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 endedMarch 31,
2015 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 Number000-54755 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 from 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 submittedelectronicallyand posted on its corporate Website, 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 May 8, 2015 was 71,372,505.


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CĪON INVESTMENT CORPORATION TABLE OF CONTENTS FORM 10-Q PagePART I - FINANCIAL INFORMATIONItem 1. Financial Statements
 1Consolidated 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
 55Item 4. Controls and Procedures
 56PART II – OTHER INFORMATIONItem 1. Legal Proceedings
 57Item 1A. Risk Factors
 57Item 2. Unregistered Sales of Equity Securities and Use of
  Proceeds
 57Item 3. Defaults Upon Senior Securities
 57Item 4. Mine Safety Disclosures
 57Item 5. Other Information
 57Item 6. Exhibits
 58Signatures
 60


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PART I – FINANCIAL INFORMATION Item
1. Financial Statements CĪON
Investment Corporation Consolidated Balance
Sheets (in thousands, except share and per share
amounts) March 31,
 
 December 31,2015
 
 2014(unaudited)AssetsInvestments, at
  fair value (amortized cost of $466,026and
  $363,564, respectively)
 $
 465,840
 
 $
 361,914Cash
 
 4,216
 
 
 9,474Due from
  counterparty(1)
 
 169,538
 
 
 128,388Receivable for
  common stock purchased
 
 -
 
 
 1,459Interest
  receivable on investments
 
 2,055
 
 
 2,184Receivable due
  on investment sold
 
 3,261
 
 
 -Unrealized
  appreciation on total return swap(1)
 
 1,640
 
 
 -Receivable due
  on total return swap(1)
 
 6,261
 
 
 4,557Prepaid expenses
  and other assets
 
 426
 
 
 125Total assets
 $
 653,237
 
 $
 508,101Liabilities and Shareholders' EquityLiabilitiesPayable for
  investments purchased
 $
 37,441
 
 $
 4,106Shareholders'
  distributions payable(3)
 
 4,402
 
 
 -Accounts payable
  and accrued expenses
 
 690
 
 
 515Commissions
  payable for common stock purchased ($218 to CĪON Securities, LLC)
 
 -
 
 
 597Accrued
  management fees
 
 2,760
 
 
 1,031Accrued
  administrative services expense
 
 441
 
 
 570Accrued
  recoupment of expense reimbursements from IIG(2)
 
 837
 
 
 -Due to IIG -
  offering, organizational and other costs(4)
 
 99
 
 
 484Unrealized
  depreciation on total return swap(1)
 
 -
 
 
 4,409Accrued capital
  gains incentive fee(5)
 
 1,454
 
 
 -Total
  liabilities
 
 48,124
 
 
 11,712Commitments and
  contingencies (Note 4 and Note 10)Shareholders'
  EquityCommon stock,
  $0.001 par value; 500,000,000 shares authorized;64,734,704
  and 53,818,629 shares issued and outstanding, respectively
 
 65
 
 
 54Capital in
  excess of par value
 
 605,048
 
 
 502,394Accumulated
  distributions in excess of net investment income
 
 (1,454)
 
 
 -Accumulated net
  unrealized depreciation on investments
 
 (186)
 
 
 (1,650)Accumulated net
  unrealized appreciation (depreciation) on total return swap(1)
 
 1,640
 
 
 (4,409)Total
  shareholders' equity
 
 605,113
 
 
 496,389Total
  liabilities and shareholders' equity
 $
 653,237
 
 $
 508,101Net asset value
  per share of common stock at end of period
 $
 9.35
 
 $
 9.22(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 for a discussion of offering, organizational and
  other costs submitted to the Company for reimbursement by IIG and its
  affiliates.(5) 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


---

CĪON Investment Corporation Consolidated Statements of Operations (in thousands, except share
and per share amounts)
 Three Months Ended
  March 31,2015
 
 2014(unaudited)
 
 (unaudited)Investment
  incomeInterest income
 $
 8,444
 
 $
 2,200Fee and other
  income
 
 470
 
 
 -Total investment
  income
 
 8,914
 
 
 2,200Operating
  expensesManagement fees
 
 2,760
 
 
 909Administrative
  services expense
 
 454
 
 
 415Capital gains
  incentive fee(1)
 
 1,454
 
 
 525Offering,
  organizational and other costs - IIG(2)
 
 -
 
 
 592General and
  administrative(3)
 
 1,278
 
 
 1,058Total expenses
 
 5,946
 
 
 3,499Expense
  reimbursements from IIG(4)
 
 -
 
 
 (1,049)Recoupment of
  expense reimbursements from IIG(4)
 
 837
 
 
 -Net operating
  expenses
 
 6,783
 
 
 2,450Net investment
  income (loss)
 
 2,131
 
 
 (250)Realized and
  unrealized gainsNet realized
  gain on investments
 
 575
 
 
 174Net change in
  unrealized appreciation on investments
 
 1,464
 
 
 611Net realized
  gain on total return swap(5)
 
 6,607
 
 
 2,963Net change in
  unrealized appreciation on total return swap(5)
 
 6,049
 
 
 1,208Total net
  realized and unrealized gains
 
 14,695
 
 
 4,956Net increase in
  net assets resulting from operations
 $
 16,826
 
 $
 4,706Per share
  information—basic and dilutedNet increase in
  net assets per share resulting from operations
 $
 0.29
 
 $
 0.24Weighted average
  shares of common stock outstanding
 
 58,939,554
 
 
 19,995,555(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 2 for a discussion of offering, organizational and
  other costs submitted to the Company for reimbursement by IIG and its
  affiliates.(3)
 See Note 9 for details of the Company's general and
  administrative expenses.(4)
 See Note 4 for a discussion of expense reimbursements from IIG
  and recoupment of expense reimbursements.(5)
 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 (in thousands, except share
and per share amounts)
 Three Months Ended
  March 31,2015
 
 2014(unaudited)
 
 (unaudited)Changes in
  net assets from operations:Net investment
  income (loss)
 $
 2,131
 
 $
 (250)Net realized
  gain on investments
 
 575
 
 
 174Net change in
  unrealized appreciation on investments
 
 1,464
 
 
 611Net realized
  gain on total return swap(1)
 
 6,607
 
 
 2,963Net change in
  unrealized appreciation on total return swap(1)
 
 6,049
 
 
 1,208Net increase in
  net assets resulting from operations
 
 16,826
 
 
 4,706Changes in
  net assets from shareholders' distributions:(2)Net investment
  income
 
 (2,131)
 
 
 -Net realized
  gain on total return swapNet interest and
  other income from TRS portfolio
 
 (6,408)
 
 
 (2,360)Net gain on TRS
  loan sales
 
 (199)
 
 
 (603)Net realized
  gain on investments
 
 (575)
 
 
 (174)Distributions in
  excess of net investment income(3)
 
 (1,454)
 
 
 (177)Net decrease in
  net assets from shareholders' distributions
 
 (10,767)
 
 
 (3,314)Changes in
  net assets from capital share transactions:Issuance of
  common stock, net of issuance costs of $10,016 and $7,750, respectively
 
 99,715
 
 
 77,173Reinvestment of
  shareholder distributions
 
 3,410
 
 
 2,334Repurchase of
  common stock
 
 (460)
 
 
 -Net increase in
  net assets resulting from capital share transactions
 
 102,665
 
 
 79,507Total increase
  in net assets
 
 108,724
 
 
 80,899Net assets at
  beginning of period
 
 496,389
 
 
 144,571Net assets at
  end of period
 $
 605,113
 
 $
 225,470Net asset value
  per share of common stock at end of period
 $
 9.35
 
 $
 9.40Shares of common
  stock outstanding at end of period
 
 64,734,704
 
 
 23,991,865Undistributed
  (distributions in excess of) net investment income at end of period(3)
 $
 (1,454)
 
 $
 40(1)
 See Note 7 for a
  discussion of the Company’s total return swap agreement.(2)
 This table presents changes in net assets from shareholders`
  distributions on a GAAP basis. See Note 5 for a discussion of the sources of
  distributions paid by the Company.(3)
 Distributions in excess of net investment income represent
  unearned capital gains incentive fees, which reduce GAAP basis net investment
  income available for distributions but does not reduce tax basis net
  investment income.  This tax-related adjustment represents additional
  distributions for tax purposes.
 See
accompanying notes to consolidated financial statements. 3


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CĪON Investment
Corporation Consolidated Statements of Cash Flows (in thousands)
 Three Months Ended
  March 31,2015
 
 2014(unaudited)
 
 (unaudited)Operating
  activities:Net increase in
  net assets resulting from operations
 $
 16,826
 
 $
 4,707Adjustments to
  reconcile net increase in net assets resulting fromoperations to
  net cash used in operating activities:Net accretion of
  discount on investments
 
 (204)
 
 
 (46)Proceeds from
  principal repayment of investments
 
 1,118
 
 
 5,289Purchase of
  investments
 
 (115,528)
 
 
 (66,997)(Increase)
  decrease in short term investments, net
 
 (22,838)
 
 
 380Proceeds from
  sale of investments
 
 35,565
 
 
 13,166Net realized
  gain on investments
 
 (575)
 
 
 (174)Net unrealized
  appreciation on investments
 
 (1,464)
 
 
 (611)Net unrealized
  appreciation on total return swap(1)
 
 (6,049)
 
 
 (1,208)Increase in due
  from counterparty(1)
 
 (41,150)
 
 
 (27,665)Increase in
  accrued reimbursement of expense support(2)
 
 837
 
 
 546(Increase)
  decrease in prepaid expenses and other assets
 
 (301)
 
 
 53Decrease
  (increase) in interest receivable on investments
 
 129
 
 
 (275)Increase in
  receivable due on investment sold
 
 (3,261)
 
 
 (6,357)Increase in
  receivable due on total return swap(1)
 
 (1,704)
 
 
 (1,008)Increase in
  payable for investments purchased
 
 33,335
 
 
 4,105Increase in
  accrued capital gains incentive fee on unrealized appreciation
 
 1,454
 
 
 387Increase in
  accounts payable and accrued expenses
 
 146
 
 
 56Decrease in
  accrued administrative services expense
 
 (129)
 
 
 -Increase in
  accrued management fees
 
 1,729
 
 
 -Increase in due
  to IIG - other(3)
 
 -
 
 
 379(Decrease)
  increase in due to IIG - offering, organizational and other costs(3)
 
 (385)
 
 
 41Net cash used in
  operating activities
 
 (102,449)
 
 
 (75,232)Financing
  activities:Gross proceeds
  from issuance of common stock
 
 111,190
 
 
 84,924Commissions and
  dealer manager fees paid
 
 (10,584)
 
 
 (7,751)Repurchase of
  common stock
 
 (460)
 
 
 -Shareholders'
  distributions paid(4)
 
 (2,955)
 
 
 (1,876)Net cash
  provided by financing activities
 
 97,191
 
 
 75,297Net (decrease)
  increase in cash
 
 (5,258)
 
 
 65Cash, beginning
  of period
 
 9,474
 
 
 450Cash, end of
  period
 $
 4,216
 
 $
 515Supplemental
  non-cash financing activities:Reinvestment of
  shareholders` distributions
 $
 3,410
 
 $
 2,334Shareholders'
  distributions payable
 $
 4,402
 
 $
 -(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 2 for a discussion of offering, organizational and
  other costs submitted to the Company for reimbursement by IIG and its
  affiliates.(4)
 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
(unaudited) March 31, 2015 (in thousands)
 Portfolio
  Company(a)
 
 Index Rate(b)
 
 Industry
 
 Principal/Par
  Amount
 
 Amortized
  Cost
 
 Fair
  Value(c)Senior
  Secured First Lien Debt - 13.3%Accruent, LLC,
  L+625, 1.00% LIBOR Floor, 11/25/2019
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 $
 2,985
 
 $
 2,979
 
 $
 2,985ECI Acquisition
  Holdings, Inc., L+625, 1.00% LIBOR Floor, 3/11/2019(d)
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 8,710
 
 
 8,670
 
 
 8,710F+W Media, Inc.,
  L+650, 1.25% LIBOR Floor, 6/30/2019
 
 3 Month LIBOR
 
 Media:
  Diversified & Production
 
 
 11,123
 
 
 10,721
 
 
 10,845Ignite
  Restaurant Group, Inc., L+700, 1.00% LIBOR Floor, 2/13/2019
 
 3 Month LIBOR
 
 Beverage, Food
  & Tobacco
 
 
 14,925
 
 
 14,727
 
 
 14,776Infogroup Inc.,
  L+600, 1.50% LIBOR Floor, 5/26/2018
 
 3 Month LIBOR
 
 Media:
  Advertising, Printing & Publishing
 
 
 10,829
 
 
 10,317
 
 
 10,233Nathan’s Famous,
  Inc., 10.00%, 3/15/2020(g)
 
 None
 
 Beverage, Food
  & Tobacco
 
 
 6,000
 
 
 6,000
 
 
 6,307SK Spice
  S.Á.R.L, L+825, 1.25% LIBOR Floor, 9/30/2018(g)
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 1,753
 
 
 1,727
 
 
 1,763Smile Brands
  Group, Inc., L+625, 1.25% LIBOR Floor, 8/16/2019
 
 6 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 4,859
 
 
 4,778
 
 
 4,434Sprint
  Industrial Holdings, LLC, L+575, 1.25% LIBOR Floor, 5/14/2019
 
 3 Month LIBOR
 
 Energy: Oil
  & Gas
 
 
 1,438
 
 
 1,426
 
 
 1,359Studio Movie
  Grill Holdings, LLC, L+725, 1.00% LIBOR Floor, 9/10/2018(d)
 
 1 Month LIBOR
 
 Hotel, Gaming
  & Leisure
 
 
 15,943
 
 
 15,781
 
 
 15,943TOPPS Company,
  Inc., L+600, 1.25% LIBOR Floor, 10/2/2018
 
 3 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 705
 
 
 695
 
 
 697US Joiner
  Holding Company, L+600, 1.00% LIBOR Floor, 4/16/2020
 
 3 Month LIBOR
 
 Capital
  Equipment
 
 
 2,618
 
 
 2,584
 
 
 2,611Total Senior
  Secured First Lien Debt
 
 
 
 
 
 
 
 
 
 80,405
 
 
 80,663Senior
  Secured Second Lien Debt - 49.2%Access CIG, LLC,
  L+875, 1.00% LIBOR Floor, 10/17/2022
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 6,400
 
 
 6,029
 
 
 6,048ALM Media, LLC,
  L+800, 1.00% LIBOR Floor, 7/30/2021
 
 3 Month LIBOR
 
 Media:
  Advertising, Printing & Publishing
 
 
 10,344
 
 
 10,153
 
 
 10,137American
  Residential Services LLC, L+800, 1.00% LIBOR Floor, 12/31/2021
 
 3 Month LIBOR
 
 Construction
  & Building
 
 
 3,700
 
 
 3,666
 
 
 3,644AmWINS Group,
  LLC, L+850, 1.00% LIBOR Floor, 9/4/2020(h)
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 750
 
 
 757
 
 
 752Blue Ribbon,
  LLC, L+825, 1.00% LIBOR Floor, 11/13/2022
 
 3 Month LIBOR
 
 Beverage, Food
  & Tobacco
 
 
 15,000
 
 
 14,848
 
 
 14,813Drew Marine
  Group, Inc., L+700, 1.00% LIBOR Floor, 5/19/2021(g)
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 5,000
 
 
 5,003
 
 
 4,925EISI LLC, L+850,
  1.00% LIBOR Floor, 9/23/2020
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 20,000
 
 
 19,650
 
 
 19,800Elements
  Behavioral Health, Inc., L+875, 1.00% LIBOR Floor, 2/11/2020
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 5,000
 
 
 4,957
 
 
 4,965Emerald 3
  Limited, L+700, 1.00% LIBOR Floor, 5/16/2022(g)
 
 3 Month LIBOR
 
 Environmental
  Industries
 
 
 5,000
 
 
 4,954
 
 
 4,850Flexera Software
  LLC, L+700, 1.00% LIBOR Floor, 4/2/2021
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 833
 
 
 815
 
 
 821Fram Group
  Holdings Inc., L+900, 1.50% LIBOR Floor, 1/29/2018
 
 1 Month LIBOR
 
 Automotive
 
 
 90
 
 
 89
 
 
 88GCA Services
  Group, Inc., L+800, 1.25% LIBOR Floor, 11/1/2020
 
 6 Month LIBOR
 
 Services:
  Consumer
 
 
 800
 
 
 797
 
 
 802Genex Holdings,
  Inc., L+775, 1.00% LIBOR Floor, 5/30/2022
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 9,910
 
 
 9,846
 
 
 9,712Global Tel*Link
  Corporation, L+775, 1.25% LIBOR Floor, 11/23/2020
 
 3 Month LIBOR
 
 Telecommunications
 
 
 9,500
 
 
 9,486
 
 
 9,280GTCR Valor
  Companies, Inc., L+850, 1.00% LIBOR Floor, 11/30/2021
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 5,000
 
 
 4,957
 
 
 4,825H.D. Vest, Inc.,
  L+825, 1.25% LIBOR Floor, 6/18/2019
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 17,500
 
 
 17,419
 
 
 17,371Hilex Poly Co.
  LLC, L+875, 1.00% LIBOR Floor, 6/5/2022(h)
 
 3 Month LIBOR
 
 Containers,
  Packaging & Glass
 
 
 12,409
 
 
 12,161
 
 
 12,440Institutional
  Shareholder Services Inc., L+750, 1.00% LIBOR Floor, 4/30/2022
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 5,860
 
 
 5,834
 
 
 5,772Landslide
  Holdings, Inc., L+725, 1.00% LIBOR Floor, 2/25/2021
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 9,830
 
 
 9,838
 
 
 9,535Lanyon
  Solutions, Inc., L+850, 1.00% LIBOR Floor, 11/15/2021
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 2,273
 
 
 2,263
 
 
 2,205Learfield
  Communications, Inc., L+775, 1.00% LIBOR Floor, 10/9/2021
 
 3 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 1,417
 
 
 1,405
 
 
 1,421Mergermarket
  USA, Inc., L +650, 1.00% LIBOR Floor, 2/4/2022
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 2,000
 
 
 1,991
 
 
 1,830Mitchell
  International, Inc., L+750, 1.00% LIBOR Floor, 10/11/2021(h)
 
 1 Month LIBOR
 
 High Tech
  Industries
 
 
 4,000
 
 
 3,974
 
 
 3,990MSC.Software
  Corporation, L+750, 1.00% LIBOR Floor, 5/29/2021
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 7,820
 
 
 7,763
 
 
 7,703Navex Global,
  Inc., L+875, 1.00% LIBOR Floor, 11/18/2022
 
 6 Month LIBOR
 
 High Tech
  Industries
 
 
 8,000
 
 
 7,844
 
 
 7,920Pelican
  Products, Inc., L+825, 1.00% LIBOR Floor, 4/11/2021(h)
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 2,969
 
 
 2,984
 
 
 2,954Pike
  Corporation, L+850, 1.00% LIBOR Floor, 6/22/2022(h)
 
 1 Month LIBOR
 
 Energy:
  Electricity
 
 
 10,000
 
 
 9,833
 
 
 9,975PODS, LLC,
  L+825, 1.00% LIBOR Floor, 2/2/2023(h)
 
 3 Month LIBOR
 
 Services:
  Consumer
 
 
 9,984
 
 
 9,924
 
 
 10,059PSC Industrial
  Holdings Corp., L+825, 1.00% LIBOR Floor, 12/5/2021
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 10,000
 
 
 9,805
 
 
 9,975Securus
  Technologies Holdings, Inc., L+775, 1.25% LIBOR Floor, 4/30/2021
 
 3 Month LIBOR
 
 Telecommunications
 
 
 4,500
 
 
 4,475
 
 
 4,444SI Organization,
  Inc., L+800, 1.00% LIBOR Floor, 5/23/2020
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 1,511
 
 
 1,497
 
 
 1,534SMG, L+825,
  1.00% LIBOR Floor, 2/27/2021
 
 3 Month LIBOR
 
 Hotel, Gaming
  & Leisure
 
 
 6,220
 
 
 6,220
 
 
 6,251Survey Sampling
  International, LLC, L+900, 1.00% LIBOR Floor, 12/16/2021
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 15,000
 
 
 14,708
 
 
 14,737TASC, Inc.,
  12.00%, 5/23/2021(g)
 
 None
 
 Services:
  Business
 
 
 7,332
 
 
 7,105
 
 
 7,790Telecommunications
  Management, LLC, L+800, 1.00% LIBOR Floor, 10/30/2020(h)
 
 3 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 1,106
 
 
 1,089
 
 
 1,090TMK Hawk Parent,
  Corp., L+750, 1.00% LIBOR Floor, 10/1/2022
 
 3 Month LIBOR
 
 Beverage, Food
  & Tobacco
 
 
 15,000
 
 
 14,855
 
 
 15,000TransFirst Inc.,
  L+800, 1.00% LIBOR Floor, 11/11/2022
 
 6 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 7,087
 
 
 7,019
 
 
 7,126U.S. Renal Care,
  Inc., L+900, 1.25% LIBOR Floor, 1/3/2020(h)
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 3,486
 
 
 3,527
 
 
 3,525Vestcom
  International, Inc., L+775, 1.00% LIBOR Floor, 9/30/2022
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 15,000
 
 
 14,931
 
 
 14,850Wand
  Intermediate I LP, L+725, 1.00% LIBOR Floor, 9/19/2022
 
 6 Month LIBOR
 
 Automotive
 
 
 14,000
 
 
 13,905
 
 
 14,070
 See
accompanying notes to consolidated financial statements. 5


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CĪON Investment Corporation Consolidated Schedule of
Investments (unaudited) (continued) March 31, 2015 (in thousands)
 Portfolio Company(a)
 
 Index Rate(b)
 
 Industry
 
 Principal/Par
  Amount
 
 Amortized
  Cost
 
 Fair
  Value(c)Winebow
  Holdings, Inc., L+750, 1.00% LIBOR Floor, 1/2/2022(h)
 
 1 Month LIBOR
 
 Beverage, Food
  & Tobacco
 
 
 7,488
 
 
 7,339
 
 
 7,001WP CPP Holdings,
  LLC, L+775, 1.00% LIBOR Floor, 4/30/2021
 
 3 Month LIBOR
 
 Aerospace &
  Defense
 
 
 1,435
 
 
 1,429
 
 
 1,428Total Senior
  Secured Second Lien Debt
 
 
 
 
 
 
 
 
 297,144
 
 297,458Collateralized
  Securities and Structured Products - Debt - 4.7%Deutsche Bank AG
  Frankfurt CRAFT 2013-1A Class Credit Linked Note, L+925, 4/17/2020(g)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 2,000
 
 
 2,034
 
 
 1,980Deutsche Bank AG
  Frankfurt CRAFT 2013-1X Class Credit Linked Note, L+925, 4/17/2020(g)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 610
 
 
 619
 
 
 604Deutsche Bank AG
  Frankfurt CRAFT 2014-1 Class Credit Linked Note, L+965, 5/15/2019(g)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 5,400
 
 
 5,400
 
 
 5,388Great Lakes CLO
  2014-1, Ltd. Class E Notes, L+525, 4/15/2025(f)(g)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 5,000
 
