CION Investment Corporation

03/12/2026 | Press release | Distributed by Public on 03/12/2026 04:06

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our consolidated financial statements and related notes and other financial information appearing elsewhere in this Annual Report on Form 10-K. In addition to historical information, the following discussion and other parts of this Annual Report on Form 10-K contain forward-looking information that involves risks and uncertainties (see "Forward-Looking Statements" in this report). 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.
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 its affiliates. 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 of investments in senior secured debt, including first lien loans, second lien loans and unitranche loans, and, to a lesser extent, collateralized securities, structured products and other similar securities, unsecured debt, and equity, 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 equity interests in the form of common or preferred stock in our target companies, either in conjunction with one of our debt investments or through a co-investment with a financial sponsor.
On October 5, 2021, our shares of common stock began trading on the NYSE under the ticker symbol "CION". The Listing accomplished our goal of providing our shareholders with greatly enhanced liquidity. On February 26, 2023, our shares of common stock and our Series A Notes listed and commenced trading in Israel on the TASE under the ticker symbol "CION" and "CION B1", respectively. On October 9, 2024, our 7.50% 2029 Notes listed and commenced trading on the NYSE under the ticker symbol "CICB" and on February 12, 2026, our 2031 Notes listed and commenced trading on the NYSE under the ticker symbol "CICC".
We are managed by CIM, our affiliate and a registered investment adviser. Pursuant to an investment advisory agreement with us, CIM oversees the management of our activities and is responsible for making investment decisions for our portfolio. On August 5, 2025, our board of directors, including a majority of the board of directors who are not interested persons, approved the renewal of the second amended and restated investment advisory agreement with CIM for a period of twelve months, commencing August 9, 2025. We have also entered into an administration agreement with CIM to provide us with administrative services necessary for us to operate. We and CIM previously engaged AIM to act as our investment sub-adviser.
On July 11, 2017, the members of CIM entered into the Third Amended CIM LLC Agreement for the purpose of creating a joint venture between AIM and CIG. Under the Third Amended CIM LLC Agreement, AIM became a member of CIM and was issued a newly-created class of membership interests in CIM pursuant to which AIM, among other things, shares in the profits, losses, distributions and expenses of CIM with the other members in accordance with the terms of the Third Amended CIM LLC Agreement, which results in CIG and AIM each owning a 50% economic interest in CIM.
On July 10, 2017, our independent directors unanimously approved the termination of the investment sub-advisory agreement with AIM, effective as of July 11, 2017, as part of the new and ongoing relationship among us, CIM and AIM. Although the investment sub-advisory agreement and AIM's engagement as our investment sub-adviser were terminated, AIM continues to perform certain services for CIM and us. AIM is not paid a separate fee in exchange for such services, but is entitled to receive distributions as a member of CIM as described above.
On December 4, 2017, the members of CIM entered into the Fourth Amended CIM LLC Agreement under which AIM performs certain services for CIM, which include, among other services, providing (a) trade and settlement support; (b) portfolio and cash reconciliation; (c) market pipeline information regarding syndicated deals, in each case, as reasonably requested by CIM; and (d) monthly valuation reports and support for all broker-quoted investments. AIM may also, from time to time, provide us with access to potential investment opportunities made available on Apollo's credit platform on a similar basis as other third-party market participants. All of our investment decisions are the sole responsibility of, and are made at the sole discretion of, CIM's investment committee, which consists entirely of CIG senior personnel.
Upon the occurrence of the Listing on October 5, 2021, we and CIM entered into the second amended and restated investment advisory agreement in order to implement the changes to the advisory fees payable from us to CIM that (i) reduced the annual base management fee, (ii) amended the structure of the subordinated incentive fee on income payable from us to CIM and reduced the hurdle and incentive fee rates, and (iii) reduced the incentive fee on capital gains payable from us to CIM (as described in further detail in Notes 2 and 4 to our consolidated financial statements included in this report).
We seek to meet our investment objective by utilizing the experienced management team of CIM, which includes its access to the relationships and human capital of its affiliates in sourcing, evaluating and structuring transactions, as well as monitoring and servicing our investments. 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 $75 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 monthly. 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 and capital structuring fees, monitoring fees, fees for providing managerial assistance and possibly consulting fees and performance-based fees. Any such fees generated in connection with our investments will be recognized when earned.
Operating Expenses
Our primary operating expenses are the payment of management fees and subordinated incentive fees on income under the investment advisory agreement and interest expense on our financing arrangements. Our investment advisory fees compensate CIM for its work in identifying, evaluating, negotiating, executing, monitoring and servicing our investments. We bear all other expenses of our operations and transactions.
