
 844,079
 
 
 845,460Healogics, Inc.,
  L+800, 1.25% LIBOR Floor, 2/5/2020
 
 6 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 500,000
 
 
 495,426
 
 
 511,250Learfield
  Communications, Inc., L+775, 1.00% LIBOR Floor, 10/9/2021
 
 3 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 1,417,333
 
 
 1,403,174
 
 
 1,452,766LTS Buyer, LLC,
  L+675, 1.25% LIBOR Floor, 4/12/2021
 
 6 Month LIBOR
 
 Telecommunications
 
 
 500,000
 
 
 495,233
 
 
 505,835Securus
  Technologies Holdings, Inc., L+775, 1.25% LIBOR Floor, 4/30/2021(f)
 
 3 Month LIBOR
 
 Telecommunications
 
 
 3,500,000
 
 
 3,461,450
 
 
 3,467,205SESAC Holdco II,
  LLC, L+875, 1.25% LIBOR Floor, 8/8/2019
 
 1 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 1,500,000
 
 
 1,522,110
 
 
 1,537,500Sprint
  Industrial Holdings, LLC, L+1,000, 1.25% LIBOR Floor, 11/14/2019
 
 3 Month LIBOR
 
 Energy: Oil
  & Gas
 
 
 500,000
 
 
 490,421
 
 
 505,000Telecommunications
  Management, LLC, L+800, 1.00% LIBOR Floor, 10/30/2020
 
 3 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 543,290
 
 
 538,266
 
 
 554,156WP CPP Holdings,
  LLC, L+775, 1.00% LIBOR Floor, 4/30/2021
 
 3 Month LIBOR
 
 Aerospace &
  Defense
 
 
 1,435,000
 
 
 1,427,930
 
 
 1,463,701Total Senior
  Secured Second Lien Term Loans
 
 
 
 
 
 
 
 
 
 22,189,331
 
 
 22,552,214See accompanying notes to consolidated
  financial statements.
  7


---

CĪON
Investment Corporation Consolidated Schedule of Investments December 31, 2013  Portfolio
  Company(a)
 
 Index Rate(b)
 
 Industry
 
 Principal/Par
  Amount
 
 Amortized
  Cost
 
 Fair
  Value(c)Collateralized
  Securities - 6.1%Ivy Hill Middle
  Market Credit Fund VII, Ltd. Class E Notes, L+565, 10/20/2025(e)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 2,000,000
 
 
 1,850,000
 
 
 1,850,000Ivy Hill Middle
  Market Credit Fund VII, Ltd. Subordinated Notes, Residual, 10/20/2025(e)
 
 N/A
 
 Diversified
  Financials
 
 
 2,000,000
 
 
 1,896,000
 
 
 1,945,600JPMorgan Chase
  Bank, N.A. Credit Link Note, L+1,225, 12/20/2021(e)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 5,000,000
 
 
 5,000,000
 
 
 5,000,000Total
  Collateralized Securities
 
 
 
 
 
 
 
 
 
 8,746,000
 
 
 8,795,600Short Term
  Investments - 7.9%(g)First American
  Treasury Obligations Fund, Class Z Shares(h)
 
 
 
 
 
 
 11,383,669
 
 
 11,383,669
 
 
 11,383,669Total Short
  Term Investments
 
 
 
 
 
 
 
 
 
 11,383,669
 
 
 11,383,669TOTAL
  INVESTMENTS - 72.3%
 
 
 
 
 
 
 
 
 $
 103,414,685
 
 $
 104,518,913OTHER ASSETS
  IN EXCESS OF LIABILITIES - 27.7%
 
 
 
 
 
 
 
 
 
 
 
 $
 40,051,572NET ASSETS -
  100%
 
 
 
 
 
 
 
 
 
 
 
 $
 144,570,485TOTAL RETURN
  SWAP - 1.1%
 
 
 
 
 
 Notional
  Amount
 
 
 
 
 Unrealized AppreciationCitibank TRS
  Facility (see Note 7)
 
 
 
 
 
 $
 148,199,937
 
 
 
 
 $
 1,548,617(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 per note (e) below. The Company
  does not control and is not an affiliate of any of the portfolio companies in
  its investment portfolio.(b)
 The 1, 3, 6 and 12 month LIBOR rates were 0.17%, 0.25%, 0.35%
  and 0.58%, respectively, as of December 31, 2013. The applicable LIBOR rate
  as of December 31, 2013 for the loan listed may not be the applicable LIBOR
  rate, as the loan may have been priced or repriced based on a LIBOR rate
  prior to December 31, 2013.(c)
 Fair value determined by the Company’s board of directors (see
  Note 8).(d)
 The Company is
  committed to fund an additional $2,450,758 as of December 31, 2013 (see Note
  6 and Note 10). The Company is committed to fund an additional $1,330,667 as
  of March 7, 2014.(e)
 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 December 31, 2013, 88.2% of the Company’s
  total assets represented qualifying assets. In addition, as described in Note
  7, 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, 76.1% of the
  Company’s total assets represented qualifying assets as of December 31, 2013.(f)
 Position or portion thereof unsettled as of December 31, 2013.(g)
 Short term investments represent an investment in a fund that
  invests in highly liquid investments with original maturity dates of three
  months or less.(h)
 Effective yield as of December 31, 2013 is <0.01%.See accompanying notes to consolidated
  financial statements.
  8


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (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 an externally managed, non-diversified closed-end
management investment company that has elected to be regulated as a business
development company, or BDC, under the 1940 Act. The Company elected to be
treated for federal income tax purposes as a regulated investment company, or
RIC, as defined under Subchapter M of the Internal Revenue Code of 1986, as
amended, or the Code. The Company’s
investment objective is to generate current income and, to a lesser extent,
capital appreciation for investors. The Company’s portfolio is comprised primarily
of investments in senior secured loans and, to a lesser extent, second lien
loans, collateralized loan obligations 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. 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, 2013 and for the year then ended
included in the Company’s Annual Report on Form 10-K. Operating results for
interim periods are not necessarily indicative of the results that may be
expected for the full year ending December 31, 2014. The consolidated
balance sheet and the consolidated schedule of investments as of December 31,
2013 are derived from the 2013 audited consolidated financial statements. The Company
evaluates subsequent events through the date that the consolidated financial
statements are issued. 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. 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 $38,395,666 and $11,383,669 of such investments at June 30, 2014 and
December 31, 2013, respectively, which are included in investments, at fair
value on the accompanying consolidated balance sheets and on the consolidated
schedule of investments. Organization Costs and Offering Expenses 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. 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 9


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 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 4). These expenses were fully amortized over a twelve month period as
an adjustment to capital in excess of par value. 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. The following table summarizes organization
costs and offering expenses incurred by IIG and by the Company from January 31,
2012 (Inception) through June 30, 2014:  Organization Costs and Offering Expenses
  Incurred by IIGPeriod
 
 Organization Costs
 
 Offering Expenses
 
 Other Pre-Effective Costs(5)
 
 TotalYear EndedDecember 31,
  2012(1)
 
 $
 191,717
 
 $
 1,619,621
 
 $
 200,507
 
 $
 2,011,845December 31,
  2013
 
 
 -
 
 
 -
 
 
 -
 
 
 -Three Months
  EndedMarch 31, 2014
 
 
 -
 
 
 -
 
 
 -
 
 
 -June 30, 2014
 
 
 -
 
 
 -
 
 
 -
 
 
 -Total
 
 
 191,717
 
 
 1,619,621
 
 
 200,507
 
 
 2,011,845Expenses
  submitted for reimbursement by IIG(2)
 
 
 -
 
 
 (1,591,475)
 
 
 -
 
 
 (1,591,475)Total
  Unreimbursed Expenses Incurred by IIG
 
 $
 191,717
 
 $
 28,146
 
 $
 200,507
 
 $
 420,370Organization Costs and Offering Expenses
  Incurred by the Company(3)Period
 
 Organization Costs
 
 Offering Expenses
 
 Other Pre-Effective Costs(5)
 
 TotalYear EndedDecember 31,
  2012(1)
 
 $
 -
 
 $
 29,652
 
 $
 -
 
 $
 29,652December 31,
  2013
 
 
 -
 
 
 1,786,978
 
 
 -
 
 
 1,786,978Three Months
  EndedMarch 31, 2014
 
 
 -
 
 
 539,720
 
 
 -
 
 
 539,720June 30, 2014
 
 
 -
 
 
 448,869
 
 
 -
 
 
 448,869Total
 
 
 -
 
 
 2,805,219
 
 
 -
 
 
 2,805,219Expenses
  reimbursed by the Company(2)
 
 
 -
 
 
 1,591,475
 
 
 -
 
 
 1,591,475Total Expenses
  Incurred by the Company
 
 $
 -
 
 $
 4,396,694
 
 $
 -
 
 $
 4,396,694Expenses paid as
  of June 30, 2014
 
 $
 -
 
 $
 4,125,600
 
 $
 -
 
 $
 4,125,600Expenses accrued
  as of June 30, 2014(4)
 
 
 -
 
 
 271,094
 
 
 -
 
 
 271,094Total
  Expenses Incurred by the Company
 
 $
 -
 
 $
 4,396,694
 
 $
 -
 
 $
 4,396,694(1)
 Organization costs and offering expenses were incurred from
  January 31, 2012 (Inception) through December 31, 2012.(2)
 Of this amount, $1,000,000 of expenses charged directly to
  equity were submitted for reimbursement by IIG on December 17, 2012, and
  $591,475 of expenses charged directly to general and administrative expense
  were submitted for reimbursement by IIG during the three months ended March
  31, 2014.(3)
 Offering expenses incurred directly by the Company are included
  in general and administrative expense on the consolidated statements of
  operations.(4)
 Included in accounts payable and accrued expenses on the
  consolidated balance sheets.(5)
 Represent general and administrative expenses incurred by IIG
  related to the Company prior to December 17, 2012.
 No
material organization costs or offering expenses have been incurred by IIG or
its affiliates subsequent to June 30, 2014. 10


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 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 continues to qualify as a RIC and continues to satisfy 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 98.0% 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
differences relating to permanent differences are reclassified among the
Company’s capital accounts, as appropriate. Additionally, the tax character of
distributions is determined in accordance with income tax regulations that may
differ from GAAP (see Note 5). During the three and six months ended June 30,
2014, the Company declared distributions of $5,120,083 and $8,434,527,
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 during the six months
ended June 30, 2014 and 2013, the Company did not have any uncertain tax
positions. The Company is subject to examination by U.S. federal, New
York State, New York City and Maryland income tax jurisdictions for 2012. 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. 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 820, defines fair value as the
price that would be received from the sale of an asset or paid to transfer a
liability in an orderly transaction between market participants at the
measurement date. ASC 820 also establishes a three-tier fair value hierarchy,
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. The Company’s
investments as of June 30, 2014, excluding short term investments,consisted primarily of debt securities that
are traded on a private over-the-counter market for institutional investments.
Except as described below, 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. 11


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 The Company values its total return
swap, or TRS, in accordance with the agreements between Flatiron Funding, LLC,
or Flatiron, and Citibank, N.A., or Citibank, which collectively establish the
TRS, or 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. 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 Agreement. As a result of the private nature of this
marketplace (meaning actual transactions are not publicly reported), the
Company believes that the total fair value of the TRS should be classified as
Level 3 within the fair value hierarchy. If the Company owns identical
investments in its investment portfolio and through the TRS, the Company
utilizes the TRS pricing for consistency. For additional information on the
TRS, see Note 7. Notwithstanding
the foregoing, if in the reasonable judgment of CIM, the price of 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.  Consistent
with the Company’s valuation policy, the Company evaluates the source of
inputs, including any markets in which the Company’s investments are trading,
in determining fair value. The
Company periodically benchmarks the “bid” and “ask” prices it receives from the
third-party pricing services against the actual prices at which the Company
purchases and sells its investments. Based on the results of the benchmark
analysis and the experience of the Company’s management in purchasing and
selling these investments, the Company believes that these prices are reliable
indicators of fair value. However, 12


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 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 2 or Level 3 within the fair value hierarchy. 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. 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 using the
effective interest method. 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. The Company may
have investments in its investment portfolio that contain a paid-in-kind, or
PIK, interest provision. Any PIK interest will be added to the principal
balance of such investments and is recorded as income, if the portfolio company
valuation indicates that such PIK interest is collectible. In order to maintain
RIC status, substantially all of this income must be paid out to shareholders
in the form of distributions, even if the Company has not collected any cash. Loans and debt securities, including those that are
individually identified as being impaired under Accounting Standards
Codification 310 - Receivables, or ASC 310,are
generally placed on nonaccrual status immediately if, in the opinion of
management, principal or interest is not likely to be paid in accordance with
the terms of the debt agreement, or when principal or interest is past due 90
days or more. Interest accrued but not collected at the date a loan or security
is placed on nonaccrual status is reversedagainst
interest income. Interest income is recognized on nonaccrual loans or debt
securities only to the extent received in cash. How­ever, where there is doubt
regarding the ultimate collectibility ofprincipal,
cash receipts, whether designated as principal or interest, are thereafter
applied to reduce the carrying value of the loan or debt security. Loans or
securities are restored to accrual status only when interest and principal
payments are brought current and future payments are reasonably assured. Net Realized
Gains or Losses and Net Change in Unrealized Appreciation or Depreciation Gains
or losses on the sale of investments are calculated by using the
weighted-average method. The Company measures realized gains or losses by the
difference between the net proceeds from the repayment or sale and the weighted-average
amortized cost 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 the TRS. The Company marks its derivative to market
through net change in unrealized (depreciation) appreciation on total return
swap in the consolidated statements of operations. For additional information
on the TRS, see Note 7. Capital Gains
Incentive Fee Pursuant
to the terms of the investment advisory agreement the Company entered into with
CIM, the incentive fee on capital gains earned on liquidated investments of the
Company’s investment portfolio during operations is determined and payable in
arrears as of the end of each calendar year. Such fee equals 20% of the
Company’s incentive fee capital gains (i.e., the Company’s realized capital
gains on a cumulative basis from inception, calculated as of the end of each
calendar year, computed net of all realized capital losses and unrealized
capital depreciation on a cumulative basis), less the aggregate amount of any
previously paid capital gains incentive fees. On a cumulative basis and to the
extent that all realized capital losses and unrealized capital depreciation
exceed realized capital gains as well as the aggregate realized net capital
gains for which a fee has previously been paid, the Company would not be
required to pay CIM a capital gains incentive fee. On a quarterly basis, the
Company accrues for the capital gains incentive fee by calculating such fee as
if it were due and payable as of the end of such period. CIM has not taken
any incentive fees with respect to the Company’s TRS to date. For purposes of
computing the capital gains incentive fee, CIM will become entitled to a
capital gains incentive fee only upon the termination or disposition of the
TRS, at which point all net gains and losses of the underlying loans
constituting the reference assets of the TRS will be realized. For purposes of
computing the subordinated incentive fee on income, CIM is not entitled to a
subordinated incentive fee on income with respect to the TRS. Any unrealized
gains on the TRS are reflected in total assets on the Company’s consolidated
balance sheets and included in the computation of the base management fee. 13


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 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 at least annually.  Note 3.
Share Transactions The following tablesummarizes transactions with respect to
shares of the Company’s common stock during the six months ended June 30, 2014
and 2013:  Six Months Ended
  June 30,2014
 
 2013Shares
 
 Amount
 
 Shares
 
 AmountGross
  shares/proceeds from the offering
 
 
 16,897,905
 
 $
 174,102,106
 
 
 3,330,978
 
 $
 33,565,552Reinvestment of
  distributions
 
 
 546,068
 
 
 5,129,582
 
 
 21,988
 
 
 213,150Total gross
  shares/proceeds
 
 
 17,443,973
 
 
 179,231,688
 
 
 3,352,966
 
 
 33,778,702Sales
  commissions and dealer manager fees
 
 
 -
 
 
 (15,432,857)
 
 
 -
 
 
 (3,038,387)Net
  shares/proceeds from the offering
 
 
 17,443,973
 
 
 163,798,831
 
 
 3,352,966
 
 
 30,740,315Share repurchase
  program
 
 
 (4,881)
 
 
 (45,905)
 
 
 -
 
 
 -Net
  shares/proceeds from share transactions
 
 
 17,439,092
 
 $
 163,752,926
 
 
 3,352,966
 
 $
 30,740,315
  During the six months ended June 30, 2014
and 2013, the Company sold 17,443,973 and 3,352,966 shares, respectively, at an
average price per share of $10.27 and $10.07, respectively.  The proceeds from the reinvestment of
shareholder distributions are included in the gross proceeds from the Company’s
offering for purposes of determining the total amount of organization costs and
offering expenses that can be paid by the Company (see Note 4).  As of June 30, 2014, the Company sold
32,949,270 shares of common stock for net proceeds of $336,318,008 at an
average price per share of $10.21. The net proceeds include gross proceeds
received from reinvested shareholder distributions of $6,672,596, for which the
Company issued 708,948 shares of common stock, and gross proceeds paid for
shares of common stock tendered for repurchase of $45,905, for which the
Company repurchased 4,881 shares of common stock.  During the period from July 1, 2014 to
August 11, 2014, the Company sold 4,032,022 shares of common stock for net
proceeds of $41,495,280 at an average price per share of $10.29. The net
proceeds include gross proceeds received from reinvested shareholder
distributions of $1,327,420, for which the Company issued 141,157 shares of
common stock, and gross proceeds paid for shares of common stock tendered for
repurchase of $146,826, for which the Company repurchased 15,611 shares of
common stock.  Since commencing its continuous public
offering on July 2, 2012 and through August 11, 2014, the Company sold
36,981,292 shares of common stock for net proceeds of $377,813,288 at an
average price per share of $10.22. The net proceeds include gross proceeds
received from reinvested shareholder distributions of $8,000,016, for which the
Company issued 850,105 shares of common stock, and gross proceeds paid for
shares of common stock tendered for repurchase of $192,731, for which the
Company repurchased 20,492 shares of common stock.  On December 28, 2012, January 31, 2013,
March 14, 2013, May 15, 2013, August 15, 2013, and February 4, 2014, 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,
$10.32 and $10.45 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. 14