 
 4,533
 
 
 4,478Ivy Hill Middle
  Market Credit Fund VII, Ltd. Class E Notes, L+565, 10/20/2025(f)(g)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 2,000
 
 
 1,862
 
 
 1,837JFIN CLO 2014,
  Ltd. Class E Notes, L+500, 4/20/2025(f)(g)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 2,500
 
 
 2,312
 
 
 2,194JPMorgan Chase
  Bank, N.A. Credit Link Note, L+1225, 12/20/2021(g)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 5,000
 
 
 5,000
 
 
 4,953NXT Capital CLO
  2014-1, LLC Class E Notes, L+550, 4/23/2026(f)(g)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 7,500
 
 
 7,018
 
 
 6,813Total
  Collateralized Securities and Structured Products - Debt
 
 
 
 
 
 
 
 28,778
 
 
 28,247Collateralized
  Securities and Structured Products - Equity - 4.3%APIDOS CLO XVI
  Subordinated Notes, 12.24% Estimated Yield, 1/19/2025(g)(h)
 
 (e)
 
 Diversified
  Financials
 
 
 9,000
 
 
 6,005
 
 
 6,005CENT CLO 19
  Limited Subordinated Notes, 11.80% Estimated Yield, 10/29/2025(g)(h)
 
 (e)
 
 Diversified
  Financials
 
 
 2,000
 
 
 1,534
 
 
 1,534Dryden XXIII
  Senior Loan Fund Subordinated Notes, 12.09% Estimated Yield, 7/17/2023(g)(h)
 
 (e)
 
 Diversified
  Financials
 
 
 9,250
 
 
 6,752
 
 
 6,753Galaxy XV CLO
  LTD Class A Subordinated Notes, 12.45% Estimated Yield, 4/15/2025(g)(h)
 
 (e)
 
 Diversified
  Financials
 
 
 4,000
 
 
 2,872
 
 
 2,872Ivy Hill Middle
  Market Credit Fund IX, Ltd. Subordinated Notes, 15.00% Estimated Yield,
  10/18/2025(g)
 
 (e)
 
 Diversified
  Financials
 
 
 8,146
 
 
 7,444
 
 
 7,413Ivy Hill Middle
  Market Credit Fund VII, Ltd. Subordinated Notes, 15.00% Estimated Yield,
  10/20/2025(g)
 
 (e)
 
 Diversified
  Financials
 
 
 2,000
 
 
 1,904
 
 
 1,707Total
  Collateralized Securities and Structured Products - Equity
 
 
 
 
 
 
 
 26,511
 
 
 26,284Short Term
  Investments - 5.5%(i)First American
  Treasury Obligations Fund, Class Z Shares(j)
 
 
 
 
 
 
 33,188
 
 
 33,188
 
 
 33,188Total Short
  Term Investments
 
 
 
 
 
 
 
 
 
 33,188
 
 
 33,188TOTAL
  INVESTMENTS - 77.0%
 
 
 
 
 
 
 
 
 $
 466,026
 
 $
 465,840OTHER ASSETS
  IN EXCESS OF LIABILITIES - 23.0%
 
 
 
 
 
 
 
 
 
 
 
 $
 139,273NET ASSETS -
  100%
 
 
 
 
 
 
 
 
 
 
 
 $
 605,113TOTAL RETURN
  SWAP - 0.3%
 
 
 
 
 
 Notional
  Amount
 
 
 
 
 Unrealized AppreciationCitibank TRS
  Facility (see Note 7)
 
 
 
 
 
 $
 593,494
 
 
 
 
 $
 1,640
 (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 (g) below. The Company does not control and is not
  an affiliate of any of the portfolio companies in its investment portfolio.
  Unless specifically identified, investments do not contain a paid-in-kind, or
  PIK, interest provision.(b)
 The 1, 3 and 6 month London Interbank Offered Rate, or LIBOR,
  rates were 0.18%, 0.27% and 0.40%, respectively, as of March 31, 2015.  The
  actual LIBOR rate for each loan listed may not be the applicable LIBOR rate
  as of March 31, 2015, as the loan may have been priced or repriced based on a
  LIBOR rate prior to or subsequent to March 31, 2015.(c)
 Fair value determined by the Company’s board of directors (see
  Note 8).(d)
 As discussed in Note 10, the Company is committed, upon the
  satisfaction of certain conditions, to fund an additional $1,207 and $4,010
  as of March 31, 2015 to ECI Acquisition Holdings, Inc. and Studio Movie Grill
  Holdings, LLC, respectively.  As of May 8, 2015, the Company is committed,
  upon the satisfaction of certain conditions, to fund an additional $1,207 and
  $3,540 to ECI Acquisition Holdings, Inc. and Studio Movie Grill Holdings,
  LLC, respectively.(e)
 The CLO subordinated notes are considered equity positions in
  the CLO vehicles and are not rated. Equity investments are entitled to
  recurring distributions, which are generally equal to the remaining cash flow
  of the payments made by the underlying vehicle's securities less contractual
  payments to debt holders and expenses. The estimated yield indicated is based
  upon a current projection of the amount and timing of these recurring
  distributions and the estimated amount of repayment of principal upon
  termination. Such projections are periodically reviewed and adjusted, and the
  estimated yield may not ultimately be realized.(f)
 Great Lakes CLO 2014-1 Class E Notes, Ivy Hill Middle Market
  Credit Fund VII Class E Notes and NXT Capital CLO 2014-1 Class E Notes were
  rated Ba2 on Moody's credit scale as of March 31, 2015. JFIN CLO 2014 Class E
  Notes were rated BB on S&P's credit scale as of March 31, 2015.(g)
 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 March 31, 2015, 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, 83.3% of the Company’s total
  assets represented qualifying assets as of March 31, 2015.(h)
 Position or portion thereof unsettled as of March 31, 2015.(i)
 Short term investments represent an investment in a fund that
  invests in highly liquid investments with average original maturity dates of
  three months or less.(j)
 Effective yield as of March 31, 2015 is <0.01%.
 See
accompanying notes to consolidated financial statements. 6


---

CĪON Investment Corporation Consolidated Schedule of
Investments December 31, 2014 (in thousands)
 Portfolio
  Company(a)
 
 Index Rate(b)
 
 Industry
 
 Principal/Par
  Amount
 
 Amortized
  Cost
 
 Fair
  Value(c)Senior
  Secured First Lien Debt - 13.9%Accruent, LLC,
  L+625, 1.00% LIBOR Floor, 11/25/2019
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 $
 2,993
 
 $
 2,986
 
 $
 2,993ECI Acquisition
  Holdings, Inc., L+625, 1.00% LIBOR Floor, 3/11/2019(d)
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 8,214
 
 
 8,170
 
 
 8,214F+W Media, Inc.,
  L+650, 1.25% LIBOR Floor, 6/30/2019
 
 3 Month LIBOR
 
 Media:
  Diversified & Production
 
 
 6,443
 
 
 6,220
 
 
 6,298Ignite
  Restaurant Group, Inc., L+700, 1.00% LIBOR Floor, 2/13/2019
 
 3 Month LIBOR
 
 Beverage, Food
  & Tobacco
 
 
 14,963
 
 
 14,753
 
 
 14,814Infogroup Inc.,
  L+600, 1.50% LIBOR Floor, 5/26/2018
 
 3 Month LIBOR
 
 Media:
  Advertising, Printing & Publishing
 
 
 10,828
 
 
 10,281
 
 
 10,098SK Spice
  S.Á.R.L, L+825, 1.25% LIBOR Floor, 9/30/2018(g)
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 1,758
 
 
 1,730
 
 
 1,745Smile Brands
  Group, Inc., L+625, 1.25% LIBOR Floor, 8/16/2019
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 4,871
 
 
 4,782
 
 
 4,746Sprint
  Industrial Holdings, LLC, L+575, 1.25% LIBOR Floor, 5/14/2019
 
 3 Month LIBOR
 
 Energy: Oil
  & Gas
 
 
 1,442
 
 
 1,429
 
 
 1,377Studio Movie
  Grill Holdings, LLC, L+725, 1.00% LIBOR Floor, 9/10/2018(d)
 
 3 Month LIBOR
 
 Hotel, Gaming
  & Leisure
 
 
 13,588
 
 
 13,401
 
 
 13,452TOPPS Company,
  Inc., L+600, 1.25% LIBOR Floor, 10/2/2018
 
 3 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 1,611
 
 
 1,586
 
 
 1,571US Joiner
  Holding Company, L+600, 1.00% LIBOR Floor, 4/16/2020
 
 3 Month LIBOR
 
 Capital
  Equipment
 
 
 3,955
 
 
 3,901
 
 
 3,896Total Senior
  Secured First Lien Debt
 
 
 
 
 
 
 
 
 69,239
 
 69,204Senior
  Secured Second Lien Debt - 49.4%Access CIG, LLC,
  L+875, 1.00% LIBOR Floor, 10/17/2022
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 6,400
 
 
 6,018
 
 
 6,048ALM Media, LLC,
  L+800, 1.00% LIBOR Floor, 7/30/2021
 
 3 Month LIBOR
 
 Media:
  Advertising, Printing & Publishing
 
 
 10,344
 
 
 10,149
 
 
 10,137American
  Residential Services LLC, L+800, 1.00% LIBOR Floor, 12/31/2021
 
 3 Month LIBOR
 
 Construction
  & Building
 
 
 3,700
 
 
 3,663
 
 
 3,626Blue Ribbon,
  LLC, L+825, 1.00% LIBOR Floor, 11/13/2022
 
 1 Month LIBOR
 
 Beverage, Food
  & Tobacco
 
 
 8,000
 
 
 7,900
 
 
 7,900Drew Marine
  Group, Inc., L+700, 1.00% LIBOR Floor, 5/19/2021(g)
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 5,000
 
 
 5,003
 
 
 4,975EISI LLC, L+850,
  1.00% LIBOR Floor, 9/23/2020
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 20,000
 
 
 19,663
 
 
 19,800Elements
  Behavioral Health, Inc., L+875, 1.00% LIBOR Floor, 2/11/2020
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 5,000
 
 
 4,955
 
 
 4,970Emerald 3
  Limited, L+700, 1.00% LIBOR Floor, 5/16/2022(g)
 
 3 Month LIBOR
 
 Environmental
  Industries
 
 
 5,000
 
 
 4,952
 
 
 4,850Fram Group
  Holdings Inc., L+900, 1.50% LIBOR Floor, 1/29/2018
 
 1 Month LIBOR
 
 Automotive
 
 
 90
 
 
 88
 
 
 88GCA Services
  Group, Inc., L+800, 1.25% LIBOR Floor, 11/1/2020
 
 3 Month LIBOR
 
 Services:
  Consumer
 
 
 800
 
 
 797
 
 
 792Genex Holdings,
  Inc., L+775, 1.00% LIBOR Floor, 5/30/2022
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 9,910
 
 
 9,856
 
 
 9,637Global Tel*Link
  Corporation, L+775, 1.25% LIBOR Floor, 11/23/2020
 
 3 Month LIBOR
 
 Telecommunications
 
 
 9,500
 
 
 9,484
 
 
 9,369GTCR Valor
  Companies, Inc., L+850, 1.00% LIBOR Floor, 11/30/2021
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 5,000
 
 
 4,955
 
 
 4,850H.D. Vest, Inc.,
  L+800, 1.25% LIBOR Floor, 6/18/2019
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 854
 
 
 846
 
 
 848Hilex Poly Co.
  LLC, L+875, 1.00% LIBOR Floor, 6/5/2022
 
 3 Month LIBOR
 
 Containers,
  Packaging & Glass
 
 
 10,000
 
 
 9,751
 
 
 9,800Institutional
  Shareholder Services Inc., L+750, 1.00% LIBOR Floor, 4/30/2022
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 5,860
 
 
 5,834
 
 
 5,772Landslide
  Holdings, Inc., L+725, 1.00% LIBOR Floor, 2/25/2021
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 9,830
 
 
 9,842
 
 
 9,535Lanyon
  Solutions, Inc., L+850, 1.00% LIBOR Floor, 11/15/2021
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 2,273
 
 
 2,263
 
 
 2,216Learfield
  Communications, Inc., L+775, 1.00% LIBOR Floor, 10/9/2021
 
 3 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 1,417
 
 
 1,405
 
 
 1,410Mergermarket
  USA, Inc., L+650, 1.00% LIBOR Floor, 2/4/2022
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 2,000
 
 
 1,990
 
 
 1,895MSC.Software
  Corporation, L+750, 1.00% LIBOR Floor, 5/29/2021
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 7,820
 
 
 7,761
 
 
 7,664Navex Global,
  Inc., L+875, 1.00% LIBOR Floor, 11/18/2022
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 8,000
 
 
 7,841
 
 
 7,880Pelican
  Products, Inc., L+825, 1.00% LIBOR Floor, 4/11/2021
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 2,441
 
 
 2,459
 
 
 2,387Pike
  Corporation, L+850, 1.00% LIBOR Floor, 6/22/2022
 
 1 Month LIBOR
 
 Energy:
  Electricity
 
 
 6,000
 
 
 5,850
 
 
 5,932PSC Industrial
  Holdings Corp., L+825, 1.00% LIBOR Floor, 12/5/2021
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 10,000
 
 
 9,800
 
 
 9,850Securus
  Technologies Holdings, Inc., L+775, 1.25% LIBOR Floor, 4/30/2021
 
 3 Month LIBOR
 
 Telecommunications
 
 
 4,500
 
 
 4,472
 
 
 4,444SI Organization,
  Inc., L+800, 1.00% LIBOR Floor, 5/23/2020
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 1,511
 
 
 1,497
 
 
 1,496SMG, L+825,
  1.00% LIBOR Floor, 2/27/2021
 
 3 Month LIBOR
 
 Hotel, Gaming
  & Leisure
 
 
 6,220
 
 
 6,220
 
 
 6,251Survey Sampling
  International, LLC, L+900, 1.00% LIBOR Floor, 12/16/2021
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 15,000
 
 
 14,701
 
 
 14,738TASC, Inc.,
  12.00%, 5/23/2021(h)
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 7,332
 
 
 7,099
 
 
 7,497Telecommunications
  Management, LLC, L+800, 1.00% LIBOR Floor, 10/30/2020
 
 3 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 675
 
 
 671
 
 
 667TMK Hawk Parent,
  Corp., L+750, 1.00% LIBOR Floor, 10/1/2022
 
 3 Month LIBOR
 
 Beverage, Food
  & Tobacco
 
 
 15,000
 
 
 14,852
 
 
 14,925TransFirst Inc.,
  L+800, 1.00% LIBOR Floor, 11/11/2022
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 7,087
 
 
 7,016
 
 
 7,019U.S. Renal Care,
  Inc., L+900, 1.25% LIBOR Floor, 1/3/2020
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 486
 
 
 492
 
 
 487Vestcom
  International, Inc., L+775, 1.00% LIBOR Floor, 9/30/2022
 
 6 Month LIBOR
 
 Services:
  Business
 
 
 15,000
 
 
 14,927
 
 
 14,775Wand
  Intermediate I LP, L+725, 1.00% LIBOR Floor, 9/19/2022
 
 3 Month LIBOR
 
 Automotive
 
 
 14,000
 
 
 13,899
 
 
 14,035Winebow
  Holdings, Inc., L+750, 1.00% LIBOR Floor, 1/2/2022
 
 1 Month LIBOR
 
 Beverage, Food
  & Tobacco
 
 
 5,488
 
 
 5,494
 
 
 5,323WP CPP Holdings,
  LLC, L+775, 1.00% LIBOR Floor, 4/30/2021
 
 3 Month LIBOR
 
 Aerospace &
  Defense
 
 
 1,435
 
 
 1,429
 
 
 1,370Total Senior
  Secured Second Lien Debt
 
 
 
 
 
 
 
 
 245,894
 
 245,258
 See
accompanying notes to consolidated financial statements. 7


---

CĪON Investment Corporation Consolidated Schedule of
Investments (continued) December 31, 2014 (in thousands)
 Portfolio
  Company(a)
 
 Index Rate(b)
 
 Industry
 
 Principal/Par
  Amount
 
 Amortized
  Cost
 
 Fair
  Value(c)Collateralized
  Securities and Structured Products - Debt - 5.6%Deutsche Bank AG
  Frankfurt CRAFT 2013-1A Class Credit Linked Note, L+925, 4/17/2020(g)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 2,000
 
 
 2,035
 
 
 1,999Deutsche Bank AG
  Frankfurt CRAFT 2013-1X Class Credit Linked Note, L+925, 4/17/2020(g)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 610
 
 
 620
 
 
 610Deutsche Bank AG
  Frankfurt CRAFT 2014-1 Class Credit Linked Note, L+965, 5/15/2019(g)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 5,400
 
 
 5,400
 
 
 5,400Great Lakes CLO
  2014-1, Ltd. Class E Notes, L+525, 4/15/2025(f)(g)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 5,000
 
 
 4,522
 
 
 4,325Ivy Hill Middle
  Market Credit Fund VII, Ltd. Class E Notes, L+565, 10/20/2025(f)(g)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 2,000
 
 
 1,860
 
 
 1,815JFIN CLO 2014,
  Ltd. Class E Notes, L+500, 4/20/2025(f)(g)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 2,500
 
 
 2,308
 
 
 2,168JPMorgan Chase
  Bank, N.A. Credit Link Note, L+1,225, 12/20/2021(g)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 5,000
 
 
 5,000
 
 
 5,048NXT Capital CLO
  2014-1, LLC, Class E Notes, L+550, 4/23/2026(f)(g)
 
 3 Month LIBOR
 
 Diversified
  Financials
 
 
 7,500
 
 
 7,007
 
 
 6,600Total
  Collateralized Securities and Structured Products - Debt
 
 
 
 
 
 
 
 
 28,752
 
 27,965Collateralized
  Securities and Structured Products - Equity - 1.8%Ivy Hill Middle
  Market Credit Fund IX, Ltd. Subordinated Notes, 14% Estimated Yield,
  10/18/2025(g)
 
 (e)
 
 Diversified
  Financials
 
 
 8,146
 
 
 7,427
 
 
 7,413Ivy Hill Middle
  Market Credit Fund VII, Ltd. Subordinated Notes, 14% Estimated Yield,
  10/20/2025(g)
 
 (e)
 
 Diversified
  Financials
 
 
 2,000
 
 
 1,902
 
 
 1,724Total
  Collateralized Securities and Structured Products - Equity
 
 
 
 
 
 
 
 
 9,329
 
 9,137Short Term
  Investments - 2.1%(i)First American
  Treasury Obligations Fund, Class Z Shares(j)
 
 
 
 
 
 
 10,350
 
 
 10,350
 
 
 10,350Total Short
  Term Investments
 
 
 
 
 
 
 
 
 
 10,350
 
 
 10,350TOTAL
  INVESTMENTS - 72.9%
 
 
 
 
 
 
 
 
 $
 363,564
 
 $
 361,914OTHER ASSETS
  IN EXCESS OF LIABILITIES - 27.1%
 
 
 
 
 
 
 
 
 
 
 
 $
 134,475NET ASSETS -
  100%
 
 
 
 
 
 
 
 
 
 
 
 $
 496,389TOTAL RETURN
  SWAP - (0.9%)
 
 
 
 
 
 Notional
  Amount
 
 
 
 
 Unrealized DepreciationCitibank TRS
  Facility (see Note 7)
 
 
 
 
 
 $
 431,979
 
 
 
 
 $
 (4,409)
 (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 (g) below. The Company does not control and is not
  an affiliate of any of the portfolio companies in its investment portfolio.
  Unless specifically identified, investments do not contain a paid-in-kind, or
  PIK, interest provision.(b)
 The 1, 3 and 6 month London Interbank Offered Rate, or LIBOR,
  rates were 0.17%, 0.26% and 0.36%, respectively, as of December 31, 2014. 
  The actual LIBOR rate for each loan listed may not be the applicable LIBOR
  rate as of December 31, 2014, as the loan may have been priced or repriced
  based on a LIBOR rate prior to or subsequent to December 31, 2014.(c)
 Fair value determined by the Company’s board of directors (see
  Note 8).(d)
 As discussed in Note 10, the Company is committed, upon the
  satisfaction of certain conditions, to fund an additional $1,724 and $6,388
  as of December 31, 2014 to ECI Acquisition Holdings, Inc. and Studio Movie
  Grill Holdings, LLC, respectively.  As of March 25, 2015, the Company is
  committed, upon the satisfaction of certain conditions,  to fund an
  additional $1,207 and $4,245 to ECI Acquisition Holdings, Inc. and Studio
  Movie Grill Holdings, LLC, respectively.(e)
 The CLO subordinated notes are considered equity positions in
  the CLO vehicles and are not rated. Equity investments are entitled to
  recurring distributions, which are generally equal to the remaining cash flow
  of the payments made by the underlying vehicle's securities less contractual
  payments to debt holders and expenses. The estimated yield indicated is based
  upon a current projection of the amount and timing of these recurring
  distributions and the estimated amount of repayment of principal upon
  termination. Such projections are periodically reviewed and adjusted, and the
  estimated yield may not ultimately be realized.(f)
 Great Lakes CLO 2014-1 Class E Notes, Ivy Hill Middle Market
  Credit Fund VII Class E Notes and NXT Capital CLO 2014-1 Class E Notes were
  rated Ba2 on Moody's credit scale as of December 31, 2014. JFIN CLO 2014
  Class E Notes were rated BB on S&P's credit scale as of December 31,
  2014.(g)
 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, 2014, 89.3% 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, 86.8% of the
  Company’s total assets represented qualifying assets as of December 31, 2014.(h)
 Position or portion thereof unsettled as of December 31, 2014.(i)
 Short term investments represent an investment in a fund that
  invests in highly liquid investments with average original maturity dates of
  three months or less.(j)
 Effective yield as of December 31, 2014 is <0.01%.
  See
accompanying notes to consolidated financial statements. 8


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 Note 1. Organization and Principal Business CĪON Investment Corporation, or the
Company, was incorporated under the general corporation laws of the State of
Maryland on August 9, 2011. On December 17, 2012, the Company successfully
raised gross proceeds from unaffiliated outside investors of at least $2,500,
or the minimum offering requirement, and commenced operations. The Company is
an externally managed, non-diversified closed-end management investment company
that has elected to be regulated as a business development company, or BDC,
under the 1940 Act. The Company elected to be treated for federal income tax
purposes as a regulated investment company, or RIC, as defined under Subchapter
M of the Internal Revenue Code of 1986, as amended, or the Code. The Company’s
investment objective is to generate current income and, to a lesser extent,
capital appreciation for investors.The Company’s
portfolio is comprised primarily of investments in senior secured loans,
including first lien loans, second lien loans and unitranche loans, and, to a
lesser extent, collateralized securities, structured products and other similar
securities 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.On October 31, 2014, the board of directors of the
Company, including a majority of the board of directors who are not interested
persons, approved the renewal of the investment sub-advisory agreement with AIM
for a period of twelve months commencing December 17, 2014.  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, 2014 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, 2015. The consolidated
balance sheet and the consolidated schedule of investments as of
December 31, 2014 are derived from the 2014 audited consolidated financial
statements. The
Company evaluates subsequent events through the date that the consolidated
financial statements are issued. 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 $33,188 and $10,350 of such investments at March
31, 2015 and December 31, 2014, respectively, which are included in
investments, at fair value on the accompanying consolidated balance sheets and
on the consolidated schedule of investments. Offering, Organizational and Other
Pre-Effective Costs Offering
costs 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 costs were
funded by IIG and its affiliates and there was no liability for these offering
costs to the Company until IIG and its affiliates submitted such costs for
reimbursement. Upon meeting the minimum offering requirement on December 17,
2012, the Company incurred and capitalized offering costs of $1,000 that were
submitted for reimbursement by IIG (see Note 4). These costs were fully
amortized over a twelve month period as an adjustment to capital in excess of
par value. The remaining offering costs funded by IIG and its affiliates were incurred
when IIG and its affiliates submitted such costs for reimbursement during the
year endedDecember 31, 2014. 9


