8-K
CION Investment Corp (CION)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):March 10, 2022 (March 8, 2022)
CĪONInvestment Corporation
(Exact Name of Registrant as Specified in Charter)
| Maryland | 000-54755 | 45-3058280 |
|---|---|---|
| (State<br> or Other Jurisdiction of Incorporation) | (Commission<br> File Number) | (I.R.S.<br> Employer Identification No.) |
| 3 Park Avenue, 36th Floor<br><br> <br>New York, New York 10016 | ||
| --- | ||
| (Address of Principal Executive Offices) | ||
| (212) 418-4700 | ||
| --- | ||
| (Registrant’s<br> telephone number, including area code) | ||
| Not applicable | ||
| --- | ||
| (Former<br> name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title<br> of each class | Trading<br> symbol(s) | Name<br> of each exchange on which registered |
|---|---|---|
| Common stock, par value $0.001 per share | CION | The New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02. Results of Operations and FinancialCondition.
Q2 2022Regular Quarterly Distribution
The board of directors (the “Board”) of CĪON Investment Corporation (“CION”) has delegated to CION’s executive officers the authority to determine the amount, record dates, payment dates and other terms of distributions to shareholders, which will be ratified by the Board on a quarterly basis.
On March 8, 2022, CION’s co-chief executive officers declared a regular quarterly cash distribution of $0.28 per share for the second quarter of 2022 payable on June 8, 2022 to shareholders of record as of June 1, 2022. A copy of the press release announcing the foregoing is attached hereto as Exhibit 99.1 and incorporated by reference herein.
Q4 and YE 2021 Financial Results
On March 10, 2022, CION issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 31, 2021. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.
In connection with its conference call to be held on March 10, 2022 to discuss its financial results for the fourth quarter and fiscal year ended December 31, 2021, CION has provided an accompanying slide presentation in the Investor Resources – Events and Presentations section of its website at www.cionbdc.com. A copy of the presentation is also attached hereto as Exhibit 99.2 and incorporated by reference herein.
The information disclosed under this Item 2.02, including Exhibits 99.1 and 99.2 hereto, is being “furnished” and shall not be deemed “filed” by CION for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 7.01. Regulation FD Disclosure.
The information in Item 2.02 of this Current Report on Form 8-K is incorporated by reference into this Item 7.01.
Item 9.01.Financial Statements and Exhibits.
| (d) | Exhibits. |
|---|---|
| 99.1 | Press<br> Release dated March 10, 2022. |
| --- | --- |
| 99.2 | CĪON Investment Corporation Fourth Quarter 2021 Earnings Presentation. |
| --- | --- |
| SIGNATURES | |
| --- |
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CĪON Investment Corporation<br><br> <br>**** | ||
|---|---|---|
| Date: | March 10, 2022 | By: /s/ Michael A. Reisner |
| Co-Chief Executive Officer |
EXHIBIT LIST
| EXHIBITNUMBER | DESCRIPTION |
|---|---|
| 99.1 | Press<br> Release dated March 10, 2022 |
| --- | --- |
| 99.2 | CĪON Investment Corporation<br>Fourth Quarter 2021 Earnings Presentation. |
Exhibit 99.1
CION INVESTMENT CORPORATION REPORTS DECEMBER31, 2021 FINANCIAL RESULTS; ANNOUNCES SECOND QUARTER 2022 REGULAR DISTRIBUTION OF $0.28 PER SHARE
For Immediate Release
NEW YORK, March 10, 2022 — CION Investment Corporation (NYSE: CION) (“CION” or the “Company”) today reported its financial results for the fourth quarter and fiscal year ended December 31, 2021 and filed its Form 10-K with the U.S. Securities and Exchange Commission.
CION also announced that, on March 8, 2022, its co-chief executive officers declared a second quarter 2022 regular distribution of $0.28 per share payable on June 8, 2022 to shareholders of record as of June 1, 2022.
