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Joint Ventures | 9 Months Ended
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Sep. 30, 2022
Equity Method Investments and Joint Ventures [Abstract] |
Joint Ventures | Joint Ventures CION/EagleTree Partners, LLC On December 21, 2021, the Company formed CION/EagleTree, an off-balance sheet joint venture partnership with ET-BC Debt Opportunities, LP, or ET-BC, which is an affiliate of EagleTree Capital, LP, or EagleTree. EagleTree made a Firm-level investment with proprietary capital. CION/EagleTree will jointly pursue debt opportunities and special situation, crossover, subordinated and other junior capital investments that leverage the Company's and EagleTree's combined sourcing and portfolio management capabilities. The Company contributed a portfolio of second lien loans and equity investments and ET-BC contributed proprietary Firm-level cash in exchange for 85% and 15%, respectively, of the senior secured notes, participating preferred equity, and common share interests of CION/EagleTree. The Company and ET-BC are not required to make any additional capital contributions to CION/EagleTree. The Company’s equity investment in CION/EagleTree is not redeemable. All portfolio and other material decisions regarding CION/EagleTree must be submitted to its board of managers, which is comprised of four members, two of whom were selected by the Company and the other two were selected by ET-BC. Further, all portfolio and other material decisions require the affirmative vote of at least one board member from the Company and one board member from ET-BC. The Company also serves as administrative agent to CION/EagleTree to provide servicing functions and other administrative services. In certain cases, these servicing functions and other administrative services may be performed by CIM. On December 21, 2021, CION/EagleTree issued senior secured notes of $61,629 to the Company and $10,875 to ET-BC, or the CION/EagleTree Notes. The CION/EagleTree Notes bear interest at a fixed rate of 14.0% per year and are secured by a first priority security interest in all of the assets of CION/EagleTree. The obligations of CION/EagleTree under the CION/EagleTree Notes are non-recourse to the Company. In accordance with ASU 2015-02, Consolidation, the Company determined that CION/EagleTree is not a variable interest entity, or VIE. However, the Company is not the primary beneficiary and therefore does not consolidate CION/EagleTree. The Company's maximum exposure to losses from CION/EagleTree is limited to its investment in CION/EagleTree. The following table sets forth the individual investments in CION/EagleTree's portfolio as of September 30, 2022:
Portfolio Company |  | Interest(a) |  | Maturity |  | Industry |  | Principal/ Par Amount/ Units |  | Cost(b) |  | Fair Value
Senior Secured First Lien Debt |  |  |  |  |  |  |  |  |  |  |  |
Berlitz Holdings, Inc.(g) |  | S+900, 1.00% SOFR Floor |  | 2/14/2025 |  | Services: Business |  | $ | 1,200 |  |  | $ | 1,118 |  |  | $ | 1,143 |
Community Tree Service, LLC(h) |  | S+850, 1.00% SOFR Floor |  | 6/17/2027 |  | Construction & Building |  | 500 |  | 500 |  |  | 498 |
Future Pak, LLC(e) |  | L+800, 2.00% LIBOR Floor |  | 7/2/2024 |  | Healthcare & Pharmaceuticals |  | 1,559 |  | 1,543 |  |  | 1,524 |
Total Senior Secured First Lien Debt |  |  |  |  |  |  |  |  |  | 3,161 |  |  | 3,165 |
Senior Secured Second Lien Debt |  |  |  |  |  |  |  |  |  |  |  |
Access CIG, LLC(f) |  | L+775, 0.00% LIBOR Floor |  | 2/27/2026 |  | Services: Business |  | 7,250 |  |  | 7,219 |  |  | 6,915 |
Dayton Superior Corp.(e) |  | L+700, 2.00% LIBOR Floor |  | 12/4/2024 |  | Construction & Building |  | 1,014 |  | 1,015 |  |  | 1,008 |