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 Organizational 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 organizational costs were funded by IIG and its affiliates and
there was no liability for these organizational costs to the Company until IIG
and its affiliates submitted such costs for reimbursement. The Company incurred
these costs when IIG and its affiliates submitted such costs for reimbursement
during the year ended December 31, 2014. The
following table summarizes offering, organizational and other costs incurred by
IIG and by the Company from January 31, 2012 (Inception) throughMarch 31, 2015: Offering, Organizational and Other Costs
  Incurred by IIGPeriod
 
 Organizational Costs
 
 Offering Costs
 
 Other Pre-Effective Costs(5)
 
 TotalYear EndedDecember 31,
  2012(1)
 
 $
 192
 
 $
 1,620
 
 $
 200
 
 $
 2,012December 31,
  2013
 
 
 -
 
 
 -
 
 
 -
 
 
 -December 31,
  2014
 
 
 -
 
 
 -
 
 
 -
 
 
 -Three Months
  EndedMarch 31, 2015
 
 
 -
 
 
 -
 
 
 -
 
 
 -Total
 
 
 192
 
 
 1,620
 
 
 200
 
 
 2,012Costs submitted
  for reimbursement by IIG(2)
 
 
 (192)
 
 
 (1,620)
 
 
 (200)
 
 
 (2,012)Total
  Unreimbursed Costs at March 31, 2015
 
 $
 -
 
 $
 -
 
 $
 -
 
 $
 -Offering, Organizational and Other Costs
  Incurred by the Company(3)Period
 
 Organizational Costs
 
 Offering Costs
 
 Other Pre-Effective Costs(5)
 
 TotalYear EndedDecember 31,
  2012(1)
 
 $
 -
 
 $
 30
 
 $
 -
 
 $
 30December 31,
  2013
 
 
 -
 
 
 1,787
 
 
 -
 
 
 1,787December 31,
  2014
 
 
 -
 
 
 2,026
 
 
 -
 
 
 2,026Three Months
  EndedMarch 31, 2015
 
 
 -
 
 
 481
 
 
 -
 
 
 481Total
 
 
 -
 
 
 4,324
 
 
 -
 
 
 4,324Costs reimbursed
  by the Company(2)
 
 
 192
 
 
 1,620
 
 
 200
 
 
 2,012Total Costs
  Incurred by the Company
 
 $
 192
 
 $
 5,944
 
 $
 200
 
 $
 6,336Costs paid as of
  March 31, 2015
 
 $
 192
 
 $
 5,750
 
 $
 200
 
 $
 6,142Costs accrued as
  of March 31, 2015(4)
 
 
 -
 
 
 194
 
 
 -
 
 
 194Total Costs
  Incurred by the Company
 
 $
 192
 
 $
 5,944
 
 $
 200
 
 $
 6,336
 (1)
 IIG originally incurred all offering, organizational and other
  costs prior to the commencement of operations on December 17, 2012.
  Subsequent to the commencement of operations, the Company incurred all
  offering and organizational costs and such costs, including reimbursement of
  costs originally incurred by IIG, will not exceed 1.5% of the actual gross
  proceeds raised from the offering. See Note 4 for actual gross proceeds
  raised from the offering and the amount of offering and organizational costs
  that can be paid by the Company.(2)
 Of this amount, $1,000 of costs charged directly to equity were
  submitted for reimbursement by IIG on December 17, 2012.  Of the remaining
  amount, $592 and $420 of costs charged directly to operating expense were
  submitted for reimbursement by IIG during the three months ended March 31,
  2014 and December 31, 2014, respectively.(3)
 Offering costs incurred directly by the Company are included in
  general and administrative expense on the consolidated statements of
  operations.(4)
 Of this amount, $99 is presented as Due to IIG - offering,
  organizational and other costs on the consolidated balance sheets. The
  remainder is included in accounts payable and accrued expenses on the
  consolidated balance sheets.(5)
 Amounts represent general and administrative expenses,
  consisting primarily of professional fees and insurance expense, incurred by
  IIG related to the Company prior to December 17, 2012 and are included in
  offering, organizational and other costs - IIG in the consolidated statements
  of operations. For Financial Industry Regulatory Authority, Inc., or FINRA,
  purposes, these costs are treated as offering and organizational costs and
  are subject to reimbursement by the Company in accordance with the investment
  advisory agreement.
 10


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 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 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 months ended March 31, 2015 and
2014, the Company declared distributions of $10,767 and $3,314, 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. The Company did not have any
uncertain tax positions during the periods presented herein. The Company is subject to examination by U.S. federal, New
York State, New York City and Maryland income tax jurisdictions for 2012 and
2013. 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. 11


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 Valuation of Portfolio Investments The fair value of
the Company’s investments is determined quarterly in good faith by the Company’s
board of directors pursuant to its consistently applied valuation procedures
and valuation process in accordance with Accounting Standards Codification
Topic 820, Fair Value Measurements and Disclosure, or ASC 820. ASC 820 defines
fair value as the price that would be received from the sale of an asset or
paid to transfer a liability in an orderly transaction between market
participants at the measurement date. ASC 820 also establishes a three-tier
fair value hierarchythat prioritizes and ranks the level of market price observability of
inputs used in measuringinvestments
at fair value. Inputs used to measure these fair values are classified into the
following hierarchy: Level 1
 -
 Quoted prices in active markets for identical assets or
  liabilities, accessible by the Company at the measurement date.Level 2
 -
 Quoted prices for similar assets or liabilities in active
  markets, or quoted prices for identical or similar assets or liabilities in
  markets that are not active, or other observable inputs other than quoted
  prices.Level 3
 -
 Unobservable inputs for the asset or liability. The inputs used
  in the determination of fair value may require significant management
  judgment or estimation. Such information may be the result of consensus
  pricing information or broker quotes that include a disclaimer that the
  broker would not be held to such a price in an actual transaction. The
  non-binding nature of consensus pricing and/or quotes accompanied by the
  disclaimer would result in classification as a Level 3 asset, assuming no
  additional corroborating evidence.
 Market price observability is
affected by a number of factors, including the type of investment and the
characteristics specific to the investment. Investments with readily available
active quoted prices or for which fair value can be measured from actively
quoted prices generally will have a higher degree of market price observability
and a lesser degree of judgment used in measuring fair value. Based on the observability of
the inputs used in the valuation techniques, the Company is required to provide
disclosures on fair value measurements according to the fair value hierarchy. The
level in the fair value hierarchy for each fair value measurement has been determined
based on the lowest level of input that is significant to the fair value
measurement. Our assessment of the significance of a particular input to the
fair value measurement in its entirety requires judgment and considers factors
specific to each investment. The level assigned to the investment valuations
may not be indicative of the risk or liquidity associated with investing in
such investments. Because of the inherent uncertainties of valuation, the
values reflected in the financial statements may differ materially from the
value that would be received upon an actual sale of such investments.In addition, changes in the market
environment and other events that may occur over the life of the investments
may cause the gains or losses that the Company ultimately realizes on these
investments to materially differ from the valuations currently assigned.  The Company’s
investments, excluding short term investments,consist primarily of debt securities that
are traded on a private over-the-counter market for institutional investments.
CIM attempts to obtain market quotations from at least two brokers or dealers
for each investment (if available, otherwise from a principal market maker or a
primary market dealer or other independent pricing service). CIM utilizes
mid-market pricing to determine fair value unless a different point within the
range is more representative. Because of the private nature of this marketplace
(meaning actual transactions are not publicly reported), the Company believes
that these valuation inputs result in Level 3 classification within the fair
value hierarchy. Notwithstanding the foregoing, if in the
reasonable judgment of CIM, the price of any investment held by the Company and
determined in the manner described above does not accurately reflect the fair
value of such investment, CIM will value such investment at a price that
reflects such investment’s fair value and report such change in the valuation
to the board of directors or its designee as soon as practicable. Investments
that carry certain restrictions on sale will typically be valued at a discount
from the public market value of the investment. 12


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 Any investments that are not publicly
traded or for which a market price is not otherwise readily available are
valued at a price that reflects its fair value. With respect to such
investments, the investments are reviewed and valued using one or more of the
following types of analyses: i.Market comparable statistics and
public trading multiples discounted for illiquidity, minority ownership and
other factors for companies with similar characteristics. ii.Valuations implied by third-party
investments in the applicable portfolio companies. iii.Discounted cash flow analysis,
including a terminal value or exit multiple. Determination
of fair value involves subjective judgments and estimates. Accordingly, these
notes to the Company’s consolidated financial statements refer to the
uncertainty with respect to the possible effect of such valuations, and any
change in such valuations, on the Company’s consolidated financial statements.
Below is a description of factors that the Company’s board of directors may
consider when valuing the Company’s equity and debt investments where a market
price is not readily available: ·the size and scope of a portfolio
company and its specific strengths and weaknesses; ·prevailing interest rates for like
securities; ·expected volatility in future
interest rates; ·leverage; ·call features, put features and
other relevant terms of the debt; ·the borrower’s ability to
adequately service its debt; ·the fair market value of the
portfolio company in relation to the face amount of its outstanding debt; ·the quality of collateral securing
the Company’s debt investments; ·multiples of earnings before
interest, taxes, depreciation and amortization, or EBITDA, cash flows, net
income, revenues or, in some cases, book value or liquidation value; and ·other factors deemed applicable. All of these
factors may be subject to adjustment based upon the particular circumstances of
a portfolio company or the Company’s actual investment position. For example,
adjustments to EBITDA may take into account compensation to previous owners, or
acquisition, recapitalization, and restructuring expenses or other related or
non-recurring items. The choice of analyses and the weight assigned to such
factors may vary across investments and may change within an investment if
events occur that warrant such a change. The discounted cash
flow model deemed appropriate by CIM is prepared for the applicable investments
and reviewed by 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. Consistent with the
Company’s valuation policy, the Company evaluates the source of inputs,
including any markets in which the Company’s investments are trading, in
determining fair value. The Company
periodically benchmarks the broker quotes from the brokers or dealers against
the actual prices at which the Company purchases and sells its investments.
Based on the results of the benchmark analysis and the experience of the
Company’s management in purchasing and selling these investments, the Company
believes that these quotes are reliable indicators of fair value. The Company
may also use other methods to determine fair value for securities for which it
cannot obtain market quotations through brokers or dealers, including the use
of an independent valuation firm. The Company periodically benchmarks the
valuations provided by an 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. The value of the total return swap, or TRS,
is primarily based on the increase or decrease in the value of the loans
underlying the TRS, as determined by the Company. The loans underlying the TRS
are valued in the same manner as loans owned by the Company. As in all cases,
the level in the fair value hierarchy for each instrument is determined based
on the lowest level of inputs that are significant to the fair value
measurement. The Company has classified the TRS as Level 3 within the fair
value hierarchy based on the lowest level of significant inputs. For additional
information on the TRS, see Note 7. 13


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 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. In addition, the Company may generate revenue in
the form of commitment, 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 investments
are recognized when earned. The Company may
have investments in its investment portfolio that contain a PIK interest
provision. Any PIK interest would 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. For
the three months ended March 31, 2015 and 2014, the Company did not record any
PIK interest from its investments. 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 appreciation on total return swap in the
consolidated statements of operations. For additional information on the TRS,
see Note 7. 14


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 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. 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. 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 three months ended March 31, 2015 and 2014: Three Months Ended
  March 31,2015
 
 2014Shares
 
 Amount
 
 Shares
 
 AmountGross
  shares/proceeds from the offering
 
 
 10,602,475
 
 $
 109,731
 
 
 8,232,851
 
 $
 84,924Reinvestment of
  distributions
 
 
 362,547
 
 
 3,410
 
 
 248,836
 
 
 2,334Total gross
  shares/proceeds
 
 
 10,965,022
 
 
 113,141
 
 
 8,481,687
 
 
 87,258Sales
  commissions and dealer manager fees
 
 
 -
 
 
 (10,016)
 
 
 -
 
 
 (7,750)Net
  shares/proceeds from the offering
 
 
 10,965,022
 
 
 103,125
 
 
 8,481,687
 
 
 79,508Share repurchase
  program
 
 
 (48,947)
 
 
 (460)
 
 
 -
 
 
 -Net
  shares/proceeds from share transactions
 
 
 10,916,075
 
 $
 102,665
 
 
 8,481,687
 
 $
 79,508
 15


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 During the three months ended March 31, 2015 and 2014, the Company
sold 10,965,022 and 8,481,687 shares, respectively, at an average price per
share of $10.32 and $10.29, respectively.  Reinvestment of shareholder distributions and
share repurchases are included in the gross proceeds from the Company’s
offering for purposes of determining the total amount of offering and
organizational costs that can be paid by the Company (see Note 4).  As of March 31, 2015, the Company sold
64,734,704 shares of common stock for net proceeds of $663,808 at an average
price per share of $10.25. The net proceeds include gross proceeds received
from reinvested shareholder distributions of $18,950, for which the Company
issued 2,014,344 shares of common stock, and gross proceeds paid for shares of
common stock tendered for repurchase of $945, for which the Company repurchased
100,487 shares of common stock.  During the period from April 1, 2015 to May
8, 2015, the Company sold 6,637,801 shares of common stock for net proceeds of
$68,186 at an average price per share of $10.27. The net proceeds include gross
proceeds received from reinvested shareholder distributions of $4,319, for
which the Company issued 459,295 shares of common stock, and gross proceeds paid
for shares of common stock tendered for repurchase of $398, for which the
Company repurchased 42,288 shares of common stock.  Since commencing its continuous public
offering on July 2, 2012 and through May 8, 2015, the Company sold 71,372,505
shares of common stock for net proceeds of $731,994 at an average price per
share of $10.26. The net proceeds include gross proceeds received from
reinvested shareholder distributions of $23,269, for which the Company issued
2,473,639 shares of common stock, and gross proceeds paid for shares of common
stock tendered for repurchase of $1,343, for which the Company repurchased
142,775 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.  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 three months ended March 31, 2015: Three Months
  Ended
 
 Repurchase Date
 
 Shares Repurchased
 
 Percentage of Shares Tendered That Were
  Repurchased
 
 Repurchase Price Per Share
 
 Aggregate Consideration for Repurchased
  SharesMarch 31, 2015
 
 January 7, 2015
 
 48,947
 
 100%
 
 $
 9.41
 
 $
 460Total
 
 
 
 
 48,947
 
 
 
 
 
 
 $
 460
 16


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 Note 4. Transactions with Related Parties  For the three months ended March 31, 2015 and 2014, fees and
other expenses incurred by the Company related to CIM and its affiliates were
as follows: Three Months Ended
  March 31,Entity
 
 Capacity
 
 Description
 
 2015
 
 2014(3)CĪON
  Securities, LLC
 
 Dealer manager
 
 Dealer manager
  fees(1)
 
 $
 3,251
 
 $
 2,513CIM
 
 Investment
  adviser
 
 Management
  fees(2)
 
 
 2,760
 
 
 909CIM
 
 Investment
  adviser
 
 Incentive
  fees(2)
 
 
 1,454
 
 
 525ICON Capital,
  LLC
 
 Administrative
  services provider
 
 Administrative
  services expense(2)
 
 
 454
 
 
 415IIG
 
 Sponsor
 
 Reimbursement of
  offering, organizational and other costs(2)
 
 
 -
 
 
 592IIG
 
 Sponsor
 
 Recoupment of
  expense support(2)
 
 
 837
 
 
 -$
 8,756
 
 $
 4,954(1)
 Amounts charged
  directly to equity.(2)
 Amounts charged
  directly to operations.(3)
 For the three months ended March 31, 2014, all management fees,
  $1 of administrative services expense, and $139 of incentive fees were
  supported pursuant to the expense support and conditional reimbursement
  agreement.
  The Company has entered
into certain agreements with CIM’s affiliate, CĪON Securities, LLC,
formerly known as ICON Securities, LLC, or CĪON Securities, whereby the
Company pays certain fees and reimbursements. CĪON 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 May 8, 2015, the Company paid or accrued
sales commissions of $42,716 to the selling dealers and dealer manager fees of
$20,758 to CĪON Securities.  The Company has entered
into an investment advisory agreement with CIM. On October 31, 2014, the board
of directors of the Company, including a majority of the board of
directors who are not interested persons, approved the renewal of the investment
advisory agreement for a period of twelve months commencing December 17,
2014. 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 unrealized depreciation and no such fee is
payable with respect to unrealized appreciation unless and until such appreciation
is actually realized.For the three months endedMarch
31, 2015and2014,
the Company recorded capital gains incentive feesrelated to unrealized appreciationof$1,454and$386, respectively.  At March 31, 2015, the Company’s liability
for capital gains incentive fees was $1,454, which represents capital gains
incentive fees related to unrealized appreciation. 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, 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. On October 31, 2014,
the board of directors of the Company, including a majority of the board
of directors who are not interested persons, approved the renewal of the administration
agreement for a period of twelve months commencing December 17, 2014. 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. 17


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 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 offering and organizational costs
have been reimbursed. The Company’s payment of offering and organizational
costs 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 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 $100,000 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 for offering and organizational costs submitted
for reimbursement. The transactions satisfied an independent obligation of IIG
to invest $1,000 in the Company’s shares. Through that date, the Company had
raised gross proceeds from unaffiliated outside investors of $2,639 and from
affiliated investors of $2,000, which, applying 1.5% of actual proceeds raised
through the date of reimbursement, would have resulted in CIM being entitled to
$70.  With respect to the
payment of offering and organizational costs, the Company will continue to
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, plus interest accrued at a rate of 7%
per year.  From inception through March
31, 2015, IIG and its affiliates incurred offering, organizational and other
pre-effective costs of $2,012. Of these costs, $1,812 represented offering and
organizational costs, all of which have been submitted to the Company for
reimbursement. The Company paid $450 in October 2013, $550 in March 2014, $592
in May 2014 and $420 in March 2015.  No additional material offering,
organizational or other pre-effective costs have been incurred by IIG or its
affiliates subsequent to March 31, 2015.  As of March 31, 2015,
the Company raised gross proceeds of $663,808, of which it can pay up to $9,957
in offering and organizational costs (which represents 1.5% of the actual gross
proceeds raised). Through March 31, 2015, the Company paid $6,142 of such
costs, leaving an additional $3,815 that can be paid. As of May 8, 2015, the
Company raised gross proceeds of $731,994, of which it can pay up to $10,980 in
offering and organizational costs (which represents 1.5% of the actual gross
offering proceeds raised). Through May 8, 2015, the Company paid $6,368 of such
costs, leaving an additional $4,612 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. For the three months
ended March 31, 2015, the Company did not receive any expense reimbursements
from IIG. For the three months ended March 31, 2014, the total expense reimbursement
from IIG was $1,049 relating to certain operating expenses.  On December 13,
2013 and January 16, 2015, the Company and IIG amended the expense support and
conditional reimbursement agreement to extend the termination date of such
agreement from January 30, 2014 to January 30, 2015 and from January 30, 2015
to December 31, 2015, respectively. 18


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 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
 
 $
 117
 
 $
 117
 
 $
 -
 
 0.93%
 
 0.00%(2)
 
 December 31, 2015March 31, 2013
 
 
 819
 
 
 819
 
 
 -
 
 2.75%
 
 7.00%
 
 March 31, 2016June 30, 2013
 
 
 1,148
 
 
 523
 
 
 625
 
 1.43%
 
 7.00%
 
 June 30, 2016September 30,
  2013
 
 
 1,297
 
 
 -
 
 
 1,297
 
 0.49%
 
 7.00%
 
 September 30, 2016December 31,
  2013
 
 
 695
 
 
 -
 
 
 695
 
 0.31%
 
 7.00%
 
 December 31, 2016March 31, 2014
 
 
 1,049
 
 
 -
 
 
 1,049
 
 0.27%
 
 7.00%
 
 March 31, 2017June 30, 2014
 
 
 -
 
 
 -
 
 
 -
 
 0.31%
 
 7.00%
 
 June 30, 2017September 30,
  2014
 
 
 -
 
 
 -
 
 
 -
 
 0.13%
 
 7.00%
 
 September 30, 2017December 31,
  2014
 
 
 831
 
 
 -
 
 
 831
 
 0.15%
 
 7.00%
 
 December 31, 2017March 31, 2015
 
 
 -
 
 
 -
 
 
 -
 
 0.74%
 
 7.00%
 
 March 31, 2018Total
 
 $
 5,956
 
 $
 1,459
 
 $
 4,497
 (1)
 Operating expenses include all expenses borne by the Company,
  except for offering and organizational costs, base management fees, incentive
  fees, administrative services expenses, other general and administrative
  expenses owed to CIM and its affiliates, and interest expense.(2)
 The Company did not declare any distributions during the three
  months ended December 31, 2012.(3)
 Annualized Distribution Rate equals the annualized rate of
  distributions paid to shareholders based on the amount of the regular cash
  distributions paid immediately prior to the date the expense support payment
  obligation was incurred by CIM. Annualized Distribution Rate does not include
  special cash or stock distributions paid to shareholders.
  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. The obligation to reimburse IIG for any expense support provided by IIG
under such agreement is further conditioned by the following: (i) in the period
in which reimbursement is sought, the ratio of operating expenses to average
net assets, when considering the reimbursement, cannot exceeded the ratio of
operating expenses to average net assets for the period when the expense
support was provided; (ii) in the period when reimbursement is sought, the
annualized distribution rate cannot fall below the annualized distribution rate
for the period when the expense support was provided; and (iii) the expense
support can only be reimbursed within three years from the date the expense
support was provided.  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
March 31, 2015, the Company recorded obligations to repay expense
reimbursements to IIG of $837. During the three months ended March 31, 2014,
the Company did not record any obligation to repay expense reimbursements to
IIG.The Company may or may not be requested to
reimburse any remaining costs in the future.  As of March 31, 2015 and
December 31, 2014, the total net liability payable to CIM and its affiliates
was $4,144 and $2,303, respectively, which primarily related to fees earned by
CIM during the preceding three months of each period.  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.  19


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 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. 
For the three months ended March 31, 2015, the Company did not receive any
expense reimbursements from IIG.  For the three months ended March 31, 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 forty-nine and thirteen record dates during the year ended
December 31, 2014 and three months ended March 31, 2015, respectively. Declared
distributions are paid monthly.  The following table
presents cash distributions per share that were declared during the year ended
December 31, 2014 and three months ended March 31, 2015: DistributionsThree Months
  Ended
 