QUARTERLY HIGHLIGHTS
| • | On December 21, 2021, the Company formed a joint venture partnership with an affiliate of EagleTree Capital,<br>LP to jointly pursue debt opportunities and special situation, crossover, subordinated and other junior capital investments; |
|---|---|
| • | On December 30, 2021, the Company received shareholder approval to reduce its asset coverage ratio requirement<br>from 200% to 150%, effective December 31, 2021, which allows the Company to increase the maximum amount of leverage that it is permitted<br>to incur; |
| --- | --- |
| • | Net investment income per share for the quarter ended December 31, 2021 was $0.32. Earnings per share<br>for the quarter ended December 31, 2021 was $0.28; |
| --- | --- |
| • | Net asset value per share was $16.34 as of December 31, 2021 compared to $16.52 as of September 30,<br>2021. The decrease was primarily due to the year-end special distribution of $0.20 per share that was paid in the fourth quarter; |
| --- | --- |
| • | As of December 31, 2021, the Company had $830 million of total principal amount of debt outstanding,<br>of which 81% was comprised of senior secured bank debt and 19% was comprised of unsecured debt. The Company’s debt-to-equity ratio<br>was 0.89x as of December 31, 2021 compared to 0.86x as of September 30, 2021; |
| --- | --- |
| • | As of December 31, 2021, the Company had total investments at fair value of $1,666 million in 113<br>portfolio companies across 22 industries. The investment portfolio was comprised of 93.9% senior secured loans, including 91.6% in first<br>lien investments;^1^ |
| --- | --- |
| • | During the quarter, the Company had new investment commitments of $353 million, funded new investment<br>commitments of $339 million, funded previously unfunded commitments of $10 million, and had sales and repayments totaling $319 million,<br>resulting in a net funded portfolio change of $30 million; |
| --- | --- |
| • | The Company placed one new investment on non-accrual status during the quarter. As of December 31,<br>2021, investments on non-accrual status amounted to 0.7% and 2.5% of the total investment portfolio at fair value and amortized cost,<br>respectively; |
| --- | --- |
| • | For the quarter ended December 31, 2021, the Company paid distributions totaling $26.5 million, or<br>$0.46 per share, with two record dates, which included a quarterly regular distribution of $0.26 per share and a year-end special distribution<br>of $0.20 per share; and |
| --- | --- |
| • | As previously announced, the Company's co-chief executive officers declared a first quarter 2022 regular<br>distribution of $0.28 per share payable on March 30, 2022 to shareholders of record as of March 23, 2022. |
| --- | --- |
“Our core portfolio continued to perform well in the fourth quarter, generating net investment income of $0.32 per share. Investment activity was very strong during the quarter as we closed $353 million in new investment commitments, and experienced $319 million in sales and repayments. We previously announced an increase to our quarterly regular distribution from $0.26 per share to $0.28 per share beginning in the first quarter of 2022, and we are pleased to maintain this level of distribution for the second quarter of 2022,” said Mark Gatto, co-Chief Executive Officer of CION.
“In December, we received shareholder approval to reduce our asset coverage ratio from 200% to 150%, which will enable us to potentially increase our leverage as we seek to further drive portfolio growth and commensurate investment income,” added Michael A. Reisner, co-Chief Executive Officer of CION. “Additionally, we announced the formation of a joint venture partnership with a longstanding, experienced partner that we believe will provide us the opportunity to expand our investment focus.”
SELECTED FINANCIAL HIGHLIGHTS
| As of | As of | |||||
|---|---|---|---|---|---|---|
| (in thousands, except per share data) | December 31, 2021 | September 30, 2021 | ||||
| Investment portfolio, at fair value^1^ | $ | 1,666,122 | $ | 1,630,464 | ||
| Total debt outstanding^2^ | $ | 830,000 | $ | 805,000 | ||
| Net assets | $ | 930,512 | $ | 941,013 | ||
| Net asset value per share | $ | 16.34 | $ | 16.52 | ||
| Debt-to-equity | 0.89 | x | 0.86 | x | ||
| (in thousands, except share and per share data) | Three Months Ended December 31, 2021 | Three Months Ended September 30, 2021 | ||||
| --- | --- | --- | --- | --- | --- | --- |
| Total investment income | $ | 40,404 | $ | 42,620 | ||
| Total operating expenses and income tax expense | $ | 21,994 | $ | 23,008 | ||
| Net investment income after taxes | $ | 18,410 | $ | 19,612 | ||
| Net realized (losses) gains | $ | (15,209 | ) | $ | 19,736 | |
| Net unrealized gains (losses) | $ | 12,772 | $ | (14,240 | ) | |
| Net increase in net assets resulting from operations | $ | 15,973 | $ | 25,108 | ||
| Net investment income per share | $ | 0.32 | $ | 0.35 | ||
| Net realized and unrealized (losses) gains per share | $ | (0.04 | ) | $ | 0.09 | |
| Earnings per share | $ | 0.28 | $ | 0.44 | ||
| Weighted average shares outstanding | 56,958,440 | 56,774,323 | ||||
| Distributions declared per share | $ | 0.46 | $ | 0.26 |
Total investment income for the three months ended December 31, 2021 and September 30, 2021 was $40.4 million and $42.6 million, respectively. The decrease in investment income was primarily driven by a decrease in dividend income related to the exit of the Conisus Holdings, Inc. investment during the three months ended September 30, 2021.