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
  Share Repurchase Program  Beginning in the first quarter of 2014, the
Company began offering, and on a quarterly basis thereafter it intends to
continue offering, to repurchase shares on such terms as may be determined by
the Company’s board of directors in its complete and absolute discretion
unless, in the judgment of the independent directors of the Company’s board of
directors, such repurchases would not be in the best interests of the Company’s
shareholders or would violate applicable law.  The Company currently limits the number of
shares to be repurchased during any calendar year to the number of shares it
can repurchase with the proceeds it receives from the issuance of shares
pursuant to its second amended and restated distribution reinvestment plan. At
the discretion of the Company’s board of directors, it may also use cash on
hand, cash available from borrowings and cash from liquidation of investments
as of the end of the applicable period to repurchase shares. In addition, the
Company limits the number of shares to be repurchased in any calendar year to
15% of the weighted average number of shares outstanding in the prior calendar
year, or 3.75% in each quarter, though the actual number of shares that it
offers to repurchase may be less in light of the limitations noted above. The
Company offers to repurchase such shares at a price equal to 90% of the
offering price in effect on each date of repurchase.  Any periodic repurchase offers are subject
in part to the Company’s available cash and compliance with the BDC and RIC
qualification and diversification rules promulgated under the 1940 Act and the Code,
respectively. While the Company conducts quarterly tender offers as described
above, it is not required to do so and may suspend or terminate the share
repurchase program at any time, upon 30 days’ notice.  The following
table summarizes the share repurchases completed during the six months ended
June 30, 2014:  Three Months
  Ended
 
 
 Shares Repurchased
 
 Percentage of Shares Tendered That Were
  Repurchased
 
 Repurchase Price Per Share
 
 Aggregate Consideration for Repurchased
  SharesMarch 31, 2014
 
 
 -
 
 -
 
 $
 -
 
 $
 -June 30, 2014
 
 
 4,881
 
 100%
 
 
 9.41
 
 
 45,905Total
 
 
 4,881
 
 
 
 
 
 
 $
 45,905
  Note 4. Transactions with Related Parties  For the three and six
months ended June 30, 2014 and 2013, fees and other expenses incurred by the
Company related to CIM and its affiliates were as follows:  Three Months Ended
  June 30,
 
 Six Months Ended
  June 30,Entity
 
 Capacity
 
 Description
 
 2014
 
 2013
 
 2014
 
 2013ICON Securities,
  LLC
 
 Dealer manager
 
 Dealer manager
  fees(1)
 
 $
 2,585,978
 
 $
 617,001
 
 $
 5,099,173
 
 $
 975,270CIM
 
 Investment
  adviser
 
 Management fees(2)(3)
 
 
 1,303,206
 
 
 120,781
 
 
 2,212,013
 
 
 165,523CIM
 
 Investment
  adviser
 
 Incentive fees(2)(3)
 
 
 219,747
 
 
 57,705
 
 
 745,073
 
 
 174,728ICON Capital,
  LLC
 
 Administrative
  services provider
 
 Administrative
  services expense(2)(4)
 
 
 430,220
 
 
 307,636
 
 
 845,615
 
 
 571,191IIG
 
 Sponsor
 
 Organization
  costs and offering expenses reimbursement(2)
 
 
 -
 
 
 -
 
 
 591,475
 
 
 -IIG
 
 Sponsor
 
 Recoupment of
  expense support(2)
 
 
 599,626
 
 
 -
 
 
 599,626
 
 
 -$
 5,138,777
 
 $
 1,103,123
 
 $
 10,092,975
 
 $
 1,886,712(1)
 Amounts charged
  directly to equity.(2)
 Amounts charged
  directly to operations.(3)
 Except for the
  three months ended June 30, 2014, all expenses have been supported pursuant
  to the expense support and conditional reimbursement agreement.(4)
 For the three
  and six months ended June 30, 2013, all expenses have been supported pursuant
  to the expense support and conditional reimbursement agreement.
 15


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (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. Since commencing its continuous public offering on July 2,
2012 and through August 11, 2014, the Company paid or accrued sales commissions
of $22,023,266 to the selling dealers and dealer manager fees of $10,699,258 to
ICON Securities.  The Company has entered
into an investment advisory agreement with CIM. Pursuant to the investment
advisory agreement, CIM is paid an annual base management fee equal to 2.0% of
the average value of the Company’s gross assets, less cash and cash
equivalents, and an incentive fee based on the Company’s performance, as
described below. The incentive fee consists of two parts. The first part, which
is referred to as the subordinated incentive fee on income, is calculated and
payable quarterly in arrears based on “pre-incentive fee net investment income”
for the immediately preceding quarter and is subject to a hurdle rate, measured
quarterly and expressed as a rate of return on adjusted capital, as defined in
the investment advisory agreement, equal to 1.875% per quarter, or an
annualized rate of 7.5%. The second part of the incentive fee, which is
referred to as the incentive fee on capital gains, is described in Note 2. Refer
to Note 7 for a discussion of CIM’s entitlement to receive incentive fees and
accrual of the incentive fee on capital gains with respect to the TRS.  The Company accrues the capital gains
incentive fee based on net realized gains and unrealized appreciation; 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 appreciation unless and until such appreciation is actually
realized. For the three and six months ended June 30, 2014, capital gains incentive
fees of $11,347 and $398,003, respectively, were based on net unrealized appreciation
and $208,400 and $347,070, respectively, were based on realized gains. For the three
and six months ended June 30, 2013, capital gains incentive fees of $5,525 and
$80,497, respectively, were based on net unrealized appreciation and $52,180
and $94,231, respectively, were based on realized gains.  At June 30, 2014, the Company’s liability
for capital gain incentive fees was $1,136,972, of which $15,156 was payable.
The remaining liability was comprised of capital gain incentive fees of
$923,052 related to unrealized appreciation and $198,764 related to realized
gains from the TRS. With respect to the TRS, CIM will become entitled to a
capital gains incentive fee only upon the termination or disposition of the
TRS, at which point all net gains and losses of the underlying loans
constituting the reference assets of the TRS will be realized. See Note 2 and
Note 7 for an additional discussion of CIM’s entitlement to receive incentive
fees and accrual of the incentive fee on capital gains with respect to the TRS.  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.  Under the terms of the
investment advisory agreement, CIM and certain of its affiliates, which includes
IIG, are entitled to receive reimbursement of up to 1.5% of the gross proceeds
raised until all organization costs and offering expenses have been reimbursed.
The Company’s payment of organization costs and offering expenses will not
exceed 1.5% of the actual gross proceeds raised from the offering (without
giving effect to any potential reimbursements from IIG and its affiliates). If
the Company sells the maximum number of shares at its latest public offering
price of $10.45 per share, the Company estimates that it may incur up to
approximately $15,675,000 of expenses. 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, which could be as late as December
31, 2015, 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 costs and offering expenses
submitted for reimbursement. The transactions 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 costs and offering expenses, the Company
will interpret the 1.5% limit based on actual gross proceeds raised at the time
of such reimbursement.  In addition, the Company will not issue any
of its shares or other securities for services or for property other than cash
or securities except as a dividend or distribution to its security holders or
in connection with a reorganization.  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. 16


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 From inception through June 30, 2014, IIG
and its affiliates incurred organization costs, offering expenses and other
pre-effective costs of approximately $2,012,000. Of these costs, approximately
$1,811,000 represented organization costs and offering expenses, of which
$1,591,475 was submitted to the Company for reimbursement. The Company paid
$450,000 in October 2013, $550,000 in March 2014 and $591,475 in May 2014.  No
additional material organization costs, offering expenses or other
pre-effective costs have been incurred by IIG or its affiliates subsequent to
June 30, 2014. The decision to fund the Company’s organization costs, offering
expenses and other pre-effective costs 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 remaining
costs funded by IIG and its affiliates.  As of June 30, 2014, the
Company raised gross proceeds of $336,318,008, of which it can pay up to
$5,044,770 in organization costs and offering expenses (which represents 1.5%
of the actual gross proceeds raised). Through June 30, 2014, the Company paid
$4,125,600 of such costs and expenses, leaving an additional $919,170 that can
be paid. As of August 11, 2014, the Company raised gross proceeds of $377,813,288,
of which it can pay up to $5,667,199 in organization costs and offering
expenses (which represents 1.5% of the actual gross proceeds raised). Through
August 11, 2014, the Company paid $4,652,049 of such costs and expenses,
leaving an additional $1,015,150 that can be paid.  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 has 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.  On December 13,
2013, the Company and IIG amended and restated the expense support and
conditional reimbursement agreement to extend the termination date of such
agreement from January 30, 2014 to January 30, 2015. 17


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 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 following three month periods.  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
 
 
 482,920
 
 
 336,453
 
 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, 2016December 31,
  2013
 
 
 695,160
 
 
 -
 
 
 695,160
 
 0.31%
 
 7.00%
 
 December 31, 2016March 31, 2014
 
 
 1,048,858
 
 
 -
 
 
 1,048,858
 
 0.25%
 
 7.00%
 
 March 31, 2017June 30, 2014
 
 
 -
 
 
 -
 
 
 -
 
 0.36%
 
 7.00%
 
 June 30, 2017Total
 
 $
 5,124,467
 
 $
 599,626
 
 $
 4,524,841
 (1)
 Operating expenses include all expenses borne by the Company,
  except for organization costs and offering expenses, interest expense, base
  management fees, incentive fees, administrative services expenses and other
  general and administrative expenses owed to CIM and its affiliates.(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.
  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
(i) if expense reimbursement amounts funded by IIG exceed operating expenses
incurred during any fiscal quarter, (ii) if the sum of the Company’s net
investment income for tax purposes, net capital gains and the amount of any
dividends and other distributions paid to the Company on account of investments
in portfolio companies (to the extent not included in net investment income or
net capital gains for tax purposes) exceeds the distributions paid by the
Company to shareholders, and (iii) during any fiscal quarter occurring within
three years of the date on which IIG funded such amount.  Reimbursement of such
costs will be determined as appropriate to meet the objectives of the expense
support and conditional reimbursement agreement. During the three months ended
June 30, 2014, the Company recorded an obligation to repay $599,626 of expense
reimbursements from IIG. The Company may or may not be requested to reimburse
any remaining costs in the future.  As of June 30, 2014, the
total net liability payable to CIM and its affiliates was $2,262,135, which
related to fees earned by CIM primarily during the three months ended June 30,
2014 and expense support recoupment by IIG.  As of December 31, 2013, the net
reimbursement due from IIG was $545,593.  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 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. A substantial portion of the Company’s distributions
have resulted, and future 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 a return of capital for tax purposes. 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. 18


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 For the three and
six months ended June 30, 2013 and the six months ended June 30, 2014, if
expense reimbursements from IIG were not supported, some or all of the
distributions may have been a return of capital for tax purposes.  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 5. Distributions  The Company’s board of directors declared
distributions for twenty four and twenty two record dates during the year ended
December 31, 2013 and six months ended June 30, 2014, respectively. Declared
distributions are paid monthly.  The following table presents cash
distributions per share that were declared during the year ended December 31,
2013 and six months ended June 30, 2014:  DistributionsThree Months
  Ended
 
 Per Share
 
 AmountFiscal 2013March 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
 
 
 1,089,797December 31,
  2013 (six record dates)
 
 
 0.1806
 
 
 2,157,124Fiscal 2014March 31, 2014
  (nine record dates)
 
 $
 0.1679
 
 $
 3,314,444June 30, 2014
  (thirteen record dates)
 
 
 0.1829
 
 
 5,120,083Total
  distributions for the six months ended June 30, 2014
 
 $
 0.3508
 
 $
 8,434,527
  On February 1, 2014, the
Company changed from semi-monthly closings to weekly closings for the sale of the
Company’s shares pursuant to its continuous public offering. As result, the Company’s board of
directors authorizes and declares on a monthly basis a weekly distribution amount per share of
common stock. 19


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 On June 13, 2014, the Company’s board of
directors declared five weekly cash distributions of $0.014067 per share, which
were paid on July 30, 2014 to shareholders of record on July 1, July 8, July
15, July 22, and July 29, 2014.  On July 15, 2014, the board of directors
declared four weekly cash distributions of $0.014067 per share, payable on
August 27, 2014 to shareholders of record on August 5, August 12, August 19,
and August 26, 2014.  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 second 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. A substantial portion of the Company’s distributions
have resulted, and future distributions may result, from expense reimbursements
from IIG, which are subject to repayment by the Company. 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 six months ended June 30, 2014 and 2013:  Six Months Ended
  June 30,2014
 
 2013Source of
  Distribution
 
 Per Share
 
 Amount
 
 Percentage
 
 Per Share
 
 Amount
 
 PercentageNet realized
  gain on total return swapNet interest and
  other income from TRS portfolio
 
 $
 0.2365
 
 $
 5,686,805
 
 67.4%
 
 $
 0.1643
 
 $
 335,925
 
 46.2%Net gain on TRS
  loan sales
 
 
 0.0863
 
 
 2,076,736
 
 24.6%
 
 
 0.1299
 
 
 265,555
 
 36.5%Net realized
  gain on investments
 
 
 0.0161
 
 
 384,105
 
 4.6%
 
 
 0.0073
 
 
 15,015
 
 2.1%From other
  sources(1)
 
 
 0.0119
 
 
 286,881
 
 3.4%
 
 
 0.0542
 
 
 110,901
 
 15.2%Total
  distributions
 
 $
 0.3508
 
 $
 8,434,527
 
 100.0%
 
 $
 0.3557
 
 $
 727,396
 
 100.0%
 (1)Includes adjustments made to net
  investment income to arrive at taxable income available for distributions.
  It is the Company's
policy to comply with all requirements of the Code applicable to RICs and to
distribute substantially all of its taxable income to its shareholders. In
addition, by distributing during each calendar year substantially all of its
net investment income, net realized capital gains and certain other amounts, if
any, the Company intends not to be subject to a federal excise tax.
Accordingly, no federal income tax provision was required.  Income and
capital gain distributions are determined in accordance with the Code and
federal tax regulations, which may differ from amounts determined in accordance
with GAAP. These book/tax differences, which could be material, are primarily
due to differing treatments of income and gains on various investments held by
the Company. Permanent book/tax differences result in reclassifications to
capital in excess of par value, accumulated undistributed net investment
income, accumulated undistributed realized gain on investments, and accumulated
undistributed realized gain on total return swap. During 2013, the Company did
not have any reclassifications as a result of permanent book/tax differences.  The determination of the tax attributes of
the Company’s distributions is made annually as of the end of the Company’s
fiscal year based upon the Company’s taxable income for the full year and
distributions paid for the full year. The tax characteristics of distributions
to shareholders are reported to shareholders annually on Form 1099-DIV. All distributions
for 2013 are characterized as ordinary income distributions for federal income
tax purposes.  The tax components of accumulated earnings
for the current year will be determined at year end. As of December 31, 2013,
the components of accumulated earnings on a tax basis were as follows:  December 31, 2013Undistributed
  net investment income
 $
 80,044Performance-based
  incentive fee on unrealized gains
 
 (530,569)Net unrealized
  appreciation on investments and total return swap
 
 2,603,245$
 2,152,720
 20


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 As of June 30, 2014, the aggregate gross unrealized appreciation
for all securities in which there was an excess of value over tax cost was
$4,540,010; the aggregate gross unrealized depreciation for all securities in
which there was an excess of tax cost over value was $630,712; the net
unrealized appreciation was $3,909,297; the aggregate cost of securities for
Federal income tax purposes was $171,334,411.  As of December 31, 2013, the aggregate
gross unrealized appreciation for all securities in which there was an excess
of value over tax cost was $2,726,569; the aggregate gross unrealized
depreciation for all securities in which there was an excess of tax cost over
value was $123,324; the net unrealized appreciation was $2,603,245; the
aggregate cost of securities for Federal income tax purposes was $103,464,285.  Note 6. Investments  The composition of the Company’s investment
portfolio as of June 30, 2014 and December 31, 2013 at amortized cost and fair
value was as follows:  June 30, 2014
 
 December 31, 2013Amortized
  Cost(1)
 
 Fair
  Value
 
 Percentage of
  Investment
  Portfolio
 
 Amortized
  Cost(1)
 
 Fair
  Value
 
 Percentage of
  Investment
  PortfolioSenior secured
  term loans - first lien
 
 $
 75,883,653
 
 $
 76,790,268
 
 36.8%
 
 $
 61,095,685
 
 $
 61,787,430
 
 66.4%Senior secured
  term loans - second lien
 
 
 100,093,765
 
 
 101,524,554
 
 48.6%
 
 
 22,189,331
 
 
 22,552,214
 
 24.2%Collateralized
  securities
 
 
 30,596,849
 
 
 30,577,322
 
 14.6%
 
 
 8,746,000
 
 
 8,795,600
 
 9.4%Subtotal/total
  percentage
 
 
 206,574,267
 
 
 208,892,144
 
 100.0%
 
 
 92,031,016
 
 
 93,135,244
 
 100.0%Short term
  investments(2)
 
 
 38,395,666
 
 
 38,395,666
 
 
 
 
 11,383,669
 
 
 11,383,669Total
  investments
 
 $
 244,969,933
 
 $
 247,287,810
 
 
 
 $
 103,414,685
 
 $
 104,518,913
 (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)
 Short term investments represent an investment in a fund that
  invests in highly liquid investments with original maturity dates of three
  months or less.
 21


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 The following tables show the composition of the Company’s
investment portfolio by industry classification and geographic dispersion, and
the percentage, by fair value, of the total investment portfolio assets in such
industries and geographies as of June 30, 2014 and December 31, 2013:  June 30, 2014
 