Recent Developments
Q1 2026 Monthly Base Distributions
On January 6, 2026, our co-chief executive officers declared base distributions of $0.10 per share for each of January, February, and March 2026, which were paid or will be payable to shareholders as follows:
Declaration Date
Record Date
Payment Date
Amount Per Share
January 6, 2026 January 16, 2026 January 30, 2026 $ 0.10
January 6, 2026 February 13, 2026 February 27, 2026 $ 0.10
January 6, 2026 March 13, 2026 March 27, 2026 $ 0.10
Q2 2026 Monthly Base Distributions
On March 9, 2026, our co-chief executive officers declared base distributions of $0.10 per share for each of April, May and June 2026, which will be payable to shareholders as follows:
Declaration Date Record Date Payment Date Amount Per Share
March 9, 2026 April 10, 2026 April 24, 2026 $ 0.10
March 9, 2026 May 15, 2026 May 29, 2026 $ 0.10
March 9, 2026 June 12, 2026 June 26, 2026 $ 0.10
2031 Notes
On February 9, 2026, we issued and sold $135,000 in aggregate principal amount of our 2031 Notes, which includes $10,000 in aggregate principal amount of our 2031 Notes issued and sold pursuant to the exercise in full of the underwriters' option to purchase additional 2031 Notes to cover overallotments. Our 2031 Notes were issued pursuant to an Indenture, or the Base Indenture, and a Second Supplemental Indenture, or the Second Supplemental Indenture, and, together with the Base Indenture, the Indenture, between us and U.S. Bank Trust Company, National Association, as trustee, or the Trustee. Our 2031 Notes began trading on the NYSE under the ticker symbol "CICC" on February 12, 2026.
Our 2031 Notes will mature on March 31, 2031, unless previously redeemed or repurchased in accordance with their terms. The interest rate of our 2031 Notes is 7.50% per year and will be paid quarterly in arrears on March 30, June 30, September 30 and December 30 of each year, which will commence on March 30, 2026. Our 2031 Notes are our direct unsecured obligations and rank pari passu with our existing and future unsecured, unsubordinated indebtedness; senior to any series of preferred stock that we may issue in the future; senior to any of our future indebtedness that expressly provides it is subordinated to our 2031 Notes; effectively subordinated to all of our existing and future secured indebtedness (including indebtedness that is initially unsecured to which we subsequently grant security), to the extent of the value of the assets securing such indebtedness; and structurally subordinated to all existing and future indebtedness and other obligations of any of our existing or future subsidiaries.
Our 2031 Notes may be redeemed in whole or in part at any time or from time to time at our option on or after March 31, 2028, upon not less than 30 days nor more than 60 days written notice by mail prior to the date fixed for redemption thereof, at a redemption price of $25 per 2031 Note plus accrued and unpaid interest payments otherwise payable for the then-current quarterly interest period accrued to the date fixed for redemption.
The Indenture contains certain covenants, including covenants requiring us to comply with the asset coverage ratio requirements set forth in the 1940 Act, but giving effect to any exemptive relief granted to us by the SEC, and certain other exceptions, and to provide financial information to the holders of our 2031 Notes and the Trustee if we should no longer be subject to the reporting requirements under the Exchange Act.
Portfolio Investment Activity for the Years Ended December 31, 2025 and 2024
The following table summarizes our investment activity, excluding short term investments and PIK securities, for the years ended December 31, 2025 and 2024:
Years Ended December 31,
Net Investment Activity 2025 2024
Purchases and drawdowns
Senior secured first lien debt $ 239,164 $ 439,038
Collateralized securities and structured products - equity 2,967 2,002
Unsecured debt - 1,096
Equity 21,866 21,918
Sales and principal repayments (367,726) (486,463)
Net portfolio activity $ (103,729) $ (22,409)
The following tables summarize the composition of our investment portfolio at amortized cost and fair value as of December 31, 2025 and 2024:
December 31, 2025
Investments Cost(1) Investments Fair
Value 		Percentage of
Investment
Portfolio
Senior secured first lien debt $ 1,494,155 $ 1,370,525 80.8 %
Senior secured second lien debt 2,218 - -
Collateralized securities and structured products - equity 4,969 5,028 0.3 %
Unsecured debt 25,563 6,639 0.4 %
Equity 299,181 314,788 18.5 %
Subtotal/total percentage 1,826,086 1,696,980 100.0 %
Short term investments(2) 116,010 116,010
Total investments $ 1,942,096 $ 1,812,990
Number of portfolio companies 89
Average annual EBITDA of portfolio companies
$59.1 million
Median annual EBITDA of portfolio companies
$35.9 million
Purchased at a weighted average price of par 95.89 %
Gross annual portfolio yield based upon the purchase price(3) 9.15 %
(1)Represents amortized cost for debt investments and cost for equity investments. 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 gross annual portfolio yield does not represent and may be higher than an actual investment return to shareholders because it excludes our expenses and does not consider the cost of leverage.