 Per Share
 
 AmountFiscal 2014March 31, 2014
  (nine record dates)
 
 $
 0.1679
 
 $
 3,315June 30, 2014
  (thirteen record dates)
 
 
 0.1829
 
 
 5,120September 30,
  2014 (fourteen record dates)
 
 
 0.1969
 
 
 7,396December 31,
  2014 (thirteen record dates)
 
 
 0.1829
 
 
 8,716Total
  distributions for the year ended December 31, 2014
 
 $
 0.7306
 
 $
 24,547Fiscal 2015March 31, 2015
  (thirteen record dates)
 
 $
 0.1829
 
 $
 10,767Total
  distributions for the three months ended March 31, 2015
 
 $
 0.1829
 
 $
 10,767
  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.  On March 13, 2015, the Company’s board of
directors declared four weekly cash distributions of $0.014067 per share, which
were paid on April 29, 2015 to shareholders of record on April 7, April 14,
April 21, and April 28, 2015. On April 15, 2015 the Company`s board of
directors declared four weekly cash distributions of $0.014067 per share, payable
on May 27, 2015 to shareholders of record on May 5, May 12, May 19, and May 26,
2015.  20


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 The Company has
adopted an “opt in” distribution reinvestment plan for shareholders. As a
result, if the Company makes a distribution, shareholders will receive
distributions in cash unless they specifically “opt in” to the 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 on a GAAP basis that the Company has
declared on its shares of common stock during the three months ended March 31,
2015 and 2014: Three Months Ended
  March 31,2015
 
 2014Source of Distribution
 
 Per Share
 
 Amount
 
 Percentage
 
 Per Share
 
 Amount
 
 PercentageNet investment
  income(1)
 
 $
 0.0362
 
 $
 2,131
 
 19.8%
 
 $
 -
 
 $
 -
 
 -Net realized
  gain on total return swapNet interest and
  other income from TRS portfolio
 
 
 0.1088
 
 
 6,408
 
 59.5%
 
 
 0.1197
 
 
 2,360
 
 71.3%Net gain on TRS
  loan sales
 
 
 0.0034
 
 
 199
 
 1.9%
 
 
 0.0306
 
 
 603
 
 18.2%Net realized
  gain on investments
 
 
 0.0098
 
 
 575
 
 5.3%
 
 
 0.0087
 
 
 174
 
 5.2%Distributions in
  excess of net investment income(2)
 
 
 0.0247
 
 
 1,454
 
 13.5%
 
 
 0.0089
 
 
 177
 
 5.3%Total
  distributions
 
 $
 0.1829
 
 $
 10,767
 
 100.0%
 
 $
 0.1679
 
 $
 3,314
 
 100.0%
 (1)
 Distributions from net investment income includes expense
  support from IIG of $1,049 related to the three months ended March 31, 2014.(2)
 Distributions in excess of net investment income represent
  unearned capital gains incentive fees, which reduce GAAP basis net investment
  income available for distributions but does not reduce tax basis net
  investment income.  This tax-related adjustment represents additional
  distributions for tax purposes. On a GAAP basis, distributions in excess of
  net investment income represent a return of capital.
  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 2014, 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 2014 were characterized as ordinary income distributions for
federal income tax purposes. 21


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 The tax components of accumulated earnings for the current year
will be determined at year end. As of December 31, 2014, the components of
accumulated earnings on a tax basis were as follows:  December 31, 2014Undistributed
  net investment income
 $
 -Performance-based
  incentive fee on unrealized gains
 
 -Net unrealized
  depreciation on investments and total return swap
 
 (6,059)$
 (6,059)
  As of March 31, 2015, the aggregate gross
unrealized appreciation for all securities in which there was an excess of
value over tax cost was $9,399; the aggregate gross unrealized depreciation for
all securities in which there was an excess of tax cost over value was $7,945;
the net unrealized appreciation was $1,454; and the aggregate cost of
securities for Federal income tax purposes was $466,026.  As of December 31, 2014, the aggregate
gross unrealized appreciation for all securities in which there was an excess
of value over tax cost was $2,913; the aggregate gross unrealized depreciation
for all securities in which there was an excess of tax cost over value was
$8,972; the net unrealized depreciation was $6,059; and the aggregate cost of
securities for Federal income tax purposes was $363,564.  Note 6. Investments  The composition of the Company’s investment
portfolio as of March 31, 2015 and December 31, 2014 at amortized cost and fair
value was as follows:  March 31, 2015
 
 December 31, 2014Amortized
  Cost(1)
 
 Fair
  Value
 
 Percentage of
  Investment
  Portfolio
 
 Amortized
  Cost(1)
 
 Fair
  Value
 
 Percentage of
  Investment
  PortfolioSenior secured
  first lien debt
 
 $
 80,405
 
 $
 80,663
 
 18.6%
 
 $
 69,239
 
 $
 69,204
 
 19.7%Senior secured
  second lien debt
 
 
 297,144
 
 
 297,458
 
 68.8%
 
 
 245,894
 
 
 245,258
 
 69.8%Collateralized
  securities and structured products - debt
 
 
 28,778
 
 
 28,247
 
 6.5%
 
 
 28,752
 
 
 27,965
 
 8.0%Collateralized
  securities and structured products - equity
 
 
 26,511
 
 
 26,284
 
 6.1%
 
 
 9,329
 
 
 9,137
 
 2.5%Subtotal/total
  percentage
 
 
 432,838
 
 
 432,652
 
 100.0%
 
 
 353,214
 
 
 351,564
 
 100.0%Short term
  investments(2)
 
 
 33,188
 
 
 33,188
 
 
 
 
 10,350
 
 
 10,350Total
  investments
 
 $
 466,026
 
 $
 465,840
 
 
 
 $
 363,564
 
 $
 361,914
 (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 average original maturity dates of
  three months or less.
 22


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 The following tables show the composition of the Company’s
investment portfolio by industry classification and geographic dispersion, and
the percentage, by fair value, of the total investment portfolio assets in such
industries and geographies as of March 31, 2015 and December 31, 2014:  March 31, 2015
 
 December 31, 2014Industry
  Classification
 
 Investments at
  Fair Value
 
 Percentage of
  Investment Portfolio
 
 Investments at
  Fair Value
 
 Percentage of
  Investment PortfolioServices:
  Business
 
 $
 81,783
 
 18.9%
 
 $
 89,123
 
 25.4%High Tech
  Industries
 
 
 58,959
 
 13.6%
 
 
 45,737
 
 13.0%Beverage, Food
  & Tobacco
 
 
 57,897
 
 13.4%
 
 
 42,962
 
 12.2%Diversified
  Financials
 
 
 54,531
 
 12.6%
 
 
 37,102
 
 10.6%Banking,
  Finance, Insurance & Real Estate
 
 
 25,249
 
 5.8%
 
 
 7,867
 
 2.2%Hotel, Gaming
  & Leisure
 
 
 22,194
 
 5.1%
 
 
 19,703
 
 5.6%Media:
  Advertising, Printing & Publishing
 
 
 20,370
 
 4.7%
 
 
 20,235
 
 5.8%Automotive
 
 
 14,158
 
 3.3%
 
 
 14,123
 
 4.0%Telecommunications
 
 
 13,724
 
 3.2%
 
 
 13,813
 
 3.9%Healthcare &
  Pharmaceuticals
 
 
 12,924
 
 3.0%
 
 
 10,203
 
 2.9%Containers,
  Packaging & Glass
 
 
 12,440
 
 2.9%
 
 
 9,800
 
 2.8%Services:
  Consumer
 
 
 10,861
 
 2.5%
 
 
 792
 
 0.2%Media:
  Diversified & Production
 
 
 10,845
 
 2.5%
 
 
 6,298
 
 1.8%Energy:
  Electricity
 
 
 9,975
 
 2.3%
 
 
 5,932
 
 1.7%Chemicals,
  Plastics & Rubber
 
 
 9,642
 
 2.2%
 
 
 9,107
 
 2.6%Environmental
  Industries
 
 
 4,850
 
 1.1%
 
 
 4,850
 
 1.4%Construction
  & Building
 
 
 3,644
 
 0.9%
 
 
 3,626
 
 1.0%Capital
  Equipment
 
 
 2,611
 
 0.6%
 
 
 3,896
 
 1.1%Media:
  Broadcasting & Subscription
 
 
 2,511
 
 0.6%
 
 
 2,077
 
 0.6%Aerospace &
  Defense
 
 
 1,428
 
 0.3%
 
 
 1,370
 
 0.4%Energy: Oil
  & Gas
 
 
 1,359
 
 0.3%
 
 
 1,377
 
 0.4%Consumer Goods:
  Non-Durable
 
 
 697
 
 0.2%
 
 
 1,571
 
 0.4%Subtotal/total
  percentage
 
 
 432,652
 
 100.0%
 
 
 351,564
 
 100.0%U.S. Treasury
  Securities
 
 
 33,188
 
 
 
 
 10,350Total investments
 
 $
 465,840
 
 
 
 $
 361,914
  March 31, 2015
 
 December 31, 2014Geographic
  Dispersion(1)
 
 Investments at
  Fair Value
 
 Percentage of
  Investment Portfolio
 
 Investments at
  Fair Value
 
 Percentage of
  Investment PortfolioUnited States
 
 $
 378,349
 
 87.5%
 
 $
 314,540
 
 89.4%Cayman Islands
 
 
 34,793
 
 8.0%
 
 
 17,445
 
 5.0%Germany
 
 
 7,972
 
 1.9%
 
 
 8,009
 
 2.3%Netherlands
 
 
 4,925
 
 1.1%
 
 
 4,975
 
 1.4%United Kingdom
 
 
 4,850
 
 1.1%
 
 
 4,850
 
 1.4%Switzerland
 
 
 1,763
 
 0.4%
 
 
 1,745
 
 0.5%Subtotal/total
  percentage
 
 
 432,652
 
 100.0%
 
 
 351,564
 
 100.0%U.S. Treasury Securities
 
 
 33,188
 
 
 
 
 10,350Total investments
 
 $
 465,840
 
 
 
 $
 361,914
 (1)
 The geographic
  dispersion is determined by the portfolio company's country of domicile.
 23


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 As of March 31, 2015 and December 31, 2014,
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.  The Company’s investment
portfolio may contain senior secured investments that are in the form of lines
of credit, revolving credit facilities, or unfunded commitments, which may
require the Company to provide funding when requested in accordance with the
terms of the underlying agreements. As of March 31, 2015 andDecember 31, 2014,
the Company’s unfunded commitments amounted to $15,217 and $23,112,
respectively. As of May 8, 2015, the Company’s unfunded commitments amounted to
$39,241.  Since these commitments
may expire without being drawn upon, unfunded commitments do not necessarily
represent future cash requirements or future earning assets for the Company.  Refer to Note 10 for further details
on the Company’s unfunded commitments.  Note 7. Total Return Swap  On December 17, 2012, the Company, through
its wholly-owned subsidiary, Flatiron Funding, LLC, or Flatiron, entered into a
TRS with Citibank, N.A., or Citibank.  Effective December 9, 2013, Flatiron and
Citibank amended the TRS to, among other things, 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 $150,000 to $225,000, 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 $275,000 effective February 18,
2014, to $325,000 effective April 30, 2014, to $375,000 effective July 30,
2014, to $475,000 effective September 5, 2014, to $600,000 effective January
20, 2015 and to $750,000 effective March 4, 2015. Effective November 18, 2014,
Flatiron and Citibank further amended to TRS to extend the termination or call
date from December 17, 2014 to December 17, 2015.  The agreements
between Flatiron and Citibank, which collectively establish the TRS, are
referred to herein as the TRS Agreement.  A TRS is a contract in which one party
agrees to make periodic payments to another party based on the change in the
market value of the assets underlying the TRS and interest payments in return
for periodic payments based on a fixed or variable interest rate. A TRS
effectively adds leverage to a portfolio by providing investment exposure to a
security or market without owning or taking physical custody of such security
or investing directly in such market. Because of the unique structure of a TRS,
a TRS typically offers lower financing costs than are offered through more
traditional borrowing arrangements.  The TRS with Citibank enables the Company,
through its ownership of Flatiron, to obtain the economic benefit of owning the
loans subject to the TRS, without actually owning them, in return for an
interest-type payment to Citibank. As such, the TRS is analogous to Flatiron
borrowing funds to acquire loans and incurring interest expense to a lender.  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 $750,000. 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.  24


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 The Company has no contractual obligation to post any such
additional collateral or to make any interest payments to Citibank on behalf of
Flatiron. The Company may, but is not obligated to, increase its investment in
Flatiron for the purpose of funding any additional collateral or payment
obligations for which Flatiron may become obligated during the term of the TRS.
If the Company does not make any such additional investment in Flatiron and
Flatiron fails to meet its obligations under the TRS, then Citibank will have
the right to terminate the TRS and seize the cash collateral posted by Flatiron
under the TRS. In the event of an early termination of the TRS, Flatiron would
be required to pay an early termination fee.  Citibank may terminate the TRS on or after
December 17, 2015, 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 $5,841 at March 31, 2015. Flatiron may also be required to pay a
minimum usage fee in connection with the TRS. As of March 31, 2015 and December
31, 2014, Flatiron owed Citibank a minimum usage fee of $45 and $16,
respectively.  The value of the TRS is based on the
increase or decrease in the value of the loans underlying the TRS, as
determined by the Company. The loans underlying the TRS are valued in the same
manner as loans owned by the Company.  As of March 31, 2015 and December 31,
2014, the fair value of the TRS was $1,640 and ($4,409), respectively. The fair
value of the TRS is reflected as unrealized depreciation on total return swap
and unrealized appreciation on total return swap on the Company’s consolidated
balance sheets. The change in value of the TRS is reflected in the Company’s
consolidated statements of operations as net change in unrealized appreciation
on total return swap. As of March 31, 2015 and December 31, 2014, Flatiron had
selected 91 and 69 underlying loans with a total notional amount of $593,494
and $431,979, respectively. For the same periods, Flatiron posted $169,538 and
$128,388 in cash collateral held by Citibank (of which only $157,910 and $116,564was 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 and fees 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 fees and net gains on sales and principal repayments
of underlying loans of the TRS. As of March 31, 2015 and December 31, 2014 and
for the three months ended March 31, 2015 and 2014, the net receivable and net
realized gain on the TRS consisted of the following:  Net Realized Gain(2)Net Receivable(1)
 
 Three Months Ended March 31,March 31, 2015
 
 December 31, 2014
 
 2015
 
 2014Interest and
  other income from TRS portfolio
 
 $
 7,734
 
 $
 5,656
 
 $
 8,414
 
 $
 3,074Interest and
  other expense from TRS portfolio
 
 
 (1,709)
 
 
 (1,318)
 
 
 (2,006)
 
 
 (714)Net gain on TRS
  loan sales
 
 
 236
 
 
 219
 
 
 199
 
 
 603Total
 
 $
 6,261
 
 $
 4,557
 
 $
 6,607
 
 $
 2,963
 (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.
 25


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 In connection with the TRS, Flatiron is required to comply with
various covenants and reporting requirements as defined in the TRS Agreement.
As of March 31, 2015, 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. The net unrealized appreciation on the TRS, if any, is
reflected in total assets on the Company’s consolidated balance sheets and
included in the computation of the base management fee. The base management fee
does not include any net unrealized depreciation on the TRS as such amounts are
not included in total assets. 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. 26


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 The
following is a summary of the underlying loans subject to the TRS as of March
31, 2015: Underlying
  Loans(a)
 
 Index Rate(b)
 
 Industry
 
 Notional
  Amount
 
 Fair
  Value(c)
 
 Unrealized
  Appreciation /
  (Depreciation)Senior
  Secured First Lien DebtABG Intermediate
  Holdings 2 LLC, L+450, 1.00% LIBOR Floor, 5/27/2021
 
 6 Month LIBOR
 
 Retail
 
 $
 6,787
 
 $
 6,881
 
 $
 94AdvancePierre
  Foods, Inc., L+450, 1.25% LIBOR Floor, 7/10/2017
 
 6 Month LIBOR
 
 Beverage, Food
  & Tobacco
 
 
 3,666
 
 
 3,702
 
 
 36Alion Science
  and Technology Corp., L+1000, 1.00% LIBOR Floor, 8/18/2019
 
 1 Month LIBOR
 
 Capital
  Equipment
 
 
 6,070
 
 
 6,246
 
 
 176ALM Media, LLC,
  L+450, 1.00% LIBOR Floor, 7/31/2020
 
 3 Month LIBOR
 
 Media:
  Advertising, Printing & Publishing
 
 
 8,035
 
 
 7,931
 
 
 (104)American Dental
  Partners, Inc., L+475, 1.00% LIBOR Floor, 8/29/2021
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 12,375
 
 
 12,438
 
 
 63American Energy
  - Marcellus, LLC, L+425, 1.00% LIBOR Floor, 8/4/2020
 
 3 Month LIBOR
 
 Energy: Oil
  & Gas
 
 
 4,254
 
 
 3,640
 
 
 (614)American
  Residential Services, LLC, L+450, 1.00% LIBOR Floor, 6/30/2021
 
 3 Month LIBOR
 
 Construction
  & Building
 
 
 14,319
 
 
 14,345
 
 
 26American Tire
  Distributors, Inc., L+425, 1.00% LIBOR Floor, 9/1/2021(d)
 
 Prime
 
 Automotive
 
 
 3,921
 
 
 3,962
 
 
 41American Tire
  Distributors, Inc., L+475, 1.00% LIBOR Floor, 6/1/2018
 
 Prime
 
 Automotive
 
 
 11,912
 
 
 11,935
 
 
 23Aquilex, LLC,
  L+400, 1.00% LIBOR Floor, 12/31/2020
 
 1 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 1,948
 
 
 1,933
 
 
 (15)Azure Midstream
  Energy, LLC, L+650, 1.00% LIBOR Floor, 11/15/2018
 
 1 Month LIBOR
 
 Energy: Oil
  & Gas
 
 
 3,350
 
 
 3,199
 
 
 (151)BRG Sports,
  Inc., L+550, 1.00% LIBOR Floor, 4/15/2021
 
 1 Month LIBOR
 
 Consumer Goods:
  Durable
 
 
 8,820
 
 
 9,013
 
 
 193C.H.I. Overhead
  Doors, Inc., L+425, 1.25% LIBOR Floor, 3/18/2019
 
 1 Month LIBOR
 
 Construction
  & Building
 
 
 5,638
 
 
 5,638
 
 
 -Caraustar
  Industries, Inc., L+675, 1.25% LIBOR Floor, 5/1/2019
 
 3 Month LIBOR
 
 Forest Products
  & Paper
 
 
 15,373
 
 
 15,904
 
 
 531Caraustar
  Industries, Inc., L+675, 1.25% LIBOR Floor, 5/1/2019
 
 3 Month LIBOR
 
 Forest Products
  & Paper
 
 
 914
 
 
 914
 
 
 -Central Security
  Group, Inc., L+525, 1.00% LIBOR Floor, 10/6/2020
 
 1 Month LIBOR
 
 Services:
  Consumer
 
 
 13,146
 
 
 13,307
 
 
 161Charming
  Charlie, LLC, L+800, 1.00% LIBOR Floor, 12/24/2019
 
 3 Month LIBOR
 
 Retail
 
 
 8,714
 
 
 8,835
 
 
 121Chemstralia Pty
  Ltd., L+625, 1.00% LIBOR Floor, 2/28/2022(e)
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 3,239
 
 
 3,392
 
 
 153Compuware
  Corporation, L+525, 1.00% LIBOR Floor, 12/15/2019
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 271
 
 
 271
 
 
 -CSP Technologies
  North America, LLC, L+600, 1.00% LIBOR Floor, 1/29/2022
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 13,686
 
 
 13,825
 
 
 139CT Technologies
  Intermediate Holdings, Inc., L+500, 1.00% LIBOR Floor, 12/1/2021
 
 1 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 4,938
 
 
 5,037
 
 
 99DBRS, Inc.,
  L+525, 1.00% LIBOR Floor, 3/4/2022(e)
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 13,103
 
 
 13,235
 
 
 132Diamond Resorts
  Corporation, L+450, 1.00% LIBOR Floor, 5/9/2021(e)
 
 3 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 3,007
 
 
 3,017
 
 
 10Emmis Operating
  Company, L+500, 1.00% LIBOR Floor, 6/10/2021
 
 1 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 6,935
 
 
 7,035
 
 
 100Evergreen Skills
  Lux S.À.R.L., L+475, 1.00% LIBOR Floor, 4/28/2021(e)
 
 6 Month LIBOR
 
 High Tech
  Industries
 
 
 7,303
 
 
 7,406
 
 
 103Global Cash
  Access, Inc., L+525, 1.00% LIBOR Floor, 12/18/2020
 
 3 Month LIBOR
 
 Hotel, Gaming
  & Leisure
 
 
 9,726
 
 
 9,834
 
 
 108GTCR Valor
  Companies, Inc., L+500, 1.00% LIBOR Floor, 5/30/2021
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 3,928
 
 
 3,957
 
 
 29HC Group
  Holdings III, Inc., L+500, 1.00% LIBOR Floor, 4/7/2022(d)
 
 12 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 497
 
 
 504
 
 
 7Healogics, Inc.,
  L+425, 1.00% LIBOR Floor, 7/1/2021
 
 6 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 4,916
 
 
 5,003
 
 
 87Hemisphere Media
  Holdings, LLC, L+400, 1.00% LIBOR Floor, 7/30/2020
 
 3 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 4,036
 
 
 4,026
 
 
 (10)Hilex Poly Co.
  LLC, L+500, 1.00% LIBOR Floor, 12/5/2021
 
 3 Month LIBOR
 
 Containers,
  Packaging & Glass
 
 
 8,359
 
 
 8,487
 
 
 128Hyperion Finance
  S.Á.R.L, L+475, 1.00% LIBOR Floor, 10/17/2019(e)
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 4,377
 
 
 4,477
 
 
 100Hyperion
  Insurance Group Limited, L+450, 1.00% LIBOR Floor, 3/26/2022(d)(e)
 
 (f)
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 3,062
 
 
 3,101
 
 
 39IMG Worldwide
  Holdings, LLC, L+425, 1.00% LIBOR Floor, 5/6/2021
 
 3 Month LIBOR
 
 Media:
  Diversified & Production
 
 
 12,482
 
 
 12,555
 
 
 73Integra Telecom
  Holdings, Inc., L+400, 1.25% LIBOR Floor, 2/22/2019
 
 3 Month LIBOR
 
 Telecommunications
 
 
 4,930
 
 
 5,000
 
 
 70inVentiv Health,
  Inc., L+625, 1.50% LIBOR Floor, 5/15/2018(d)
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 4,495
 
 
 4,495
 
 
 -inVentiv Health,
  Inc., L+625, 1.50% LIBOR Floor, 5/15/2018(d)
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 1,696
 
 
 1,693
 
 
 (3)Lanyon
  Solutions, Inc., L+450, 1.00% LIBOR Floor, 11/13/2020
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 1,157
 
 
 1,162
 
 
 5LTCG Holdings
  Corp., L+500, 1.00% LIBOR Floor, 6/6/2020
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 7,978
 