 December 31, 2013Industry
  Classification
 
 Investments at
  Fair Value
 
 Percentage of
  Investment Portfolio
 
 Investments at
  Fair Value
 
 Percentage of
  Investment PortfolioServices:
  Business
 
 $
 36,640,254
 
 17.5%
 
 $
 15,754,714
 
 16.9%Diversified
  Financials
 
 
 30,577,322
 
 14.6%
 
 
 8,795,600
 
 9.4%High Tech
  Industries
 
 
 22,225,813
 
 10.6%
 
 
 2,876,400
 
 3.1%Healthcare &
  Pharmaceuticals
 
 
 17,389,316
 
 8.3%
 
 
 8,968,804
 
 9.6%Automotive
 
 
 14,634,267
 
 7.0%
 
 
 7,473,560
 
 8.0%Beverage, Food
  & Tobacco
 
 
 11,778,769
 
 5.6%
 
 
 -
 
 -Capital
  Equipment
 
 
 9,950,063
 
 4.8%
 
 
 3,014,850
 
 3.2%Media:
  Diversified & Production
 
 
 9,609,642
 
 4.6%
 
 
 1,920,350
 
 2.1%Energy: Oil
  & Gas
 
 
 7,548,610
 
 3.7%
 
 
 3,629,300
 
 3.9%Chemicals,
  Plastics & Rubber
 
 
 6,861,526
 
 3.3%
 
 
 6,797,514
 
 7.3%Hotel, Gaming
  & Leisure
 
 
 6,328,850
 
 3.0%
 
 
 515,000
 
 0.6%Consumer Goods:
  Non-Durable
 
 
 6,328,022
 
 3.0%
 
 
 9,527,245
 
 10.2%Construction
  & Building
 
 
 6,144,188
 
 2.9%
 
 
 3,415,256
 
 3.7%Services:
  Consumer
 
 
 5,583,028
 
 2.7%
 
 
 5,628,126
 
 6.0%Environmental
  Industries
 
 
 4,993,750
 
 2.4%
 
 
 1,909,952
 
 2.1%Media:
  Advertising, Printing & Publishing
 
 
 4,328,134
 
 2.2%
 
 
 -
 
 -Telecommunications
 
 
 3,543,750
 
 1.7%
 
 
 3,973,040
 
 4.3%Media:
  Broadcasting & Subscription
 
 
 2,129,339
 
 1.0%
 
 
 3,544,422
 
 3.8%Aerospace &
  Defense
 
 
 1,452,041
 
 0.7%
 
 
 1,463,701
 
 1.6%Banking,
  Finance, Insurance & Real Estate
 
 
 845,460
 
 0.4%
 
 
 2,427,410
 
 2.6%Containers,
  Packaging & Glass
 
 
 -
 
 -
 
 
 1,500,000
 
 1.6%Subtotal/total
  percentage
 
 
 208,892,144
 
 100.0%
 
 
 93,135,244
 
 100.0%U.S. Treasury
  Securities
 
 
 38,395,666
 
 
 
 
 11,383,669Total investments
 
 $
 247,287,810
 
 
 
 $
 104,518,913
  June 30, 2014
 
 December 31, 2013Geographic
  Dispersion(1)
 
 Investments at
  Fair Value
 
 Percentage of
  Investment Portfolio
 
 Investments at
  Fair Value
 
 Percentage of
  Investment PortfolioUnited States
 
 $
 183,461,343
 
 87.8%
 
 $
 82,542,130
 
 88.6%Cayman Islands
 
 
 10,513,600
 
 5.0%
 
 
 3,795,600
 
 4.1%Germany
 
 
 8,055,675
 
 3.9%
 
 
 -
 
 -Netherlands
 
 
 5,075,000
 
 2.4%
 
 
 5,037,500
 
 5.4%Switzerland
 
 
 1,786,526
 
 0.9%
 
 
 1,760,014
 
 1.9%Subtotal/total
  percentage
 
 
 208,892,144
 
 100.0%
 
 
 93,135,244
 
 100.0%U.S. Treasury Securities
 
 
 38,395,666
 
 
 
 
 11,383,669Total investments
 
 $
 247,287,810
 
 
 
 $
 104,518,913
 (1)The geographic dispersion is determined
  by the portfolio company's country of domicile.
 As of June 30, 2014
and December 31, 2013, there were no delinquent or non-accrual debt
investments. The Company does
not “control” and is not an “affiliate” of any of the Company’s portfolio
companies, each as defined in the 1940 Act. In general, under the 1940 Act, the
Company would be presumed to “control” a portfolio company or issuer if the
Company owned 25% or more of its voting securities and would be an “affiliate”
of a portfolio company or issuer if the Company owned 5% or more of its voting
securities. 22


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 The Company’s investment portfolio may contain senior
secured investments that are in the form of lines of credit, unfunded delayed
drawdown loan commitments, or revolving credit facilities, which require the
Company to provide funding when requested by portfolio companies in accordance
with the terms of the underlying loan agreements. As of June 30, 2014 andDecember 31, 2013,
the Company’s unfunded loan commitments amounted to $16,674,000 and $2,450,758,
respectively. As of August 11, 2014, the Company’s unfunded loan commitments
amounted to $48,341,000.For information on the companies to which the
Company is committed to fund additional amounts as ofJune
30, 2014 andDecember 31, 2013,refer
to the consolidated schedule of investments.  Note 7. Total Return Swap  On December 17, 2012, the Company, through
its wholly-owned subsidiary, Flatiron, entered into a TRS with Citibank. Effective
December 9, 2013, Flatiron and Citibank amended the TRS to, among other things,
extend the termination or call date from December 17, 2013 to December 17,
2014, increase the maximum aggregate market value of the portfolio of loans
subject to the TRS (determined at the time each such loan becomes subject to
the TRS) from $150 million to $225 million, and increase the interest rate payable
by Flatiron to Citibank with respect to each loan included in the TRS by
increasing the spread over the floating rate index specified for each such loan
from 1.25% to 1.35% per year. Flatiron and Citibank further amended the TRS to
increase the maximum aggregate market value of the portfolio of loans subject
to the TRS to $275 million effective February 18, 2014, to $325 million
effective April 30, 2014, and to $375 million effective July 30, 2014.  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.  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 $375 million. 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, be part of a loan facility of at
least $125 million and have at least two bid quotations from 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 1.35% 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. 23


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 Citibank may terminate the TRS on or after December 17, 2014, 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 80% of the maximum portfolio amount, multiplied by 1.35% per year.
The Company estimates the early termination fee would have been approximately $1,624,000
at June 30, 2014. Other than during the first 90 days 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 June 30, 2014, Flatiron was not subject to a
minimum usage fee.  The value of the TRS is based on the
valuation of the underlying portfolio of loans subject to the TRS. Pursuant to
the terms of the TRS, on each business day, Citibank values each underlying
loan in good faith on a mark-to-market basis by determining how much Citibank
would receive on such date if it sold such loan in the open market. As of June
30, 2014 and December 31, 2013, the fair value of the TRS was $1,571,894 and
$1,548,617, respectively. 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 (depreciation) appreciation
on total return swap. As of June 30, 2014 and December 31, 2013, Flatiron had
selected 57 and 63 underlying loans with a total notional amount of
$275,947,739 and $148,199,937, respectively. For the same periods, Flatiron
posted $79,705,510 and $40,703,777 in cash collateral held by Citibank (of
which only $74,663,041 and $39,285,408 was required to be posted), which is
reflected in due from counterparty on the Company’s consolidated balance
sheets.  Realized gains and losses on the TRS are
composed of any gains or losses on loans underlying the TRS as well as net
interest earned during the period. Receivable due on the TRS is composed of any
amounts due from Citibank that consist of earned but not yet collected net
interest and net gains on sales and principal repayments of underlying loans of
the TRS. As of and for the three and six months ended June 30, 2014, the net
receivable and net realized gain on the TRS consisted of the following:  Net Receivable(1)
 
 Net Realized Gain(2)As of
  June 30, 2014
 
 Three Months Ended
  June 30, 2014
 
 Six Months Ended
  June 30, 2014Interest and
  other income from TRS portfolio
 
 $
 4,087,317
 
 $
 4,349,324
 
 $
 7,423,291Interest and
  other expense from TRS portfolio
 
 
 (944,600)
 
 
 (1,022,891)
 
 
 (1,736,486)Net gain on TRS
  loan sales
 
 
 1,425,972
 
 
 1,473,629
 
 
 2,076,736Total
 
 $
 4,568,689
 
 $
 4,800,062
 
 $
 7,763,541
  (1)
 Net receivable
  is reflected in receivable due on total return swap on the Company's
  consolidated balance sheets.(2)
 Net realized
  gain is reflected in net realized gain on total return swap on the Company's
  consolidated statements of operations.
 24


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 In connection with the TRS, Flatiron is required to comply with
various covenants and reporting requirements as defined in the TRS Agreement.
As of June 30, 2014, Flatiron was in compliance with all covenants and
reporting requirements.  CIM has not taken any incentive fees with
respect to the Company’s TRS to date. For purposes of computing the capital
gains incentive fee, CIM will become entitled to a capital gains incentive fee
only upon the termination or disposition of the TRS, at which point all net
gains and losses of the underlying loans constituting the reference assets of
the TRS will be realized. For purposes of computing the subordinated incentive
fee on income, CIM is not entitled to a subordinated incentive fee on income
with respect to the TRS. 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. 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 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.  For purposes of the asset coverage ratio
test applicable to the Company as a BDC, the Company treats the outstanding
notional amount of the TRS, less the total amount of cash collateral 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 treats 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. 25


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 The
following is a summary of the underlying loans subject to the TRS as of June
30, 2014:  Underlying
  Loans(a)
 
 Index Rate(b)
 
 Industry
 
 Notional
  Amount
 
 Fair
  Value(c)
 
 Unrealized
  Appreciation /
  (Depreciation)Senior
  Secured First Lien Term LoansABG Intermediate
  Holdings 2 LLC, L+450, 1.00% LIBOR Floor, 5/27/2021
 
 Various
 
 Retail
 
 $
 6,838,760
 
 $
 6,909,957
 
 $
 71,197Active Network,
  Inc., L+450, 1.00% LIBOR Floor, 11/13/2020
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 1,250,802
 
 
 1,250,023
 
 
 (779)American
  Residential Services, LLC, L+450, 1.00% LIBOR Floor, 6/30/2021(d)
 
 3 Month LIBOR
 
 Construction
  & Building
 
 
 11,442,500
 
 
 11,500,000
 
 
 57,500American Tire
  Distributors, Inc., L+475, 1.00% LIBOR Floor, 6/1/2018(d)
 
 3 Month LIBOR
 
 Automotive
 
 
 6,813,917
 
 
 6,833,041
 
 
 19,124Amneal
  Pharmaceuticals, LLC, L+475, 1.00% LIBOR Floor, 11/1/2019
 
 1 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 3,330,925
 
 
 3,378,601
 
 
 47,676Aquilex, LLC,
  L+400, 1.00% LIBOR Floor, 12/31/2020
 
 1 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 4,962,563
 
 
 4,950,125
 
 
 (12,438)Arc Document
  Solutions, Inc., L+525, 1.00% LIBOR Floor, 12/20/2018(e)
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 4,566,188
 
 
 4,705,969
 
 
 139,781Azure Midstream
  Energy, LLC, L+550, 1.00% LIBOR Floor, 11/15/2018
 
 1 Month LIBOR
 
 Energy: Oil
  & Gas
 
 
 4,270,705
 
 
 4,303,077
 
 
 32,372BBTS Borrower,
  LP, L+650, 1.25% LIBOR Floor, 6/4/2019
 
 3 Month LIBOR
 
 Energy: Oil
  & Gas
 
 
 4,449,054
 
 
 4,476,734
 
 
 27,680Bluestem Brands,
  Inc., L+650, 1.00% LIBOR Floor, 12/6/2018
 
 3 Month LIBOR
 
 Retail
 
 
 3,998,138
 
 
 4,009,227
 
 
 11,089BRG Sports,
  Inc., L+550, 1.00% LIBOR Floor, 4/15/2021
 
 1 Month LIBOR
 
 Consumer Goods:
  Durable
 
 
 10,283,200
 
 
 10,417,550
 
 
 134,350Caraustar
  Industries, Inc., L+625, 1.25% LIBOR Floor, 5/1/2019
 
 3 Month LIBOR
 
 Forest Products
  & Paper
 
 
 921,623
 
 
 939,003
 
 
 17,380Charming
  Charlie, LLC, L+800, 1.00% LIBOR Floor, 12/18/2019
 
 3 Month LIBOR
 
 Retail
 
 
 8,779,574
 
 
 8,901,628
 
 
 122,054CHI Overhead
  Doors, Inc., L+425, 1.25% LIBOR Floor, 3/18/2019
 
 1 Month LIBOR
 
 Construction
  & Building
 
 
 5,967,401
 
 
 5,977,367
 
 
 9,966Cyanco
  Intermediate Corp., L+450, 1.00% LIBOR Floor, 5/1/2020
 
 1 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 959,599
 
 
 965,205
 
 
 5,606Deluxe
  Entertainment Services Group, Inc., L+550, 1.00% LIBOR Floor, 2/28/2020(e)
 
 6 Month LIBOR
 
 Media:
  Diversified & Production
 
 
 546,401
 
 
 547,087
 
 
 686Emmis Operating
  Company, L+475, 1.00% LIBOR Floor, 6/10/2021
 
 3 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 4,937,500
 
 
 5,025,000
 
 
 87,500GTCR Valor
  Companies, Inc., L+500, 1.00% LIBOR Floor, 5/30/2021(e)
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 1,899,125
 
 
 1,906,318
 
 
 7,193Hemisphere Media
  Holdings, LLC, L+500, 1.25% LIBOR Floor, 7/30/2020(d)(e)
 
 1 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 7,317,946
 
 
 7,392,680
 
 
 74,734Hyperion Finance
  S.à r.l., L+475, 1.00% LIBOR Floor, 10/17/2019(e)
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 4,410,338
 
 
 4,488,694
 
 
 78,356Indra Holdings
  Corp., L+425, 1.00% LIBOR Floor, 5/1/2021
 
 3 Month LIBOR
 
 Retail
 
 
 7,397,975
 
 
 7,457,195
 
 
 59,220Insight
  Pharmaceuticals, LLC, L+500, 1.25% LIBOR Floor, 8/25/2016
 
 2 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 5,819,510
 
 
 5,821,961
 
 
 2,451inVentiv Health,
  Inc., L+625, 1.50% LIBOR Floor, 5/15/2018
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 2,508,750
 
 
 2,495,825
 
 
 (12,925)inVentiv Health,
  Inc., L+600, 1.50% LIBOR Floor, 8/4/2016
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 7,341,585
 
 
 7,390,591
 
 
 49,006LTCG Holdings
  Corp., L+500, 1.00% LIBOR Floor, 6/6/2020
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 8,288,350
 
 
 8,413,300
 
 
 124,950LTI Flexible
  Products, Inc., L+450, 1.00% LIBOR Floor, 5/1/2021
 
 3 Month LIBOR
 
 Consumer Goods:
  Durable
 
 
 10,447,500
 
 
 10,486,875
 
 
 39,375Marine
  Acquisition Corp., L+425, 1.00% LIBOR Floor, 1/30/2021
 
 3 Month LIBOR
 
 Capital
  Equipment
 
 
 7,910,250
 
 
 8,019,563
 
 
 109,313Packaging
  Coordinators, Inc., L+425, 1.25% LIBOR Floor, 5/10/2020
 
 3 Month LIBOR
 
 Containers,
  Packaging & Glass
 
 
 1,975,075
 
 
 1,980,038
 
 
 4,963Peppermill
  Casinos, Inc., L+600, 1.25% LIBOR Floor, 11/9/2018
 
 1 Month LIBOR
 
 Hotel, Gaming
  & Leisure
 
 
 972,695
 
 
 1,007,144
 
 
 34,449Photonis
  Technologies SAS, L+750, 1.00% LIBOR Floor, 9/18/2019(e)
 
 3 Month LIBOR
 
 Aerospace &
  Defense
 
 
 8,765,425
 
 
 8,875,916
 
 
 110,491Polyconcept
  Finance B.V., L+475, 1.25% LIBOR Floor, 6/28/2019(d)(e)
 
 1 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 7,348,077
 
 
 7,353,233
 
 
 5,156PSC Industrial
  Outsourcing, LP, L+450, 1.00% LIBOR Floor, 5/15/2020
 
 1 Month LIBOR
 
 Energy: Oil
  & Gas
 
 
 13,978,800
 
 
 14,049,400
 
 
 70,600Safe-Guard
  Products International, LLC, L+600, 1.25% LIBOR Floor, 12/21/2018
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 6,875,626
 
 
 6,893,170
 
 
 17,544SI Organization,
  Inc., L+475, 1.00% LIBOR Floor, 11/23/2019(d)
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 6,838,002
 
 
 6,857,494
 
 
 19,492SK Spice
  S.Á.R.L, L+825, 1.25% LIBOR Floor, 9/30/2018(e)
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 8,351,689
 
 
 8,418,927
 
 
 67,238Smile Brands
  Group, Inc., L+625, 1.25% LIBOR Floor, 8/16/2019
 
 6 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 4,722,448
 
 
 4,523,731
 
 
 (198,717)SRA
  International, L+525, 1.25% LIBOR Floor, 7/20/2018
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 2,219,764
 
 
 2,265,210
 
 
 45,446Steward Health
  Care System, LLC, L+550, 1.25% LIBOR Floor, 4/10/2020
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 9,350,503
 
 
 9,308,138
 
 
 (42,365)Sutherland
  Global Services, L+600, 1.25% LIBOR Floor, 3/6/2019(e)
 
 6 Month LIBOR
 
 Services:
  Business
 
 
 1,864,234
 
 
 1,876,868
 
 
 12,634TASC, Inc.,
  L+550, 1.00% LIBOR Floor, 5/23/2020(d)
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 3,482,200
 
 
 3,494,138
 
 
 11,938TOPPS Company,
  Inc., L+600, 1.25% LIBOR Floor, 10/2/2018
 
 3 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 2,342,310
 
 
 2,285,634
 
 
 (56,676)Travel Leaders
  Group, LLC, L+600, 1.00% LIBOR Floor, 12/5/2018
 
 3 Month LIBOR
 
 Services:
  Consumer
 
 
 1,925,625
 
 
 1,947,563
 
 
 21,938Travelport, LLC,
  L+500, 1.25% LIBOR Floor, 6/26/2019(e)
 
 3 Month LIBOR
 
 Hotel, Gaming
  & Leisure
 
 
 1,577,417
 
 
 1,627,770
 
 
 50,353VFH Parent, LLC,
  L+450, 1.25% LIBOR Floor, 11/8/2016
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 506,266
 