MedPlast Holdings, Inc.(e) |  | L+775, 0.00% LIBOR Floor |  | 7/2/2026 |  | Healthcare & Pharmaceuticals |  | 6,750 |  | 6,103 |  |  | 6,218 |
Zest Acquisition Corp.(e) |  | L+750, 1.00% LIBOR Floor |  | 3/14/2026 |  | Healthcare & Pharmaceuticals |  | 15,000 |  | 14,810 |  |  | 13,875 |
Total Senior Secured Second Lien Debt |  |  |  |  |  |  |  |  |  | 29,147 |  |  | 28,016 |
Collateralized Securities and Structured Products - Equity |  |  |  |  |  |  |  |  |  |
Ivy Hill Middle Market Credit Fund VIII, Ltd. Subordinated Loan(c) |  | 11.84% Estimated Yield |  | 2/2/2026 |  | Diversified Financials |  | 10,000 |  | 9,874 |  |  | 9,579 |
Total Collateralized Securities and Structured Products - Equity |  |  |  |  |  |  |  | 9,874 |  |  | 9,579 |
Equity |  |  |  |  |  |  |  |  |  |  |  |
American Clinical Solutions LLC, Class A Membership Interests(d) |  |  |  |  |  | Healthcare & Pharmaceuticals |  | 6,030,384 Units |  | 5,200 |  |  | 4,583 |
Anthem Sports and Entertainment Inc., Class A Preferred Stock Warrants(d) |  |  |  |  |  | Media: Diversified & Production |  | 1,469 Units |  | 486 |  |  | 1,836 |
Anthem Sports and Entertainment Inc., Class B Preferred Stock Warrants(d) |  |  |  |  |  | Media: Diversified & Production |  | 255 Units |  | — |  |  | 320 |
Anthem Sports and Entertainment Inc., Common Stock Warrants(d) |  |  |  |  |  | Media: Diversified & Production |  | 4,746 Units |  | — |  |  | 999 |
BCP Great Lakes Fund LP, Partnership Interests (5.6% ownership) |  |  |  |  |  | Diversified Financials |  | N/A |  | 11,628 |  |  | 11,177 |
Carestream Health Holdings, Inc., Common Stock(d) |  |  |  |  |  | Healthcare & Pharmaceuticals |  | 613,262 Units |  | 21,759 |  |  | 21,759 |
CHC Medical Partners, Inc., Series C Preferred Stock, 12% Dividend |  |  |  |  |  | Healthcare & Pharmaceuticals |  | 2,727,273 Units |  | 7,809 |  |  | 8,495 |
CTS Ultimate Holdings LLC, Class A Preferred Units(d) |  |  |  |  |  | Construction & Building |  | 3,578,701 Units |  | 1,000 |  |  | 930 |
Dayton HoldCo, LLC, Membership Units(d) |  |  |  |  |  | Construction & Building |  | 37,264 Units |  | 8,400 |  |  | 15,345 |
HDNet Holdco LLC, Preferred Unit Call Option(d) |  |  |  |  |  | Media: Diversified & Production |  | 1 Unit |  | — |  |  | 206 |
HW Ultimate Holdings, LP, Class A Membership Units, 4% Dividend |  |  |  |  |  | Capital Equipment |  | 2,000,000 Units |  | 2,062 |  |  | 1,600 |
Language Education Holdings GP LLC, Common Units(d) |  |  |  |  |  | Services: Business |  | 133,333 Units |  | — |  |  | — |
Language Education Holdings LP, Ordinary Common Units(d) |  |  |  |  |  | Services: Business |  | 133,333 Units |  | 300 |  |  | 364 |
Skillsoft Corp., Class A Common Stock(d) |  |  |  |  |  | High Tech Industries |  | 243,425 Units |  | 2,000 |  |  | 446 |
Spinal USA, Inc. / Precision Medical Inc., Warrants(d) |  |  |  |  |  | Healthcare & Pharmaceuticals |  | 20,667,324 Units |  | — |  |  | — |
Total Equity |  |  |  |  |  |  |  |  |  | 60,644 |  |  | 68,060 |
TOTAL INVESTMENTS |  |  |  |  |  |  |  |  |  | $ | 102,826 |  |  | $ | 108,820 |
a.The actual LIBOR rate for each loan listed may not be the applicable LIBOR rate as of September 30, 2022, as the loan may have been priced or repriced based on a LIBOR rate prior to or subsequent to September 30, 2022. The actual SOFR rate for each loan listed may not be the applicable SOFR rate as of September 30, 2022, as the loan may have been priced or repriced based on a SOFR rate prior to or subsequent to September 30, 2022. b.Represents amortized cost for debt securities and cost for equity investments. c.The CLO subordinated notes are considered equity positions in the CLO vehicles and are not rated. Equity investments are entitled to recurring