Operating expenses for the three months ended December 31, 2021 and September 30, 2021 were $22.0 million and $23.0 million, respectively. Operating expenses decreased by $1.0 million primarily due to lower management fees incurred as a result of the change in the calculation of the management fee during the fourth quarter and lower non-recurring expenses associated with the listing of the Company's common stock on the New York Stock Exchange, partially offset by higher incentive fees, administrative services expenses and non-recurring shareholder proxy solicitation costs.
PORTFOLIO AND INVESTMENT ACTIVITY^1^
A summary of the Company's investment activity for the three months ended December 31, 2021 is as follows:
| New Investment Commitments | Sales and Repayments | |||||||
|---|---|---|---|---|---|---|---|---|
| Investment Type | in Thousands | % of Total | in Thousands | % of Total | ||||
| Senior secured first lien debt | 88 | % | 63 | % | ||||
| Senior secured second lien debt | — | 19 | % | |||||
| Collateralized securities and structured products - equity | — | 3 | % | |||||
| Unsecured debt | 6 | % | — | |||||
| Equity | 6 | % | 15 | % | ||||
| Total | 100 | % | 100 | % |
All values are in US Dollars.
During the three months ended December 31, 2021, new investment commitments were made across 13 new portfolio companies and 5 existing portfolio companies. Sales and repayments were primarily driven by the full sale or repayment of investments in 25 portfolio companies. As a result, the number of portfolio companies decreased from 126 as of September 30, 2021 to 113 as of December 31, 2021.
PORTFOLIO SUMMARY^1^
As of December 31, 2021, the Company’s investments consisted of the following:
| Investments at Fair Value | ||||
|---|---|---|---|---|
| Investment Type | in Thousands | % of Total | ||
| Senior secured first lien debt | 91.6 | % | ||
| Senior secured second lien debt | 2.3 | % | ||
| Collateralized securities and structured products - equity | 0.2 | % | ||
| Unsecured debt | 1.6 | % | ||
| Equity | 4.3 | % | ||
| Total | 100.0 | % |
All values are in US Dollars.
The following table presents certain selected information regarding the Company’s investments:
| As of | ||||
|---|---|---|---|---|
| December 31, 2021 | September 30, 2021 | |||
| Number of portfolio companies | 113 | 126 | ||
| Percentage of performing loans bearing a floating rate^3^ | 88.8 | 93.1 | ||
| Percentage of performing loans bearing a fixed rate^3^ | 11.2 | 6.9 | ||
| Yield on debt and other income producing investments at amortized cost^4^ | 8.89 | 8.95 | ||
| Yield on performing loans at amortized cost^4^ | 9.16 | 8.92 | ||
| Yield on total investments at amortized cost | 8.62 | 8.31 | ||
| Weighted average leverage (net debt/EBITDA)^5^ | 4.52 | 4.63 | ||
| Weighted average interest coverage^5^ | 3.39 | 3.50 | ||
| Median EBITDA^6^ | 36.3 million | 43.1 million |
All values are in US Dollars.
As of December 31, 2021, investments on non-accrual status represented 0.7% and 2.5% of the total investment portfolio at fair value and amortized cost, respectively.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2021, the Company had $830 million of total principal amount of debt outstanding, comprised of $675 million of outstanding borrowings under its senior secured credit facilities, $125 million of senior unsecured notes due 2026, and $30 million of unsecured notes due 2024. The combined weighted average interest rate on debt outstanding was 3.64% for the quarter ended December 31, 2021. As of December 31, 2021, the Company had $92 million in cash and short term investments and $50 million available under its financing arrangements.^2^
EARNING CONFERENCE CALL
CION will host an earnings conference call on Thursday, March 10, 2022 at 11:00 am Eastern Time to discuss its financial results for the fourth quarter and fiscal year ended December 31, 2021. Please visit the Investor Resources - Events and Presentations section of the Company’s website at www.cionbdc.com for a slide presentation that complements the earnings conference call.
All interested parties are invited to participate via telephone or listen via the live webcast, which can be accessed by clicking the following link: CION Investment Corporation Fourth Quarter 2021 Financial Results Webcast. Domestic callers can access the conference call by dialing (877) 445-9755. International callers can access the conference call by dialing +1 (201) 493-6744. All callers are asked to dial in approximately 10 minutes prior to the call. An archived replay will be available on a webcast link located in the Investor Resources - Events and Presentations section of CION’s website.