December 31, 2024
Investments Cost(1) Investments Fair
Value 		Percentage of
Investment
Portfolio
Senior secured first lien debt $ 1,610,540 $ 1,563,256 86.0 %
Senior secured second lien debt 5,187 2,680 0.1 %
Collateralized securities and structured products - equity 2,980 2,682 0.1 %
Unsecured debt 29,487 11,814 0.6 %
Equity 226,681 239,438 13.2 %
Subtotal/total percentage 1,874,875 1,819,870 100.0 %
Short term investments(2) 68,818 68,818
Total investments $ 1,943,693 $ 1,888,688
Number of portfolio companies 105
Average annual EBITDA of portfolio companies
$53.6 million
Median annual EBITDA of portfolio companies
$34.2 million
Purchased at a weighted average price of par 96.17 %
Gross annual portfolio yield based upon the purchase price(3) 10.96 %
(1)Represents amortized cost for debt investments and cost for equity investments. 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 gross annual portfolio yield does not represent and may be higher than an actual investment return to shareholders because it excludes our expenses and does not consider the cost of leverage.
The following table summarizes the composition of our investment portfolio by the type of interest rate as of December 31, 2025 and 2024, excluding short term investments of $116,010 and $68,818, respectively:
December 31, 2025 December 31, 2024
Interest Rate Allocation Investments Cost Investments Fair Value Percentage of
Investment
Portfolio 		Investments Cost Investments Fair Value Percentage of
Investment
Portfolio
Floating interest rate investments $ 1,346,938 $ 1,246,818 73.5 % $ 1,519,038 $ 1,476,158 81.1 %
Non-income producing investments 252,869 175,561 10.4 % 202,115 214,958 11.8 %
Fixed interest rate investments 172,139 139,850 8.2 % 145,347 119,844 6.6 %
Other income producing investments(1) 54,140 134,751 7.9 % 8,375 8,910 0.5 %
Total investments $ 1,826,086 $ 1,696,980 100.0 % $ 1,874,875 $ 1,819,870 100.0 %
(1) - Other income producing investments include equity securities that have paid dividends within the trailing twelve months, securities with returns based on contractual waterfall structures, and investments structured to generate returns primarily through exit-based multiples of invested capital, or MOICs.
The following table shows the composition of our investment portfolio by industry classification and the percentage, by fair value, of the total assets in such industries as of December 31, 2025 and 2024:
December 31, 2025 December 31, 2024
Industry Classification Investments Fair Value Percentage of
Investment Portfolio 		Investments Fair Value Percentage of
Investment Portfolio
Services: Business $ 250,178 14.7 % $ 285,960 15.7 %
Healthcare & Pharmaceuticals 191,483 11.3 % 199,733 11.0 %
Retail 187,490 11.0 % 160,093 8.8 %
Energy: Oil & Gas 146,490 8.6 % 116,393 6.4 %
Media: Diversified & Production 122,806 7.2 % 129,210 7.1 %
Services: Consumer 113,150 6.8 % 111,832 6.2 %
Beverage, Food & Tobacco 101,153 6.0 % 100,612 5.5 %
Consumer Goods: Durable 90,696 5.3 % 95,968 5.3 %
Banking, Finance, Insurance & Real Estate 69,066 4.1 % 64,422 3.5 %
Construction & Building 65,493 3.9 % 99,383 5.5 %
High Tech Industries 55,956 3.3 % 37,665 2.1 %
Diversified Financials 54,744 3.2 % 56,822 3.1 %
Media: Advertising, Printing & Publishing 47,644 2.8 % 104,622 5.7 %
Capital Equipment 31,599 1.9 % 52,349 2.9 %
Consumer Goods: Non-Durable 28,876 1.7 % 35,210 1.9 %
Environmental Industries 27,928 1.6 % 27,344 1.5 %
Automotive 27,145 1.6 % 31,104 1.7 %
Hotel, Gaming & Leisure 22,733 1.3 % 49,823 2.7 %
Containers, Packaging & Glass 18,652 1.1 % 18,687 1.0 %
Metals & Mining 16,637 1.0 % 13,094 0.7 %
Aerospace & Defense 15,075 0.9 % 13,825 0.8 %
Transportation: Cargo 11,986 0.7 % 10,465 0.6 %
Telecommunications - - 5,222 0.3 %
Chemicals, Plastics & Rubber - - 32 -
Subtotal/total percentage 1,696,980 100.0 % 1,819,870 100.0 %
Short term investments 116,010 68,818
Total investments $ 1,812,990 $ 1,888,688
Our investment portfolio may contain senior secured investments that are in the form of lines of credit, delayed draw term loans, 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 December 31, 2025 and 2024, ourunfunded commitments amounted to $47,779 and $70,681, respectively. As of March 4, 2026, our unfunded commitments amounted to $49,174. 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 the section "Commitments and Contingencies" for further details on our unfunded commitments.
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 rates 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 Rating Description
1 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 rating 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 rated 3, 4, or 5, CIM enhances its level of scrutiny over the monitoring of such portfolio company.