 
 7,957
 
 
 (21)LTI Flexible
  Products, Inc., L+450, 1.00% LIBOR Floor, 5/1/2021
 
 1 Month LIBOR
 
 Consumer Goods:
  Durable
 
 
 6,409
 
 
 6,421
 
 
 12Mohegan Tribal
  Gaming Authority, L+450, 1.00% LIBOR Floor, 11/19/2019
 
 3 Month LIBOR
 
 Hotel, Gaming
  & Leisure
 
 
 5,790
 
 
 5,955
 
 
 165Navex Global,
  Inc., L+475, 1.00% LIBOR Floor, 11/19/2021
 
 6 Month LIBOR
 
 High Tech
  Industries
 
 
 13,840
 
 
 13,930
 
 
 90Nielsen &
  Bainbridge, LLC, L+500, 1.00% LIBOR Floor, 8/15/2020
 
 6 Month LIBOR
 
 Consumer Goods:
  Durable
 
 
 16,216
 
 
 16,235
 
 
 19Oasis
  Outsourcing Holdings, Inc., L+475, 1.00% LIBOR Floor, 12/26/2021
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 9,875
 
 
 10,050
 
 
 175Onex Wizard US
  Acquisition Inc., L+425, 1.00% LIBOR Floor, 3/11/2022(e)
 
 1 Month LIBOR
 
 Containers,
  Packaging & Glass
 
 
 3,957
 
 
 4,022
 
 
 65Opal
  Acquisition, Inc., L+400, 1.00% LIBOR Floor, 11/27/2020
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 7,425
 
 
 7,500
 
 
 75Pelican
  Products, Inc., L+425, 1.00% LIBOR Floor, 4/10/2020
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 7,947
 
 
 7,963
 
 
 16Peppermill
  Casinos, Inc., L+600, 1.25% LIBOR Floor, 11/9/2018
 
 1 Month LIBOR
 
 Hotel, Gaming
  & Leisure
 
 
 965
 
 
 980
 
 
 15Photonis
  Technologies SAS, L+750, 1.00% LIBOR Floor, 9/18/2019(e)
 
 3 Month LIBOR
 
 Aerospace &
  Defense
 
 
 9,500
 
 
 9,074
 
 
 (426)Pike
  Corporation, L+450, 1.00% LIBOR Floor, 12/22/2021
 
 1 Month LIBOR
 
 Energy:
  Electricity
 
 
 2,500
 
 
 2,499
 
 
 (1)PODS, LLC,
  L+425, 1.00% LIBOR Floor, 2/2/2022
 
 6 Month LIBOR
 
 Services:
  Consumer
 
 
 7,960
 
 
 8,085
 
 
 125Polyconcept
  Finance B.V., L+475, 1.25% LIBOR Floor, 6/28/2019(e)
 
 1 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 7,291
 
 
 7,342
 
 
 51PSC Industrial
  Holdings Corp., L+475, 1.00% LIBOR Floor, 12/5/2020
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 4,938
 
 
 4,958
 
 
 20
 27


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 Underlying Loans(a)
 
 Index Rate(b)
 
 Industry
 
 Notional
  Amount
 
 Fair
  Value(c)
 
 Unrealized
  Appreciation /
  (Depreciation)Riverbed
  Technology, Inc., L+500, 1.00% LIBOR Floor, 2/25/2022(d)
 
 2 Month LIBOR
 
 High Tech
  Industries
 
 
 1,638
 
 
 1,663
 
 
 25RP Crown Parent,
  LLC, L+500, 1.00% LIBOR Floor, 12/21/2018(d)
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 11,657
 
 
 11,709
 
 
 52Scientific Games
  International, Inc., L+500, 1.00% LIBOR Floor, 10/1/2021(d)(e)
 
 1 Month LIBOR
 
 Hotel, Gaming
  & Leisure
 
 
 16,608
 
 
 16,927
 
 
 319SESAC Holdco II
  LLC, L+400, 1.00% LIBOR Floor, 2/7/2019
 
 1 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 1,150
 
 
 1,151
 
 
 1SG Acquisition,
  Inc., L+525, 1.00% LIBOR Floor, 8/19/2021
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 14,576
 
 
 14,709
 
 
 133SGS Cayman,
  L.P., L+500, 1.00% LIBOR Floor, 4/23/2021(e)
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 526
 
 
 543
 
 
 17SI Organization,
  Inc., L+475, 1.00% LIBOR Floor, 11/23/2019
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 7,239
 
 
 7,291
 
 
 52SK Spice
  S.Á.R.L, L+825, 1.25% LIBOR Floor, 9/30/2018(e)
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 8,289
 
 
 8,309
 
 
 20Smile Brands
  Group, Inc., L+625, 1.25% LIBOR Floor, 8/16/2019
 
 6 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 4,687
 
 
 4,234
 
 
 (453)Southcross
  Holdings Borrower LP, L+500, 1.00% LIBOR Floor, 8/4/2021
 
 3 Month LIBOR
 
 Energy: Oil
  & Gas
 
 
 1,258
 
 
 1,205
 
 
 (53)SRA
  International Inc., L+525, 1.25% LIBOR Floor, 7/20/2018
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 2,149
 
 
 2,207
 
 
 58Steward Health
  Care System, LLC, L+550, 1.25% LIBOR Floor, 4/10/2020
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 10,929
 
 
 11,032
 
 
 103Styrolution US
  Holding LLC, L+550, 1.00% LIBOR Floor, 11/7/2019
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 3,963
 
 
 4,064
 
 
 101Surgery Center
  Holdings, Inc., L+425, 1.00% LIBOR Floor, 11/3/2020
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 6,515
 
 
 6,654
 
 
 139Survey Sampling
  International, LLC, L+500, 1.00% LIBOR Floor, 12/16/2020
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 7,920
 
 
 7,940
 
 
 20Sutherland
  Global Services Inc., L+500, 1.00% LIBOR Floor, 4/23/2021
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 2,259
 
 
 2,333
 
 
 74Tank Holding
  Corp., L+425, 1.00% LIBOR Floor, 3/16/2022
 
 1 Month LIBOR
 
 Capital
  Equipment
 
 
 3,662
 
 
 3,699
 
 
 37TASC, Inc.,
  L+600, 1.00% LIBOR Floor, 5/23/2020(e)
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 10,937
 
 
 11,467
 
 
 530TIBCO Software
  Inc., L+550, 1.00% LIBOR Floor, 12/4/2020(d)
 
 1 Month LIBOR
 
 High Tech
  Industries
 
 
 17,483
 
 
 18,058
 
 
 575TMFS Holdings,
  LLC, L+450, 1.00% LIBOR Floor, 7/30/2021
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 14,768
 
 
 14,858
 
 
 90TOPPS Company,
  Inc., L+600, 1.25% LIBOR Floor, 10/2/2018
 
 3 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 2,325
 
 
 2,289
 
 
 (36)Travel Leaders
  Group, LLC, L+600, 1.00% LIBOR Floor, 12/5/2018
 
 3 Month LIBOR
 
 Services:
  Consumer
 
 
 3,789
 
 
 3,808
 
 
 19U.S. Farathane,
  LLC, L+575, 1.00% LIBOR Floor, 12/23/2021
 
 3 Month LIBOR
 
 Automotive
 
 
 3,611
 
 
 3,697
 
 
 86USS Parent
  Holdings Corp., L+475, 1.00% LIBOR Floor, 8/5/2021
 
 1 Month LIBOR
 
 Construction
  & Building
 
 
 11,565
 
 
 11,558
 
 
 (7)Vince, LLC,
  L+475, 1.00% LIBOR Floor, 11/27/2019(e)
 
 3 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 1,565
 
 
 1,569
 
 
 4Western Dental
  Services, Inc., L+500, 1.00% LIBOR Floor, 11/1/2018
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 6,115
 
 
 5,517
 
 
 (598)Total Senior
  Secured First Lien Debt
 
 
 
 
 
 
 535,159
 
 
 538,797
 
 
 3,638Senior
  Secured Second Lien DebtAmWINS Group,
  LLC, L+850, 1.00% LIBOR Floor, 9/4/2020
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 870
 
 
 914
 
 
 44Asurion, LLC,
  L+750, 1.00% LIBOR Floor, 3/3/2021
 
 3 Month LIBOR
 
 Services:
  Consumer
 
 
 7,717
 
 
 7,827
 
 
 110Deltek, Inc.,
  L+875, 1.25% LIBOR Floor, 10/10/2019
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 1,620
 
 
 1,650
 
 
 30Evergreen Skills
  Lux S.À.R.L., L+825, 1.00% LIBOR Floor, 4/28/2022(e)
 
 6 Month LIBOR
 
 High Tech
  Industries
 
 
 9,798
 
 
 9,433
 
 
 (365)GOBP Holdings,
  Inc., L+825, 1.00% LIBOR Floor, 10/21/2022
 
 3 Month LIBOR
 
 Retail
 
 
 3,940
 
 
 3,940
 
 
 -Mergermarket
  USA, Inc., L+650, 1.00% LIBOR Floor, 2/4/2022
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 6,965
 
 
 6,405
 
 
 (560)Onex Carestream
  Finance LP, L+850, 1.00% LIBOR Floor, 12/7/2019
 
 1 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 9,616
 
 
 9,698
 
 
 82Pelican
  Products, Inc., L+825, 1.00% LIBOR Floor, 4/11/2021
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 8,050
 
 
 7,960
 
 
 (90)PFS Holding
  Corporation, L+725, 1.00% LIBOR Floor, 1/31/2022
 
 1 Month LIBOR
 
 Retail
 
 
 4,973
 
 
 3,711
 
 
 (1,262)Securus
  Technologies Holdings, Inc., L+775, 1.25% LIBOR Floor, 4/30/2021
 
 3 Month LIBOR
 
 Telecommunications
 
 
 1,002
 
 
 988
 
 
 (14)Telx Group,
  Inc., L+650, 1.00% LIBOR Floor, 4/9/2021
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 2,970
 
 
 2,974
 
 
 4U.S. Renal Care,
  Inc., L+750, 1.00% LIBOR Floor, 7/3/2020
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 814
 
 
 837
 
 
 23Total Senior
  Secured Second Lien Debt
 
 
 
 
 
 
 58,335
 
 
 56,337
 
 
 (1,998)Total
 
 
 
 
 
 $
 593,494
 
 $
 595,134
 
 $
 1,640
 (a)
 All of the underlying loans subject to the TRS 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, 6 and 12 month LIBOR rates were 0.18%, 0.22%,
  0.27%, 0.40% and 0.70%, respectively, as of March 31, 2015. The prime rate
  was 3.25% as of March 31, 2015.  The actual LIBOR rate for each loan listed
  may not be the applicable LIBOR rate as of March 31, 2015, as the loan may
  have been priced or repriced based on a LIBOR rate prior to or subsequent to
  March 31, 2015.(c)
 Fair value determined by the Company’s board of directors (see
  Note 8).(d)
 Position or portion thereof unsettled as of March 31, 2015.(e)
 All or a portion of 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 March 31, 2015, 87.3% of the
  Company’s total assets represented qualifying assets. In addition, as
  described in this Note 7, 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, 83.3%
  of the Company’s total assets represented qualifying assets as of March 31,
  2015.(f)
 As of May 8, 2015, no interest rate option had been elected as
  the entire position remained unsettled.
 28


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 The following is a summary of the underlying loans subject to the
TRS as of December 31, 2014: Underlying
  Loans(a)
 
 Index Rate(b)
 
 Industry
 
 Notional
  Amount
 
 Fair
  Value(c)
 
 Unrealized
  Appreciation /
  (Depreciation)Senior
  Secured First Lien DebtABG Intermediate
  Holdings 2 LLC, L+450, 1.00% LIBOR Floor, 5/27/2021
 
 6 Month LIBOR
 
 Retail
 
 $
 6,804
 
 $
 6,858
 
 $
 54Alion Science
  and Technology Corp., L+1,000, 1.00% LIBOR Floor, 8/18/2019
 
 1 Month LIBOR
 
 Capital
  Equipment
 
 
 6,085
 
 
 6,168
 
 
 83ALM Media, LLC,
  L+450, 1.00% LIBOR Floor, 7/31/2020
 
 3 Month LIBOR
 
 Media:
  Advertising, Printing & Publishing
 
 
 7,096
 
 
 7,001
 
 
 (95)American Dental
  Partners, Inc., L+475, 1.00% LIBOR Floor, 8/29/2021
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 12,406
 
 
 12,344
 
 
 (62)American Energy
  - Marcellus, LLC, L+425, 1.00% LIBOR Floor, 8/4/2020
 
 3 Month LIBOR
 
 Energy: Oil
  & Gas
 
 
 4,254
 
 
 3,800
 
 
 (454)American
  Residential Services, LLC, L+450, 1.00% LIBOR Floor, 6/30/2021
 
 3 Month LIBOR
 
 Construction
  & Building
 
 
 14,355
 
 
 14,255
 
 
 (100)American Tire
  Distributors, Inc., L+475, 1.00% LIBOR Floor, 6/1/2018(d)
 
 1 Month LIBOR
 
 Automotive
 
 
 11,942
 
 
 11,939
 
 
 (3)Aquilex, LLC,
  L+400, 1.00% LIBOR Floor, 12/31/2020
 
 1 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 1,953
 
 
 1,923
 
 
 (30)Azure Midstream
  Energy, LLC, L+550, 1.00% LIBOR Floor, 11/15/2018
 
 1 Month LIBOR
 
 Energy: Oil
  & Gas
 
 
 4,161
 
 
 3,750
 
 
 (411)BRG Sports,
  Inc., L+550, 1.00% LIBOR Floor, 4/15/2021
 
 1 Month LIBOR
 
 Consumer Goods:
  Durable
 
 
 9,294
 
 
 9,369
 
 
 75C.H.I. Overhead
  Doors, L+425, 1.25% LIBOR Floor, 3/18/2019
 
 1 Month LIBOR
 
 Construction
  & Building
 
 
 5,731
 
 
 5,699
 
 
 (32)Caraustar
  Industries, Inc., L+675, 1.25% LIBOR Floor, 5/1/2019(d)
 
 3 Month LIBOR
 
 Forest Products
  & Paper
 
 
 9,650
 
 
 9,944
 
 
 294Caraustar
  Industries, Inc., L+625, 1.25% LIBOR Floor, 5/1/2019
 
 3 Month LIBOR
 
 Forest Products
  & Paper
 
 
 917
 
 
 923
 
 
 6Central Security
  Group, Inc., L+525, 1.00% LIBOR Floor, 10/6/2020
 
 1 Month LIBOR
 
 Services:
  Consumer
 
 
 13,178
 
 
 13,174
 
 
 (4)Charming
  Charlie, LLC, L+800, 1.00% LIBOR Floor, 12/24/2019
 
 3 Month LIBOR
 
 Retail
 
 
 8,736
 
 
 8,681
 
 
 (55)Compuware
  Holdings, LLC (B1), L+525, 1.00% LIBOR Floor, 12/15/2019
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 274
 
 
 274
 
 
 -Compuware
  Holdings, LLC (B2), L+525, 1.00% LIBOR Floor, 12/10/2021
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 552
 
 
 552
 
 
 -CT Technologies
  Intermediate Holdings, Inc., L+500, 1.00% LIBOR Floor, 12/1/2021
 
 1 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 4,950
 
 
 4,981
 
 
 31Emmis Operating
  Company, L+500, 1.00% LIBOR Floor, 6/10/2021
 
 3 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 6,935
 
 
 6,965
 
 
 30Evergreen Skills
  Lux S.À.R.L., L+475, 1.00% LIBOR Floor, 4/28/2021(d)(e)
 
 6 Month LIBOR
 
 High Tech
  Industries
 
 
 2,947
 
 
 2,944
 
 
 (3)Global Cash
  Access, Inc., L+525, 1.00% LIBOR Floor, 12/18/2020(d)
 
 1 Month LIBOR
 
 Hotel, Gaming
  & Leisure
 
 
 7,806
 
 
 7,786
 
 
 (20)GTCR Valor
  Companies, Inc., L+500, 1.00% LIBOR Floor, 5/30/2021
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 3,938
 
 
 3,883
 
 
 (55)Hemisphere Media
  Holdings, LLC, L+400, 1.00% LIBOR Floor, 7/30/2020
 
 3 Month LIBOR
 
 Media:
  Broadcasting & Subscription
 
 
 4,042
 
 
 4,000
 
 
 (42)Hilex Poly Co.
  LLC, L+500, 1.00% LIBOR Floor, 12/5/2021(d)
 
 1 Month LIBOR
 
 Containers,
  Packaging & Glass
 
 
 8,359
 
 
 8,329
 
 
 (30)Hyperion Finance
  S.Á.R.L, L+475, 1.00% LIBOR Floor, 10/17/2019(e)
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 4,388
 
 
 4,455
 
 
 67inVentiv Health,
  Inc., L+625, 1.50% LIBOR Floor, 5/15/2018
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 2,490
 
 
 2,472
 
 
 (18)Lanyon
  Solutions, Inc., L+450, 1.00% LIBOR Floor, 11/13/2020
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 1,160
 
 
 1,142
 
 
 (18)LTCG Holdings
  Corp., L+500, 1.00% LIBOR Floor, 6/6/2020
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 8,081
 
 
 8,010
 
 
 (71)LTI Flexible
  Products, Inc., L+450, 1.00% LIBOR Floor, 5/1/2021
 
 3 Month LIBOR
 
 Consumer Goods:
  Durable
 
 
 6,425
 
 
 6,417
 
 
 (8)Navex Global,
  Inc., L+475, 1.00% LIBOR Floor, 11/19/2021
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 9,900
 
 
 9,900
 
 
 -Nielsen &
  Bainbridge, LLC, L+500, 1.00% LIBOR Floor, 8/15/2020
 
 6 Month LIBOR
 
 Consumer Goods:
  Durable
 
 
 16,256
 
 
 16,193
 
 
 (63)Oasis
  Outsourcing Holdings, Inc., L+475, 1.00% LIBOR Floor, 12/26/2021(d)
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 9,900
 
 
 9,975
 
 
 75Peppermill
  Casinos, Inc., L+600, 1.25% LIBOR Floor, 11/9/2018
 
 1 Month LIBOR
 
 Hotel, Gaming
  & Leisure
 
 
 968
 
 
 977
 
 
 9Photonis
  Technologies SAS, L+750, 1.00% LIBOR Floor, 9/18/2019(e)
 
 3 Month LIBOR
 
 Aerospace &
  Defense
 
 
 10,214
 
 
 10,014
 
 
 (200)Polyconcept
  Finance B.V., L+475, 1.25% LIBOR Floor, 6/28/2019(e)
 
 1 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 7,310
 
 
 7,389
 
 
 79PSC Industrial
  Holdings Corp., L+475, 1.00% LIBOR Floor, 12/5/2020
 
 Prime
 
 Services:
  Business
 
 
 4,950
 
 
 4,969
 
 
 19Scientific Games
  International, Inc., L+500, 1.00% LIBOR Floor, 10/1/2021(d)(e)
 
 1 Month LIBOR
 
 Hotel, Gaming
  & Leisure
 
 
 3,796
 
 
 3,843
 
 
 47SG Acquisition,
  Inc., L+525, 1.00% LIBOR Floor, 8/19/2021
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 14,613
 
 
 14,727
 
 
 114SGS Cayman,
  L.P., L+500, 1.00% LIBOR Floor, 4/23/2021(e)
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 527
 
 
 539
 
 
 12SI Organization,
  Inc., L+475, 1.00% LIBOR Floor, 11/23/2019
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 7,256
 
 
 7,236
 
 
 (20)SK Spice
  S.Á.R.L, L+825, 1.25% LIBOR Floor, 9/30/2018(e)
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 8,310
 
 
 8,221
 
 
 (89)Smile Brands
  Group, Inc., L+625, 1.25% LIBOR Floor, 8/16/2019
 
 6 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 4,699
 
 
 4,533
 
 
 (166)Southcross
  Holdings Borrower LP, L+500, 1.00% LIBOR Floor, 8/4/2021
 
 3 Month LIBOR
 
 Energy: Oil
  & Gas
 
 
 1,262
 
 
 1,135
 
 
 (127)SRA
  International, L+525, 1.25% LIBOR Floor, 7/20/2018
 
 1 Month LIBOR
 
 High Tech
  Industries
 
 
 2,149
 
 
 2,186
 
 
 37Steward Health
  Care System, LLC, L+550, 1.25% LIBOR Floor, 4/10/2020(d)
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 10,957
 
 
 10,949
 
 
 (8)Styrolution US
  Holding LLC, L+550, 1.00% LIBOR Floor, 11/7/2019
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 5,195
 
 
 5,169
 
 
 (26)
 29


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 Underlying Loans(a)
 
 Index Rate(b)
 
 Industry
 
 Notional
  Amount
 
 Fair
  Value(c)
 
 Unrealized
  Appreciation /
  (Depreciation)Survey Sampling
  International, LLC, L+500, 1.00% LIBOR Floor, 12/16/2020
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 7,920
 
 
 7,940
 
 
 20Sutherland
  Global Services Inc., L+500, 1.00% LIBOR Floor, 4/23/2021
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 2,265
 
 
 2,317
 
 
 52TASC, Inc.,
  L+550, 1.00% LIBOR Floor, 5/23/2020(d)(e)
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 10,964
 
 
 11,113
 
 
 149TIBCO Software
  Inc., L+550, 1.00% LIBOR Floor, 12/4/2020(d)
 
 1 Month LIBOR
 
 High Tech
  Industries
 
 
 12,538
 
 
 12,672
 
 
 134TMFS Holdings,
  LLC, L+450, 1.00% LIBOR Floor, 7/30/2021
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 11,850
 
 
 11,880
 
 
 30TOPPS Company,
  Inc., L+600, 1.25% LIBOR Floor, 10/2/2018
 
 3 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 2,331
 
 
 2,263
 
 
 (68)Travel Leaders
  Group, LLC, L+600, 1.00% LIBOR Floor, 12/5/2018
 
 3 Month LIBOR
 
 Services:
  Consumer
 
 
 3,840
 
 
 3,849
 
 
 9USS Parent
  Holdings Corp., L+475, 1.00% LIBOR Floor, 8/5/2021
 
 1 Month LIBOR
 
 Construction
  & Building
 
 
 11,594
 
 
 11,529
 
 
 (65)Vince, LLC,
  L+475, 1.00% LIBOR Floor, 11/27/2019(e)
 
 6 Month LIBOR
 
 Consumer Goods:
  Non-Durable
 
 
 1,736
 
 
 1,727
 
 
 (9)Western Dental
  Services, Inc., L+500, 1.00% LIBOR Floor, 11/1/2018
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 6,131
 
 
 5,869
 
 
 (262)William Morris
  Endeavor, L+425, 1.00% LIBOR Floor, 5/6/2021(d)
 
 3 Month LIBOR
 
 Media:
  Diversified & Production
 
 
 10,554
 
 
 10,239
 
 
 (315)Total Senior
  Secured First Lien Debt
 
 
 
 
 
 
 378,894
 
 
 377,391
 
 
 (1,503)Senior
  Secured Second Lien DebtAmWINS Group,
  LLC, L+850, 1.00% LIBOR Floor, 9/4/2020(d)
 