 
 504,761
 
 
 (1,505)Vince, LLC,
  L+500, 1.00% LIBOR Floor, 11/27/2019(e)
 
 Various
 
 Consumer Goods:
  Non-Durable
 
 
 2,195,736
 
 
 2,212,076
 
 
 16,340Western Dental
  Services, Inc., L+500, 1.00% LIBOR Floor, 11/1/2018
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 6,161,917
 
 
 6,184,751
 
 
 22,834Total Senior
  Secured First Lien Term Loans
 
 
 
 
 
 
 239,113,988
 
 
 240,628,558
 
 
 1,514,570
 26


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 Underlying Loans(a)
 
 Index Rate(b)
 
 Industry
 
 Notional
  Amount
 
 Fair
  Value(c)
 
 Unrealized
  Appreciation /
  (Depreciation)Senior
  Secured Second Lien Term LoansArysta
  LifeScience SPC, LLC, L+700, 1.25% LIBOR Floor, 11/30/2020(e)
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 1,160,540
 
 
 1,188,565
 
 
 28,025Del Monte Foods,
  Inc., L+725, 1.00% LIBOR Floor, 7/26/2021
 
 6 Month LIBOR
 
 Beverage, Food
  & Tobacco
 
 
 320,322
 
 
 317,086
 
 
 (3,236)Deltek, Inc.,
  L+875, 1.25% LIBOR Floor, 10/10/2019
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 1,619,640
 
 
 1,666,675
 
 
 47,035Evergreen Skills
  Lux S.À.R.L., L+675, 1.00% LIBOR Floor, 4/28/2022(e)
 
 6 Month LIBOR
 
 High Tech
  Industries
 
 
 7,151,625
 
 
 7,141,536
 
 
 (10,089)Mergermarket
  USA, Inc., L+650, 1.00% LIBOR Floor, 2/4/2022(e)
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 6,965,000
 
 
 6,943,160
 
 
 (21,840)Pelican
  Products, Inc., L+825, 1.00% LIBOR Floor, 4/11/2021
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 4,990,000
 
 
 5,050,000
 
 
 60,000PFS Holding
  Corporation, L+725, 1.00% LIBOR Floor, 1/31/2022
 
 1 Month LIBOR
 
 Retail
 
 
 7,104,300
 
 
 6,925,800
 
 
 (178,500)Securus
  Technologies Holdings, Inc., L+775, 1.25% LIBOR Floor, 4/30/2021
 
 3 Month LIBOR
 
 Telecommunications
 
 
 1,001,875
 
 
 1,012,500
 
 
 10,625Sheridan
  Holdings, Inc., L+725, 1.00% LIBOR Floor, 12/20/2021
 
 1 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 2,736,250
 
 
 2,808,438
 
 
 72,188Telx Group,
  Inc., L+650, 1.00% LIBOR Floor, 4/9/2021
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 2,970,000
 
 
 3,000,000
 
 
 30,000U.S. Renal Care,
  Inc., L+750, 1.00% LIBOR Floor, 1/3/2020
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 814,199
 
 
 837,315
 
 
 23,116Total Senior
  Secured Second Lien Term Loans
 
 
 
 
 
 
 36,833,751
 
 
 36,891,075
 
 
 57,324Total
 
 
 
 
 
 $
 275,947,739
 
 $
 277,519,633
 
 $
 1,571,894
 (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 per note (e) below. 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)
 The 1, 2, 3, and 6 month LIBOR rates were 0.16%%, 0.19%, 0.23%,
  and 0.33%, respectively, as of June 30, 2014. The prime rate was 3.25% as of
  June 30, 2014. The applicable LIBOR rate as of June 30, 2014 for the loan
  listed may not be the applicable LIBOR rate, as the loan may have been priced
  or repriced based on a LIBOR rate prior to June 30, 2014.(c)
 Fair value determined by the Company’s board of directors (see
  Note 8).(d)
 Position or portion thereof unsettled as of June 30, 2014.(e)
 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 June 30, 2014, 87.3% of the Company’s total
  assets represented qualifying assets. In addition, as described in this note,
  the Company calculates its compliance with the qualifying asset test on a
  “look through” basis by treating each loan underlying the TRS as either a
  qualifying asset or non-qualifying asset based on whether the obligor is an
  eligible portfolio company. On this basis, 79.4% of the Company’s total
  assets represented qualifying assets as of June 30, 2014.
 27


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 The following is a summary of the underlying loans subject to the
TRS as of December 31, 2013:  Underlying
  Loans(a)
 
 Index Rate(b)
 
 Industry
 
 Notional
  Amount
 
 Fair
  Value(c)
 
 Unrealized
  Appreciation /
  (Depreciation)Senior
  Secured First Lien Term LoansThe Active
  Network, Inc., L+450, 1.00% LIBOR Floor, 11/13/2020
 
 1 Month LIBOR
 
 High Tech
  Industries
 
 $
 1,947,215
 
 $
 1,964,339
 
 $
 17,124Amneal
  Pharmaceuticals, LLC, L+475, 1.00% LIBOR Floor, 11/1/2019
 
 1 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 3,347,710
 
 
 3,398,433
 
 
 50,723Aquilex, LLC,
  L+400, 1.00% LIBOR Floor, 12/31/2020(d)
 
 1 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 4,987,500
 
 
 5,012,500
 
 
 25,000ARG IH
  Corporation, L+400, 1.00% LIBOR Floor, 11/15/2020
 
 1 Month LIBOR
 
 Beverage, Food
  & Tobacco
 
 
 2,394,000
 
 
 2,410,512
 
 
 16,512Arc Document
  Solutions, Inc., L+525, 1.00% LIBOR Floor, 12/20/2018(d)(e)
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 4,870,600
 
 
 4,932,725
 
 
 62,125Ascensus, Inc.,
  L+400, 1.00% LIBOR Floor, 12/2/2019
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 4,975,000
 
 
 5,018,750
 
 
 43,750ATI Holdings,
  Inc., L+400, 1.25% LIBOR Floor, 12/21/2019
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 490,050
 
 
 495,931
 
 
 5,881Avaya, Inc.,
  L+675, 1.25% LIBOR Floor, 3/31/2018
 
 3 Month LIBOR
 
 Telecommunications
 
 
 1,993,401
 
 
 2,014,431
 
 
 21,030Azure Midstream
  Energy, LLC, L+550, 1.00% LIBOR Floor, 11/15/2018
 
 1 Month LIBOR
 
 Energy: Oil
  & Gas
 
 
 4,380,210
 
 
 4,407,930
 
 
 27,720BBTS Borrower,
  LP, L+650, 1.25% LIBOR Floor, 6/4/2019
 
 3 Month LIBOR
 
 Energy: Oil
  & Gas
 
 
 1,854,169
 
 
 1,878,474
 
 
 24,305Bluestem Brands,
  Inc., L+650, 1.00% LIBOR Floor, 12/6/2018
 
 1 Month LIBOR
 
 Retail
 
 
 1,832,600
 
 
 1,832,600
 
 
 -Camp
  International Holding Company, L+375, 1.00% LIBOR Floor, 5/31/2019
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 1,220,000
 
 
 1,230,163
 
 
 10,163Caraustar
  Industries, Inc., L+625, 1.25% LIBOR Floor, 5/1/2019
 
 6 Month LIBOR
 
 Forest Products
  & Paper
 
 
 713,584
 
 
 738,748
 
 
 25,164Charming
  Charlie, LLC, L+800, 1.00% LIBOR Floor, 12/18/2019(d)
 
 3 Month LIBOR
 
 Retail
 
 
 4,289,675
 
 
 4,333,225
 
 
 43,550Cyanco Intermediate
  Corp., L+450, 1.00% LIBOR Floor, 5/1/2020
 
 1 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 1,254,383
 
 
 1,265,813
 
 
 11,430Digital Insight
  Corporation, L+375, 1.00% LIBOR Floor, 10/16/2019
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 775,105
 
 
 779,000
 
 
 3,895Global Tel*Link
  Corporation, L+375, 1.25% LIBOR Floor, 5/23/2020
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 2,940,113
 
 
 2,915,814
 
 
 (24,299)Grande
  Communications Networks, LLC, L+350, 1.00% LIBOR Floor, 5/31/2020
 
 3 Month LIBOR
 
 Telecommunications
 
 
 2,486,435
 
 
 2,497,471
 
 
 11,036Hemisphere Media
  Holdings, LLC, L+500, 1.25% LIBOR Floor, 7/30/2020(e)
 
 1 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 4,324,817
 
 
 4,349,487
 
 
 24,670Herff Jones,
  Inc., L+450, 1.00% LIBOR Floor, 6/25/2019
 
 1 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 1,973,732
 
 
 2,054,268
 
 
 80,536Hyperion Finance
  S.à r.l., L+475, 1.00% LIBOR Floor, 10/17/2019(e)
 
 2 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 4,432,500
 
 
 4,471,875
 
 
 39,375Information
  Resources, Inc., L+375, 1.00% LIBOR Floor, 9/30/2020
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 892,269
 
 
 900,492
 
 
 8,223Insight
  Pharmaceuticals, LLC, L+500, 1.25% LIBOR Floor, 8/25/2016
 
 6 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 4,002,500
 
 
 3,980,000
 
 
 (22,500)inVentiv Health,
  Inc., L+600, 1.50% LIBOR Floor, 8/4/2016
 
 6 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 5,260,192
 
 
 5,228,718
 
 
 (31,474)Learfield
  Communications, Inc., L+400, 1.00% LIBOR Floor, 10/9/2020
 
 3 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 746,250
 
 
 757,500
 
 
 11,250Lineage
  Logistics, LLC, L+350, 1.00% LIBOR Floor, 4/26/2019
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 2,501,589
 
 
 2,504,769
 
 
 3,180Merrill Corp.,
  L+625, 1.00% LIBOR Floor, 3/8/2018(d)
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 671,827
 
 
 679,040
 
 
 7,213Mohegan Tribal
  Gaming Authority, L+450, 1.00% LIBOR Floor, 11/19/2019
 
 2 Month LIBOR
 
 Hotel, Gaming
  & Leisure
 
 
 1,643,400
 
 
 1,683,871
 
 
 40,471OCI Beaumont,
  LLC, L+500, 1.25% LIBOR Floor, 8/20/2019 (B2 Term Loan)(e)
 
 6 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 2,285,804
 
 
 2,333,284
 
 
 47,480Opal
  Acquisition, Inc., L+400, 1.00% LIBOR Floor, 11/27/2020(d)
 
 1 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 4,580,879
 
 
 4,617,136
 
 
 36,257Packaging
  Coordinators, Inc., L+425, 1.25% LIBOR Floor, 5/10/2020
 
 3 Month LIBOR
 
 Containers,
  Packaging & Glass
 
 
 1,985,025
 
 
 1,995,000
 
 
 9,975Peppermill
  Casinos, Inc., L+600, 1.25% LIBOR Floor, 11/9/2018
 
 1 Month LIBOR
 
 Hotel, Gaming
  & Leisure
 
 
 977,637
 
 
 1,012,275
 
 
 34,638Photonis
  Technologies SAS, L+750, 1.00% LIBOR Floor, 9/18/2019(e)
 
 3 Month LIBOR
 
 Aerospace &
  Defense
 
 
 5,764,360
 
 
 5,853,870
 
 
 89,510Polyconcept
  Finance B.V., L+475, 1.25% LIBOR Floor, 6/28/2019(e)
 
 1 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 2,470,979
 
 
 2,521,407
 
 
 50,428Safe-Guard
  Products International, LLC, L+600, 1.25% LIBOR Floor, 12/21/2018
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 2,222,426
 
 
 2,266,102
 
 
 43,676Salix
  Pharmaceuticals, Ltd., L+325, 1.00% LIBOR Floor, 1/2/2020(d)(e)
 
 1 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 2,815,850
 
 
 2,857,423
 
 
 41,573SESAC Holdco II,
  LLC, L+400, 1.00% LIBOR Floor, 2/8/2019
 
 1 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 490,050
 
 
 496,856
 
 
 6,806SK Spice
  S.Á.R.L, L+825, 1.25% LIBOR Floor, 9/30/2018(e)
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 2,972,550
 
 
 2,966,316
 
 
 (6,234)SRA
  International, L+525, 1.25% LIBOR Floor, 7/20/2018
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 2,351,305
 
 
 2,388,954
 
 
 37,649Steward Health
  Care System, LLC, L+550, 1.25% LIBOR Floor, 4/10/2020
 
 12 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 3,436,500
 
 
 3,478,147
 
 
 41,647Sutherland
  Global Services, L+600, 1.25% LIBOR Floor, 3/6/2019(e)
 
 6 Month LIBOR
 
 Services:
  Business
 
 
 1,913,941
 
 
 1,917,307
 
 
 3,366Tech Finance
  & Co. S.C.A., L+600, 1.25% LIBOR Floor, 7/11/2020(e)
 
 3 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 1,942,906
 
 
 1,994,750
 
 
 51,844Tervita, L+500,
  1.25% LIBOR Floor, 5/15/2018(d)(e)
 
 3 Month LIBOR
 
 Environmental
  Industries
 
 
 3,533,364
 
 
 3,554,920
 
 
 21,556The TOPPS
  Company, Inc., L+600, 1.25% LIBOR Floor, 10/2/2018
 
 3 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 2,007,500
 
 
 1,995,000
 
 
 (12,500)Travel Leaders
  Group, LLC, P+500, 2.00% Base Rate Floor, 12/5/2018
 
 Prime
 
 Services:
  Consumer
 
 
 1,975,000
 
 
 1,965,000
 
 
 (10,000)Travelport, LLC,
  L+500, 1.25% LIBOR Floor, 6/26/2019(e)
 
 3 Month LIBOR
 
 Hotel, Gaming
  & Leisure
 
 
 1,585,383
 
 
 1,640,669
 
 
 55,286TriNet HR Corp.,
  L+400, 1.00% LIBOR Floor, 8/20/2020
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 1,649,167
 
 
 1,678,319
 
 
 29,152Vince, LLC,
  L+500, 1.00% LIBOR Floor, 11/27/2019(e)
 
 1 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 1,752,300
 
 
 1,783,275
 
 
 30,975VFH Parent, LLC,
  L+450, 1.25% LIBOR Floor, 11/8/2019
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 2,597,561
 
 
 2,624,622
 
 
 27,061W/S Packaging
  Group, Inc., L+400, 1.00% LIBOR Floor, 8/9/2019
 
 4 Month LIBOR
 
 Containers,
  Packaging & Glass
 
 
 2,481,284
 
 
 2,493,750
 
 
 12,466Washington
  Inventory Services, L+450, 1.25% LIBOR Floor, 12/20/2018
 
 3 Month LIBOR
 
 Retail
 
 
 492,525
 
 
 495,931
 
 
 3,406WP CPP Holdings,
  LLC, L+375, 1.00% LIBOR Floor, 12/28/2019
 
 3 Month LIBOR
 
 Aerospace &
  Defense
 
 
 935,288
 
 
 942,320
 
 
 7,032Total Senior
  Secured First Lien Term Loans
 
 
 
 
 
 
 128,420,410
 
 
 129,609,512
 
 
 1,189,102
 28


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 Underlying Loans(a)
 
 Index Rate(b)
 
 Industry
 
 Notional
  Amount
 
 Fair
  Value(c)
 
 Unrealized
  Appreciation /
  (Depreciation)Senior Secured
  Second Lien Term LoansArysta
  LifeScience SPC, LLC, L+700, 1.25% LIBOR Floor, 11/30/2020(e)
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 1,160,540
 
 
 1,190,029
 
 
 29,489Carestream
  Health, Inc., L+850, 1.00% LIBOR Floor, 12/7/2019(e)
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 980,000
 
 
 1,017,500
 
 
 37,500Del Monte Foods,
  Inc., L+725, 1.00% LIBOR Floor, 7/26/2021(d)
 
 6 Month LIBOR
 
 Beverage, Food
  & Tobacco
 
 
 2,257,200
 
 
 2,299,950
 
 
 42,750Deltek, Inc.,
  L+875, 1.25% LIBOR Floor, 10/10/2019
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 1,619,640
 
 
 1,660,540
 
 
 40,900Ion Trading
  Technologies S.Á R.L., L+700, 1.25% LIBOR Floor, 5/22/2021(e)
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 993,125
 
 
 1,018,130
 
 
 25,005Performance Food
  Group, Inc., L+525, 1.00% LIBOR Floor, 11/14/2019
 
 3 Month LIBOR
 
 Beverage, Food
  & Tobacco
 
 
 3,849,587
 
 
 3,887,290
 
 
 37,703Securus
  Technologies Holdings, Inc., L+775, 1.25% LIBOR Floor, 4/30/2021
 
 3 Month LIBOR
 
 Telecommunications
 
 
 1,002,075
 
 
 990,830
 
 
 (11,245)Sheridan
  Holdings, Inc., L+725, 1.00% LIBOR Floor, 12/20/2021
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 2,736,250
 
 
 2,750,000
 
 
 13,750TriNet HR Corp.,
  L+775, 1.00% LIBOR Floor, 2/20/2021
 
 2 Month LIBOR
 
 Services:
  Business
 
 
 2,465,510
 
 
 2,512,500
 
 
 46,990U.S. Renal Care,
  Inc., L+750, 1.00% LIBOR Floor, 1/3/2020
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 676,200
 
 
 696,900
 
 
 20,700TWCC Holding
  Corp., L+600, 1.00% LIBOR Floor, 6/26/2020
 
 6 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 2,039,400
 
 
 2,115,373
 
 
 75,973Total Senior
  Secured Second Lien Term Loans
 
 
 
 
 
 
 19,779,527
 
 
 20,139,042
 
 
 359,515Total
 
 
 
 
 