The following table summarizes the composition of our investment portfolio based on the 1 to 5 investment rating scale at fair value as of December 31, 2025 and 2024, excluding short term investments of $116,010 and $68,818, respectively:
December 31, 2025 December 31, 2024
Investment Rating Investments
Fair Value 		Percentage of
Investment Portfolio 		Investments
Fair Value 		Percentage of
Investment Portfolio
1 $ 139,062 8.2 % $ 36,418 2.0 %
2 1,321,197 77.9 % 1,561,233 85.8 %
3 196,003 11.5 % 192,203 10.6 %
4 32,413 1.9 % 23,554 1.3 %
5 8,305 0.5 % 6,462 0.3 %
$ 1,696,980 100.0 % $ 1,819,870 100.0 %
The amount of the investment portfolio in each rating category may vary substantially from period to period resulting primarily from changes in the composition of such portfolio as a result of new investment, repayment and exit activities. In addition, changes in the rating of investments may be made to reflect our expectation of performance and changes in investment values.
Current Investment Portfolio (Unaudited)
The following table summarizes the composition of our investment portfolio at fair value as of March 4, 2026:
Investments Fair
Value 		Percentage of
Investment
Portfolio
Senior secured first lien debt $ 1,370,868 80.9 %
Senior secured second lien debt - -
Collateralized securities and structured products - equity 5,028 0.3 %
Unsecured debt 6,686 0.4 %
Equity 311,202 18.4 %
Subtotal/total percentage 1,693,784 100.0 %
Short term investments(1) 250,894
Total investments $ 1,944,678
Number of portfolio companies 87
Average annual EBITDA of portfolio companies
$60.3 million
Median annual EBITDA of portfolio companies
$35.9 million
Purchased at a weighted average price of par 95.27 %
Gross annual portfolio yield based upon the purchase price(2) 9.20 %
(1)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.
(2)The gross annual portfolio yield does not represent and may be higher than an actual investment return to shareholders because it excludes our expenses and does not consider the cost of leverage.
Results of Operations for the Years Ended December 31, 2025 and 2024
Our results of operations for the years ended December 31, 2025 and 2024 were as follows:
Years Ended December 31,
2025 2024
Investment income $ 240,821 $ 252,432
Operating expenses and income taxes 147,781 156,572
Net investment income after taxes 93,040 95,860
Net realized loss on investments
(39,569) (28,313)
Net change in unrealized depreciation on investments
(74,102) (33,645)
Net (decrease) increase in net assets resulting from operations
$ (20,631) $ 33,902
Investment Income
For the years ended December 31, 2025 and 2024, we generated investment income of $240,821 and $252,432, respectively, consisting primarily of interest income on investments in senior secured debt, collateralized securities and structured products, and unsecured debt. The decrease in total investment income was primarily driven by lower SOFR rates during the year ended December 31, 2025 compared to the year ended December 31, 2024.
Operating Expenses and Income Taxes
The composition of our operating expenses and income taxes for the years ended December 31, 2025 and 2024 was as follows:
Years Ended December 31,
2025 2024
Management fees $ 26,076 $ 27,321
Administrative services expense 5,180 4,783
Subordinated incentive fee on income 19,736 20,334
General and administrative 6,334 7,157
Interest expense 90,540 96,870
Income tax (benefit) expense, including excise tax
(85) 107
Total operating expenses and income taxes $ 147,781 $ 156,572
The decrease in interest expense was primarily the result of lower SOFR rates on our borrowings during the year ended December 31, 2025 compared to the year ended December 31, 2024.
The composition of our general and administrative expenses for the years ended December 31, 2025 and 2024 was as follows:
Years Ended December 31,
2025 2024
Professional fees $ 1,759 $ 2,348
Dues and subscriptions 1,021 1,001
Valuation expense 792 751
Insurance expense 740 721
Director fees and expenses 705 696
Accounting and administrative costs 555 639
Transfer agent expense 501 488
Printing and marketing expense 151 308
Other expenses 110 205
Total general and administrative expense $ 6,334 $ 7,157
Net Investment Income After Taxes
Our net investment income after taxes totaled $93,040 and $95,860 for the years ended December 31, 2025 and 2024, respectively. The decrease in net investment income was primarily the result of a decrease in our total investment income during the year ended December 31, 2025 as compared to the year ended December 31, 2024, which was partially offset by a decrease in our interest expense during the year ended December 31, 2025 as compared to the year ended December 31, 2024.
Net Realized Loss on Investments
Our net realized loss on investments totaled $(39,569) and $(28,313) for the years ended December 31, 2025 and 2024, respectively, which were driven primarily by realized losses on the restructure and write-off of certain investments during each period.
Net Change in Unrealized Depreciation on Investments
The net change in unrealized depreciation on our investments totaled $(74,102) and $(33,645) for the years ended December 31, 2025 and 2024, respectively. This increase was driven primarily by mark-to-market price changes on certain investments during the year ended December 31, 2025. During the year ended December 31, 2024, the net change in unrealized depreciation on our investments was driven primarily by mark-to-market price changes on certain investments, which was partially offset by realized losses on the restructure and write-off of certain investments.
Net (Decrease) Increase in Net Assets Resulting from Operations
For the years ended December 31, 2025 and 2024, we recorded a net (decrease) increase in net assets resulting from operations of $(20,631) and $33,902, respectively, as a result of our operating activity for the respective periods.