 3 Month LIBOR
 
 Banking,
  Finance, Insurance & Real Estate
 
 
 870
 
 
 893
 
 
 23Arysta
  LifeScience SPC, LLC, L+700, 1.25% LIBOR Floor, 11/30/2020(e)
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 1,161
 
 
 1,170
 
 
 9Deltek, Inc.,
  L+875, 1.25% LIBOR Floor, 10/10/2019
 
 3 Month LIBOR
 
 Services:
  Business
 
 
 1,620
 
 
 1,648
 
 
 28Evergreen Skills
  Lux S.À.R.L., L+825, 1.00% LIBOR Floor, 4/28/2022(e)
 
 6 Month LIBOR
 
 High Tech
  Industries
 
 
 9,798
 
 
 9,425
 
 
 (373)GOBP Holdings,
  Inc., L+825, 1.00% LIBOR Floor, 10/21/2022
 
 3 Month LIBOR
 
 Retail
 
 
 6,895
 
 
 6,921
 
 
 26Mergermarket
  USA, Inc., L+650, 1.00% LIBOR Floor, 2/04/2022
 
 1 Month LIBOR
 
 Services:
  Business
 
 
 6,965
 
 
 6,633
 
 
 (332)Onex Carestream
  Finance LP, L+850, 1.00% LIBOR Floor, 12/7/2019
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 7,967
 
 
 7,945
 
 
 (22)Pelican
  Products, Inc., L+825, 1.00% LIBOR Floor, 4/11/2021
 
 3 Month LIBOR
 
 Chemicals,
  Plastics & Rubber
 
 
 8,050
 
 
 7,820
 
 
 (230)PFS Holding
  Corporation, L+725, 1.00% LIBOR Floor, 1/31/2022
 
 1 Month LIBOR
 
 Retail
 
 
 4,973
 
 
 2,961
 
 
 (2,012)Securus
  Technologies Holdings, Inc., L+775, 1.25% LIBOR Floor, 4/30/2021
 
 3 Month LIBOR
 
 Telecommunications
 
 
 1,002
 
 
 988
 
 
 (14)Telx Group,
  Inc., L+650, 1.00% LIBOR Floor, 4/9/2021
 
 3 Month LIBOR
 
 High Tech
  Industries
 
 
 2,970
 
 
 2,951
 
 
 (19)U.S. Renal Care,
  Inc., L+750, 1.00% LIBOR Floor, 7/3/2020
 
 3 Month LIBOR
 
 Healthcare &
  Pharmaceuticals
 
 
 814
 
 
 824
 
 
 10Total Senior
  Secured Second Lien Debt
 
 
 
 
 
 
 53,085
 
 
 50,179
 
 
 (2,906)Total
 
 
 
 
 
 $
 431,979
 
 $
 427,570
 
 $
 (4,409)
 (a)
 All of the underlying loans subject to the TRS 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, 3, and 6 month LIBOR rates were 0.17%, 0.26%, and 0.36%,
  respectively, as of December 31, 2014. The prime rate was 3.25% as of
  December 31, 2014. The actual LIBOR rate for each loan listed may not be the
  applicable LIBOR rate as of December 31, 2014, as the loan may have been
  priced or repriced based on a LIBOR rate prior to or subsequent to December
  31, 2014.(c)
 Fair value determined by the Company’s board of directors (see
  Note 8).(d)
 Position or portion thereof unsettled as of December 31, 2014.(e)
 All or a portion of 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, 2014, 89.3% of
  the Company’s total assets represented qualifying assets. In addition, as
  described in this Note 7, 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, 86.8%
  of the Company’s total assets represented qualifying assets as of December
  31, 2014.
 30


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 Note 8. Fair Value of Financial Instruments  The following table presents fair value
measurements of the Company’s portfolio investments and TRS as of March 31,
2015 and December 31, 2014, according to the fair value hierarchy:  March 31, 2015
 
 December 31, 2014Level 1
 
 Level 2
 
 Level 3
 
 Total
 
 Level 1
 
 Level 2
 
 Level 3
 
 TotalSenior secured
  first lien debt
 $
 -
 
 $
 -
 
 $
 80,663
 
 $
 80,663
 
 $
 -
 
 $
 -
 
 $
 69,204
 
 $
 69,204Senior secured
  second lien debt
 
 -
 
 
 -
 
 
 297,458
 
 
 297,458
 
 
 -
 
 
 -
 
 
 245,258
 
 
 245,258Collateralized
  securities and structured products - debt
 
 -
 
 
 -
 
 
 28,247
 
 
 28,247
 
 
 -
 
 
 -
 
 
 27,965
 
 
 27,965Collateralized
  securities and structured products - equity
 
 -
 
 
 -
 
 
 26,284
 
 
 26,284
 
 
 -
 
 
 -
 
 
 9,137
 
 
 9,137Short term
  investments
 
 33,188
 
 
 -
 
 
 -
 
 
 33,188
 
 
 10,350
 
 
 -
 
 
 -
 
 
 10,350Total return
  swap
 
 -
 
 
 -
 
 
 1,640
 
 
 1,640
 
 
 -
 
 
 -
 
 
 (4,409)
 
 
 (4,409)Total
 $
 33,188
 
 $
 -
 
 $
 434,292
 
 $
 467,480
 
 $
 10,350
 
 $
 -
 
 $
 347,155
 
 $
 357,505
  The following tables provide a
reconciliation of the beginning and ending balances for investments that use Level
3 inputs for the three March 31, 2015 and 2014:  Three Months Ended
  March 31, 2015Senior Secured First Lien Debt
 
 Senior Secured Second Lien Debt
 
 Collateralized Securities and Structured
  Products - Debt
 
 Collateralized Securities and Structured
  Products - Equity
 
 Unsecured Debt
 Total Return
  Swap
 
 TotalBeginning
  balance, December 31, 2014
 $
 69,204
 
 $
 245,258
 
 $
 27,965
 
 $
 9,137
 
 $
 -
 
 $
 (4,409)
 
 $
 347,155Investments
  purchased
 
 41,627
 
 
 52,037
 
 
 -
 
 
 17,163
 
 
 4,701
 
 
 -
 
 
 115,528Net realized
  gain
 
 507
 
 
 9
 
 
 -
 
 
 -
 
 
 59
 
 
 6,607
 
 
 7,182Net change in
  unrealized appreciation
 
 293
 
 
 950
 
 
 256
 
 
 (35)
 
 
 -
 
 
 6,049
 
 
 7,513Accretion of
  discount
 
 100
 
 
 59
 
 
 26
 
 
 19
 
 
 -
 
 
 -
 
 
 204Sales and
  principal repayments
 
 (31,068)
 
 
 (855)
 
 
 -
 
 
 -
 
 
 (4,760)
 
 
 (6,607)
 
 
 (43,290)Ending
  balance, March 31, 2015
 $
 80,663
 
 $
 297,458
 
 $
 28,247
 
 $
 26,284
 
 $
 -
 
 $
 1,640
 
 $
 434,292Change in
  unrealized gains or losses for the period included in changes in net assets
  for assets held at the end of the reporting period
 $
 293
 
 $
 951
 
 $
 256
 
 $
 (35)
 
 $
 -
 
 $
 5,928
 
 $
 7,393
 31


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 Three Months Ended
  March 31, 2014Senior
  Secured First
  Lien Debt
 
 Senior Secured
  Second Lien
  Debt
 
 Collateralized Securities and Structured
  Products - Debt
 
 Collateralized Securities and Structured
  Products - Equity
 
 Total Return
  Swap
 
 TotalBeginning
  balance, December 31, 2013
 $
 61,788
 
 $
 22,552
 
 $
 6,849
 
 $
 1,946
 
 $
 1,549
 
 $
 94,684Investments
  purchased
 
 39,067
 
 
 25,637
 
 
 2,293
 
 
 -
 
 
 -
 
 
 66,997Net realized
  gain
 
 144
 
 
 30
 
 
 -
 
 
 -
 
 
 2,963
 
 
 3,137Net change in
  unrealized appreciation
 
 313
 
 
 342
 
 
 9
 
 
 (53)
 
 
 1,208
 
 
 1,819Accretion of
  discount
 
 41
 
 
 4
 
 
 1
 
 
 -
 
 
 -
 
 
 46Sales and
  principal repayments
 
 (17,054)
 
 
 (1,401)
 
 
 -
 
 
 -
 
 
 (2,963)
 
 
 (21,418)Ending
  balance, March 31, 2014
 $
 84,299
 
 $
 47,164
 
 $
 9,152
 
 $
 1,893
 
 $
 2,757
 
 $
 145,265Change in
  unrealized gains or losses for the period included in changes in net assets
  for assets held at the end of the reporting period
 $
 454
 
 $
 384
 
 $
 9
 
 $
 (53)
 
 $
 1,355
 
 $
 2,149
  Significant Unobservable Inputs  The valuation techniques and significant
unobservable inputs used in recurring Level 3 fair value measurements of investments
as of March 31, 2015 and December 31, 2014 were as follows:  March 31, 2015Fair Value
 
 Valuation Techniques/
  Methodologies
 
 Unobservable
  Inputs
 
 Range
 
 Weighted Average(1)Senior secured
  first lien debt
 $
 46,384
 
 Discounted Cash Flow
 
 Discount Rates
 
 6.5%
 -
 8.6%
 
 8.0%34,279
 
 Broker Quotes
 
 Broker Quotes
 
 N/A
 
 N/ASenior secured
  second lien debt
 
 175,785
 
 Discounted Cash Flow
 
 Discount Rates
 
 8.2%
 -
 10.8%
 
 9.3%121,673
 
 Broker Quotes
 
 Broker Quotes
 
 N/A
 
 N/ACollateralized
  securities and structured products - debt
 
 28,247
 
 Discounted Cash Flow
 
 Discount Rates
 
 8.5%
 -
 12.3%
 
 10.3%Collateralized
  securities and structured products - equity
 
 26,284
 
 Discounted Cash Flow
 
 Discount Rates
 
 11.5%
 -
 15.0%
 
 12.2%Total Return
  Swap
 
 491
 
 Discounted Cash Flow
 
 Discount Rates
 
 5.2%
 -
 10.1%
 
 6.9%1,149
 
 Broker Quotes
 
 Broker Quotes
 
 N/A
 
 N/ATotal
 $
 434,292
 (1) Weighted
  average amounts are based on the estimated fair values.
 32


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 December 31, 2014Fair Value
 
 Valuation Techniques/
  Methodologies
 
 Unobservable
  Inputs
 
 Range
 
 Weighted Average(1)Senior secured
  first lien debt
 $
 29,932
 
 Discounted Cash Flow
 
 Discount Rates
 
 6.8%
 -
 10.0%
 
 7.9%39,272
 
 Broker Quotes
 
 Broker Quotes
 
 N/A
 
 N/ASenior secured
  second lien debt
 
 147,914
 
 Discounted Cash Flow
 
 Discount Rates
 
 8.1%
 -
 11.5%
 
 9.4%97,344
 
 Broker Quotes
 
 Broker Quotes
 
 N/A
 
 N/ACollateralized
  securities and structured products - debt
 
 27,965
 
 Discounted Cash Flow
 
 Discount Rates
 
 9.5%
 -
 12.3%
 
 10.9%Collateralized
  securities and structured products - equity
 
 9,137
 
 Discounted Cash Flow
 
 Discount Rates
 
 10.7%
 -
 14.0%
 
 13.4%Total Return
  Swap
 
 (954)
 
 Discounted Cash Flow
 
 Discount Rates
 
 5.8%
 -
 11.6%
 
 7.2%(3,455)
 
 Broker Quotes
 
 Broker Quotes
 
 N/A
 
 N/ATotal
 $
 347,155
 (1) Weighted
  average amounts are based on the estimated fair values.
  The significant unobservable inputs used in
the fair value measurement of the Company`s senior secured first lien debt,
senior secured second lien debt, collateralized securities and structured
products, and total return swap are discount rates. A significant increase or
decrease in discount rates would result in a significantly lower or high fair
value measurement, respectively.  Note 9. General and Administrative Expense  General and administrative expense
consisted of the following items for the three months ended March 31, 2015 and
2014:  Three Months Ended
  March 31,2015
 
 2014Due diligence
  fees
 $
 262
 
 $
 323Professional
  fees expense
 
 235
 
 
 287Transfer agent
  expense
 
 225
 
 
 116Marketing
  expense
 
 99
 
 
 88Dues and
  subscriptions
 
 88
 
 
 21Director fees
  and expenses
 
 64
 
 
 32Insurance expense
 
 59
 
 
 52Printing and
  mailing expense
 
 55
 
 
 33Filing fees
 
 27
 
 
 6Other expenses
 
 164
 
 
 100Total general
  and administrative expense
 $
 1,278
 
 $
 1,058
 33


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 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
March 31, 2015 and December 31, 2014, the Company’s commitments and
contingencies were as follows: Unfunded
  Commitments
 
 March 31, 2015(1)
 
 December 31, 2014(1)SS&C
  Technologies, Inc.(2)
 
 $
 10,000
 
 $
 -Studio Movie
  Grill Holdings, LLC(3)
 
 
 4,010
 
 
 6,388ECI
  Acquisition Holdings, Inc.(3)
 
 
 1,207
 
 
 1,724Dollar Tree,
  Inc.(4)
 
 
 -
 
 
 15,000Total
 
 $
 15,217
 
 $
 23,112
 (1)
 Unless otherwise noted, the funding criteria for these unfunded
  commitments had not been met at the date indicated.(2)
 As of March 31, 2015, such commitment was subject to the
  execution of a definitive loan agreement and the consummation of the
  underlying corporate transaction, and conditional upon receipt of all
  necessary shareholder, regulatory and other applicable approvals. As of May
  8, 2015, the Company's unfunded commitments included $10,000 to SS&C
  Technologies, Inc.(3)
 As of May 8, 2015, the Company's unfunded commitments were to
  portfolio companies ECI Acquisition Holdings, Inc. and Studio Movie Grill
  Holdings, LLC in the amount of $1,207 and $3,540, respectively, and included
  unfunded commitments to Tenet Healthcare and Informatica Corp. for $14,444
  and $10,050, respectively.(4)
 As of December 31, 2014, such commitment was subject to the
  execution of a definitive loan agreement and the consummation of the
  underlying corporate transaction, and conditional upon receipt of all
  necessary shareholder, regulatory and other applicable approvals.  Prior to
  March 31, 2015, the Dollar Tree, Inc. unfunded commitment was terminated.
  Unfunded commitments to provide
funds to companies are not recorded on the Company’s consolidated balance
sheets. Since these commitments may expire without being drawn upon, unfunded
commitments do not necessarily represent future cash requirements or future
earning assets for the Company.  The Company intends to use cash on hand,
short-term investments and other liquid assets to fund these commitments should
the need arise.For information on the companies to which the Company
is committed to fund additional amounts as of March 31, 2015 and December 31,
2014, refer to the table above and the consolidated schedule of investments.  The Staff of the Division of
Investment Management has recently informed the Company that it views unfunded
commitments as senior securities under the 1940 Act.  The Company is
reviewing the Staff’s position and its impact on the Company’s
operations and business objectives and will continue to engage the Staff
in discussions as to the appropriate treatment of unfunded commitments.
 During the course of this review, analysis and discussions, the
Company intends to comply with the Staff’s position by including unfunded
commitments as a senior security in the asset coverage test or by segregating
or setting aside liquid assets or engaging in other SEC or Staff-approved
measures to “cover” unfunded commitments in an amount required to comply with
the 1940 Act.  Note 11. Fee Income  Fee
income consists of commitment fees and amendment fees. The following table
summarizes the Company’s fee income for the three months ended March 31,
2015 and 2014: Three Months Ended March 31,2015
 
 2014Commitment fees
 
 $
 468
 
 $
 -Amendment fees
 
 
 2
 
 
 -Total
 
 $
 470
 
 $
 -
  For the three months ended
March 31, 2015 and 2014, all income from fees was non-recurring. 34


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 Note 12.
Financial Highlights  The following is a schedule of financial
highlights as of and for the three months ended March 31, 2015 and 2014:  As of and for the
 
 As of and for theThree Months Ended
 
 Three Months EndedMarch 31, 2015
 
 March 31, 2014Per share
  data:(1)Net asset value
  at beginning of period
 $
 9.22
 
 $
 9.32Results of
  operations:Net investment income
  (loss)(2)
 
 0.04
 
 
 (0.01)Net realized
  gain and net change in unrealized appreciation on investments(3)
 
 0.03
 
 
 0.04Net realized
  gain and net change in unrealized appreciation on total return swap
 
 0.21
 
 
 0.21Net increase in
  net assets resulting from operations(3)
 
 0.28
 
 
 0.24Shareholder
  distributions:Distributions
  from net investment income
 
 (0.04)
 
 
 (0.16)Distributions
  from net realized gains
 
 (0.12)
 
 
 (0.01)Distributions in
  excess of net investment income(4)
 
 (0.02)
 
 
 -Net decrease in
  net assets from shareholder distributions
 
 (0.18)
 
 
 (0.17)Capital share
  transactions:Issuance of
  common stock above net asset value(5)
 
 0.03
 
 
 0.01Net increase in
  net assets resulting from capital share transactions
 
 0.03
 
 
 0.01Net asset value
  at end of period
 $
 9.35
 
 $
 9.40Shares of common
  stock outstanding at end of period
 
 64,734,704
 
 
 23,991,865Total investment
  return-net asset value(6)
 
 3.33%
 
 
 2.63%Net assets at
  beginning of period
 $
 496,389
 
 $
 144,571Net assets at
  end of period
 $
 605,113
 
 $
 225,470Average net
  assets
 $
 547,867
 
 $
 195,361Ratio/Supplemental
  data:Ratio of net
  investment income (loss) to average net assets(7)
 
 0.39%
 
 
 (0.13%)Ratio of gross
  operating expenses to average net assets
 
 1.24%
 
 
 1.79%Ratio of
  expenses (before recoupment of expense reimbursements) to average net
  assets(8)
 
 1.09%
 
 
 1.79%Ratio of net
  operating expenses to average net assets(9)
 
 1.24%
 
 
 1.25%Portfolio
  turnover rate(10)
 
 9.63%
 
 
 16.17%Asset coverage
  ratio(11)
 
 2.38
 
 
 2.39
 (1)
 The per share data for the three months ended March 31, 2015 and
  2014 was derived by using the weighted average shares of common stock
  outstanding during each period.(2)
 Net investment income (loss) per share includes expense
  reimbursements from IIG of $0.05 per share for the three months ended March
  31, 2014 and expense recoupments of $0.01 per share for the three months
  ended March 31, 2015.(3)
 The amount shown for net realized gain and net change in
  unrealized appreciation on investments is the balancing figure derived from
  the other figures in the schedule. The amount shown at this caption for a
  share outstanding throughout the period may not agree with the change in the
  aggregate gains and losses in portfolio securities for the period because of
  the timing of sales and repurchases of the Company’s shares in relation to
  fluctuating market values for the portfolio. As a result, net increase in net
  assets resulting from operations in this schedule may vary from the
  consolidated statements of operations.(4)
 Distributions in excess of net investment income represent
  unearned capital gains incentive fees of $1,454, which reduce GAAP basis net
  investment income available for distributions but does not reduce tax basis
  net investment income.  This tax-related adjustment represents additional
  distributions for tax purposes. On a GAAP basis, distributions in excess of
  net investment income represent a return of capital.
 35


---

CĪON Investment Corporation Notes to Consolidated Financial Statements(unaudited) March
31, 2015 (in
thousands, except share and per share amounts)
 (5)
 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.(6)
 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 March 31, 2015) 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.(7)
 Excluding the expense reimbursements from IIG and the recoupment
  of expense reimbursements during the period, the ratio of net investment
  income (loss) to average net assets would have been 0.54% and (0.66%) for the
  three months ended March 31, 2015 and 2014, respectively.(8)
 The ratio of expense reimbursements from IIG and expense
  recoupments to average net assets for the three months ended March 31, 2015
  and 2014 were (0.15%) and 0.54%, respectively.(9)
 In order to record an obligation to reimburse IIG for expense
  support provided, the ratio of gross operating expenses to average net
  assets, when considering the reimbursement, in the period in which
  reimbursement is sought cannot exceeded the ratio of gross operating expenses
  to average net assets for the period when the expense support was provided.
  For purposes of this calculation, gross operating expenses include all
  expenses borne by the Company, except for offering and organizational costs,
  base management fees, incentive fees, administrative services expenses, other
  general and administrative expenses owed to CIM and its affiliates and
  interest expense. For the three months ended March 31, 2015 and 2014, the
  ratio of gross operating expenses to average net assets, when considering
  reimbursements, were 0.74% and 0.27%, respectively.(10)
 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.(11)
 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 well as unfunded commitments, for the
  three months ended March 31, 2015, as senior securities.
  Note 13. Subsequent Events  Registration Statement  On April 28, 2015, the Company filed a
registration statement on Form N-2 to sell up to 100,000,000 additional shares
of its common stock at an initial public offering price of $10.45 per share.  East West Bank Credit Facility  On April 30, 2015, the Company entered into
a revolving credit facility, or the EWB Credit Facility, with East West Bank,
or EWB. The EWB Credit Facility provides for borrowings in an aggregate
principal amount of up to $40,000, subject to compliance with a borrowing base.
As of May 8, 2015, the aggregate principal amount available in connection with
the EWB Credit Facility was $40,000. 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, 2014. In addition to
historical information, the following discussion and other parts of this Quarterly
Report on Form 10-Q contain forward-looking information that involves
risks and uncertainties. Amounts and percentages presented herein may have been
rounded for presentation and all dollar amounts, excluding share and per share
amounts, are presented in thousands unless otherwise noted.  Forward-Looking
Statements  Some of the
statements within this Quarterly Report on Form 10-Q 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;•
 the effects of a changing
  interest rate environment;•
 our ability to source
  favorable private investments;•
 our tax status;•
 the effect of changes to tax
  legislation and our tax position;•
 the tax status of the
  companies in which we invest; and•
 the timing and amount of
  distributions and dividends from the companies in which we invest.
  In addition, words such
as “anticipate,” “believe,” “expect” and “intend” indicate a forward-looking
statement, although not all forward-looking statements include these words. The
forward-looking statements contained in this Quarterly Report on Form 10-Q involve
risks and uncertainties. Our actual results could differ materially from those
implied or expressed in the forward-looking statements for any reason,
including the factors set forth in “Risk Factors” in Item 1A of Part II of this
Quarterly Report on Form 10-Q. Other factors that could cause actual results to
differ materially include:  •
 changes in the economy;•
 risks associated with possible
  disruption in our operations or the economy generally due to terrorism 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 from persons not affiliated with us,
CIM or Apollo. We are an externally managed, non-diversified closed-end
management investment company that has elected to be regulated as a BDC under
the 1940 Act. We elected to be treated for federal income tax purposes as a
RIC, as defined under Subchapter M of the Code. Our investment objective is to generate current income
and, to a lesser extent, capital appreciation for investors. Our portfolio is
comprised primarily ofinvestments in
senior secured loans, including first lien loans, second lien loans and
unitranche loans, and, to a lesser extent, collateralized securities,
structured products and other similar securitiesand 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. On October 31, 2014, our
board of directors, including a majority of directors who are not interested
persons, approved the renewal of the investment advisory agreement with CIM and
the investment sub-advisory agreement with AIM, each for a period of twelve
months commencing December 17, 2014.  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, 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 are 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; 38