distributions, which are generally equal to the remaining cash flow of the payments made by the underlying vehicle's securities less contractual payments to debt holders and expenses. The estimated yield indicated is based upon a current projection of the amount and timing of these recurring distributions and the estimated amount of repayment of principal upon termination. Such projections are periodically reviewed and adjusted, and the estimated yield may not ultimately be realized. d.Non-income producing security. e.The interest rate on these loans is subject to 1 month LIBOR, which as of September 30, 2022 was 3.14%. f.The interest rate on these loans is subject to 3 month LIBOR, which as of September 30, 2022 was 3.75%. g.The interest rate on these loans is subject to 1 month SOFR, which as of September 30, 2022 was 3.04%. h.The interest rate on these loans is subject to 3 month SOFR, which as of September 30, 2022 was 3.59%. The following table sets forth the individual investments in CION/EagleTree's portfolio as of December 31, 2021:
Portfolio Company |  | Interest(a) |  | Maturity |  | Industry |  | Principal/ Par Amount/ Units |  | Cost(b) |  | Fair Value
Senior Secured Second Lien Debt |  |  |  |  |  |  |  |  |  |  |  |
Access CIG, LLC(e) |  | L+775, 0.00% LIBOR Floor |  | 2/27/2026 |  | Services: Business |  | $ | 7,250 |  |  | $ | 7,214 |  |  | $ | 7,256 |
Carestream Health, Inc.(f) |  | L+1250, 1.00% LIBOR Floor |  | 8/8/2023 |  | Healthcare & Pharmaceuticals |  | 12,460 |  | 12,057 |  |  | 12,242 |
Dayton Superior Corp.(f) |  | L+700, 2.00% LIBOR Floor |  | 12/4/2024 |  | Construction & Building |  | 1,477 |  | 1,479 |  |  | 1,478 |
MedPlast Holdings, Inc.(e) |  | L+775, 0.00% LIBOR Floor |  | 7/2/2026 |  | Healthcare & Pharmaceuticals |  | 6,750 |  | 6,004 |  |  | 6,446 |
Ministry Brands, LLC(e) |  | L+925, 1.00% LIBOR Floor |  | 6/2/2023 |  | Services: Business |  | 7,000 |  | 6,983 |  |  | 7,000 |
Zest Acquisition Corp.(e) |  | L+750, 1.00% LIBOR Floor |  | 3/14/2026 |  | Healthcare & Pharmaceuticals |  | 15,000 |  | 14,776 |  |  | 14,925 |
Total Senior Secured Second Lien Debt |  |  |  |  |  |  |  |  |  | 48,513 |  |  | 49,347 |
Collateralized Securities and Structured Products - Equity |  |  |  |  |  |  |  |  |  |
Ivy Hill Middle Market Credit Fund VIII, Ltd. Subordinated Loan(c) |  | 11.84% Estimated Yield |  | 2/2/2026 |  | Diversified Financials |  | 10,000 |  | 9,997 |  |  | 9,856 |
Total Collateralized Securities and Structured Products - Equity |  |  |  |  |  |  |  | 9,997 |  |  | 9,856 |
Equity |  |  |  |  |  |  |  |  |  |  |  |
American Clinical Solutions LLC, Class A Membership Interests(d) |  |  |  |  |  | Healthcare & Pharmaceuticals |  | 6,030,384 Units |  | 5,200 |  |  | 5,729 |
Anthem Sports and Entertainment Inc., Class A Preferred Stock Warrants(d) |  |  |  |  |  | Media: Diversified & Production |  | 1,469 Units |  | 486 |  |  | 1,704 |
Anthem Sports and Entertainment Inc., Class B Preferred Stock Warrants(d) |  |  |  |  |  | Media: Diversified & Production |  | 255 Units |  | — |  |  | 297 |
Anthem Sports and Entertainment Inc., Common Stock Warrants(d) |  |  |  |  |  | Media: Diversified & Production |  | 4,746 Units |  | — |  |  | 2,572 |
BCP Great Lakes Fund LP, Partnership Interests (5.6% ownership) |  |  |  |  |  | Diversified Financials |  | N/A |  | 11,118 |  |  | 11,224 |
Carestream Health Holdings, Inc., Warrants(d) |  |  |  |  |  | Healthcare & Pharmaceuticals |  | 388 Units |  | 500 |  |  | 801 |
CHC Medical Partners, Inc., Series C Preferred Stock, 12% Dividend |  |  |  |  |  | Healthcare & Pharmaceuticals |  | 2,727,273 Units |  | 7,564 |  |  | 7,964 |
Dayton HoldCo, LLC, Membership Units(d) |  |  |  |  |  | Construction & Building |  | 37,264 Units |  | 8,400 |  |  | 11,166 |