Results of Operations for the Years Ended December 31, 2024 and 2023
Our results of operations for the years ended December 31, 2024 and 2023 were as follows:
Years Ended December 31,
2024 2023
Investment income $ 252,432 $ 251,010
Operating expenses and income taxes 156,572 145,988
Net investment income after taxes 95,860 105,022
Net realized loss on investments
(28,313) (31,927)
Net change in unrealized (depreciation) appreciation on investments
(33,645) 22,219
Net increase in net assets resulting from operations $ 33,902 $ 95,314
Investment Income
For the years ended December 31, 2024 and 2023, we generated investment income of $252,432 and $251,010, respectively, consisting primarily of interest income on investments in senior secured debt, collateralized securities and structured products, and unsecured debt. The increase in total investment income was primarily driven by an increase in transaction fees on investments received during the year ended December 31, 2024 compared to the year ended December 31, 2023.
Operating Expenses and Income Taxes
The composition of our operating expenses and income taxes for the years ended December 31, 2024 and 2023 was as follows:
Years Ended December 31,
2024 2023
Management fees $ 27,321 $ 26,856
Administrative services expense 4,783 3,971
Subordinated incentive fee on income 20,334 22,277
General and administrative 7,157 7,382
Interest expense 96,870 85,556
Income tax expense (benefit), including excise tax
107 (54)
Total operating expenses and income taxes $ 156,572 $ 145,988
The increase in interest expense was primarily the result of higher average borrowings under our financing arrangements during the year ended December 31, 2024 compared to the year ended December 31, 2023, partially offset by lower SOFR rates during the year ended December 31, 2024 compared to the year ended December 31, 2023.
The composition of our general and administrative expenses for the years ended December 31, 2024 and 2023 was as follows:
Years Ended December 31,
2024 2023
Professional fees $ 2,348 $ 2,178
Dues and subscriptions 1,001 800
Valuation expense 751 853
Insurance expense 721 675
Director fees and expenses 696 696
Accounting and administrative costs 639 637
Transfer agent expense 488 911
Printing and marketing expense 308 351
Other expenses 205 281
Total general and administrative expense $ 7,157 $ 7,382
Net Investment Income After Taxes
Our net investment income after taxes totaled $95,860 and $105,022 for the years ended December 31, 2024 and 2023, respectively. The decrease in net investment income was primarily the result of an increase in our interest expense during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Net Realized Loss on Investments
Our net realized loss on investments totaled $(28,313) and $(31,927) for the years ended December 31, 2024 and 2023, respectively. Net realized losses during the year ended December 31, 2024 were primarily from realized losses on the restructure and write-off of certain investments. Net realized losses during the year ended December 31, 2023 were primarily from realized losses on the restructure of certain investments.
Net Change in Unrealized (Depreciation) Appreciation on Investments
The net change in unrealized (depreciation) appreciation on our investments totaled $(33,645) and $22,219 for the years ended December 31, 2024 and 2023, respectively. This change was driven primarily by mark-to-market price changes on certain investments during the year ended December 31, 2024, which were partially offset by realized losses on the restructure and write-off of certain investments. During the year ended December 31, 2023, the net change in unrealized (depreciation) appreciation on our investments was driven primarily by mark-to-market price changes on certain investments.
Net Increase in Net Assets Resulting from Operations
For the years ended December 31, 2024 and 2023, we recorded a net increase in net assets resulting from operations of $33,902 and $95,314, respectively, as a result of our operating activity for the respective periods.
Financial Condition, Liquidity and Capital Resources
We generate cash primarily from cash flows from interest, fees and dividends earned from our investments as well as principal repayments and proceeds from sales of our investments. We also employ leverage to seek to enhance our returns as market conditions permit and at the discretion of CIM and pursuant to the 1940 Act. As a result, we also generate cash from our existing financing arrangements and may generate cash from future borrowings, as well as future offerings of securities including public and/or private issuances of debt and/or equity securities. We use cash primarily to (i) purchase investments in new and existing portfolio companies, (ii) pay for the cost of operations (including paying advisory fees to and reimbursing CIM), (iii) make debt service payments related to any of our financing arrangements and (iv) pay cash distributions to the holders of our shares.
On March 23, 2018, an amendment to Section 61(a) of the 1940 Act was signed into law to permit BDCs to reduce the minimum "asset coverage" ratio from 200% to 150% and, as a result, to potentially increase the ratio of a BDC's debt to equity from a maximum of 1-to-1 to a maximum of 2-to-1, so long as certain approval and disclosure requirements are satisfied. As a result of receiving shareholder approval on December 30, 2021, effective December 31, 2021, we are required to maintain asset coverage for our senior securities of 150% rather than 200%, which allows us to increase the maximum amount of leverage that we are permitted to incur. We may from time to time enter into additional financing arrangements or increase the size of our existing financing arrangements. Any such increase to our leverage would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors.
As of December 31, 2025 and 2024, our asset coverage ratio was 1.62 and 1.73, respectively. We carefully consider our unfunded commitments for the purpose of planning our ongoing financial leverage, daily cash management and liquidity requirements.