---

·federal, state and local taxes; ·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, as amended; ·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 March 31, 2015 and 2014  The following table summarizes our
investment activity, excluding short term investments, for the three months
ended March 31, 2015 and 2014: Three Months Ended March 31,2015
 
 2014Net Investment Activity
 
 Investment Portfolio
 
 Total Return Swap
 
 Total
 
 Investment Portfolio
 
 Total Return Swap
 
 TotalPurchases and
  drawdownsSenior secured
  first lien debt
 
 $
 41,627
 
 $
 174,589
 
 $
 216,216
 
 $
 39,067
 
 $
 135,071
 
 $
 174,138Senior secured
  second lien debt
 
 
 52,037
 
 
 9,702
 
 
 61,739
 
 
 25,637
 
 
 17,884
 
 
 43,521Collateralized
  securities and structured products - debt
 
 
 -
 
 
 -
 
 
 -
 
 
 2,293
 
 
 -
 
 
 2,293Collateralized
  securities and structured products - equity
 
 
 17,163
 
 
 -
 
 
 17,163
 
 
 -
 
 
 -
 
 
 -Unsecured debt
 
 
 4,701
 
 
 -
 
 
 4,701
 
 
 -
 
 
 -
 
 
 -Sales and
  principal repayments
 
 
 (36,683)
 
 
 (22,975)
 
 
 (59,658)
 
 
 (18,455)
 
 
 (67,710)
 
 
 (86,165)Net portfolio
  activity
 
 $
 78,845
 
 $
 161,316
 
 $
 240,161
 
 $
 48,542
 
 $
 85,245
 
 $
 133,787
 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
March 31, 2015 and December 31, 2014: March 31, 2015Investment 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
  first lien debt
 
 $
 80,405
 
 $
 80,663
 
 18.6%
 
 $
 535,159
 
 $
 538,797
 
 90.5%
 
 $
 615,564
 
 $
 619,460
 
 60.3%Senior secured
  second lien debt
 
 
 297,144
 
 
 297,458
 
 68.8%
 
 
 58,335
 
 
 56,337
 
 9.5%
 
 
 355,479
 
 
 353,795
 
 34.4%Collateralized
  securities and structured products - debt
 
 
 28,778
 
 
 28,247
 
 6.5%
 
 
 -
 
 
 -
 
 -
 
 
 28,778
 
 
 28,247
 
 2.7%Collateralized
  securities and structured products - equity
 
 
 26,511
 
 
 26,284
 
 6.1%
 
 
 -
 
 
 -
 
 -
 
 
 26,511
 
 
 26,284
 
 2.6%Subtotal/total
  percentage
 
 
 432,838
 
 
 432,652
 
 100.0%
 
 
 593,494
 
 
 595,134
 
 100.0%
 
 
 1,026,332
 
 
 1,027,786
 
 100.0%Short term
  investments(2)
 
 
 33,188
 
 
 33,188
 
 
 
 
 -
 
 
 -
 
 
 
 
 33,188
 
 
 33,188Total
  investments
 
 $
 466,026
 
 $
 465,840
 
 
 
 $
 593,494
 
 $
 595,134
 
 
 
 $
 1,059,520
 
 $
 1,060,974Number of
  portfolio companies
 
 
 
 
 65
 
 
 
 
 
 
 
 85
 
 
 
 
 
 
 
 130(3)Average annual
  EBITDA of portfolio companies
 
 
 $65.5 million
 
 
 
 
 
 $163.4 million
 
 
 
 
 
 $125.3 millionMedian annual
  EBITDA of portfolio companies
 
 
 $57.6 million
 
 
 
 
 
 $89.0 million
 
 
 
 
 
 $65.0 millionPurchased at a
  weighted average price of par
 
 
 
 
 96.75%
 
 
 
 
 
 
 
 98.94%
 
 
 
 
 
 
 
 98.00%Gross annual
  portfolio yield based upon the purchase price(4)
 
 9.39%
 
 
 
 
 
 
 
 6.70%(5)
 
 
 
 
 
 
 
 7.84%
 (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 average 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 20
  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, 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(1)
 
 Fair Value
 
 PercentageSenior secured
  first lien debt
 
 $
 69,239
 
 $
 69,204
 
 19.7%
 
 $
 378,894
 
 $
 377,391
 
 88.3%
 
 $
 448,133
 
 $
 446,595
 
 57.3%Senior secured
  second lien debt
 
 
 245,894
 
 
 245,258
 
 69.8%
 
 
 53,085
 
 
 50,179
 
 11.7%
 
 
 298,979
 
 
 295,437
 
 37.9%Collateralized
  securities and structured products - debt
 
 
 28,752
 
 
 27,965
 
 8.0%
 
 
 -
 
 
 -
 
 -
 
 
 28,752
 
 
 27,965
 
 3.6%Collateralized
  securities and structured products - equity
 
 
 9,329
 
 
 9,137
 
 2.5%
 
 
 -
 
 
 -
 
 -
 
 
 9,329
 
 
 9,137
 
 1.2%Subtotal/total
  percentage
 
 
 353,214
 
 
 351,564
 
 100.0%
 
 
 431,979
 
 
 427,570
 
 100.0%
 
 
 785,193
 
 
 779,134
 
 100.0%Short term
  investments(2)
 
 
 10,350
 
 
 10,350
 
 
 
 
 -
 
 
 -
 
 
 
 
 10,350
 
 
 10,350Total
  investments
 
 $
 363,564
 
 $
 361,914
 
 
 
 $
 431,979
 
 $
 427,570
 
 
 
 $
 795,543
 
 $
 789,484Number of
  portfolio companies
 
 
 
 
 56
 
 
 
 
 
 
 
 65
 
 
 
 
 
 
 
 104(3)Average annual
  EBITDA of portfolio companies
 
 
 $62.9 million
 
 
 
 
 
 $118.1 million
 
 
 
 
 
 $94.8 millionMedian annual
  EBITDA of portfolio companies
 
 
 $53.2 million
 
 
 
 
 
 $65.0 million
 
 
 
 
 
 $60.1 millionPurchased at a
  weighted average price of par
 
 
 
 
 98.09%
 
 
 
 
 
 
 
 99.01%
 
 
 
 
 
 
 
 98.59%Gross annual
  portfolio yield based upon the purchase price(4)
 
 9.23%
 
 
 
 
 
 
 
 6.87%(5)
 
 
 
 
 
 
 
 7.93%
 (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 average 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 17
  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 March 31,
2015 and December 31, 2014, excluding short term investments of $33,188 and
$10,350, respectively: March 31, 2015Investment 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
 
 $
 419,733
 
 $
 418,555
 
 96.7%
 
 $
 593,494
 
 $
 595,134
 
 100.0%
 
 $
 1,013,227
 
 $
 1,013,689
 
 98.6%Fixed interest rate
  investments
 
 
 13,105
 
 
 14,097
 
 3.3%
 
 
 -
 
 
 -
 
 -
 
 
 13,105
 
 
 14,097
 
 1.4%Total
  investments
 
 $
 432,838
 
 $
 432,652
 
 100.0%
 
 $
 593,494
 
 $
 595,134
 
 100.0%
 
 $
 1,026,332
 
 $
 1,027,786
 
 100.0%
  December 31, 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
 
 $
 346,115
 
 $
 344,067
 
 97.9%
 
 $
 431,979
 $
 427,570
 
 100.0%
 
 $
 778,094
 
 $
 771,637
 
 99.0%Fixed interest
  rate investments
 
 
 7,099
 
 
 7,497
 
 2.1%
 
 
 -
 
 -
 
 -
 
 
 7,099
 
 
 7,497
 
 1.0%Total
  investments
 
 $
 353,214
 
 $
 351,564
 
 100.0%
 
 $
 431,979
 $
 427,570
 
 100.0%
 
 $
 785,193
 
 $
 779,134
 
 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 March 31, 2015 and December 31, 2014:  March 31, 2015Investment 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
 
 $
 81,783
 
 18.9%
 
 $
 73,829
 
 12.4%
 
 $
 155,612
 
 15.1%High Tech
  Industries
 
 
 58,959
 
 13.6%
 
 
 72,770
 
 12.2%
 
 
 131,729
 
 12.8%Healthcare &
  Pharmaceuticals
 
 
 12,924
 
 3.0%
 
 
 74,642
 
 12.5%
 
 
 87,566
 
 8.5%Banking,
  Finance, Insurance & Real Estate
 
 
 25,249
 
 5.8%
 
 
 38,059
 
 6.4%
 
 
 63,308
 
 6.2%Beverage, Food
  & Tobacco
 
 
 57,897
 
 13.4%
 
 
 3,702
 
 0.6%
 
 
 61,599
 
 6.0%Chemicals,
  Plastics & Rubber
 
 
 9,642
 
 2.2%
 
 
 47,446
 
 8.0%
 
 
 57,088
 
 5.6%Hotel, Gaming
  & Leisure
 
 
 22,194
 
 5.1%
 
 
 33,696
 
 5.7%
 
 
 55,890
 
 5.4%Diversified
  Financials
 
 
 54,531
 
 12.6%
 
 
 -
 
 -
 
 
 54,531
 
 5.3%Services:
  Consumer
 
 
 10,861
 
 2.5%
 
 
 33,027
 
 5.6%
 
 
 43,888
 
 4.3%Construction
  & Building
 
 
 3,644
 
 0.9%
 
 
 31,541
 
 5.3%
 
 
 35,185
 
 3.4%Automotive
 
 
 14,158
 
 3.3%
 
 
 19,594
 
 3.3%
 
 
 33,752
 
 3.3%Consumer Goods:
  Durable
 
 
 -
 
 -
 
 
 31,669
 
 5.3%
 
 
 31,669
 
 3.1%Media:
  Advertising, Printing & Publishing
 
 
 20,370
 
 4.7%
 
 
 7,931
 
 1.3%
 
 
 28,301
 
 2.8%Containers,
  Packaging & Glass
 
 
 12,440
 
 2.9%
 
 
 12,509
 
 2.1%
 
 
 24,949
 
 2.4%Media:
  Diversified & Production
 
 
 10,845
 
 2.5%
 
 
 12,555
 
 2.1%
 
 
 23,400
 
 2.3%Retail
 
 
 -
 
 -
 
 
 23,367
 
 3.9%
 
 
 23,367
 
 2.3%Telecommunications
 
 
 13,724
 
 3.2%
 
 
 5,988
 
 1.0%
 
 
 19,712
 
 1.9%Forest Products
  & Paper
 
 
 -
 
 -
 
 
 16,818
 
 2.8%
 
 
 16,818
 
 1.6%Consumer Goods:
  Non-Durable
 
 
 697
 
 0.2%
 
 
 14,217
 
 2.4%
 
 
 14,914
 
 1.5%Media:
  Broadcasting & Subscription
 
 
 2,511
 
 0.6%
 
 
 12,212
 
 2.1%
 
 
 14,723
 
 1.4%Capital
  Equipment
 
 
 2,611
 
 0.6%
 
 
 9,945
 
 1.7%
 
 
 12,556
 
 1.2%Energy:
  Electricity
 
 
 9,975
 
 2.3%
 
 
 2,499
 
 0.4%
 
 
 12,474
 
 1.2%Aerospace &
  Defense
 
 
 1,428
 
 0.3%
 
 
 9,074
 
 1.5%
 
 
 10,502
 
 1.0%Energy: Oil
  & Gas
 
 
 1,359
 
 0.3%
 
 
 8,044
 
 1.4%
 
 
 9,403
 
 0.9%Environmental
  Industries
 
 
 4,850
 
 1.1%
 
 
 -
 
 -
 
 
 4,850
 
 0.5%Subtotal/total
  percentage
 
 
 432,652
 
 100.0%
 
 
 595,134
 
 100.0%
 
 
 1,027,786
 
 100.0%U.S. Treasury
  Securities
 
 
 33,188
 
 
 
 
 -
 
 
 
 
 33,188Total investments
 
 $
 465,840
 
 
 
 $
 595,134
 
 
 
 $
 1,060,974
 42


---

December 31, 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
 
 $
 89,123
 
 25.4%
 
 $
 70,280
 
 16.4%
 
 $
 159,403
 
 20.4%High Tech
  Industries
 
 
 45,737
 
 13.0%
 
 
 36,029
 
 8.4%
 
 
 81,766
 
 10.5%Healthcare &
  Pharmaceuticals
 
 
 10,203
 
 2.9%
 
 
 49,917
 
 11.7%
 
 
 60,120
 
 7.7%Beverage, Food
  & Tobacco
 
 
 42,962
 
 12.2%
 
 
 -
 
 -
 
 
 42,962
 
 5.5%Banking,
  Finance, Insurance & Real Estate
 
 
 7,867
 
 2.2%
 
 
 31,955
 
 7.5%
 
 
 39,822
 
 5.1%Diversified
  Financials
 
 
 37,102
 
 10.6%
 
 
 -
 
 -
 
 
 37,102
 
 4.8%Construction
  & Building
 
 
 3,626
 
 1.0%
 
 
 31,483
 
 7.4%
 
 
 35,109
 
 4.5%Chemicals,
  Plastics & Rubber
 
 
 9,107
 
 2.6%
 
 
 24,303
 
 5.7%
 
 
 33,410
 
 4.3%Hotel, Gaming
  & Leisure
 
 
 19,703
 
 5.6%
 
 
 12,606
 
 3.0%
 
 
 32,309
 
 4.1%Consumer Goods:
  Durable
 
 
 -
 
 -
 
 
 31,979
 
 7.5%
 
 
 31,979
 
 4.1%Media:
  Advertising, Printing & Publishing
 
 
 20,235
 
 5.8%
 
 
 7,001
 
 1.6%
 
 
 27,236
 
 3.5%Automotive
 
 
 14,123
 
 4.0%
 
 
 11,939
 
 2.8%
 
 
 26,062
 
 3.3%Retail
 
 
 -
 
 -
 
 
 25,421
 
 6.0%
 
 
 25,421
 
 3.3%Containers,
  Packaging & Glass
 
 
 9,800
 
 2.8%
 
 
 8,329
 
 1.9%
 
 
 18,129
 
 2.3%Services:
  Consumer
 
 
 792
 
 0.2%
 
 
 17,023
 
 4.0%
 
 
 17,815
 
 2.3%Media:
  Diversified & Production
 
 
 6,298
 
 1.8%
 
 
 10,239
 
 2.4%
 
 
 16,537
 
 2.1%Telecommunications
 
 
 13,813
 
 3.9%
 
 
 988
 
 0.2%
 
 
 14,801
 
 1.9%Media:
  Broadcasting & Subscription
 
 
 2,077
 
 0.6%
 
 
 10,965
 
 2.6%
 
 
 13,042
 
 1.7%Consumer Goods:
  Non-Durable
 
 
 1,571
 
 0.4%
 
 
 11,379
 
 2.7%
 
 
 12,950
 
 1.7%Aerospace &
  Defense
 
 
 1,370
 
 0.4%
 
 
 10,014
 
 2.3%
 
 
 11,384
 
 1.5%Forest Products
  & Paper
 
 
 -
 
 -
 
 
 10,867
 
 2.5%
 
 
 10,867
 
 1.4%Capital
  Equipment
 
 
 3,896
 
 1.1%
 
 
 6,168
 
 1.4%
 
 
 10,064
 
 1.3%Energy: Oil
  & Gas
 
 
 1,377
 
 0.4%
 
 
 8,685
 
 2.0%
 
 
 10,062
 
 1.3%Energy:
  Electricity
 
 
 5,932
 
 1.7%
 
 
 -
 
 -
 
 
 5,932
 
 0.8%Environmental
  Industries
 
 
 4,850
 
 1.4%
 
 
 -
 
 -
 
 
 4,850
 
 0.6%Subtotal/total
  percentage
 
 
 351,564
 
 100.0%
 
 
 427,570
 
 100.0%
 
 
 779,134
 
 100.0%U.S. Treasury
  Securities
 
 
 10,350
 
 
 
 
 -
 
 
 
 
 10,350Total investments
 
 $
 361,914
 
 
 
 $
 427,570
 
 
 
 $
 789,484
  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, revolving credit facilities, or unfunded commitments,
which may require us to provide funding when requested in accordance with the
terms of the underlying agreements. As of March 31, 2015 and December 31, 2014,
our unfunded commitments amounted to $15,217 and $23,112, respectively. As of
May 8, 2015, our unfunded commitments amounted to $39,241. Since these
commitments may expire without being drawn upon, unfunded commitments do not
necessarily represent future cash requirements or future earning assets for us.
Refer to section “Commitments and Contingencies and Off-Balance Sheet
Arrangements” for further details on our unfunded commitments. 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 March 31, 2015 and December 31, 2014,
excluding short term investments of $33,188 and $10,350, respectively: March 31, 2015Investment 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
 
 
 420,642
 
 97.2%
 
 
 573,628
 
 96.4%
 
 
 994,270
 
 96.7%3
 
 
 12,010
 
 2.8%
 
 
 17,795
 
 3.0%
 
 
 29,805
 
 2.9%4
 
 
 -
 
 -
 
 
 3,711
 
 0.6%
 
 
 3,711
 
 0.4%5
 
 
 -
 
 -
 
 
 -
 
 -
 
 
 -
 
 -$
 432,652
 
 100.0%
 
 $
 595,134
 
 100.0%
 
 $
 1,027,786
 
 100.0%
  December 31, 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
 
 
 342,922
 
 97.5%
 
 
 405,522
 
 94.8%
 
 
 748,444
 
 96.1%3
 
 
 8,642
 
 2.5%
 
 
 19,087
 
 4.5%
 
 
 27,729
 
 3.5%4
 
 
 -
 
 -
 
 
 2,961
 
 0.7%
 
 
 2,961
 
 0.4%5
 
 
 -
 
 -
 
 
 -
 
 -
 
 
 -
 
 -$
 351,564
 
 100.0%
 
 $
 427,570
 
 100.0%
 
 $
 779,134
 
 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 May 8, 2015, our investment
portfolio, excluding our short term investments and TRS, consisted of interests
in 71 portfolio companies (19% in senior secured first lien debt, 68% in senior
secured second lien debt, 12% in collateralized securities and structured products
(comprised of 3% invested in rated debt, 3% invested in non-rated debt and 6%
invested in non-rated equity of such securities and products) and 1% in unsecured
debt with a total fair value of $500,670 with an average and median portfolio
company annual EBITDA of $70.1 million and $58.7 million, respectively, at
initial investment. As of May 8, 2015, investments in our portfolio, excluding
our short term investments and TRS, were purchased at a weighted average price
of 96.87% of par value. Our estimated gross annual portfolio yield was 9.28%
based upon the purchase price of such investments. The estimated gross
portfolio yield does not represent an actual investment return to shareholders.
For the three months ended March 31, 2015, our total investment return-net
asset value was 3.33%. Total investment return-net asset value is a measure of
the change in total value for shareholders who held our common stock at the beginning
and end of the period, including distributions paid or payable during the
period, and is described further in Note 12 of our consolidated financial
statements.  As of May 8, 2015, our short term
investments included an investment in a U.S. Treasury Obligations Fund of
$44,694.  Further, as of May 8, 2015, 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 92 portfolio
companies.  45


---

Results of Operations for the Three Months Ended March 31, 2015
and 2014  Our results of operations for
the three months ended March 31, 2015 and 2014 were as follows:  Three Months Ended
  March 31,2015
 
 2014Investment income
 $
 8,914
 
 $
 2,200Net operating expenses
 
 6,783
 
 
 2,450Net investment income (loss)
 
 2,131
 
 
 (250)Net realized gain on investments
 
 575
 
 
 174Net change in unrealized appreciation on investments
 
 1,464
 
 
 611Net realized gain on total return swap
 
 6,607
 
 
 2,963Net change in unrealized appreciation on total return swap
 
 6,049
 
 
 1,208Net increase in net assets resulting from operations
 $
 16,826
 
 $
 4,706
  Investment Income  For the three months
ended March 31, 2015 and 2014, we generated investment income of $8,914 and
$2,200, respectively, consisting primarily of interest income on investments in
senior secured loans, collateralized securities and structured products of 62
and 48 portfolio companies held during each respective period. During the three
months ended March 31, 2015 and 2014, our investment portfolio, excluding short
term investments and the TRS, increased $81,088 and $49,373, 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
March 31, 2015 and 2014 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 March 31, 2015 and 2014 was as follows:  Three Months Ended
  March 31,2015
 
 2014Management fees
 $
 2,760
 
 $
 909Administrative services expense
 
 454
 
 
 415Capital gains incentive fee
 1,454
 
 
 525Offering, organizational and other costs - IIG
 
 -
 
 
 592General and administrative
 
 1,278
 
 
 1,058Total expenses
 5,946
 
 
 3,499Expense reimbursements from IIG
 -
 
 
 (1,049)Recoupment of expense reimbursements from IIG
 
 837
 
 
 -Net operating expenses
 $
 6,783
 
 $
 2,450
 46


---

The composition of our general and administrative expenses for the
three months ended March 31, 2015 and 2014 was as follows:  Three Months Ended
  March 31,2015
 
 2014Due diligence
  fees
 $
 262
 
 $
 323Professional
  fees expense
 
 235
 
 
 287Transfer agent
  expense
 
 225
 
 
 116Marketing
  expense
 
 99
 
 
 88Dues and
  subscriptions
 
 88
 
 
 21Director fees
  and expenses
 
 64
 
 
 32Insurance
  expense
 
 59
 
 
 52Printing and
  mailing expense
 
 55
 
 
 33Filing fees
 
 27
 
 
 6Other expenses
 
 164
 
 
 100Total general
  and administrative expense
 $
 1,278
 
 $
 1,058
  Expense Reimbursements  Our affiliate, IIG, 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 March 31, 2015,
IIG recouped $837 of expense reimbursements made during the three months ended
March 31, 2013 and June 30, 2013 in connection with the expense support and
conditional reimbursement agreement. We did not receive any expense
reimbursements from IIG for the three months ended March 31, 2015. For the
three months ended March 31, 2014, we received expense reimbursements from IIG
of $1,049.  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
 
 $
 117
 
 $
 117
 
 $
 -
 
 0.93%
 
 0.00%(2)
 