HDNet Holdco LLC, Preferred Unit Call Option(d) |  |  |  |  |  | Media: Diversified & Production |  | 1 Unit |  | — |  |  | — |
HW Ultimate Holdings, LP, Class A Membership Units, 4% Dividend |  |  |  |  |  | Capital Equipment |  | 2,000,000 Units |  | 2,002 |  |  | 2,021 |
Skillsoft Corp., Class A Common Stock(d) |  |  |  |  |  | High Tech Industries |  | 243,425 Units |  | 2,000 |  |  | 2,227 |
Spinal USA, Inc. / Precision Medical Inc., Warrants(d) |  |  |  |  |  | Healthcare & Pharmaceuticals |  | 20,667,324 Units |  | — |  |  | — |
Tenere Inc., Warrants(d) |  |  |  |  |  | Capital Equipment |  | N/A |  | 1,166 |  |  | 1,235 |
Total Equity |  |  |  |  |  |  |  |  |  | 38,436 |  |  | 46,940 |
TOTAL INVESTMENTS |  |  |  |  |  |  |  |  |  | $ | 96,946 |  |  | $ | 106,143 |
a.The actual LIBOR rate for each loan listed may not be the applicable LIBOR rate as of December 31, 2021, as the loan may have been priced or repriced based on a LIBOR rate prior to or subsequent to December 31, 2021. b.Represents amortized cost for debt securities and cost for equity investments. c.The CLO subordinated notes are considered equity positions in the CLO vehicles and are not rated. Equity investments are entitled to recurring distributions, which are generally equal to the remaining cash flow of the payments made by the underlying vehicle's securities less contractual payments to debt holders and expenses. The estimated yield indicated is based upon a current projection of the amount and timing of these recurring distributions and the estimated amount of repayment of principal upon termination. Such projections are periodically reviewed and adjusted, and the estimated yield may not ultimately be realized. d.Non-income producing security. e.The interest rate on these loans is subject to 1 month LIBOR, which as of December 31, 2021 was 0.10%. f.The interest rate on these loans is subject to 3 month LIBOR, which as of December 31, 2021 was 0.21%. The following table includes selected balance sheet information for CION/EagleTree as of September 30, 2022 and December 31, 2021:
Selected Balance Sheet Information: |  | September 30, 2022 |  | December 31, 2021
Investments, at fair value (amortized cost of $102,826 and $96,946, respectively) |  | $ | 108,820 |  |  | $ | 106,143 |
Cash and other assets |  | 5,684 |  |  | 1,776 |
Dividend receivable on investments |  | 310 |  |  | 265 |
Interest receivable on investments |  | 301 |  |  | 109 |
Total assets |  | $ | 115,115 |  |  | $ | 108,293 |
Senior secured notes (net of unamortized debt issuance costs of $100 and $0, respectively) |  | $ | 73,164 |  |  | $ | 72,504 |
Other liabilities |  | 369 |  |  | 735 |
Total liabilities |  | 73,533 |  |  | 73,239 |
Members' capital |  | 41,582 |  |  | 35,054 |
Total liabilities and members' capital |  | $ | 115,115 |  |  | $ | 108,293 |
The following table includes selected statement of operations information for CION/EagleTree for the three and nine months ended September 30, 2022 and for the period from December 21, 2021 (commencement of operations) through December 31, 2021:
Selected Statement of Operations Information: | Three Months Ended September 30, 2022 |  | Nine Months Ended September 30, 2022 |  | Period From December 21, 2021 (Commencement of Operations) Through December 31, 2021
Total revenues | $ | 4,237 |  |  | $ | 7,960 |  |  | $ | 688 |
Total expenses | 2,860 |  |  | 8,382 |  |  | 800 |
Net realized gain on investments | 10,153 |  |  | 10,153 |  |  | — |
Net change in unrealized (depreciation) appreciation on investments | (3,050) |  |  | (3,203) |  |  | 9,197 |
Net increase in net assets | $ | 8,480 |  |  | $ | 6,528 |  |  | $ | 9,085 |