On August 27, 2024, our shareholders authorized us to issue shares of our common stock at prices below the then current NAV per share in one or more offerings for a 12-month period following such shareholder approval. Through the expiration of such shareholder approval on August 27, 2025, we did not issue any such shares.
As of December 31, 2025, we had cash of $8,159 and short term investments of $116,010 invested in a fund that primarily invests in U.S. government securities. Cash and short term investments as of December 31, 2025, taken together with amounts available to us for borrowing under our secured financing arrangements, are expected to be sufficient for our investing and financing activities and to conduct our operations in the near term. As of December 31, 2025, we had $100 million available under our secured financing arrangements.
Our short and long-term cash needs include principal payments on outstanding financing arrangements, including potentially the outstanding amount of our Series A Notes that mature on August 31, 2026, the funding of new and existing portfolio investments, the payment of operating expenses including interest expense, management fees, incentive fees, administrative services expense and general and administrative expenses, as well as paying distributions to our shareholders. As described further in Note 4 to the consolidated financial statements included in this report, a portion of the subordinated incentive fee on income that we pay to CIM may include deferred interest and accrued income that we have not yet received and may never receive in cash, which CIM is not obligated to reimburse us.
Funding for short and long-term cash needs will come from cash provided from operating activities (including scheduled/unscheduled principal payments from our investments) and unused net proceeds from our revolving financing facilities. We believe that our liquidity and sources of capital are adequate to satisfy our short and long-term cash requirements. We cannot, however, be certain that these sources of funds will be available at a time and upon terms acceptable to us in sufficient amounts in the future.
Share Repurchase Policy
On September 15, 2021, our board of directors, including the independent directors, approved a share repurchase policy authorizing us to repurchase up to $50 million of our outstanding common stock after the Listing. On June 24, 2022, our board of directors, including the independent directors, increased the amount of shares of our common stock that may be repurchased under the share repurchase policy by $10 million to up to an aggregate of $60 million. On August 5, 2025, our board of directors, including the independent directors, further increased the amount of shares of our common stock that may be repurchased under the share repurchase policy by $20 million to up to an aggregate of $80 million. Under the share repurchase policy, we may purchase shares of our common stock through various means such as open market transactions, including block purchases, and privately negotiated transactions. The number of shares repurchased and the timing, manner, price and amount of any repurchases will be determined at our discretion. Factors include, but are not limited to, share price, trading volume and general market conditions, along with our general business conditions. The policy may be suspended or discontinued at any time and does not obligate us to acquire any specific number of shares of our common stock.
On August 15, 2025, as part of the share repurchase policy, we entered into a new trading plan with an independent broker, Wells Fargo, in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, based in part on historical trading data with respect to our shares. The 10b5-1 trading plan permits common stock to be repurchased at a time that we might otherwise be precluded from doing so under insider trading laws or self-imposed trading restrictions. The 10b5-1 trading plan expires on August 15, 2026, and is subject to price, market volume and timing restrictions.
During the year ended December 31, 2025, we repurchased an aggregate of 1,771,403 shares under the 10b5-1 trading plan for an aggregate purchase price of $17,190, or an average purchase price of $9.70 per share.
From January 1, 2026 to March 4, 2026, we repurchased an aggregate of 921,342 shares of common stock under the 10b5-1 trading plan for an aggregate purchase price of $8,245, or an average purchase price of $8.95 per share. From the inception of the 10b5-1 trading plan in August 2022 through March 4, 2026, we repurchased an aggregate of 6,461,924 shares of common stock under the 10b5-1 trading plan for an aggregate purchase price of $63,744, or an average purchase price of $9.86 per share.
RIC Status and Distributions
To qualify for and maintain RIC tax treatment, we must, among other things, distribute in respect of each taxable year at least 90% of our net ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any. We will incur an excise tax of 4% imposed on RICs to the extent we do not distribute in respect of each calendar year an amount at least equal to the sum of (1) 98.0% of our net ordinary income (taking into account certain deferrals and elections) for the calendar year, (2) 98.2% of our capital gains in excess of capital losses, or capital gain net income (adjusted for certain ordinary losses), for the one-year period ending on October 31 of the calendar year and (3) any net ordinary income and capital gain net income from preceding years that were not distributed during such years and on which we paid no federal income tax. For an additional discussion of our RIC status and distributions, refer to Note 2 and Note 5, respectively, of our consolidated financial statements included in this report.
We intend to pay distributions in an amount sufficient to maintain RIC status each year and to avoid any federal income taxes on income. Therefore, subject to applicable legal restrictions and the sole discretion of our board of directors, we intend to authorize and declare base distributions quarterly and pay such base distributions monthly. Base and any supplemental and/or special distributions in respect of future periods will be evaluated by management and our board of directors based on circumstances and expectations existing at the time of consideration.