 $
 148,199,937
 
 $
 149,748,554
 
 $
 1,548,617
 (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 per note (e) below. 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)
 The 1, 2, 3, 4, 6 and 12 month LIBOR rates were 0.17%, 0.21%,
  0.25%, 0.32%, 0.35% and 0.58%, respectively, as of December 31, 2013. The
  prime rate was 3.25% as of December 31, 2013. The applicable LIBOR rate as of
  December 31, 2013 for the loan listed may not be the applicable LIBOR rate,
  as the loan may have been priced or repriced based on a LIBOR rate prior to
  December 31, 2013.(c)
 Fair value determined by the Company’s board of directors (see
  Note 8).(d)
 Position or portion thereof unsettled as of December 31, 2013.(e)
 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 December 31, 2013, 88.2% of the Company’s
  total assets represented qualifying assets. In addition, as described in this
  note, the Company calculates its compliance with the qualifying asset test on
  a “look through” basis by treating each loan underlying the TRS as either a
  qualifying asset or non-qualifying asset based on whether the obligor is an
  eligible portfolio company. On this basis, 76.1% of the Company’s total
  assets represented qualifying assets as of December 31, 2013.
 29


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 Note 8. Fair Value of Financial Instruments  The Company determines the fair value of
all portfolio investments in accordance with ASC 820. ASC 820 requires enhanced
disclosures about assets and liabilities that are measured and reported at fair
value. As defined in ASC 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 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.  ·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.  The following table presents fair value
measurements of the Company’s portfolio investments and TRS as of June 30, 2014
and December 31, 2013, according to the fair value hierarchy:  June 30, 2014Valuation
  Inputs
 
 First Lien Senior
  Secured Term Loans
 
 Second Lien Senior
  Secured Term Loans
 
 Collateralized Securities
 
 Short Term
  Investments
 
 Total Return SwapLevel 1—Price
  quotations in active markets
 
 $
 -
 
 $
 -
 
 $
 -
 
 $
 38,395,666
 
 $
 -Level
  2—Significant other observable inputs
 
 
 -
 
 
 -
 
 
 -
 
 
 -
 
 
 -Level
  3—Significant unobservable inputs
 
 
 76,790,268
 
 
 101,524,554
 
 
 30,577,322
 
 
 -
 
 
 1,571,894$
 76,790,268
 
 $
 101,524,554
 
 $
 30,577,322
 
 $
 38,395,666
 
 $
 1,571,894
  December 31, 2013Valuation
  Inputs
 
 First Lien Senior
  Secured Term Loans
 
 Second Lien Senior
  Secured Term Loans
 
 Collateralized Securities
 
 Short Term
  Investments
 
 Total Return SwapLevel 1—Price
  quotations in active markets
 
 $
 -
 
 $
 -
 
 $
 -
 
 $
 11,383,669
 
 $
 -Level
  2—Significant other observable inputs
 
 
 -
 
 
 -
 
 
 -
 
 
 -
 
 
 -Level
  3—Significant unobservable inputs
 
 
 61,787,430
 
 
 22,552,214
 
 
 8,795,600
 
 
 -
 
 
 1,548,617$
 61,787,430
 
 $
 22,552,214
 
 $
 8,795,600
 
 $
 11,383,669
 
 $
 1,548,617
 30


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 The Company’s investments as of June 30, 2014 and December 31,
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 values
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. Four senior
secured loans that were purchased near December 31, 2013, were valued using cost
at acquisition, as the Company determined that the cost of the investments was the
best indication of their current 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 at least quarterly or on an as needed basis. The model uses the
estimated cash flow projections for the underlying investments and an
appropriate discount rate is determined based on the latest financial
information available for the borrower, prevailing market trends, comparable
analysis and other inputs. The model, key assumptions, inputs, and results are
reviewed by the 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 review and approve the valuation
determinations made with respect to these investments in a manner consistent
with the Company’s valuation process.  Six and three of the Company’s
collateralized security investments as of June 30, 2014 and December 31, 2013, respectively,
for which broker quotes were not available, were valued by an independent
valuation firm, which determined the fair value of such investments by
considering, among other factors, each borrower’s ability to adequately service
its debt, prevailing interest rates for like investments, call features and
other relevant terms of the debt.  The Company values 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. 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 Agreement. As a result of the private nature of this marketplace
(meaning actual transactions are not publicly reported), the Company believes
that 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 during the
six months ended June 30, 2014 and 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. 31


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 The following tables provide a reconciliation of the beginning and
ending balances for investments that use Level 3 inputs for the three and six
months ended June 30, 2014 and 2013:  Three Months Ended
  June 30, 2014First Lien Senior
  Secured Term Loans
 
 Second Lien Senior
  Secured Term Loans
 
 Collateralized Securities
 
 Total Return
  Swap
 
 TotalBeginning
  balance, March 31, 2014
 $
 84,299,368
 
 $
 47,163,590
 
 $
 11,044,972
 
 $
 2,756,542
 
 $
 145,264,472Investments
  purchased
 16,136,212
 
 57,147,031
 
 19,529,222
 
 -
 
 92,812,465Net realized
  gain
 183,014
 
 27,377
 
 -
 
 4,800,062
 
 5,010,453Net change in
  unrealized appreciation(1)
 (98,450)
 
 726,267
 
 (25,061)
 
 (1,184,648)
 
 (581,892)Accretion of
  discount
 38,301
 
 
 10,773
 
 28,189
 
 
 -
 
 
 77,263Sales and
  principal repayments
 (23,768,177)
 
 (3,550,484)
 
 -
 
 (4,800,062)
 
 (32,118,723)Ending
  balance, June 30, 2014
 $
 76,790,268
 
 $
 101,524,554
 
 $
 30,577,322
 
 $
 1,571,894
 
 $
 210,464,038Change in unrealized
  gains or losses for the period included in changes in net assets for assets
  held at the end of the reporting period
 $
 139,156
 
 $
 765,508
 
 $
 (25,061)
 
 $
 124,308
 
 $
 1,003,911
 (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.
  Six Months Ended
  June 30, 2014First Lien Senior
  Secured Term Loans
 
 Second Lien Senior
  Secured Term Loans
 
 Collateralized Securities
 
 Total Return
  Swap
 
 TotalBeginning
  balance, December 31, 2013
 $
 61,787,430
 
 $
 22,552,214
 
 $
 8,795,600
 
 $
 1,548,617
 
 $
 94,683,861Investments
  purchased
 55,203,085
 
 82,784,265
 
 21,821,944
 
 -
 
 159,809,294Net realized
  gain
 327,356
 
 56,749
 
 -
 
 7,763,541
 
 8,147,646Net change in
  unrealized appreciation(1)
 214,870
 
 1,067,906
 
 (69,127)
 
 23,277
 
 1,236,926Accretion of
  discount
 79,605
 
 
 15,229
 
 28,905
 
 
 -
 
 
 123,739Sales and
  principal repayments
 (40,822,078)
 
 (4,951,809)
 
 -
 
 (7,763,541)
 
 (53,537,428)Ending
  balance, June 30, 2014
 $
 76,790,268
 
 $
 101,524,554
 
 $
 30,577,322
 
 $
 1,571,894
 
 $
 210,464,038Change in unrealized
  gains or losses for the period included in changes in net assets for assets
  held at the end of the reporting period
 $
 495,452
 
 $
 1,136,245
 
 $
 (69,127)
 
 $
 742,861
 
 $
 2,305,431
 (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.
 32


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 Three Months Ended
  June 30, 2013First Lien Senior
  Secured Term Loans
 
 Second Lien Senior
  Secured Term Loans
 
 Collateralized Securities
 
 Total Return
  Swap
 
 TotalBeginning
  balance, March 31, 2013
 $
 5,702,500
 
 $
 2,543,125
 
 $
 -
 
 $
 263,071
 
 $
 8,508,696Investments
  purchased
 
 11,185,863
 
 2,818,325
 
 -
 
 -
 
 14,004,188Net realized
  gain
 10,438
 
 -
 
 -
 
 505,676
 
 516,114Net change in
  unrealized appreciation(1)
 
 144,971
 
 45,760
 
 -
 
 (163,108)
 
 27,623Accretion of
  discount
 
 1,710
 
 
 3,150
 
 
 -
 
 
 -
 
 
 4,860Sales and
  principal repayments
 (627,548)
 
 -
 
 -
 
 (505,676)
 
 (1,133,224)Ending
  balance, June 30, 2013
 $
 16,417,934
 
 $
 5,410,360
 
 $
 -
 
 $
 99,963
 
 $
 21,928,257Change in unrealized
  gains or losses for the period included in changes in net assets for assets
  held at the end of the reporting period
 $
 155,905
 
 $
 45,760
 
 $
 -
 
 $
 (106,881)
 
 $
 94,784
 (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.
  Six Months Ended
  June 30, 2013First Lien Senior
  Secured Term Loans
 
 Second Lien Senior
  Secured Term Loans
 
 Collateralized Securities
 
 Total Return
  Swap
 
 TotalBeginning
  balance, December 31, 2012
 $
 1,980,044
 
 $
 -
 
 $
 -
 
 $
 12,395
 
 $
 1,992,439Investments
  purchased
 
 15,362,353
 
 5,295,825
 
 -
 
 -
 
 20,658,178Net realized
  gain
 14,971
 
 -
 
 -
 
 792,013
 
 806,984Net change in
  unrealized appreciation(1)
 
 204,156
 
 110,857
 
 -
 
 87,568
 
 402,581Accretion of
  discount
 
 3,333
 
 
 3,678
 
 
 -
 
 
 -
 
 
 7,011Sales and
  principal repayments
 (1,146,923)
 
 -
 
 -
 
 (792,013)
 
 (1,938,936)Ending
  balance, June 30, 2013
 $
 16,417,934
 
 $
 5,410,360
 
 $
 -
 
 $
 99,963
 
 $
 21,928,257Change in
  unrealized gains or losses for the period included in changes in net assets
  for assets held at the end of the reporting period
 $
 204,156
 
 $
 110,857
 
 $
 -
 
 $
 97,723
 
 $
 412,736
 (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 investments
as of June 30, 2014 and December 31, 2013 were as follows:  June 30, 2014Fair Value
 
 Valuation Technique
 
 Unobservable
  Inputs
 
 Range
  (Weighted Average)Senior secured
  term loans - first lien
 $
 76,790,268
 
 Discounted cash flow
 
 Discount rates
 
 5.0% - 10.5%
  (7.5%)Senior secured
  term loans - second lien
 $
 101,524,554
 
 Discounted cash flow
 
 Discount rates
 
 6.8% - 12.2%
  (8.6%)Collateralized securities
 $
 30,577,322
 
 Discounted cash flow
 
 Discount rates
 
 9.1% - 13.0%
  (10.5%)
  December 31, 2013Fair Value
 
 Valuation Technique
 
 Unobservable
  Inputs
 
 Range
  (Weighted Average)Senior secured
  term loans - first lien
 $
 61,787,430
 
 Discounted cash flow
 
 Discount rates
 
 4.8% - 9.7%
  (6.7%)Senior secured
  term loans - second lien
 $
 22,552,214
 
 Discounted cash flow
 
 Discount rates
 
 7.5% - 11.8%
  (8.8%)Collateralized
  securities
 $
 8,795,600
 
 Discounted cash flow
 
 Discount rates
 
 10.0% - 13.0%
  (11.8%)
 33


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
  The significant unobservable inputs used in
the fair value measurement of the Company’s senior secured first lien and second
lien term loans, and collateralized securities are discount rates. A
significant increase or decrease in discount rates would result in a
significantly lower or higher fair value measurement, respectively.  Note 9. General and Administrative Expense  General and administrative expense consisted
of the following items for the three and six months ended June 30, 2014 and
2013:  Three Months Ended
  June 30,
 
 Six Months Ended
  June 30,2014
 
 2013
 
 2014
 
 2013Marketing
  expense
 $
 209,362
 
 $
 96,759
 
 $
 297,122
 
 $
 183,399Professional
  fees expense
 
 179,299
 
 
 285,736
 
 
 466,306
 
 
 526,305Transfer agent
  expense
 
 160,354
 
 
 25,365
 
 
 276,699
 
 
 38,967Due diligence
  fees
 
 78,639
 
 
 122,326
 
 
 401,626
 
 
 161,344Filing fees
 
 74,076
 
 
 51,450
 
 
 79,727
 
 
 57,550Dues and
  subscriptions
 
 57,439
 
 
 12,033
 
 
 78,849
 
 
 22,966Insurance
  expense
 
 53,411
 
 
 52,901
 
 
 105,269
 
 
 105,802Director fees
  and expenses
 
 44,500
 
 
 8,185
 
 
 76,789
 
 
 16,024Printing and
  mailing expense
 
 36,104
 
 
 73,738
 
 
 69,242
 
 
 98,626Other expenses
 
 124,303
 
 
 23,522
 
 
 223,986
 
 
 49,895Total general
  and administrative expense
 $
 1,017,487
 
 $
 752,015
 
 $
 2,075,615
 
 $
 1,260,878
  Note 10. Commitments and Contingencies  The Company entered into certain contracts
with other parties that contain a variety of indemnifications. The Company’s
maximum exposure under these arrangements is unknown. However, the Company has
not experienced claims or losses pursuant to these contracts and believes the
risk of loss related to such indemnifications to be remote.  As of June 30, 2014 and
December 31, 2013, the Company’s unfunded loan commitments amounted to $16,674,000
and $2,450,758, respectively.As of August 11, 2014, the Company’s unfunded loan
commitments amounted to $48,341,000.For information on the companies to
which the Company is committed to fund additional amounts as ofJune 30, 2014 andDecember 31, 2013,refer to the consolidated schedule of investments. 34


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 Note 11.
Financial Highlights  The following is a schedule of financial
highlights as of and for the six months ended June 30, 2014 and 2013:  As of and for the
 
 As of and for theSix Months
 
 Six MonthsEnded
 
 EndedJune 30, 2014
 
 June 30, 2013Per share
  data:(1)Net asset value
  at beginning of period
 $
 9.32
 
 $
 8.97Results of
  operations:Net investment
  (loss) income(2)
 
 (0.01)
 
 
 0.05Net realized
  gain and net change in unrealized appreciation on investments
 
 0.07
 
 
 0.16Net realized
  gain and net change in unrealized appreciation on total return swap
 
 0.32
 
 
 0.44Net increase in
  net assets resulting from operations
 
 0.38
 
 
 0.65Shareholder
  distributions:Distributions
  from net realized gains
 
 (0.34)
 
 
 (0.06)Distributions
  from other sources
 
 (0.01)
 
 
 (0.30)Net decrease in
  net assets from shareholder distributions
 
 (0.35)
 
 
 (0.36)Capital share
  transactions:Issuance of
  common stock above net asset value(3)
 
 0.03
 
 
 0.15Amortization of
  deferred offering expenses
 
 0.00
 
 
 (0.24)Net increase
  (decrease) in net assets resulting from capital share transactions
 
 0.03
 
 
 (0.09)Net asset value
  at end of period
 $
 9.38
 
 $
 9.17Shares of common
  stock outstanding at end of period
 
 32,949,270
 
 
 3,853,304Total investment
  return-net asset value(4)
 
 4.45%
 
 
 6.05%Net assets at
  beginning of period
 $
 144,570,485
 
 $
 4,487,115Net assets at
  end of period
 $
 309,087,705
 
 $
 35,321,918Average net
  assets
 $
 226,620,761
 
 $
 19,904,517Ratio/Supplemental
  data:Ratio of net
  investment (loss) income to average net assets(5)
 
 (0.08%)
 
 
 0.54%Ratio of net
  operating expenses to average net assets
 
 2.66%
 
 
 1.03%Ratio of gross
  operating expenses to average net assets(6)
 
 0.65%
 
 
 3.22%Ratio of total
  expenses (before expense reimbursements and recoupments) to average net
  assets
 
 2.85%
 
 
 10.91%Ratio of expense
  reimbursements from IIG and expense recoupments to average net assets
 
 0.20%
 
 
 9.88%Portfolio
  turnover rate(7)
 
 31.04%
 
 
 11.95%Asset coverage
  ratio(8)
 
 2.58
 
 
 2.29
  35


---

CĪON Investment Corporation Notes to Consolidated
Financial Statements June
30, 2014 (unaudited)
 (1)
 The per share data for the six months ended June 30, 2014 and
  2013 was derived by using the weighted average shares of common stock
  outstanding during each period.(2)
 Net investment (loss) income per share includes the expense
  reimbursement from IIG of $0.04 and $0.97 per share for the six months ended
  June 30, 2014 and 2013, respectively, and expense recoupments of $0.02 per
  share for the six months ended June 30, 2014.
 (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 second amended and restated distribution reinvestment
  plan and (ii) the fractional shares issued pursuant to the distribution reinvestment
  plan and second amended and restated distribution reinvestment plan are
  issued at 95% (from January 1, 2013 through September 30, 2013) and 90% (from
  October 1, 2013 through June 30, 2014) of the then public offering price on
  the date of purchase, respectively. 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.(5)
 Excluding the expense reimbursements from IIG and the recoupment
  of expense reimbursements during the period, the ratio of net investment loss
  to average net assets would have been (0.28%) and (9.34%) for the six months
  ended June 30, 2014 and 2013, respectively.(6)
 Operating expenses include all expenses borne by the Company,
  except for organization costs 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.(7)
 Portfolio turnover rate is calculated using the lesser of
  year-to-date sales or purchases over the average of the invested assets at
  fair value, excluding short term investments, and is not annualized.(8)
 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.
 36


---

Item 2. Management’s Discussion and
Analysis of Financial Condition and Results of Operations  As used in this Quarterly Report on Form 10-Q, “we,”
“us,” “our” or similar terms include CĪON Investment Corporation and its
consolidated subsidiaries.  The following discussion should be read in conjunction
with our unaudited consolidated financial statements and related notes
appearing elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated
financial statements and related notes included in our Annual Report on Form
10-K for the year ended December 31, 2013. 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 our portfolio companies;•
 the impact of the investments
  that we expect to make;•
 the ability of our portfolio
  companies to achieve their objectives;•
 our current and expected
  financings and investments;•
 the adequacy of our cash
  resources, financing sources and working capital;•
 the use of borrowed money to
  finance a portion of our investments;•
 the timing of cash flows, if
  any, from the operations of our portfolio companies;•
 our contractual arrangements
  and relationships with third parties;•
 the actual and potential
  conflicts of interest with CIM and Apollo and their respective affiliates;•
 the ability of CIM 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 invest; and•
 the timing and amount of
  distributions and dividends from the companies in which we invest.
  In addition, words such
as “anticipate,” “believe,” “expect” and “intend” indicate a forward-looking
statement, although not all forward-looking statements include these words. The
forward-looking statements contained in this Quarterly Report on Form 10-Q
involve risks and uncertainties. Our actual results could differ materially
from those implied or expressed in the forward-looking statements for any
reason, including the factors set forth in “Risk Factors” in Item 1A of Part II
of this Quarterly Report on Form 10-Q. Other factors that could cause actual
results to differ materially include:  •
 changes in the economy;•
 risks associated with possible
  disruption in our operations or the economy generally due to terrorism or
  natural disasters; and•
 future changes in laws or
  regulations and conditions in our operating areas.
  37