ENDNOTES
| ^1)^ | The discussion of the investment portfolio excludes short-term investments. |
|---|---|
| ^2)^ | Total debt outstanding excludes netting of debt issuance costs of $7.6 million and $8.3 million as of<br>December 31, 2021 and September 30, 2021, respectively. |
| --- | --- |
| ^3)^ | The fixed versus floating composition has been calculated as a percentage of performing debt investments<br>measured on a fair value basis, including income producing preferred stock investments and excludes investments, if any, on non-accrual<br>status. |
| --- | --- |
| ^4)^ | Computed based on the (a) annual actual interest rate or yield earned plus amortization of fees and discounts<br>on the performing debt and other income producing investments as of the reporting date, divided by (b) the total performing debt and other<br>income producing investments (excluding investments on non-accrual status) at amortized cost. This calculation excludes exit fees that<br>are receivable upon repayment of the investment. |
| --- | --- |
| ^5)^ | For a particular portfolio company, we calculate the level of contractual indebtedness net of cash (“net<br>debt”) owed by the portfolio company and compare that amount to measures of cash flow available to service the net debt. To calculate<br>net debt, we include debt that is both senior and pari passu to the tranche of debt owned by us but exclude debt that is legally and contractually<br>subordinated in ranking to the debt owned by us. We believe this calculation method assists in describing the risk of our portfolio investments,<br>as it takes into consideration contractual rights of repayment of the tranche of debt owned by us relative to other senior and junior<br>creditors of a portfolio company. We typically calculate cash flow available for debt service at a portfolio company by taking EBITDA<br>for the trailing twelve-month period. Weighted average net debt to EBITDA is weighted based on the fair value of our performing debt investments<br>and excluding investments where net debt to EBITDA may not be the appropriate measure of credit risk, such as cash collateralized loans<br>and investments that are underwritten and covenanted based on recurring revenue. |
| --- | --- |
For a particular portfolio company, we also calculate the level of contractual interest expense owed by the portfolio company, and compare that amount to EBITDA (“interest coverage ratio”). We believe this calculation method assists in describing the risk of our portfolio investments, as it takes into consideration contractual interest obligations of the portfolio company. Weighted average interest coverage is weighted based on the fair value of our performing debt investments, excluding investments where interest coverage may not be the appropriate measure of credit risk, such as cash collateralized loans and investments that are underwritten and covenanted based on recurring revenue.
Portfolio company statistics, including EBITDA, are derived from the financial statements most recently provided to us for each portfolio company as of the reported end date. Statistics of the portfolio companies have not been independently verified by us and may reflect a normalized or adjusted amount.
| ^6)^ | Median EBITDA is calculated based on the portfolio company's EBITDA as of our initial investment. |
|---|
CĪON Investment Corporation
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
| September 30, <br>2021 | |||||
|---|---|---|---|---|---|
| (unaudited) | |||||
| Assets | |||||
| Investments, at fair value: | |||||
| Non-controlled, non-affiliated investments (amortized cost of 1,617,126 and 1,658,592, respectively) | 1,581,124 | $ | 1,629,201 | ||
| Non-controlled, affiliated investments (amortized cost of 91,476 and 138,742, respectively) | 81,490 | 117,097 | |||
| Controlled investments (amortized cost of 83,702 and 0, respectively) | 91,425 | — | |||
| Total investments, at fair value (amortized cost of 1,792,304 and 1,797,334, respectively) | 1,754,039 | 1,746,298 | |||
| Cash | 3,774 | 2,159 | |||
| Interest receivable on investments | 21,549 | 21,283 | |||
| Receivable due on investments sold and repaid | 2,854 | 19,559 | |||
| Dividends receivable on investments | — | 135 | |||
| Prepaid expenses and other assets | 466 | 474 | |||
| Total assets | 1,782,682 | $ | 1,789,908 | ||
| Liabilities and Shareholders' Equity | |||||
| Liabilities | |||||
| Financing arrangements (net of unamortized debt issuance costs of 7,628 and 8,327, respectively) | 822,372 | $ | 796,673 | ||
| Payable for investments purchased | 11,327 | 33,360 | |||
| Accounts payable and accrued expenses | 1,922 | 3,509 | |||
| Interest payable | 4,339 | 2,838 | |||
| Accrued management fees | 6,673 | 8,443 | |||
| Accrued subordinated incentive fee on income | 3,942 | 2,933 | |||
| Accrued administrative services expense | 1,595 | 1,139 | |||
| Total liabilities | 852,170 | 848,895 | |||
| Commitments and contingencies | |||||
| Shareholders' Equity | |||||
| Common stock, 0.001 par value; 500,000,000 shares authorized; | |||||
| 56,958,440 shares issued and outstanding for both periods | 57 | 57 | |||
| Capital in excess of par value | 1,059,989 | 1,059,989 | |||
| Accumulated distributable losses | (129,534 | ) | (119,033 | ) | |
| Total shareholders' equity | 930,512 | 941,013 | |||
| Total liabilities and shareholders' equity | 1,782,682 | $ | 1,789,908 | ||
| Net asset value per share of common stock at end of period | 16.34 | $ | 16.52 |
All values are in US Dollars.