The following table presents distributions per share that were declared during the years ended December 31, 2025 and 2024:
Distributions
Three Months Ended Per Share Amount
2024
March 31, 2024 (one record date)
$ 0.34 $ 18,279
June 30, 2024 (two record dates)
0.41 21,960
September 30, 2024 (one record date)
0.36 19,234
December 31, 2024 (two record dates)
0.41 21,835
Total distributions for the year ended December 31, 2024 $ 1.52 $ 81,308
2025
March 31, 2025 (one record date)
$ 0.36 $ 19,149
June 30, 2025 (one record date)
0.36 18,934
September 30, 2025 (one record date)
0.36 18,726
December 31, 2025 (one record date)
0.36 18,552
Total distributions for the year ended December 31, 2025 $ 1.44 $ 75,361
On January 6, 2026, our co-chief executive officers declared base distributions of $0.10 per share for each of January, February, and March 2026, which were paid or will be payable to shareholders as follows:
Declaration Date
Record Date
Payment Date
Amount Per Share
January 6, 2026 January 16, 2026 January 30, 2026 $ 0.10
January 6, 2026 February 13, 2026 February 27, 2026 $ 0.10
January 6, 2026 March 13, 2026 March 27, 2026 $ 0.10
On March 9, 2026, our co-chief executive officers declared base distributions of $0.10 per share for each of April, May and June 2026, which will be payable to shareholders as follows:
Declaration Date Record Date Payment Date Amount Per Share
March 9, 2026 April 10, 2026 April 24, 2026 $ 0.10
March 9, 2026 May 15, 2026 May 29, 2026 $ 0.10
March 9, 2026 June 12, 2026 June 26, 2026 $ 0.10
For an additional discussion of our RIC status and distributions, refer to Note 2 and Note 5, respectively, of our consolidated financial statements included in this report.
JPM Credit Facility
As of December 31, 2025 and March 4, 2026, our aggregate outstanding borrowings under the JPM Credit Facility were $300,000 and the aggregate unfunded principal amount in connection with the JPM Credit Facility was $75,000. For a detailed discussion of our JPM Credit Facility, refer to Note 8 to our consolidated financial statements included in this report.
UBS Credit Facility
As of December 31, 2025 and March 4, 2026, our aggregate outstanding borrowings under the UBS Credit Facility were $100,000 and the aggregate unfunded principal amount in connection with the UBS Credit Facility was $25,000. For a detailed discussion of our UBS Credit Facility, refer to Note 8 to our consolidated financial statements included in this report.
7.70% 2029 Notes
As of December 31, 2025 and March 4, 2026, we had $125,000 in aggregate principal amount of 7.70% 2029 Notes outstanding and there was no unfunded principal amount in connection with the 7.70% 2029 Notes. For a detailed discussion of our 7.70% 2029 Notes, refer to Note 8 to our consolidated financial statements included in this report.
7.41% 2027 Notes
As of December 31, 2025 and March 4, 2026, we had $47,500 in aggregate principal amount of 7.41% 2027 Notes outstanding and there was no unfunded principal amount in connection with the 7.41% 2027 Notes. For a detailed discussion of our 7.41% 2027 Notes, refer to Note 8 to our consolidated financial statements included in this report.
2022 Term Loan
As of December 31, 2025 and March 4, 2026, our outstanding borrowings under the 2022 Term Loan were $50,000 and there was no unfunded principal amount in connection with the 2022 Term Loan. For a detailed discussion of our 2022 Term Loan, refer to Note 8 to our consolidated financial statements included in this report.
2024 Term Loan
As of December 31, 2025 and March 4, 2026, our outstanding borrowings under the 2024 Term Loan were $30,000 and there was no unfunded principal amount in connection with the 2024 Term Loan. For a detailed discussion of our 2024 Term Loan, refer to Note 8 to our consolidated financial statements included in this report.
Series A Notes
As of December 31, 2025 and March 4, 2026, we had approximately $114,844 in aggregate principal amount of Series A Notes outstanding and there was no unfunded principal amount in connection with the Series A Notes. For a detailed discussion of our Series A Notes, refer to Note 8 to our consolidated financial statements included in this report.
Floating Rate 2027 Notes
As of December 31, 2025 and March 4, 2026, we had $200,000 in aggregate principal amount of Floating Rate 2027 Notes outstanding and there was no unfunded principal amount in connection with the Floating Rate 2027 Notes. For a detailed discussion of our Floating Rate 2027 Notes, refer to Note 8 to our consolidated financial statements included in this report.
7.50% 2029 Notes
As of December 31, 2025 and March 4, 2026, we had $172,500 in aggregate principal amount of 7.50% 2029 Notes outstanding and there was no unfunded principal amount in connection with the 7.50% 2029 Notes. For a detailed discussion of our 7.50% 2029 Notes, refer to Note 8 to our consolidated financial statements included in this report.
2031 Notes
As of March 4, 2026, we had $135,000 in aggregate principal amount of 2031 Notes outstanding and there was no unfunded principal amount in connection with the 2031 Notes. For a detailed discussion of our 2031 Notes, refer to Note 16 to our consolidated financial statements included in this report.