---

We have based the forward-looking statements on
information available to us on the date of this Quarterly Report on Form 10-Q.
Except as required by the federal securities laws, we undertake no obligation
to revise or update any forward-looking statements, whether as a result of new
information, future events or otherwise. You are advised to review any
additional disclosures that we may make directly to you or through reports that
we in the future may file with the SEC, including annual reports on Form 10-K,
quarterly reports on Form 10-Q and current reports on Form 8-K. The
forward-looking statements contained in this Quarterly Report on Form 10-Q are
excluded from the safe harbor protection provided by Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended.  Overview  We were incorporated under the general corporation laws
of the State of Maryland on August 9, 2011 and commenced operations on December
17, 2012 upon raising proceeds of $2,500,000 from persons not affiliated with
us, CIM or Apollo. We are an externally managed, non-diversified closed-end
management investment company that has elected to be regulated as a BDC under
the 1940 Act. We elected to be treated for federal income tax purposes as a
RIC, as defined under Subchapter M of the Code.  Our investment objective is to generate current income
and, to a lesser extent, capital appreciation for investors. We anticipate that
our portfolio will be comprised primarily of investments insenior secured loans and, to a lesser extent, second lien
loans, collateralized loan obligations 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 oversees the management of our activities and is
responsible for making investment decisions for our portfolio. We and CIM have
engaged AIM to act as our investment sub-adviser.  We 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 focus primarily on the
senior secured debt of private and thinly traded U.S. middle-market companies,
which we define as companies that generally possess annual EBITDA of $50
million or less, with experienced management teams, significant free cash flow,
strong competitive positions and potential for growth.  Revenue  We primarily generate revenue in the form of interest
income on the debt securities that we hold and capital gains on debt or other
equity interests that we acquire in portfolio companies. The majority of our
senior debt investments bear interest at a floating rate. Interest on debt
securities is generally payable quarterly or semiannually. In some cases, some
of our investments may provide for deferred interest payments or PIK interest.
The principal amount of the debt securities and any accrued, but unpaid,
interest generally will become due at the maturity date. In addition, we may
generate revenue in the form of commitment, 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; ·federal, state and local taxes; 38


---

·independent directors’ fees and
expenses; ·costs of proxy statements, tender
offer materials, 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 Three Months
Ended June 30, 2014 and 2013  The following table summarizes our investment activity,
excluding short term investments, for the three months ended June 30, 2014 and
2013:  Three Months Ended June 30,2014
 
 2013Net Investment Activity
 
 Investment Portfolio
 
 Total Return Swap
 
 Total
 
 Investment Portfolio
 
 Total Return Swap
 
 TotalPurchases and
  drawdownsSenior secured
  term loans - first lien
 
 $
 16,136,212
 
 $
 151,011,079
 
 $
 167,147,291
 
 $
 11,185,863
 
 $
 45,827,010
 
 $
 57,012,873Senior secured
  term loans - second lien
 
 
 57,147,031
 
 
 15,111,625
 
 
 72,258,656
 
 
 2,818,325
 
 
 7,179,785
 
 
 9,998,110Collateralized
  securities
 
 
 19,529,222
 
 
 -
 
 
 19,529,222
 
 
 -
 
 
 -
 
 
 -Subordinated
  unsecured term loans
 
 
 -
 
 
 -
 
 
 -
 
 
 -
 
 
 1,425,428
 
 
 1,425,428Sales and
  principal repayments
 
 
 (27,318,661)
 
 
 (121,905,999)
 
 
 (149,224,660)
 
 
 (627,548)
 
 
 (30,960,587)
 
 
 (31,588,135)Net portfolio
  activity
 
 $
 65,493,804
 
 $
 44,216,705
 
 $
 109,710,509
 
 $
 13,376,640
 
 $
 23,471,636
 
 $
 36,848,276
 39


---

The following table summarizes the composition of our investment
portfolio at amortized cost and fair value and our underlying TRS loans
portfolio at notional amount and fair value as of June 30, 2014 and December
31, 2013:  June 30, 2014Investment Portfolio
 
 Total Return Swap
 
 TotalInvestments Amortized
  Cost(1)
 
 Investments Fair
  Value
 
 Percentage of
  Investment
  Portfolio
 
 Notional Amount of Underlying TRS Loans
 
 Fair Value of Underlying TRS Loans
 
 Percentage of Underlying TRS Loans
 
 Amortized Cost/
  Notional Amount
 
 Fair Value
 
 PercentageSenior secured
  term loans - first lien
 
 $
 75,883,653
 
 $
 76,790,268
 
 36.8%
 
 $
 239,113,988
 
 $
 240,628,558
 
 86.7%
 
 $
 314,997,641
 
 $
 317,418,826
 
 65.3%Senior secured
  term loans - second lien
 
 
 100,093,765
 
 
 101,524,554
 
 48.6%
 
 
 36,833,751
 
 
 36,891,075
 
 13.3%
 
 
 136,927,516
 
 
 138,415,629
 
 28.4%Collateralized
  securities
 
 
 30,596,849
 
 
 30,577,322
 
 14.6%
 
 
 -
 
 
 -
 
 -
 
 
 30,596,849
 
 
 30,577,322
 
 6.3%Subtotal/total
  percentage
 
 
 206,574,267
 
 
 208,892,144
 
 100.0%
 
 
 275,947,739
 
 
 277,519,633
 
 100.0%
 
 
 482,522,006
 
 
 486,411,777
 
 100.0%Short term
  investments(2)
 
 
 38,395,666
 
 
 38,395,666
 
 
 
 
 -
 
 
 -
 
 
 
 
 38,395,666
 
 
 38,395,666Total
  investments
 
 $
 244,969,933
 
 $
 247,287,810
 
 
 
 $
 275,947,739
 
 $
 277,519,633
 
 
 
 $
 520,917,672
 
 $
 524,807,443Number of
  portfolio companies
 
 
 
 
 47
 
 
 
 
 
 
 
 56
 
 
 
 
 
 
 
 93(3)Average annual
  EBITDA of portfolio companies
 
 
 $60.7 million
 
 
 
 
 
 $85.8 million
 
 
 
 
 
 $76.0 millionMedian annual
  EBITDA of portfolio companies
 
 
 $49.6 million
 
 
 
 
 
 $65.0 million
 
 
 
 
 
 $62.0 millionPurchased at a
  weighted average price of par
 
 
 
 
 98.22%
 
 
 
 
 
 
 
 99.47%
 
 
 
 
 
 
 
 98.93%Gross annual
  portfolio yield based upon the purchase price(4)
 
 8.31%
 
 
 
 
 
 
 
 6.75%(5)
 
 
 
 
 
 
 
 7.42%
 (1)
 Amortized cost represents the original cost adjusted for the
  amortization of premiums and/or accretion of discounts, as applicable, on our
  investments.(2)
 Short term investments represent an investment in a fund that
  invests in highly liquid investments with original maturity dates of three
  months or less.(3)
 The sum of investment portfolio and TRS portfolio companies does
  not equal the total number of portfolio companies. This is due to ten
  portfolio companies being in both the investment and TRS portfolios.(4)
 The portfolio yield does not represent an actual investment
  return to shareholders.(5)
 The portfolio yield for underlying TRS loans is determined
  without giving consideration to leverage.
  December 31, 2013Investment Portfolio
 
 Total Return Swap
 
 TotalInvestments Amortized
  Cost(1)
 
 Investments Fair
  Value
 
 Percentage of
  Investment
  Portfolio
 
 Notional Amount of Underlying TRS Loans
 
 Fair Value of Underlying TRS Loans
 
 Percentage of Underlying TRS Loans
 
 Amortized Cost/
  Notional Amount(1)
 
 Fair Value
 
 PercentageSenior secured
  term loans - first lien
 
 $
 61,095,685
 
 $
 61,787,430
 
 66.4%
 
 $
 128,420,410
 
 $
 129,609,512
 
 86.6%
 
 $
 189,516,095
 
 $
 191,396,942
 
 78.8%Senior secured
  term loans - second lien
 
 
 22,189,331
 
 
 22,552,214
 
 24.2%
 
 
 19,779,527
 
 
 20,139,042
 
 13.4%
 
 
 41,968,858
 
 
 42,691,256
 
 17.6%Collateralized
  securities
 
 
 8,746,000
 
 
 8,795,600
 
 9.4%
 
 
 -
 
 
 -
 
 -
 
 
 8,746,000
 
 
 8,795,600
 
 3.6%Subtotal/total
  percentage
 
 
 92,031,016
 
 
 93,135,244
 
 100.0%
 
 
 148,199,937
 
 
 149,748,554
 
 100.0%
 
 
 240,230,953
 
 
 242,883,798
 
 100.0%Short term
  investments(2)
 
 
 11,383,669
 
 
 11,383,669
 
 
 
 
 -
 
 
 -
 
 
 
 
 11,383,669
 
 
 11,383,669Total
  investments
 
 $
 103,414,685
 
 $
 104,518,913
 
 
 
 $
 148,199,937
 
 $
 149,748,554
 
 
 
 $
 251,614,622
 
 $
 254,267,467Number of
  portfolio companies
 
 
 
 
 39
 
 
 
 
 
 
 
 62
 
 
 
 
 
 
 
 91(3)Average annual
  EBITDA of portfolio companies
 
 
 $50.8 million
 
 
 
 
 
 $157.0 million
 
 
 
 
 
 $120.2 millionMedian annual
  EBITDA of portfolio companies
 
 
 $47.7 million
 
 
 
 
 
 $102.7 million
 
 
 
 
 
 $72.9 millionPurchased at a weighted
  average price of par
 
 
 
 
 98.57%
 
 
 
 
 
 
 
 99.09%
 
 
 
 
 
 
 
 98.89%Gross annual
  portfolio yield based upon the purchase price(4)
 
 7.86%
 
 
 
 
 
 
 
 6.71%(5)
 
 
 
 
 
 
 
 7.15%
 (1)
 Amortized cost
  represents the original cost adjusted for the amortization of premiums and/or
  accretion of discounts, as applicable, on our investments.(2)
 Short term
  investments represent an investment in a fund that invests in highly liquid investments
  with original maturity dates of three months or less.(3)
 The sum of investment portfolio and TRS portfolio companies does
  not equal the total number of portfolio companies. This is due to ten
  portfolio companies being in both the investment and TRS portfolios.(4)
 The portfolio
  yield does not represent an actual investment return to shareholders.(5)
 The portfolio yield for underlying TRS loans is determined
  without giving consideration to leverage.
 40


---

The following table summarizes the
composition of our investment portfolio and our underlying TRS loans portfolio by
the type of interest rate as of June 30, 2014 and December 31, 2013, excluding
short term investments of $38,395,666 and $11,383,669, respectively:  June 30, 2014Investment Portfolio
 
 Total Return Swap
 
 TotalInterest Rate
  Allocation
 
 Investments Amortized
  Cost
 
 Investments Fair
  Value
 
 Percentage of
  Investment
  Portfolio
 
 Notional Amount of Underlying TRS Loans
 
 Fair Value of Underlying TRS Loans
 
 Percentage of Underlying TRS Loans
 
 Amortized Cost/
  Notional Amount
 
 Fair Value
 
 PercentageFloating
  interest rate investments
 
 $
 203,588,545
 
 $
 205,781,940
 
 98.5%
 
 $
 275,947,739
 
 $
 277,519,633
 
 100.0%
 
 $
 479,536,284
 
 $
 483,301,573
 
 99.4%Fixed interest
  rate investments
 
 
 2,985,722
 
 
 3,110,204
 
 1.5%
 
 
 -
 
 
 -
 
 -
 
 
 2,985,722
 
 
 3,110,204
 
 0.6%Total
  investments
 
 $
 206,574,267
 
 $
 208,892,144
 
 100.0%
 
 $
 275,947,739
 
 $
 277,519,633
 
 100.0%
 
 $
 482,522,006
 
 $
 486,411,777
 
 100.0%
  December 31, 2013Investment Portfolio
 
 Total Return Swap
 
 TotalInterest Rate
  Allocation
 
 Investments Amortized
  Cost
 
 Investments Fair
  Value
 
 Percentage of
  Investment
  Portfolio
 
 Notional Amount of Underlying TRS Loans
 
 Fair Value of Underlying TRS Loans
 
 Percentage of Underlying TRS Loans
 
 Amortized Cost/
  Notional Amount
 
 Fair Value
 
 PercentageFloating
  interest rate investments
 
 $
 92,031,016
 
 $
 93,135,244
 
 100.0%
 
 $
 148,199,937
 
 $
 149,748,554
 
 100.0%
 
 $
 240,230,953
 
 $
 242,883,798
 
 100.0%Fixed interest
  rate investments
 
 
 -
 
 
 -
 
 -
 
 
 -
 
 
 -
 
 -
 
 
 -
 
 
 -
 
 -Total
  investments
 
 $
 92,031,016
 
 $
 93,135,244
 
 100.0%
 
 $
 148,199,937
 
 $
 149,748,554
 
 100.0%
 
 $
 240,230,953
 
 $
 242,883,798
 
 100.0%
 41


---

The following table
shows the composition of our investment portfolio and our underlying TRS loans
portfolio by industry classification and the percentage, by fair value, of the
total assets in such industries as of June 30, 2014 and December 31, 2013:  June 30, 2014Investment Portfolio
 
 Total Return Swap
 
 TotalIndustry
  Classification
 
 Investments Fair Value
 
 Percentage of
  Investment Portfolio
 
 Fair Value of
  Underlying
  TRS Loans
 
 Percentage of
  Underlying
  TRS Loans
 
 Fair Value
 
 PercentageServices:
  Business
 
 $
 36,640,254
 
 17.5%
 
 $
 33,957,604
 
 12.3%
 
 $
 70,597,858
 
 14.5%Healthcare &
  Pharmaceuticals
 
 
 17,389,316
 
 8.3%
 
 
 42,749,351
 
 15.4%
 
 
 60,138,667
 
 12.4%High Tech
  Industries
 
 
 22,225,813
 
 10.6%
 
 
 15,563,087
 
 5.6%
 
 
 37,788,900
 
 7.8%Retail
 
 
 -
 
 -
 
 
 34,203,807
 
 12.3%
 
 
 34,203,807
 
 7.0%Diversified
  Financials
 
 
 30,577,322
 
 14.6%
 
 
 -
 
 -
 
 
 30,577,322
 
 6.3%Energy: Oil
  & Gas
 
 
 7,548,610
 
 3.7%
 
 
 22,829,211
 
 8.2%
 
 
 30,377,821
 
 6.2%Chemicals,
  Plastics & Rubber
 
 
 6,861,526
 
 3.3%
 
 
 20,572,822
 
 7.4%
 
 
 27,434,348
 
 5.7%Construction
  & Building
 
 
 6,144,188
 
 2.9%
 
 
 17,477,367
 
 6.3%
 
 
 23,621,555
 
 4.9%Automotive
 
 
 14,634,267
 
 7.0%
 
 
 6,833,041
 
 2.5%
 
 
 21,467,308
 
 4.4%Consumer Goods:
  Durable
 
 
 -
 
 -
 
 
 20,904,425
 
 7.5%
 
 
 20,904,425
 
 4.3%Consumer Goods:
  Non-Durable
 
 
 6,328,022
 
 3.0%
 
 
 11,850,943
 
 4.3%
 
 
 18,178,965
 
 3.8%Capital
  Equipment
 
 
 9,950,063
 
 4.8%
 
 
 8,019,563
 
 2.9%
 
 
 17,969,626
 
 3.7%Media:
  Broadcasting & Subscription
 
 
 2,129,339
 
 1.0%
 
 
 12,417,680
 
 4.5%
 
 
 14,547,019
 
 3.0%Banking,
  Finance, Insurance & Real Estate
 
 
 845,460
 
 0.4%
 
 
 11,886,625
 
 4.3%
 
 
 12,732,085
 
 2.6%Beverage, Food
  & Tobacco
 
 
 11,778,769
 
 5.6%
 
 
 317,086
 
 0.1%
 
 
 12,095,855
 
 2.5%Aerospace &
  Defense
 
 
 1,452,041
 
 0.7%
 
 
 8,875,916
 
 3.2%
 
 
 10,327,957
 
 2.1%Media:
  Diversified & Production
 
 
 9,609,642
 
 4.6%
 
 
 547,087
 
 0.2%
 
 
 10,156,729
 
 2.1%Hotel, Gaming
  & Leisure
 
 
 6,328,850
 
 3.0%
 
 
 2,634,914
 
 0.9%
 
 
 8,963,764
 
 1.8%Services:
  Consumer
 
 
 5,583,028
 
 2.7%
 
 
 1,947,563
 
 0.7%
 
 
 7,530,591
 
 1.5%Environmental
  Industries
 
 
 4,993,750
 
 2.4%
 
 
 -
 
 -
 
 
 4,993,750
 
 1.0%Telecommunications
 
 
 3,543,750
 
 1.7%
 
 
 1,012,500
 
 0.4%
 
 
 4,556,250
 
 0.9%Media:
  Advertising, Printing & Publishing
 
 
 4,328,134
 
 2.2%
 
 
 -
 
 -
 
 
 4,328,134
 
 0.9%Containers,
  Packaging & Glass
 
 
 -
 
 -
 
 
 1,980,038
 
 0.7%
 
 
 1,980,038
 
 0.4%Forest Products
  & Paper
 
 
 -
 
 -
 
 
 939,003
 
 0.3%
 
 
 939,003
 
 0.2%Subtotal/total
  percentage
 
 
 208,892,144
 
 100.0%
 
 
 277,519,633
 
 100.0%
 
 
 486,411,777
 
 100.0%U.S. Treasury
  Securities
 
 
 38,395,666
 
 
 