CĪON Investment Corporation
Consolidated Statements of Operations
(in thousands, except share and per share amounts)
| Three Months Ended <br>December 31, | Year Ended <br>December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||||||
| (unaudited) | (unaudited) | |||||||||||
| Investment income | ||||||||||||
| Non-controlled, non-affiliated investments | ||||||||||||
| Interest income | $ | 32,487 | $ | 27,340 | $ | 119,792 | $ | 125,395 | ||||
| Paid-in-kind interest income | 3,349 | 7,125 | 17,306 | 17,078 | ||||||||
| Fee income | 2,571 | 2,279 | 5,927 | 4,393 | ||||||||
| Dividend income | 112 | — | 366 | 331 | ||||||||
| Non-controlled, affiliated investments | ||||||||||||
| Interest income | 1,094 | 5,004 | 4,961 | 7,883 | ||||||||
| Paid-in-kind interest income | 505 | 739 | 3,160 | 2,082 | ||||||||
| Dividend income | 26 | 762 | 5,576 | 3,012 | ||||||||
| Fee income | — | 150 | — | 150 | ||||||||
| Controlled investments | ||||||||||||
| Paid-in-kind interest income | 260 | — | 260 | — | ||||||||
| Dividend income | — | — | — | 3,518 | ||||||||
| Total investment income | 40,404 | 43,399 | 157,348 | 163,842 | ||||||||
| Operating expenses | ||||||||||||
| Management fees | 6,674 | 7,668 | 31,143 | 31,828 | ||||||||
| Administrative services expense | 966 | 672 | 3,069 | 2,465 | ||||||||
| Subordinated incentive fee on income | 3,942 | 4,323 | 6,875 | 7,631 | ||||||||
| General and administrative | 1,855 | 1,401 | 9,805 | 6,085 | ||||||||
| Interest expense | 8,256 | 7,361 | 31,807 | 36,837 | ||||||||
| Total operating expenses | 21,693 | 21,425 | 82,699 | 84,846 | ||||||||
| Net investment income before taxes | 18,711 | 21,974 | 74,649 | 78,996 | ||||||||
| Income tax expense, including excise tax | 301 | 243 | 342 | 268 | ||||||||
| Net investment income after taxes | 18,410 | 21,731 | 74,307 | 78,728 | ||||||||
| Realized and unrealized (losses) gains | ||||||||||||
| Net realized (losses) gains on: | ||||||||||||
| Non-controlled, non-affiliated investments | (5,444 | ) | (12,181 | ) | (4,100 | ) | (69,687 | ) | ||||
| Non-controlled, affiliated investments | (9,766 | ) | — | 8,010 | (211 | ) | ||||||
| Controlled investments | — | — | (3,067 | ) | — | |||||||
| Foreign currency | 1 | 2 | (3 | ) | 26 | |||||||
| Net realized (losses) gains | (15,209 | ) | (12,179 | ) | 840 | (69,872 | ) | |||||
| Net change in unrealized appreciation (depreciation) on: | ||||||||||||
| Non-controlled, non-affiliated investments | (6,566 | ) | 39,721 | 25,566 | 1,110 | |||||||
| Non-controlled, affiliated investments | 11,615 | (1,998 | ) | 7,261 | (17,945 | ) | ||||||
| Controlled investments | 7,723 | (59 | ) | 10,790 | (3,043 | ) | ||||||
| Net change in unrealized appreciation (depreciation) | 12,772 | 37,664 | 43,617 | (19,878 | ) | |||||||
| Net realized and unrealized (losses) gains | (2,437 | ) | 25,485 | 44,457 | (89,750 | ) | ||||||
| Net increase (decrease) in net assets resulting from operations | $ | 15,973 | $ | 47,216 | $ | 118,764 | $ | (11,022 | ) | |||
| Per share information—basic and diluted(1) | ||||||||||||
| Net increase (decrease) in net assets per share resulting from operations | $ | 0.28 | $ | 0.83 | $ | 2.09 | $ | (0.19 | ) | |||
| Net investment income per share | $ | 0.32 | $ | 0.38 | $ | 1.31 | $ | 1.39 | ||||
| Weighted average shares of common stock outstanding | 56,958,440 | 57,056,443 | 56,808,960 | 56,817,920 |
(1) The Company completed a two-to-one reverse stock split, effective as of September 21, 2021. The weighted average shares used in the computation of the net increase (decrease) in net assets per share resulting from operations and net investment income per share reflect the reverse stock split on a retroactive basis.