Unfunded Commitments
As of December 31, 2025 and March 4, 2026, our unfunded commitments amounted to $47,779 and $49,174, respectively. For a detailed discussion of our unfunded commitments, refer to Note 11 to our consolidated financial statements included in this report.
Recent Accounting Pronouncements
See Note 2 to our consolidated financial statements included in this report for a discussion of certain recent accounting pronouncements that are applicable to us.
Critical Accounting Policies
Our consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles, or 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.
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 CIM, as our valuation designee, subject to the oversight of our board of directors pursuant to Rule 2a-5 of the 1940 Act. 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. In accordance with Rule 2a-5 of the 1940 Act, our board of directors has designated CIM as our valuation designee to determine in good faith the fair value of such portfolio securities in conjunction with the application of our valuation procedures. Our board of directors and the audit committee of our board of directors, which is comprised solely of our independent directors, oversees the activities, methodology and processes of the valuation designee.
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, CIM, as the valuation designee of our board of directors, undertakes a multi-step valuation process each quarter, as described below:
•our quarterly valuation process generally begins with each portfolio company or investment either being sent directly to an independent valuation firm or 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 independent valuation firms, if applicable;
•preliminary valuation conclusions are then documented and discussed with members of CIM's management team;
•designated members of CIM's management team review the preliminary valuation, and, if applicable, deliver such preliminary valuation to an independent valuation firm for its review;
•designated members of CIM's management team 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 firms to discuss the assistance provided and the results of the independent valuation firms' review; and
•our board of directors and our audit committee provide oversight with respect to this valuation process, including requesting such materials as they may determine appropriate.
We shall promptly (but no later than five business days after we become aware) report to our board of directors in writing on the occurrence of matters that materially affect the fair value of the designated portfolio of investments. Material matters in this instance include a significant deficiency or material weakness in the design or effectiveness of CIM's fair value determination process resulting in a material error in the calculation of NAV of $0.01 per share or greater.
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 by an independent valuation firm. Finally, certain investments are not evaluated by an independent valuation firm unless certain aspects of such investments in the aggregate meet certain criteria.
Given the expected types of investments, excluding short term investments and stock of publicly traded companies that are classified as Level 1, management expects our portfolio holdings to be classified as Level 3. Due to the uncertainty inherent in the valuation process, particularly for 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.
Related Party Transactions
For a discussion of our relationship with related parties including CIM, CIG, and AIA and amounts incurred under agreements with such related parties, refer to Note 4 to our consolidated financial statements included in this report. For a discussion of our relationship with CION/EagleTree, refer to Note 7 to our consolidated financial statements included in this report.
Contractual Obligations
On August 26, 2016, 34th Street entered into the JPM Credit Facility with JPM, as amended on September 30, 2016, July 11, 2017, November 28, 2017, May 23, 2018, May 15, 2020, February 26, 2021, March 28, 2022, May 15, 2023, May 14, 2024, June 17, 2024 and July 15, 2024. See Note 8 to our consolidated financial statements for a more detailed description of the JPM Credit Facility.
On April 27, 2022, we entered into the 2022 Term Loan with an Israeli institutional investor. See Note 8 to our consolidated financial statements for a more detailed description of the 2022 Term Loan.
On February 28, 2023, we entered into a Deed of Trust with Mishmeret Trust Company Ltd., as trustee, pursuant to which we issued our Series A Notes. See Note 8 to our consolidated financial statements for a more detailed description of the Deed of Trust and the Series A Notes.
On November 8, 2023, we entered into the 2027 Note Purchase Agreement with purchasers of the Floating Rate 2027 Notes (Tranche A) and on September 18, 2024, we entered into the AR Note Purchase Agreement with purchasers of the Floating Rate 2027 Notes (Tranche B). See Note 8 to our consolidated financial statements for a more detailed description of the Floating Rate 2027 Notes.
On September 30, 2024, we entered into the 2024 Term Loan with an Israeli institutional investor. See Note 8 to our consolidated financial statements for a more detailed description of the 2024 Term Loan.
On October 3, 2024, we issued and sold our 7.50% 2029 Notes under the Indenture pursuant to a U.S. public offering. See Note 8 to our consolidated financial statements for a more detailed description of the 7.50% 2029 Notes.
On February 13, 2025, Murray Hill Funding II entered into the UBS Credit Facility with UBS. See Note 8 to our consolidated financial statements for a more detailed description of the UBS Credit Facility.
On December 16, 2025, we entered into the December 2025 Note Purchase Agreement with purchasers of the 7.70% 2029 Notes and the 7.41% 2027 Notes. See Note 8 to our consolidated financial statements for a more detailed description of the 7.70% 2029 Notes and the 7.41% 2027 Notes.
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, delayed draw term loans, revolving credit facilities, or other unfunded commitments, which may require us to provide funding when requested in accordance with the terms of the underlying agreements. For further details on such debt investments, refer to Note 11 to our consolidated financial statements included in this report.
We currently have no off-balance sheet arrangements, except for those discussed in Note 7 and Note 11 to our consolidated financial statements included in this report.
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