 December 31, 2015March 31, 2013
 
 
 819
 
 
 819
 
 
 -
 
 2.75%
 
 7.00%
 
 March 31, 2016June 30, 2013
 
 
 1,148
 
 
 523
 
 
 625
 
 1.43%
 
 7.00%
 
 June 30, 2016September 30,
  2013
 
 
 1,297
 
 
 -
 
 
 1,297
 
 0.49%
 
 7.00%
 
 September 30, 2016December 31,
  2013
 
 
 695
 
 
 -
 
 
 695
 
 0.31%
 
 7.00%
 
 December 31, 2016March 31, 2014
 
 
 1,049
 
 
 -
 
 
 1,049
 
 0.27%
 
 7.00%
 
 March 31, 2017June 30, 2014
 
 
 -
 
 
 -
 
 
 -
 
 0.31%
 
 7.00%
 
 June 30, 2017September 30,
  2014
 
 
 -
 
 
 -
 
 
 -
 
 0.13%
 
 7.00%
 
 September 30, 2017December 31,
  2014
 
 
 831
 
 
 -
 
 
 831
 
 0.15%
 
 7.00%
 
 December 31, 2017March 31, 2015
 
 
 -
 
 
 -
 
 
 -
 
 0.74%
 
 7.00%
 
 March 31, 2018Total
 
 $
 5,956
 
 $
 1,459
 
 $
 4,497
 (1)
 Operating expenses include all expenses borne by us, except for
  offering and organizational costs, base management fees, incentive fees,
  administrative services expenses, other general and administrative expenses
  owed to CIM and its affiliates, and interest expense.(2)
 We did not declare any distributions during the three months
  ended December 31, 2012.(3)
 Annualized Distribution Rate equals the annualized rate of
  distributions paid to shareholders based on the amount of the regular cash
  distributions paid immediately prior to the date the expense support payment
  obligation was incurred by CIM. Annualized Distribution Rate does not include
  special cash or stock distributions paid to shareholders.
 47


---

Net Investment Income (Loss)  Our net investment income (loss) totaled
$2,131 and ($250) for the three months ended March 31, 2015 and 2014, respectively.
The increase in net investment income was primarily due to an increase in the
size of our investment portfolio relative to our expenses as we continued to
achieve economies of scale.  Net Realized Gain on Investments  Our net realized gain on investments
totaled $575 and $174 for the three months ended March 31, 2015 and 2014,
respectively. The increase in net realized gain on investments was primarily
due to an increase in sales activity during the three months ended March 31,
2015 compared to the three months ended March 31, 2014. During the three months
ended March 31, 2015, we received sale proceeds and principal repayments of
$35,565 and $1,118, respectively, for gains of $575. For the three months ended
March 31, 2014, we realized gains of $174 on sale proceeds of $13,166 and
principal repayments of $5,289.  Net Change in Unrealized Appreciation on
Investments  The net change in unrealized appreciation
on our investments totaled $1,464 and $611 for the three months ended March 31,
2015 and 2014, respectively. This change was predominantly driven by primary and
secondary investments sourced with the assistance of AIM, made available to us
at advantageous purchase prices, as well as a tightening of credit spreads
during the three months ended March 31, 2015.  Net Realized Gain on TRS  Our net realized gain on the TRS totaled $6,607
and $2,963 for the three months ended March 31, 2015 and 2014, respectively. The
components of net realized gain on the TRS are summarized below for the three
months ended March 31, 2015 and 2014:  Three Months Ended
  March 31,2015
 
 
 2014Interest and
  other income from TRS portfolio
 
 $
 8,414
 
 
 $
 3,074Interest and
  other expense from TRS portfolio
 
 
 (2,006)
 
 
 
 (714)Net gain on TRS
  loan sales
 
 
 199
 
 
 
 603Total
 
 $
 6,607
 
 
 $
 2,963
  Net Change in Unrealized Appreciation on
TRS  The net change in unrealized appreciation
on the TRS totaled $6,049 and $1,208 for the three months ended March 31, 2015
and 2014, respectively. This change was predominantly driven by primary and
secondary investments sourced with the assistance of AIM, made available to us
at advantageous purchase prices, as well as a tightening of credit spreads
during the three months ended March 31, 2015.  Net Increase in Net Assets Resulting from Operations  For the three months ended
March 31, 2015 and 2014, we recorded a net increase in net assets resulting
from operations of $16,826 and $4,706, respectively. 48


---

Net Asset Value per Share, Annual Investment Return and Total
Return Since Inception  Our net asset value per share was $9.35 and
$9.32 on March 31, 2015 and 2014, respectively. After considering (i) the
overall changes in net asset value per share, (ii) paid distributions of
approximately $0.1829 per share during the three months ended March 31, 2015,
and (iii) the assumed reinvestment of those distributions at 90% of the
prevailing offering price per share, the total investment return was 3.33% for
the entire three-month period ended March 31, 2015. Total investment return-net
asset value is a measure of the change in total value for shareholders who held
our common stock at the beginning and end of the period, including
distributions paid or payable during the period, and is described further in
Note 12 of our consolidated financial statements.  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 9.57% and a cumulative total return of
23.25% (see chart below). Initial shareholders who subscribed to the offering
in December 2012 with an initial investment of $10,000 and an initial purchase
price equal to $10.00 per share (the initial public offering price including
sales load) have seen an annualized return of 4.63% and a cumulative total
return of 10.92%. Over the same time period the S&P/LSTA Leveraged Loan
Index, a primary measure of senior debt covering the U.S. leveraged loan
market, which currently consists of approximately 1,000 credit facilities
throughout numerous industries, and the BofA Merrill Lynch US High Yield Index,
a primary measure of short-term US dollar denominated below investment grade
corporate debt publicly issued in the US domestic market, registered cumulative
total returns of approximately 10.11% and 13.10%, respectively, during the
period from December 17, 2012 to March 31, 2015. In addition, the annualized
return for the S&P/LSTA Leveraged Loan Index and the BofA Merrill Lynch US
High Yield Index was 4.30% and 5.53%, respectively, during the period from
December 17, 2012 to March 31, 2015.    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 distributions declared and payable to shareholders, if
any, on the last day of the period. 49


---

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 March 31, 2015, we sold 64,734,704
shares for net proceeds of $663,808 at an average price per share of $10.25.
The net proceeds received include reinvested shareholder distributions of
$18,950, for which we issued 2,014,344 shares of common stock, and gross
proceeds paid for shares of common stock tendered for repurchased of $945, for
which we repurchased 100,487 shares of common stock. Since commencing our continuous
public offering on July 2, 2012 and through March 31, 2015, sales commissions
and dealer manager feeds related to the sale of our common stock were $38,844
and $18,852, respectively.  As of May 8, 2015, we sold 71,372,505
shares of common stock for gross proceeds of $731,994 at an average price per
share of $10.26. The gross proceeds received include reinvested shareholder
distributions of $23,269, for which we issued 2,473,639 shares of common stock,
and gross proceeds paid for shares of common stock tendered for repurchase for
$1,343 which we repurchased 142,775 shares of common stock.Since commencing our continuous
public offering on July 2, 2012 and through May 8, 2015, sales commissions and
dealer manager fees related to the sale of our common stock were $42,716 and
$20,758, respectively.  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 March 31,
2015 and December 31, 2014, we had $33,188 and $10,350 in short term
investments, respectively, invested in a fund that primarily invests in U.S.
government securities.  On April 28, 2015, we filed a registration
statement on Form N-2 to sell up to 100,000,000 additional shares of our common
stock at an initial public offering price of $10.45 per share.  Total Return Swap  For a detailed
discussion of our TRS, refer to Note 7 to our consolidated financial statements
included in this report.  East West Bank Credit Facility  On April 30, 2015, we
entered into the EWB Credit Facility with EWB. The EWB Credit Facility provides
for borrowings in an aggregate principal amount of up to $40,000, subject to
compliance with a borrowing base. As of May 8, 2015, the aggregate principal amount
available in connection with the EWB Credit Facility was $40,000.  Advances under the EWB
Credit Facility bear interest at a floating rate equal to (i) the greater of
3.25% per year or the variable rate of interest per year announced by EWB as
its prime rate, plus (ii) a spread of 0.75%. Interest is payable quarterly in
arrears. Each advance under the EWB Credit Facility will be due and payable on
the earlier of 90 days from the date such advance was made by EWB, or April 29,
2016. We may prepay any advance without penalty or premium. We will also be
subject to a non-usage fee of 0.50% per year on the amount, if any, of the
aggregate principal amount available under the EWB Credit Facility that has not
been borrowed. The non-usage fee, if any, is payable quarterly in arrears. Our
obligations to EWB under the EWB Credit Facility are secured by a first
priority security interest in certain eligible loans in which we have a
beneficial interest, as updated from time to time. U.S. Bank National
Association has agreed to serve as the collateral custodian under the EWB
Credit Facility pursuant to a custody control agreement between us and EWB.  50


---

RIC Status and Distributions Our total
investment portfolio includes loans and other securities on our consolidated
balance sheets and loans underlying the TRS. Accordingly, we treat net interest
and other income earned on all investments, including the loans underlying the
TRS, as a component of investment company taxable income when determining our
sources of distributions. The following table reflects the sources of our
distributions on a tax basis for the three months ended March 31, 2015:  Investment Portfolio
 
 Total Return Swap Portfolio
 
 Total Investment Portfolio
 
 PercentageNet investment
  income(1)
 
 $
 3,585
 
 $
 6,607
 
 $
 10,192
 
 94.7%Capital gains
  from the sale of assets(2)
 
 
 575
 
 
 -
 
 
 575
 
 5.3%Total
 
 $
 4,160
 
 $
 6,607
 
 $
 10,767
 
 100.0%
 (1)
 Tax basis net investment income does not include unearned
  capital gains incentive fees of $1,454 which reduce GAAP basis net investment
  income available for distributions.  This tax-related adjustment represents
  additional net investment income available for distribution to shareholders.(2)
 For the three months ended March 31, 2015, $6 of capital gains
  are classified as long-term. The final determination of the tax attributes of
  our distributions is made annually as of the end of our fiscal year.
  For an additional discussion of our RIC
status and distributions, refer to Note 2 and Note 5, respectively, to our
consolidated financial statements included in this report.  Recent Accounting Pronouncements In February 2015, the Financial Accounting Standard Board
issued ASU 2015-02,Consolidation: Amendments to the Consolidation
Analysis, or ASU 2015-02, which amends the criteria for determining which
entities are considered variable interest entities, or VIEs, amends the
criteria for determining if a service provider possesses a variable interest in
a VIE and ends the deferral granted to investment companies for application of
the VIE consolidation model. This guidance is effective for annual and interim
reporting periods of public entities beginning after December 15, 2015 and
early adoption is permitted. We are currently evaluating the impact ASU 2015-02
will have on our consolidated financial statements and/or disclosures. Critical Accounting Policies  Our consolidated financial statements are
prepared in conformity with GAAP, which requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting periods. Critical accounting
policies are those that require the application of management’s most difficult,
subjective or complex judgments, often because of the need to make estimates
about the effect of matters that are inherently uncertain and that may change
in subsequent periods. In preparing the consolidated financial statements, we
also utilize available information, including our past history, industry
standards and the current economic environment, among other factors, in forming
our estimates and judgments, giving due consideration to materiality. Actual
results may differ from these estimates. In addition, other companies may
utilize different estimates, which may impact the comparability of our results
of operations to those of companies in similar businesses. 51


---

Valuation of Portfolio Investments  The value of our assets is
determined quarterly and at such other times that an event occurs that
materially affects the valuation. The valuation is made pursuant to Section
2(a)(41) of the 1940 Act, which requires that we value our assets as follows:
(i) the market price for those securities for which a market quotation is
readily available, and (ii) for all other securities and assets, at fair value,
as determined in good faith by our board of directors. As a BDC, Section
2(a)(41) of the 1940 Act requires the board of directors to determine in good
faith the fair value of portfolio securities for which a market price is not
readily available, and it does so in conjunction with the application of our
valuation procedures by CIM.  There is no single standard for
determining fair value in good faith. As a result, determining fair value
requires that judgment be applied to the specific facts and circumstances of
each asset while employing a valuation process that is consistently followed.
Determinations of fair value involve subjective judgments and estimates.
Accordingly, the notes to our consolidated financial statements refer to the
uncertainty with respect to the possible effect of such valuations, and any
change in such valuations in our consolidated financial statements.  Valuation
Methods  With respect to investments for which market quotations
are not readily available, we undertake a multi-step valuation process each
quarter, as described below:  ·our quarterly valuation process
begins with each portfolio company or investment being initially valued by
certain of CIM’s investment professionals and certain members of its management
team, with such valuation taking into account information received from various
sources, including an independent valuation firm, if applicable; ·preliminary valuation conclusions
are then documented and discussed with CIM’s valuation committee. ·CIM’s valuation committee reviews
the preliminary valuation, and, if applicable, delivers such preliminary
valuation to an independent valuation firm for its review; ·CIM’s valuation committee, or its
designee, and, if appropriate, the relevant investment professionals meet with
the independent valuation firm to discuss the preliminary valuation; ·designated members of CIM’s
management team respond and supplement the preliminary valuation to reflect any
comments provided by the independent valuation firm; ·our audit committee meets with
members of CIM’s management team and the independent valuation firm to discuss
the assistance provided and the results of the independent valuation firm’s
review; and ·our board of directors discusses
the valuation and determines the fair value of each investment in our portfolio
in good faith based on various statistical and other factors, including the
input and recommendation of CIM, the audit committee and any third-party
valuation firm, if applicable.  In addition to the foregoing, certain investments for
which a market price is not readily available are evaluated on a quarterly
basis by an independent valuation firm and certain other investments are on a
rotational basis reviewed once over a twelve-month period by an independent
valuation firm. Finally, certain investments are not evaluated by an
independent valuation firm unless the net asset value and other aspects of such
investments in the aggregate exceed certain thresholds.  Given the expected types of investments, excluding
short term investments that are classified as Level 1, management expects our
portfolio holdings to be classified in Level 2 or Level 3. Due to the
uncertainty inherent in the valuation process, particularly for Level 2 and
Level 3 investments, such fair value estimates may differ significantly from
the values that would have been used had an active market for the investments
existed. In addition, changes in the market environment and other events that
may occur over the life of the investments may cause the gains or losses that
we ultimately realize on these investments to materially differ from the
valuations currently assigned. Inputs used in the valuation process are subject
to variability in the future and can result in materially different fair
values.  For an additional discussion of our investment
valuation process, refer to Note 2 to our consolidated financial statements
included in this report. 52


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Related Party Transactions  For the three
months ended March 31, 2015 and 2014, we incurred fees and other expenses
related to CIM and its affiliates as follows: Three Months Ended
  March 31,Entity
 
 Capacity
 
 Description
 
 2015
 
 2014(3)CĪON
  Securities, LLC
 
 Dealer manager
 
 Dealer manager
  fees(1)
 
 $
 3,251
 
 $
 2,513CIM
 
 Investment
  adviser
 
 Management
  fees(2)
 
 
 2,760
 
 
 909CIM
 
 Investment
  adviser
 
 Incentive
  fees(2)
 
 
 1,454
 
 
 525ICON Capital,
  LLC
 
 Administrative
  services provider
 
 Administrative
  services expense(2)
 
 
 454
 
 
 415IIG
 
 Sponsor
 
 Reimbursement of
  offering, organizational and other costs(2)
 
 
 -
 
 
 592IIG
 
 Sponsor
 
 Recoupment of
  expense support(2)
 
 
 837
 
 
 -$
 8,756
 
 $
 4,954(1)
 Amounts charged
  directly to equity.(2)
 Amounts charged
  directly to operations.(3)
 For the three months ended March 31, 2014, all management fees,
  $1 of administrative services expense, and $139 of incentive fees were
  supported pursuant to the expense support and conditional reimbursement
  agreement.
  For an additional discussion of our
relationship with CĪON Securities, CIM, ICON Capital, and IIG and amounts
incurred under agreements with such related parties, refer to Note 4 to our
consolidated financial statements included in this report.  Contractual Obligations  On December 17, 2012, Flatiron entered into
a TRS with Citibank. Flatiron and Citibank have amended the TRS on numerous
occasions including the most recent eighth amendment on March 4, 2015. See Note
7 to our consolidated financial statements for a more detailed description of
the TRS.  On April 30, 2015, we entered into the EWB
Credit Facility with EWB. See “Financial Condition, Liquidity and Capital
Resources – East West Bank Credit Facility” above for a more detailed
description of the EWB Credit Facility.  53


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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, revolving credit facilities, or other unfunded commitments, which may
require us to provide funding when requested in accordance with the terms of
the underlying agreement. As of March 31, 2015 and December 31, 2014, our
commitments and contingencies were as follows: Unfunded
  Commitments
 
 March 31, 2015(1)
 
 December 31, 2014(1)SS&C
  Technologies, Inc.(2)
 
 $
 10,000
 
 $
 -Studio Movie
  Grill Holdings, LLC(3)
 
 
 4,010
 
 
 6,388ECI
  Acquisition Holdings, Inc.(3)
 
 
 1,207
 
 
 1,724Dollar Tree,
  Inc.(4)
 
 
 -
 
 
 15,000Total
 
 $
 15,217
 
 $
 23,112
 (1)
 Unless otherwise noted, the funding criteria for these unfunded
  commitments had not been met at the date indicated.(2)
 As of March 31, 2015, such commitment was subject to the
  execution of a definitive loan agreement and the consummation of the
  underlying corporate transaction, and conditional upon receipt of all
  necessary shareholder, regulatory and other applicable approvals. As of May
  8, 2015, our unfunded commitments included $10,000 to SS&C Technologies,
  Inc.(3)
 As of May 8, 2015, our unfunded commitments were to portfolio
  companies ECI Acquisition Holdings, Inc. and Studio Movie Grill Holdings, LLC
  in the amount of $1,207 and $3,540, respectively, and included unfunded
  commitments to Tenet Healthcare and Informatica Corp. for $14,444 and
  $10,050, respectively.(4)
 As of December 31, 2014, such commitment was subject to the
  execution of a definitive loan agreement and the consummation of the
  underlying corporate transaction, and conditional upon receipt of all
  necessary shareholder, regulatory and other applicable approvals.  Prior to
  March 31, 2015, the Dollar Tree, Inc. unfunded commitment was terminated.
  Unfunded commitments to provide
funds to companies are not recorded on our consolidated balance sheets. Since
these commitments may expire without being drawn upon, unfunded commitments do
not necessarily represent future cash requirements or future earning assets for
us. We believe we maintain sufficient liquidity in the form of cash on hand,
short-term investments and other liquid assets to fund these unfunded
commitments should the need arise.For
information on the companies to which we are committed to fund additional
amounts as ofMarch 31, 2015 and December 31,2014,refer to the table above and the consolidated
schedule of investments included in this report.  The Staff of the Division of
Investment Management has recently informed us that it views our unfunded
commitments as senior securities under the 1940 Act.  We are reviewing the
Staff’s position and its impact on our operations and business
objectives and will continue to engage the Staff in discussions as to the
appropriate treatment of our unfunded commitments.  During the course of
our review, analysis and discussions, we intend to comply with the
Staff’s position by including unfunded commitments as a senior security in the
asset coverage test or by segregating or setting aside liquid assets or
engaging in other SEC or Staff-approved measures to “cover” our unfunded
commitments in an amount required to comply with the 1940 Act.  Off-Balance Sheet Arrangements  We currently have no
off-balance sheet arrangements except for those discussed in “Financial
Condition, Liquidity and Capital Resources - Total Return Swap” and “Commitments
and Contingencies and Off-Balance Sheet Arrangements - Commitments and Contingencies”
above.  54


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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 March 31, 2015, 98.6% of our
portfolio investments and underlying loans subject to the TRS paid variable
interest rates. A rise in the general level of interest rates can be expected
to lead to higher interest rates applicable to our debt investments, especially
to the extent that we hold variable rate investments, and to declines in the
value of any fixed rate investments we may hold. To the extent that a majority
of our investments may be in variable rate investments, an increase in interest
rates could make it easier for us to meet or exceed our incentive fee hurdle
rate, as defined in our investment advisory agreement, and may result in a
substantial increase in our net investment income, and also to the amount of
incentive fees payable to CIM with respect to our pre-incentive fee net
investment income.  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
material adverse effect on our business, financial condition and results of
operations.  The following table shows the effect over a
twelve month period of changes in interest rates on our net interest income,
excluding short term investments, assuming no changes in our investment
portfolio and TRS Agreement in effect as of March 31, 2015: Change in
  Interest Rates
 
 Increase (Decrease) in Net Interest
  Income(1)
 
 Percentage Change in Net Interest IncomeDown 22 basis
  points
 
 $
 1,444
 2.2%Current base interest
  rate
 
 
 -
 -Up 100 basis
  points
 
 
 (3,510)
 (5.3%)Up 200 basis
  points
 
 
 503
 0.8%Up 300 basis
  points
 
 
 4,558
 6.9%(1)
 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 March 31, 2015, 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 report. 55


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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 March 31, 2015, 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 March 31, 2015
that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting. 56


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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, 2014. 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 March 31, 2015. The table below provides information
concerning our repurchases of shares of our common stock during the three
months ended March 31, 2015 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 ProgramsJanuary 1
  to January 31, 2015
 
 48,947
 
 $
 9.41
 
 48,947
 
 (1)February 1
  to February 28, 2015
 
 -
 
 
 -
 
 -
 
 -March 1
  to March 31, 2015
 
 -
 
 
 -
 
 -
 
 -Total
 
 48,947
 
 $
 9.41
 
 48,947
 
 (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.    57


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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 Appendix A to
  Post-Effective Amendment No. 9 to Registrant’s Registration Statement on Form
  N-2 filed with the SEC on April 20, 2015 (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
 
 Eighth Amended
  and Restated Confirmation Letter Agreement dated as of March 4, 2015, 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 March 6, 2015).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)).
   58


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Exhibit
  Number
 
 Description of Document10.10
 
 Amendment No. 1
  to the Amended and Restated Expense Support and Conditional Reimbursement
  Agreement dated as of January 16, 2015, by and between CĪON Investment
  Corporation and ICON Investment Group, LLC (Incorporated by reference to
  Exhibit (K)(6) to Post-Effective Amendment No. 8 to Registrant’s Registration
  Statement on Form N-2 filed with the SEC on January 16, 2015 (File No.
  333-178646)).10.11
 
 Form of
  Follow-On Dealer Manager Agreement by and among CĪON Investment
  Corporation, CĪON Investment Management, LLC and CĪON Securities,
  LLC (Incorporated by reference to Exhibit (H)(3) to Registrant’s Registration
  Statement on Form N-2 filed with the SEC on April 28, 2015 (File No.
  333-203683)).10.12
 
 Form of
  Follow-On Selected Dealer Agreement (Incorporated by reference to Exhibit
  (H)(4) to Registrant’s Registration Statement on Form N-2 filed with the SEC
  on April 28, 2015 (File No. 333-203683)).10.13
 
 Loan and
  Security Agreement, dated as of April 30, 2015, by and between CĪON
  Investment Corporation and East West Bank (Incorporated by reference to
  Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the SEC on
  May 6, 2015).10.14
 
 Custody Control
  Agreement, dated as of April 30, 2015, by and among CĪON Investment
  Corporation, East West Bank and U.S. Bank National Association (Incorporated
  by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed
  with the SEC on May 6, 2015).31.1
 
 Rule
  13a-14(a)/15d-14(a) Certification of Co-Chief Executive Officer.31.2
 
 Rule
  13a-14(a)/15d-14(a) Certification of Co-Chief Executive Officer.31.3
 
 Rule
  13a-14(a)/15d-14(a) Certification of Chief Financial Officer.32.1
 
 Certification
  of Co-Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted
  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
 
 Certification
  of Co-Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted
  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.3
 
 Certification
  of Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant
  to Section 906 of the Sarbanes-Oxley Act of 2002.
  59


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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: May 13, 2015 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) 60


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