ABOUT CION INVESTMENT CORPORATION
CION Investment Corporation is a leading publicly listed business development company that had approximately $1.8 billion in assets as of December 31, 2021. CION seeks to generate current income and, to a lesser extent, capital appreciation for investors by focusing primarily on senior secured loans to U.S. middle-market companies. CION is advised by CION Investment Management, LLC, a registered investment adviser and an affiliate of CION. For more information, please visit www.cionbdc.com.
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “target,” “estimate,” “intend,” “continue,” or “believe” or the negatives thereof or other variations thereon or comparable terminology. You should read statements that contain these words carefully because they discuss CION’s plans, strategies, prospects and expectations concerning its business, operating results, financial condition and other similar matters. These statements represent CION’s belief regarding future events that, by their nature, are uncertain and outside of CION’s control. There are likely to be events in the future, however, that CION is not able to predict accurately or control. Any forward-looking statement made by CION in this press release speaks only as of the date on which it is made. Factors or events that could cause CION’s actual results to differ, possibly materially from its expectations, include, but are not limited to, the risks, uncertainties and other factors CION identifies in the sections entitled “Risk Factors” and “Forward-Looking Statements” in filings CION makes with the SEC, and it is not possible for CION to predict or identify all of them. CION undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
OTHER INFORMATION
The information in this press release is summary information only and should be read in conjunction with CION’s Annual Report on Form 10-K, which CION filed with the SEC on March 9, 2022, as well as CION’s other reports filed with the SEC. A copy of CION’s Annual Report on Form 10-K and CION’s other reports filed with the SEC can be found on CION’s website at www.cionbdc.com and the SEC’s website at www.sec.gov.
CONTACTS
Media
Alexander Cavalieri
acavalieri@cioninvestments.com
Investor Relations
1-800-343-3736
Analysts and Institutional Investors
Jeehae Linford
The Equity Group
jlinford@equityny.com
212-836-9615
Exhibit 99.2
CION Investment Corporation Fourth Quarter 2021 Earnings Presentation
Disclosures and Forward - Looking Statements 2 The information contained in this earnings presentation should be viewed in conjunction with the earnings conference call of CION Investment Corporation (NYSE : CION) (“CION” or the “Company”) held on March 10 , 2022 as well as the Company’s Annual Report on Form 10 - K for the year ended December 31 , 2021 that was filed with the Securities and Exchange Commission (the “SEC”) on March 9 , 2022 . The information contained herein may not be used, reproduced or distributed to others, in whole or in part, for any other purpose without the prior written consent of the Company . This earnings presentation may contain forward - looking statements that involve substantial risks and uncertainties, including the impact of COVID - 19 on the business, future operating results, access to capital and liquidity of the Company and its portfolio companies . You can identify these statements by the use of forward - looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “target,” “estimate,” “intend,” “continue,” or “believe” or the negatives thereof or other variations thereon or comparable terminology, including references to assumptions, forecasts of future results, shareholder diversification, institutional research coverage and availability and access to capital . You should read statements that contain these words carefully because they discuss the Company’s plans, strategies, prospects and expectations concerning its business, operating results, financial condition and other similar matters . These statements represent the Company’s belief regarding future events that, by their nature, are uncertain and outside of the Company’s control, such as the price at which the Company’s shares of common stock will trade on the NYSE . Any forward - looking statement made by the Company in this earnings presentation speaks only as of the date on which the Company makes it . Factors or events that could cause the Company’s actual results to differ, possibly materially from its expectations, include, but are not limited to, the risks, uncertainties and other factors the Company identifies in the sections entitled “Risk Factors” and “Forward - Looking Statements” in filings the Company makes with the SEC, and it is not possible for the Company to predict or identify all of them . The Company undertakes no obligation to update or revise publicly any forward - looking statements, whether as a result of new information, future events