 
 -
 
 
 
 
 38,395,666Total investments
 
 $
 247,287,810
 
 
 
 $
 277,519,633
 
 
 
 $
 524,807,443
 42


---

December 31, 2013Investment Portfolio
 
 Total Return Swap
 
 TotalIndustry
  Classification
 
 Investments Fair Value
 
 Percentage of
  Investment Portfolio
 
 Fair Value of
  Underlying
  TRS Loans
 
 Percentage of
  Underlying
  TRS Loans
 
 Fair Value
 
 PercentageHealthcare &
  Pharmaceuticals
 
 $
 8,968,804
 
 9.6%
 
 $
 28,520,188
 
 19.0%
 
 $
 37,488,992
 
 15.4%Services:
  Business
 
 
 15,754,714
 
 16.9%
 
 
 21,710,669
 
 14.5%
 
 
 37,465,383
 
 15.4%Chemicals,
  Plastics & Rubber
 
 
 6,797,514
 
 7.3%
 
 
 12,767,942
 
 8.5%
 
 
 19,565,456
 
 8.1%Consumer Goods:
  Non-Durable
 
 
 9,527,245
 
 10.2%
 
 
 8,353,950
 
 5.7%
 
 
 17,881,195
 
 7.5%Banking,
  Finance, Insurance & Real Estate
 
 
 2,427,410
 
 2.6%
 
 
 15,399,479
 
 10.3%
 
 
 17,826,889
 
 7.3%Media:
  Broadcasting & Subscription
 
 
 3,544,422
 
 3.8%
 
 
 9,713,966
 
 6.5%
 
 
 13,258,388
 
 5.5%Energy: Oil
  & Gas
 
 
 3,629,300
 
 3.9%
 
 
 6,286,404
 
 4.2%
 
 
 9,915,704
 
 4.1%Telecommunications
 
 
 3,973,040
 
 4.3%
 
 
 5,502,732
 
 3.7%
 
 
 9,475,772
 
 3.9%Diversified
  Financials
 
 
 8,795,600
 
 9.4%
 
 
 -
 
 -
 
 
 8,795,600
 
 3.6%Beverage, Food
  & Tobacco
 
 
 -
 
 -
 
 
 8,597,752
 
 5.7%
 
 
 8,597,752
 
 3.5%Aerospace &
  Defense
 
 
 1,463,701
 
 1.6%
 
 
 6,796,190
 
 4.5%
 
 
 8,259,891
 
 3.4%Services:
  Consumer
 
 
 5,628,126
 
 6.0%
 
 
 1,965,000
 
 1.3%
 
 
 7,593,126
 
 3.1%Automotive
 
 
 7,473,560
 
 8.0%
 
 
 -
 
 -
 
 
 7,473,560
 
 3.1%High Tech
  Industries
 
 
 2,876,400
 
 3.1%
 
 
 4,353,293
 
 2.9%
 
 
 7,229,693
 
 3.0%Retail
 
 
 -
 
 -
 
 
 6,661,756
 
 4.4%
 
 
 6,661,756
 
 2.7%Containers,
  Packaging & Glass
 
 
 1,500,000
 
 1.6%
 
 
 4,488,750
 
 3.0%
 
 
 5,988,750
 
 2.5%Environmental
  Industries
 
 
 1,909,952
 
 2.1%
 
 
 3,554,920
 
 2.4%
 
 
 5,464,872
 
 2.2%Hotel, Gaming
  & Leisure
 
 
 515,000
 
 0.6%
 
 
 4,336,815
 
 2.9%
 
 
 4,851,815
 
 2.0%Construction
  & Building
 
 
 3,415,256
 
 3.7%
 
 
 -
 
 -
 
 
 3,415,256
 
 1.4%Capital Equipment
 
 
 3,014,850
 
 3.2%
 
 
 -
 
 -
 
 
 3,014,850
 
 1.2%Media:
  Diversified & Production
 
 
 1,920,350
 
 2.1%
 
 
 -
 
 -
 
 
 1,920,350
 
 0.8%Forest Products
  & Paper
 
 
 -
 
 -
 
 
 738,748
 
 0.5%
 
 
 738,748
 
 0.3%Subtotal/total
  percentage
 
 
 93,135,244
 
 100.0%
 
 
 149,748,554
 
 100.0%
 
 
 242,883,798
 
 100.0%U.S. Treasury
  Securities
 
 
 11,383,669
 
 
 
 
 -
 
 
 
 
 11,383,669Total investments
 
 $
 104,518,913
 
 
 
 $
 149,748,554
 
 
 
 $
 254,267,467
  We do not “control” and are not an
“affiliate” of any of our portfolio companies or any of the companies of the
loans underlying the TRS, each as defined in the 1940 Act. In general, under
the 1940 Act, we would be presumed to “control” a portfolio company or issuer
if we owned 25% or more of its voting securities and would be an “affiliate” of
a portfolio company or issuer if we owned 5% or more of its voting securities.  Our
investment portfolio may contain senior secured investments that are in the
form of lines of credit, unfunded delayed drawdown loan commitments, or
revolving credit facilities, which require us to provide funding when requested
by portfolio companies in accordance with the terms of the underlying loan
agreements. As of June 30, 2014 and December 31, 2013, our unfunded loan
commitments amounted to $16,674,000 and $2,450,758, respectively. As of August
11, 2014, our unfunded loan commitments amounted to $48,341,000. 43


---

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. 44


---

The following table summarizes the
composition of our investment portfolio and our underlying TRS loans portfolio
based on the 1 to 5 investment rating scale at fair value as of June 30, 2014
and December 31, 2013, excluding short term investments of $38,395,666 and
$11,383,669, respectively:  June 30, 2014Investment Portfolio
 
 Total Return Swap
 
 TotalInvestment Rating
 
 Investments
  Fair Value
 
 Percentage of
  Investment Portfolio
 
 Fair Value of Underlying TRS Loans
 
 Percentage of Underlying TRS Loans
 
 Fair Value
 
 Percentage1
 
 $
 -
 
 -
 
 $
 -
 
 -
 
 $
 -
 
 -2
 
 
 208,892,144
 
 100.0%
 
 
 270,593,833
 
 97.5%
 
 
 479,485,977
 
 98.6%3
 
 
 -
 
 -
 
 
 6,925,800
 
 2.5%
 
 
 6,925,800
 
 1.4%4
 
 
 -
 
 -
 
 
 -
 
 -
 
 
 -
 
 -5
 
 
 -
 
 -
 
 
 -
 
 -
 
 
 -
 
 -$
 208,892,144
 
 100.0%
 
 $
 277,519,633
 
 100.0%
 
 $
 486,411,777
 
 100.0%
  December 31, 2013Investment Portfolio
 
 Total Return Swap
 
 TotalInvestment Rating
 
 Investments
  Fair Value
 
 Percentage of
  Investment Portfolio
 
 Fair Value of Underlying TRS Loans
 
 Percentage of Underlying TRS Loans
 
 Fair Value
 
 Percentage1
 
 $
 -
 
 -
 
 $
 -
 
 -
 
 $
 -
 
 -2
 
 
 93,135,244
 
 100.0%
 
 
 149,748,554
 
 100.0%
 
 
 242,883,798
 
 100.0%3
 
 
 -
 
 -
 
 
 -
 
 -
 
 
 -
 
 -4
 
 
 -
 
 -
 
 
 -
 
 -
 
 
 -
 
 -5
 
 
 -
 
 -
 
 
 -
 
 -
 
 
 -
 
 -$
 93,135,244
 
 100.0%
 
 $
 149,748,554
 
 100.0%
 
 $
 242,883,798
 
 100.0%
  The amount of the investment portfolio and
underlying TRS loans in each grading category may vary substantially from
period to period resulting primarily from changes in the composition of each
portfolio as a result of new investment, 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 August 11, 2014, our investment
portfolio, excluding our short term investments and TRS, consisted of interests
in 50 portfolio companies (37% in first lien senior secured term loans, 51% in
second lien senior secured term loans and 12% in collateralized securities)
with a total fair value of $254,355,371 with an average and median portfolio
company annual EBITDA of $88.3 million and $54.7 million, respectively, at
initial investment. As of August 11, 2014, investments in our portfolio were
purchased at a weighted average price of 98.33% of par value. Our estimated
gross annual portfolio yield was 8.49% based upon the purchase price of our
investments. The portfolio yield does not represent an actual investment return
to shareholders.  As of August 11, 2014, our short term
investments included an investment in a U.S. Treasury Obligations Fund of
$38,538,525.  Further, as of August 11, 2014,
through a TRS (described further in Note 7 of our consolidated financial
statements), we obtained the economic benefit of owning investments in first
lien senior secured and second lien senior secured floating-rate loans of 66
portfolio companies.  45


---

Results of Operations for the Three Months Ended June 30, 2014 and
2013  Our results of operations for
the three months ended June 30, 2014 and 2013 were as follows:  Three Months Ended
  June 30,2014
 
 2013Investment income
 $
 3,634,027
 
 $
 245,494Net operating expenses
 
 3,570,286
 
 
 90,601Net investment income
 63,741
 
 
 154,893Net realized gain on investments
 210,391
 
 
 10,438Net change in unrealized appreciation on investments
 602,756
 
 
 190,731Net realized gain on total return swap
 4,800,062
 
 
 505,676Net change in unrealized appreciation on total return swap
 (1,184,648)
 
 
 (163,108)Net increase in net assets resulting from operations
 $
 4,492,302
 
 $
 698,630
  Investment Income  For the three months
ended June 30, 2014 and 2013, we generated investment income of $3,634,027 and
$245,494, respectively, consisting primarily of interest income on investments
in senior secured loans of 52 and 22 portfolio companies held during each
respective period. During the three months ended June 30, 2014 and 2013, our
investment portfolio, excluding short term investments and the TRS, increased
approximately $66,384,000 and $13,582,000, respectively, as we continued to
deploy the net proceeds from our continuous offering. We expect our investment
portfolio to continue to grow due to the anticipated increase in equity
available to us for investment from our continuous offering. As a result, we
believe that reported investment income for the three months ended June 30,
2014 and 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 recorded as part of net realized gain on total return swap.  Operating Expenses  The composition of our operating expenses
for the three months ended June 30, 2014 and 2013 was as follows:  Three Months Ended
  June 30,2014
 
 2013Management fees
 $
 1,303,206
 
 $
 120,781Administrative services expense
 
 430,220
 
 
 307,636Capital gains incentive fee
 219,747
 
 
 57,705General and administrative
 
 1,017,487
 
 
 752,015Total expenses
 2,970,660
 
 
 1,238,137Expense reimbursement from IIG
 -
 
 
 (1,147,536)Recoupment of expense reimbursement from IIG
 
 599,626
 
 
 -Net operating expenses
 $
 3,570,286
 
 $
 90,601
 46


---

The composition of our general and administrative expenses for the
three months ended June 30, 2014 and 2013 was as follows:  Three Months Ended
  June 30,2014
 
 2013Marketing
  expense
 $
 209,362
 
 $
 96,759Professional
  fees expense
 
 179,299
 
 
 285,736Transfer agent
  expense
 
 160,354
 
 
 25,365Due diligence
  fees
 
 78,639
 
 
 122,326Filing fees
 
 74,076
 
 
 51,450Dues and
  subscriptions
 
 57,439
 
 
 12,033Insurance
  expense
 
 53,411
 
 
 52,901Director fees
  and expenses
 
 44,500
 
 
 8,185Printing and
  mailing expense
 
 36,104
 
 
 73,738Other expenses
 
 124,303
 
 
 23,522Total general
  and administrative expense
 $
 1,017,487
 
 $
 752,015
  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 4 to our consolidated financial statements for additional disclosure
regarding the expense reimbursements from IIG.  For the three months ended June 30, 2014,
IIG recouped $599,626 of expense reimbursements made in connection with the
expense support and conditional reimbursement agreement during the three months
ended December 31, 2012 and March 31, 2013, compared to expense reimbursements
from IIG of $1,147,536 for the three months ended June 30, 2013. All expense
reimbursements from IIG for the three months ended June 30, 2013 are eligible
to be reimbursed by us through June 30,  2016.  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 further 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
following three month periods. 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
 
 
 482,920
 
 
 336,453
 
 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, 2016December 31,
  2013
 
 
 695,160
 
 
 -
 
 
 695,160
 
 0.31%
 
 7.00%
 
 December 31, 2016March 31, 2014
 
 
 1,048,858
 
 
 -
 
 
 1,048,858
 
 0.25%
 
 7.00%
 
 March 31, 2017June 30, 2014
 
 
 -
 
 
 -
 
 
 -
 
 0.36%
 
 7.00%
 
 June 30, 2017Total
 
 $
 5,124,467
 
 $
 599,626
 
 $
 4,524,841
 (1)
 Operating
  expenses include all expenses borne by us, except for organization costs and
  offering expenses, interest expense, base management fees, incentive fees,
  administrative services expenses and other general and administrative
  expenses owed to CIM and its affiliates.(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.
 47


---

Net Investment Income  Our net investment income totaled $63,741
and $154,893 for the three months ended June 30, 2014 and 2013, respectively.
The decrease in net investment income during the second quarter of 2014,
compared to the corresponding 2013 period, was primarily due to a decrease in
expense support from IIG as we began to achieve economies of scale sufficient
to bear a reasonable level of expense in relation to our investment income and
realized gains.  Net Realized Gain on Investments  Our net realized gain on investments
totaled $210,391 and $10,438 for the three months ended June 30, 2014 and 2013,
respectively. During the second quarter of 2014, we received sale proceeds and
principal repayments of $27,064,543 and $254,118, respectively, for gains of $210,391.
For the corresponding 2013 period, we realized gains of $10,438 entirely on
principal repayments of $627,548.  Net Change in Unrealized Appreciation on
Investments  The net change in unrealized appreciation
on our investments totaled $602,756 and $190,731 for the three months ended
June 30, 2014 and 2013, respectively. This change was predominantly driven by
primary investments, sourced with the assistance of AIM, made available to us
at advantageous purchase prices, as well as the growth and increase in fair
value of the investments in our investment portfolio.  Net Realized Gain on TRS  Our net realized gain on the TRS totaled $4,800,062
and $505,676 for the three months ended June 30, 2014 and 2013, respectively. The
components of net realized gain on the TRS are summarized below for the three
months ended June 30, 2014 and 2013:  Three Months Ended
  June 30,2014
 
 
 2013Interest and
  other income from TRS portfolio
 
 $
 4,349,324
 
 
 $
 355,656Interest and
  other expense from TRS portfolio
 
 
 (1,022,891)
 
 
 
 (100,442)Net gain on TRS
  loan sales
 
 
 1,473,629
 
 
 
 250,462Total
 
 $
 4,800,062
 
 
 $
 505,676
  Net Change in Unrealized Appreciation on
TRS  The net decrease in
unrealized appreciation on the TRS totaled $1,184,648 and $163,108 for the three
months ended June 30, 2014 and 2013, respectively. For both periods, the decrease
was primarily the result of unrealized appreciation on loans underlying the TRS
becoming realized gains upon the sale of such loans.  Net Increase in Net Assets Resulting from
Operations  For the three months ended
June 30, 2014 and 2013, we recorded a net increase in net assets resulting from
operations of $4,492,302 and $698,630, respectively. 48


---

Results of Operations for the Six Months Ended June 30, 2014 and
2013  Our results of operations for
the six months ended June 30, 2014 and 2013 were as follows:  Six Months Ended
  June 30,2014
 
 2013Investment income
 $
 5,834,808
 
 $
 313,620Net operating expenses
 
 6,020,559
 
 
 205,411Net investment (loss) income
 (185,751)
 
 
 108,209Net realized gain on investments
 384,105
 
 
 14,971Net change in unrealized appreciation on investments
 1,213,649
 
 
 315,013Net realized gain on total return swap
 7,763,541
 
 
 792,013Net change in unrealized appreciation on total return swap
 23,277
 
 
 87,568Net increase in net assets resulting from operations
 $
 9,198,821
 
 $
 1,317,774
  Investment Income  For the six months ended
June 30, 2014 and 2013, we generated investment income of $5,834,808 and
$313,620, respectively, consisting primarily of interest income on investments
in senior secured loans of 61 and 23 portfolio companies held during each
respective period. During the six months ended June 30, 2014 and 2013, our
investment portfolio, excluding short term investments and the TRS, increased
approximately $115,757,000 and $19,848,000, respectively, as we continued to
deploy the net proceeds from our continuous offering. We expect our investment
portfolio to continue to grow due to the anticipated increase in equity
available to us for investment from our continuous offering. As a result, we
believe that reported investment income for the six months ended June 30, 2014
and 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 recorded
as part of net realized gain on total return swap.  Operating Expenses  The composition of our operating expenses
for the six months ended June 30, 2014 and 2013 was as follows:  Six Months Ended
  June 30,2014
 
 2013Management fees
 $
 2,212,013
 
 $
 165,523Administrative services expense
 
 845,615
 
 
 571,191Capital gains incentive fee
 745,073
 
 
 174,728Offering expense - IIG
 
 591,475
 
 
 -General and administrative
 
 2,075,615
 
 
 1,260,878Total expenses
 6,469,791
 
 
 2,172,320Expense reimbursement from IIG
 (1,048,858)
 
 
 (1,966,909)Recoupment of expense reimbursement from IIG
 
 599,626
 
 
 -Net operating expenses
 $
 6,020,559
 
 $
 205,411
 49


---

The composition of our general and administrative expenses for the
six months ended June 30, 2014 and 2013 was as follows:  Six Months Ended
  June 30,2014
 