CION SOF Funding, LLC CION SOF was organized on May 21, 2019 as a Delaware limited liability company and commenced operations on October 2, 2019 when the Company and BCP Special Opportunities Fund I, LP, or BCP, entered into the limited liability company agreement of CION SOF for purposes of establishing the manner in which the parties would invest in and co-manage CION SOF. CION SOF invested primarily in senior secured loans of U.S. middle-market companies. The Company and BCP contributed a portfolio of loans to CION SOF representing membership equity of $31,289 and $4,470, respectively, in exchange for 87.5% and 12.5% of the membership interests of CION SOF, respectively. In December 2020, the Company and BCP elected to wind-down the operations of CION SOF. On January 28, 2021, CION SOF sold all of its remaining debt and equity investments to the Company. On March 18, 2021, CION SOF declared final distributions and on March 19, 2021, distributed all remaining capital to the Company and BCP. The Company and BCP were not required to make any additional capital contributions to CION SOF. The Company’s equity investment in CION SOF was not redeemable. All portfolio and other material decisions regarding CION SOF required approval of its board of managers, which was comprised of four members, two of whom were selected by the Company and the other two were selected by BCP. Further, all portfolio and other material decisions required the affirmative vote of at least one board member from the Company and one board member from BCP. The Company also served as administrative agent to CION SOF to provide loan servicing functions and other administrative services. In certain cases, these loan servicing functions and other administrative services were performed by CIM. On October 2, 2019, CION SOF entered into a senior secured credit facility, or the SOF Credit Facility, with Morgan Stanley Bank, N.A., or MS, for borrowings of up to a maximum amount of $75,000. Advances under the SOF Credit Facility were available through October 2, 2022 and bore interest at a floating rate equal to the three-month LIBOR, plus a spread of (i) 3.0% per year through October 1, 2022 and (i) 3.5% per year thereafter through October 2, 2024. CION SOF's obligations to MS under the SOF Credit Facility were secured by a first priority security interest in all of the assets of CION SOF. The obligations of CION SOF under the SOF Credit Facility were non-recourse to the Company. On October 2, 2019, CION SOF drew down $64,702 of borrowings under the SOF Credit Facility. On December 14, 2020, CION SOF repaid to MS all amounts outstanding under the SOF Credit Facility. The Company did not record any dividend income from its equity interest in CION SOF for the year ended December 31, 2021 or the nine months ended September 30, 2022. In accordance with ASU 2015-02, Consolidation, the Company determined that CION SOF was a VIE. However, the Company was not the primary beneficiary and therefore did not consolidate CION SOF. The Company's maximum exposure to losses from CION SOF was limited to its equity contribution to CION SOF. The following table includes selected statement of operations information for CION SOF for the nine months ended September 30, 2022 and 2021 and the year ended December 31, 2021:
| Nine Months Ended September 30, |  | Year Ended December 31, |  |
Selected Statement of Operations Information: | 2022 |  | 2021 |  | 2021 |  |
Total revenues | $ | — |  |  | $ | 29 |  |  | $ | 29 |  |  |
Total expenses | — |  |  | 29 |  |  | 29 |  |  |
Net increase in net assets | $ | — |  |  | $ | — |  |  | $ | — |  |  |

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI https://asc.fasb.org/topic&trid=2196965 + Details
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