or otherwise, except as required by law . This earnings presentation does not constitute a prospectus and should under no circumstances be understood as an offer to sell or the solicitation of an offer to buy the Company’s common stock or any other securities nor will there be any sale of common stock or any other securities referred to in this earnings presentation in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state or jurisdiction . Nothing in these materials should be construed as a recommendation to invest in any securities that may be issued by the Company or as legal, accounting or tax advice . An investment in securities of the type described herein presents certain risks . The Company is managed by CION Investment Management, LLC, an affiliate of the Company . Nothing contained herein shall be relied upon as a promise or representation whether as to past or future performance . The information contained in this earnings presentation is summary information that is intended to be considered in the context of other public announcements that the Company may make, by press release or otherwise, from time to time . The Company undertakes no duty or obligation to publicly update or revise the information contained in this earnings presentation, except as required by law . These materials contain information about the Company, certain of its personnel and affiliates and its historical performance . You should not view information related to past performance of the Company as indicative of its future results, the achievement of which cannot be assured . Past performance does not guarantee future results, which may vary . The value of investments and the income derived from investments will fluctuate and can go down as well as up . A loss of principal may occur .
3 (1) The discussion of the investment portfolio excludes short term investments. Quarterly Highlights - Quarter Ended December 31, 2021 The Company completed a 2 - to - 1 reverse stock split effective September 21 , 2021 . Accordingly, share and per share amounts in this presentation have been retroactively adjusted to reflect the 2 - to - 1 reverse stock split . ▪ On March 8 , 2022 , the Company's co - chief executive officers declared a second quarter regular distribution of $ 0 . 28 per share payable on June 8 , 2022 to shareholders of record as of June 1 , 2022 ; ▪ On December 21 , 2021 , the Company formed a joint venture partnership with an affiliate of EagleTree Capital, LP to jointly pursue debt opportunities and special situation, crossover, subordinated and other junior capital investments ; ▪ On December 30 , 2021 , the Company received shareholder approval to reduce its asset coverage ratio requirement from 200 % to 150 % , effective December 31 , 2021 , which allows the Company to increase the maximum amount of leverage that it is permitted to incur ; ▪ Net investment income per share for the quarter ended December 31 , 2021 was $ 0 . 32 . Earnings per share for the quarter ended December 31 , 2021 was $ 0 . 28 ; ▪ Net asset value per share was $ 16 . 34 as of December 31 , 2021 compared to $ 16 . 52 as of September 30 , 2021 . The decrease was primarily due to the year - end special distribution of $ 0 . 20 per share that was paid in the fourth quarter ; ▪ As of December 31 , 2021 , the Company had $ 830 million of total principal amount of debt outstanding of which 81 % was comprised of senior secured bank debt and 19 % was comprised of unsecured debt . The Company’s debt - to - equity ratio was 0 . 89 x as of December 31 , 2021 compared to 0 . 86 x as of September 30 , 2021 ; ▪ As of December 31 , 2021 , the Company had total investments at fair value of $ 1 , 666 million in 113 portfolio companies across 22 industries . The investment portfolio was comprised of 93 . 9 % senior secured loans, including 91 . 6 % in first lien investments ; 1 ▪ During the quarter, the Company had new investment commitments of $ 353 million, funded new investment commitments of $ 339 million, funded previously unfunded commitments of $ 10 million, and had sales and repayments totaling $ 319 million, resulting in a net funded portfolio change of $ 30 million ; ▪ The Company placed one new investment on non - accrual status during the quarter . As of December 31 , 2021 , investments on non - accrual status amounted to 0 . 7 % and 2 . 5 % of the total investment portfolio at fair value and amortized cost, respectively ; ▪ For the quarter ended December 31 , 2021 , the Company paid distributions totaling $ 26 . 5 million, or $ 0 . 465 per share, with two record dates, which included a quarterly regular distribution of $ 0 . 26 per share and a year - end special distribution of $ 0 . 20 per share ; and ▪ As previously announced, the Company's co - chief executive officers declared a first quarter 2022 distribution of $ 0 . 28 per share payable on March 30 , 2022 to shareholders of record as of March 23 , 2022 .