 2013Professional
  fees expense
 $
 466,306
 
 $
 526,305Due diligence
  fees
 
 401,626
 
 
 161,344Marketing
  expense
 
 297,122
 
 
 183,399Transfer agent
  expense
 
 276,699
 
 
 38,967Insurance
  expense
 
 105,269
 
 
 105,802Filing fees
 
 79,727
 
 
 57,550Dues and subscriptions
 
 78,849
 
 
 22,966Director fees
  and expenses
 
 76,789
 
 
 16,024Printing and
  mailing expense
 
 69,242
 
 
 98,626Other expenses
 
 223,986
 
 
 49,895Total general
  and administrative expense
 $
 2,075,615
 
 $
 1,260,878
  Expense Reimbursement  For the six months ended June 30, 2014, we
received expense reimbursements from IIG of $1,048,858 and IIG recouped
$599,626 of prior expense reimbursements made during the three months ended
December 31, 2012 and March 31, 2013 in connection with the expense support and
conditional reimbursement agreement.  For the six months ended June 30, 2013,
we received expense reimbursements from IIG of $1,966,909.  Refer to section, “Results of Operations
for the Three Months Ended June 30, 2014 and 2013—Expense Reimbursement” above
for further detail on our expense reimbursement with our affiliate, IIG.  Net Investment (Loss) Income  Our net investment (loss) income totaled ($185,751)
and $108,209 for the six months ended June 30, 2014 and 2013, respectively. The
net investment loss during the 2014 period, compared to the net investment
income during the corresponding 2013 period, was primarily due to higher
operating expenses due to our accelerated growth and a decrease in expense
reimbursement from IIG, partially offset by an increase in investment income.  Net Realized Gain on Investments  Our net realized gain on investments
totaled $384,105 and $14,971 for the six months ended June 30, 2014 and 2013,
respectively. During the 2014 period, we received sale proceeds and principal
repayments of $40,230,388 and $5,543,499, respectively, for gains of $384,105.
For the corresponding 2013 period, we received sale proceeds and principal
repayments of $504,375 and $642,548, respectively, for gains of $14,971.  Net Change in Unrealized Appreciation on
Investments  The net change in unrealized appreciation
on our investments totaled $1,213,649 and $315,013 for the six months ended June
30, 2014 and 2013, respectively. This change was predominantly driven by
primary investments, sourced with the assistance of AIM, made available to us
at advantageous purchase prices, as well as the growth and increase in fair
value of the investments in our investment portfolio.  Net Realized Gain on TRS  Our net realized gain on the TRS totaled $7,763,541
and $792,013 for the six months ended June 30, 2014 and 2013, respectively. The
components of net realized gain on the TRS are summarized below for the six
months ended June 30, 2014 and 2013: 50


---

Six Months Ended
  June 30,2014
 
 
 2013Interest and
  other income from TRS portfolio
 
 $
 7,423,291
 
 
 $
 461,103Interest and
  other expense from TRS portfolio
 
 
 (1,736,486)
 
 
 
 (125,276)Net gain on TRS
  loan sales
 
 
 2,076,736
 
 
 
 456,186Total
 
 $
 7,763,541
 
 
 $
 792,013
  Net Change in Unrealized Appreciation on
TRS  The net change in
unrealized appreciation on the TRS totaled $23,277 and $87,568 for the six
months ended June 30, 2014 and 2013, respectively. This change was primarily
due to the growth and increase in fair value of certain loans underlying the
TRS, partially offset by unrealized appreciation on other loans underlying the
TRS becoming realized gains upon the sale of such loans.  Net Increase in Net Assets Resulting from
Operations  For the six months ended
June 30, 2014 and 2013, we recorded a net increase in net assets resulting from
operations of $9,198,821 and $1,317,774, respectively. 51


---

Net Asset Value per Share, Annual Investment Return and Total
Return Since Inception  Our net asset value per share was $9.38 and
$9.32 on June 30, 2014 and December 31, 2013, respectively. After considering
(i) the overall changes in net asset value per share, (ii) paid distributions
of approximately $0.3508 per share during the six months ended June 30, 2014,
and (iii) the assumed reinvestment of those distributions at 90% of the
prevailing offering price per share, the total investment return was 4.45% for
shareholders who held our shares over the entire six-month period ended June
30, 2014.  Initial shareholders who subscribed to the
offering in December 2012 with an initial investment of $10,000 and an initial
purchase price equal to $9.00 per share (public offering price net of sales
load) have seen an annualized return of 10.49% and the value of their
investment grow by 16.57% (see chart below). Initial shareholders who
subscribed to the offering in December 2012 with an initial investment of $10,000
and an initial purchase price equal to $10.00 per share (the initial public
offering price) have seen an annualized return of 3.17% and the value of their
investment grow by 4.91%. Over the same time period the S&P/LSTA Leverage
Loan Index, a primary measure of senior debt covering the U.S. leveraged loan
market, which currently consists of approximately 1,000 credit facilities
throughout numerous industries, had an annualized return of approximately 5.69%
and a total return of approximately 8.88%.    The calculations for the Growth of $10,000
Initial Investment are based upon (i) an initial investment of $10,000 in our
common stock at the beginning of the period, at a share price of $10.00 per
share (including sales load) and $9.00 per share (excluding sales load), (ii)
assumes reinvestment of monthly distributions in accordance with our second
amended and restated distribution reinvestment plan, (iii) the sale of the
entire investment position at the net asset value per share on the last day of
the period, and (iv) the cash payment for distributions payable to
shareholders, if any, on the last day of the period. 52


---

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, as of February 1, 2014, issue shares at weekly 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 $10.45 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 weekly closing on the sale of shares of
our common stock, our board of directors has delegated to management the
authority to conduct such closings so long as there is no change to our public
offering price. In the event of a change to our public offering price in
connection with any weekly closing, our board of directors will approve the
change prior to management conducting such closing. In connection with each weekly
closing, we will, in each case if necessary, update the information contained
in our prospectus by filing a prospectus supplement with the SEC, and we will
also post any updated information to our website.  As of June 30, 2014, we sold 32,949,270
shares of common stock for net proceeds of $336,318,008 at an average price per
share of $10.21. The net proceeds include gross proceeds received from
reinvested shareholder distributions of $6,672,596, for which we issued 708,948
shares of common stock, and gross proceeds paid for shares of common stock
tendered for repurchase of $45,905, for which we repurchased 4,881 shares of
common stock. As of August 11,
2014, we sold 36,981,292 shares of common stock for net proceeds of
$377,813,288 at an average price per share of $10.22. The net proceeds include
gross proceeds received from reinvested shareholder distributions of
$8,000,016, for which we issued 850,105 shares of common stock, and gross
proceeds paid for shares of common stock tendered for repurchase of $192,731,
for which we repurchased 20,492 shares of common stock. Since commencing our
continuous public offering on July 2, 2012 and through August 11, 2014, sales
commissions and dealer manager fees related to the sale of our common stock
were $22,023,266 and $10,699,258, respectively. On April 2, 2014, we completed our first tender offer in
connection with our share repurchase program and repurchased 4,881 shares
(representing 100% of the shares of common stock tendered for repurchase) at
$9.41 per share for aggregate consideration totaling $45,905. On July 2, 2014,
we completed our second tender offer and repurchased 15,611 shares
(representing 100% of the shares of common stock tendered for repurchase) at $9.41
per share for aggregate consideration totaling $146,826.  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 June 30, 2014
and December 31, 2013, we had $38,395,666 and $11,383,669 in short term
investments, respectively, invested in a fund that primarily invests in U.S.
government securities.  Total Return Swap  For a detailed
discussion of our TRS, refer to Note 7 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 5,
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 for the year ended
December 31, 2013.  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. 53


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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 are 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 is, 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, is calculated and payable quarterly in arrears based
upon our “pre-incentive fee net investment income” for the immediately
preceding quarter and is subject to a hurdle rate, measured quarterly and
expressed as a rate of return on adjusted capital, as defined in 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 exceeds 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 only assists CIM with identifying
investment opportunities and making investment recommendations for approval by
CIM according to pre-established investment guidelines. On an annualized basis,
AIM receives 50% of the fees payable to CIM under the investment advisory
agreement with respect to each year, which fees are paid to AIM quarterly in
arrears by CIM. 54


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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, and
to the extent requested to provide such serives and such services are so
provided, CIM and AIM and their respective affiliates may be, reimbursed for
administrative expenses incurred on our behalf. 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. For the three and six months ended June 30, 2014, we incurred
administrative services expenses to ICON Capital of $430,220 and $845,615,
respectively. For the three and six months ended June 30, 2013, we incurred
administrative services expenses to ICON Capital of $307,636 and $571,191,
respectively. The majority of such administrative services expenses related to
the allocation of costs of administrative personnel for services rendered to us
and the remainder related to other reimbursable expenses. For the three and six
months ended June 30, 2013, all administrative expenses were reimbursed by IIG
in accordance with the expense support and conditional reimbursement agreement.  Under the terms of the
investment advisory agreement, CIM and certain of its affiliates, which
includes IIG, are entitled to receive reimbursement of up to 1.5% of the gross
proceeds raised until all organization costs and offering expenses have been
reimbursed. Our payment of organization costs and offering expenses will not
exceed 1.5% of the actual gross proceeds raised from our offering (without
giving effect to any potential reimbursements from IIG and its affiliates). If
we sell the maximum number of shares at $10.45 per share, we estimate that we
may incur up to approximately $15,675,000 of expenses. Previously, we
interpreted “raised” to mean all gross proceeds that we expected to raise
through the completion of the offering of our shares, which could be as late as
December 31, 2015, 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 111,111
shares of our common stock at $9.00 per share to IIG in lieu of payment of
$1,000,000 for organization costs and offering expenses submitted for
reimbursement. The transactions 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 costs and offering expenses, we will
interpret the 1.5% limit 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 June 30, 2014, IIG and its affiliates incurred organization costs,
offering expenses and other pre-effective costs of approximately $2,012,000. Of
these costs, approximately $1,811,000 represented organization costs and
offering expenses, of which $1,591,475 was submitted to us for reimbursement. We
paid $450,000 in October 2013, $550,000 in March 2014 and $591,475 in May
2014.  No additional material organization costs, offering expenses or other
pre-effective costs have been incurred by IIG or its affiliates subsequent toJune 30, 2014. The decision to fund our organization costs, offering
expenses and other pre-effective costs 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.  As of June 30, 2014, we
raised gross proceeds of $336,318,008, of which we can pay up to $5,044,770 in
organization costs and offering expenses (which represents 1.5% of the actual
gross proceeds raised). Through June 30, 2014, we paid $4,125,600 of such costs
and expenses, leaving an additional $919,170 that can be paid. As of August 11,
2014, we raised gross proceeds of $377,813,288, of which we can pay up to
$5,667,199 in organization costs and offering expenses (which represents 1.5%
of the actual gross proceeds raised). Through August 11, 2014, we paid
$4,652,049 of such costs and expenses, leaving an additional $1,015,150 that
can be paid.  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 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.  On December 13,
2013, we and IIG amended and restated the expense support and conditional
reimbursement agreement to extend the termination date of such agreement from
January 30, 2014 to January 30, 2015.  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 (i) if expense reimbursement amounts funded by IIG exceed
operating expenses incurred during any fiscal quarter, (ii) if 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, and (iii) during any fiscal quarter occurring within three years
of the date on which IIG funded such amount.  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.During the three months ended 55


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June 30, 2014, werecorded an obligation to repay $599,626 of expense reimbursements
from IIG. We may or may not be requested to reimburse any of these costs in the
future. As of June 30, 2014, the total net liability to CIM and its affiliates
was $2,262,135, which related to fees earned by CIM primarily during the three
months ended June 30, 2014 and expense support recoupment by IIG.  Refer to the table
under “Results of Operations for the Three Months Ended June 30, 2014 and
2013—Expense Reimbursement” above for a summary of all expenses supported by
IIG and the associated dates through which such expenses are eligible for
reimbursement by us.  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.  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  On December 17, 2012, Flatiron entered into
a TRS with Citibank. Flatiron and Citibank amended the TRS, effective December
9, 2013, February 18, 2014, April 30, 2014, and July 30, 2014. See Note 7 to
our consolidated financial statements for a more detailed description of the
TRS.  Commitments and Contingencies and Off-Balance Sheet Arrangements  Commitments and Contingencies  We have entered into certain contracts with
other parties that contain a variety of indemnifications. Our maximum exposure
under these arrangements is unknown. However, we have not experienced claims or
losses pursuant to these contracts and believe the risk of loss related to such
indemnifications to be remote.  Our investment portfolio may
contain debt investments that are in the form of lines of credit, unfunded
delayed drawdown loan commitments, or revolving credit facilities, which
requires us to provide funding when requested by portfolio companies in
accordance with the terms of the underlying loan agreements. As of June 30,
2014 and December 31, 2013, unfunded loan commitments amounted to $16,674,000
and $2,450,758, respectively. As of August 11, 2014, our unfunded loan
commitments amounted to $48,341,000.For information on the companies to which we are committed to fund
additional amounts as ofJune 30, 2014 andDecember
31, 2013,refer to the consolidated schedule
of investments included in this report.  Off-Balance Sheet Arrangements  We currently have no off-balance sheet
arrangements.  56


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Item 3. Quantitative and Qualitative
Disclosures About Market Risk  We are subject to financial market risks,
including changes in interest rates. As of June 30, 2014, 99.4% 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 June 30, 2014:  Change in
  Interest Rates
 
 Increase (Decrease) in Net Interest
  Income(1)
 
 Percentage Change in Net Interest IncomeDown 21 basis
  points
 
 $
 520,705
 1.7%Current base
  interest rate
 
 
 -
 -Up 100 basis
  points
 
 
 (1,775,614)
 (5.7%)Up 200 basis
  points
 
 
 211,198
 0.7%Up 300 basis
  points
 
 
 2,296,504
 7.4%(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 1.35% per year on the
  full notional amount of the loans subject to the TRS. As of June 30, 2014,
  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. 57


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Item 4. Controls and Procedures  Evaluation of disclosure controls and procedures In connection with the preparation of this Quarterly Report
on Form 10-Qfor the three
months ended June 30, 2014, we
carried out an evaluation, under the supervision and with the participation of
our management, including our Co-Chief Executive Officers and our Chief
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures as of the end of the period covered by this report
pursuant to Rule 13a-15(b) and Rule 15d-15(b) of the Securities Exchange Act of
1934, as amended. Based on the foregoing evaluation, the Co-Chief Executive
Officers and the Chief Financial Officer concluded that our disclosure controls
and procedures were effective. In designing and evaluating our
disclosure controls and procedures, we recognized that disclosure controls and
procedures, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the disclosure
controls and procedures are met.  Our disclosure controls and
procedures have been designed to meet reasonable assurance standards.
Disclosure controls and procedures cannot detect or prevent all error and
fraud. Some inherent limitations in disclosure controls and procedures include
costs of implementation, faulty decision-making, simple error and mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
controls. The design of any system of controls is based, in part, upon certain
assumptions about the likelihood of future events, and there can be no
assurance that any design will succeed in achieving its stated goals under all
anticipated and unanticipated future conditions. Over time, controls may become
inadequate because of changes in conditions, or the degree of compliance with
established policies or procedures. Evaluation of internal control over
financial reporting  There have been no changes in our internal
control over financial reporting during the three months ended June 30, 2014
that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting. 58


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PART II - OTHER INFORMATION Item 1. Legal Proceedings We are not currently
subject to any material legal proceedings, nor, to our knowledge, is any
material legal proceeding threatened against us. From time to time, we may be
party to certain legal proceedings in the ordinary course of business,
including proceedings relating to the enforcement of our rights under contracts
with our portfolio companies and other third parties. While the outcome of
these legal proceedings cannot be predicted with certainty, we do not expect
that any such proceedings will have a material effect upon our financial
condition or results of operations.  Item 1A. Risk Factors  There have been no material changes from the risk factors
disclosed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the
year ended December 31, 2013. 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 June 30, 2014. The
table below provides information concerning our repurchases of shares of our common
stock during the three months ended June 30, 2014 pursuant to our share
repurchase program.  Period
 
 Total Number of Shares Purchased
 
 Average Price Paid per
  Share
 
 Total Number of
  Shares Purchased as Part of Publicly
  Announced Plans or Programs
 
 Maximum Number of Shares that
  May Yet Be Purchased Under the Plans or ProgramsApril 1
  to April 30, 2014
 
 4,881
 
 $
 9.405
 
 4,881
 
 (1)May 1
  to May 31, 2014
 
 -
 
 
 -
 
 -
 
 -June 1
  to June 30, 2014
 
 -
 
 
 -
 
 -
 
 -Total
 
 4,881
 
 $
 9.405
 
 4,881
 
 (1)(1)
 A description of the maximum number of shares of our common stock
  that may be repurchased under our share repurchase program is set forth in
  Note 3 to our unaudited consolidated financial statements contained in this
  Quarterly Report on Form 10-Q.
 See Note 3 to our unaudited
consolidated financial statements contained in this Quarterly Report on
Form 10-Q for a more detailed discussion of the terms of our share
repurchase program. Item 3. Defaults Upon
Senior Securities Not
applicable. Item 4. Mine Safety
Disclosures Not
applicable. Item 5. Other Information Not
applicable.    59


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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 Exhibit (D) to
  Post-Effective Amendment No. 7 to Registrant’s Registration Statement on Form
  N-2 filed with the SEC on April 28, 2014 (File No. 333-178646)).4.2
 
 Second 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
  December 16, 2013 (File No. 814-00941)).10.1
 
 Investment
  Advisory Agreement by and 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
 
 Fourth Amended
  and Restated Confirmation Letter Agreement, dated as of July 30, 2014, 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 August 1, 2014).10.9
 
 Amended and
  Restated Expense Support and Conditional Reimbursement Agreement dated as of
  December 13, 2013, by and between CĪON Investment Corporation and ICON
  Investment Group, LLC (Incorporated by reference to Exhibit (K)(5) to Post-Effective
  Amendment No. 5 to Registrant’s Registration Statement on Form N-2 filed with
  the SEC on December 20, 2013 (File No. 333-178646)).
  60


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Exhibit
  Number
 
 Description of Document31.1
 
 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.
  61


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SIGNATURES Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized. Date: August 13, 2014 CĪON
Investment Corporation
(Registrant) By:/s/ Michael A. ReisnerMichael A. Reisner
        Co-Chief Executive Officer and Co-President(Principal Executive Officer) By:/s/ Mark GattoMark Gatto
        Co-Chief Executive Officer and Co-President(Principal Executive Officer) By:/s/ Keith S. FranzKeith S. Franz
        Chief Financial Officer(Principal Financial and Accounting Officer) 62


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