4 Selected Financial Highlights (1) The discussion of the investment portfolio excludes short term investments. (2) Total debt outstanding excludes netting of debt issuance costs. Please refer to page 10 for debt net of issuance costs . (3) Includes special distributions of $0.20 per share and $0.31 per share during the quarter ended December 31, 2021 and 2020, re spe ctively.
Investment Activity ▪ New investment commitments for the quarter were $353 million, of which $339 million were funded and $14 million were unfunded . ▪ New investment commitments were made across 13 new portfolio companies and 5 existing portfolio companies. ▪ Fundings of previously unfunded commitments for the quarter were $10 million. ▪ Sales and repayments totaled $319 million for the quarter primarily driven by the full sale or repayment of investments in 25 po rtfolio companies. The discussion of the investment portfolio excludes short term investments. Unfunded c ommitments are generally subject to borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. These amounts may remain outstanding until the commitment period of an applicable loan expires, which ma y b e shorter than the loan’s maturity date. 5
6 Portfolio Asset Composition 92% 88% 84% 82% 82% 2% 6% 9% 10% 10% 0% * 1% 1% 1% 1% 2% 0% * 0% * 0% * 0% * 4% 5% 6% 7% 7% $1,666 $1,630 $1,676 $1,534 $1,496 Q4 2021 Q3 2021 Q2 2021 Q1 2021 Q4 2020 End of Period Investments (in millions) * Less than 1%. The discussion of the investment portfolio is at fair value and excludes short term investments. 88% 98% 100% 100% 96% 4% 6% 6% 2% $353 $179 $231 $186 $126 Q4 2021 Q3 2021 Q2 2021 Q1 2021 Q4 2020 New Investment Commitments (in millions)
7 INTERNAL INVESTMENT RISK RATINGS 1 (% of Total Portfolio, Fair Value) Q4 2021 NON - ACCRUAL % 1 Higher Credit Quality Lower Credit Quality Credit Quality of Investments 2.49% 0.72% Amortized Cost Fair Value (1) The discussion of the investment portfolio excludes short term investments. * - Less than 1%.
94% Senior Secured Debt Investments PORTFOLIO BY SECURITY TYPE 1 PORTFOLIO BY INTEREST RATE TYPE 1 91.6% 2.3% 4.3% 0.2% 1.6% ▪ First Lien Debt (91.6%) ▪ Second Lien Debt (2.3%) ▪ Equity (4.3%) ▪ Collateralized Securities & Structured Products: Equity (0.2%) ▪ Unsecured Debt (1.6%) ▪ Floating Interest Rate Investments (84.2%) ▪ Fixed Interest Rate Investments (10.3%) ▪ Non - Income Producing Investments (4.1%) ▪ Other Income Producing Investments (1.4%) Portfolio Summary 8 ( 1 ) See endnote 4 in our press release filed with the SEC on March 10 , 2022 . ( 2 ) See endnote 5 in our press release filed with the SEC on March 10 , 2022 . ( 3 ) See endnote 6 in our press release filed with the SEC on March 10 , 2022 . ( 4 ) The discussion of the investment portfolio excludes short term investments . 84.2% 10.3% 4.1% 1.4%
Quarterly Operating Results 9
Quarterly Balance Sheet 10
11 Q4 2021 Net Asset Value Bridge Per Share Data (1) Includes a special distribution of $0.20 per share during the quarter ended December 31, 2021.
12 Full Year 2021 Net Asset Value Bridge Per Share Data (1) Includes a special distribution of $0.20 per share during the quarter ended December 31, 2021.
13 Total Commitment Amount Principal Amount Outstanding Interest Rate Maturity Date JPM Credit Facility $575 $550 L + 3.10% 5/15/2024 UBS Facility 150 125 L + 3.375% 11/19/2023 Unsecured Notes, 2026 1 125 125 4.50% 2/11/2026 Unsecured Term Loan 1 30 30 5.20% 9/30/2024 Total Debt $880 $830 3.6% Debt Summary DEBT MATURITIES ($ in millions) DEBT SCHEDULE ($ in millions) $50 million in available capacity within existing senior secured facilities $100 $550 $0 $0 $50 $25 $0 $125 $30 2021 2022 2023 2024 2025 2026 Drawn Credit Facility Undrawn Credit Facility Unsecured Notes Unsecured Term Loan (1) Investment grade credit rating.
14 Distribution Per Share and Distribution Coverage (1) In March 2020 , the Company determined to suspend distributions commencing with the month ended April 30 , 2020 in order to provide financial flexibility in response to the COVID - 19 pandemic . In July 2020 , the Company determined to recommence distributions in August 2020 . 1
