Q1 2026 Cion Investment Corp Earnings Call

May 7, 2026

David Brown: Good morning, welcome to CION Investment Corporation's Q1 2026 earnings conference call. An earnings press release was distributed earlier this morning before market open. A copy of the release, along with a supplemental earnings presentation, is available on the company's website at www.cionbdc.com in the Investor Resources section and should be reviewed in conjunction with the company's Form 10-Q filed with the SEC. As a reminder, this conference call is being recorded for replay purposes. Please note that today's conference call may contain forward-looking statements which are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described in the company's filings with the SEC.

Operator: Good morning, welcome to CION Investment Corporation's Q1 2026 earnings conference call. An earnings press release was distributed earlier this morning before market open. A copy of the release, along with a supplemental earnings presentation, is available on the company's website at www.cionbdc.com in the Investor Resources section and should be reviewed in conjunction with the company's Form 10-Q filed with the SEC.

Speaker #1: copy of the release along with a supplemental earnings presentation is available on the company's website at www.cionbdc.com in the investor resources section. And should be reviewed in conjunction with the company's Form 10-Q filed with the SEC. this conference call is being recorded for replay purposes.

Speaker #1: the SEC. As a reminder, today's conference call may contain forward-looking statements which are not guarantees of future performance or results and involve a number of risks and uncertainties.

Operator: As a reminder, this conference call is being recorded for replay purposes. Please note that today's conference call may contain forward-looking statements which are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described in the company's filings with the SEC.

Speaker #1: Actual results may differ materially from those in the forward-looking statements as a result of a number of factors including those described in the company's filings with the SEC.

Speaker #1: Joining me on today's call will be Mark Gato, CION Investment Corp Co-Chief Executive Officer; Greg Bresner, President and Chief Investment Officer; and Keith France, Chief Financial Officer.

David Brown: Joining me on today's call will be Mark Gatto, CION Investment Corporation's Co-Chief Executive Officer, Gregg Bresner, President and Chief Investment Officer, and Keith Franz, Chief Financial Officer. With that, I would now like to turn the call over to Mark Gatto. Please go ahead, Mark.

Operator: Joining me on today's call will be Mark Gatto, CION Investment Corporation's Co-Chief Executive Officer, Gregg Bresner, President and Chief Investment Officer, and Keith Franz, Chief Financial Officer. With that, I would now like to turn the call over to Mark Gatto. Please go ahead, Mark.

Speaker #1: With that, I would now like to turn the call over to Mark Gato. Please go ahead, Mark.

Speaker #2: Thank you and good morning, everyone. I want to start this morning the way we have on prior calls. By putting our quarterly results in the proper context before walking through the details.

Mark Gatto: Thank you. Good morning, everyone. I want to start this morning the way we have on prior calls, by putting our quarterly results in the proper context before walking through the details. While this was not our strongest quarter from a headline numbers perspective, I want to make clear that the story underneath those numbers is more nuanced than the headline suggests. We believe there is quite a bit to feel good about as we look at the underlying health of our portfolio. I think it is important that investors and analysts understand what actually drove our results this quarter and evaluate us not quarter to quarter, but on a more long-term basis. Let me start with investment income. We reported $0.25 per share for Q1, which is below our monthly base distributions totaling $0.30 per share for Q1.

Speaker #2: While this was not our strongest quarter from a headline numbers perspective, I want to make clear that the story underneath those numbers is more nuanced than the headlines suggest.

Speaker #2: And we believe there is quite a bit to feel good about as we look at the underlying health of our portfolio. I think it is important that investors and analysts understand what actually drove our results this quarter and evaluate us not quarter to quarter but on a more long-term basis.

Mark Gatto: I think it is important that investors and analysts understand what actually drove our results this quarter and evaluate us not quarter to quarter, but on a more long-term basis. Let me start with investment income. We reported $0.25 per share for Q1, which is below our monthly base distributions totaling $0.30 per share for Q1.

Speaker #2: Let me start with investment income. We reported $0.25 per share for the first quarter, which is below our monthly base distributions totaling $0.30 per share for the first quarter.

Speaker #2: This shortfall was driven primarily by lower transaction fees recorded during the quarter due to lower repayment and investment activity and lower dividend income earned on our investments.

Mark Gatto: This shortfall was driven primarily by lower transaction fees recorded during the quarter due to lower repayment and investment activity and lower dividend income earned on our investments. This shortfall was also driven by higher interest expense during Q1 due to the refinancing of our lower yielding fixed rate notes and senior secured debt into higher yielding fixed rate unsecured notes and the timing of paying down our debt with the net offering proceeds received from the recent issuances of our new unsecured notes due to potential prepayment penalties as all of our debt is currently at their contractual minimums. As a result, we carried more excess cash on our balance sheet than we would have under normal operating conditions, essentially sitting on proceeds we could not deploy.

Speaker #2: This shortfall was also driven by higher interest expense during the first quarter due to the refinancing of our lower yielding fixed rate notes and senior secured debt into higher yielding fixed rate unsecured notes and the timing of paying down our debt with the net offering proceeds received from the recent issuances of our new unsecured notes due to potential prepayment penalties.

Mark Gatto: paying down our debt with the net offering proceeds received from the recent issuances of our new unsecured notes due to potential prepayment penalties as all of our debt is currently at their contractual minimums. As a result, we carried more excess cash on our balance sheet than we would have under normal operating conditions, essentially sitting on proceeds we could not deploy.

Speaker #2: As all of our debt is currently at their contractual minimums. As a result, we carried more excess cash on our balance sheet than we would have under normal operating conditions.

Speaker #2: Essentially sitting on proceeds we could not deploy. This was attributable to a specific capital structure decision we made that we believe was in the long-term interest of our shareholders.

Mark Gatto: This was attributable to a specific capital structure decision we made that we believe was in the long-term interest of our shareholders, which we do not view as a reflection of the underlying earnings power of our portfolio. Greg and Keith will provide further context. I want to be clear that we believe that the underlying earnings capacity of our portfolio remains intact, and we remain optimistic about the trajectory from here. Turning to NAV. Our net asset value declined 4.7% quarter-over-quarter to $13.11 per share from $13.76 at year-end. As we have discussed on prior calls, mark-to-market movements in our portfolio can introduce quarterly volatility, and this quarter was no exception. Importantly, over 80% of the downward movement in our marks this quarter were unrealized in nature and driven by market-level influences.

Speaker #2: Which we do not view as a reflection of the underlying earnings power of our portfolio. Greg and Keith will provide further context but I want to be clear that we believe that the underlying earnings capacity of our portfolio remains intact and we remain optimistic about the trajectory from here.

Speaker #2: Turning to NAV, our net asset value declined 4.7% quarter over quarter to $13.11 per share from $13.76 at year-end. As we have discussed on prior calls, mark-to-market movements in our portfolio can introduce quarterly volatility, and this quarter was no exception.

Mark Gatto: Turning to NAV. Our net asset value declined 4.7% quarter-over-quarter to $13.11 per share from $13.76 at year-end. As we have discussed on prior calls, mark-to-market movements in our portfolio can introduce quarterly volatility, and this quarter was no exception. Importantly, over 80% of the downward movement in our marks this quarter were unrealized in nature and driven by market-level influences.

Speaker #2: Importantly, over 80% of the downward movement in our marks this quarter were unrealized in nature and driven by market-level influences. Movements in comparable public company valuations and broader credit spread widening and not by a fundamental credit deterioration at our portfolio companies.

Mark Gatto: Movements in comparable public company valuations and broader credit spread widening and not by a fundamental credit deterioration at our portfolio companies. This is an important distinction and one that gives us confidence in the underlying resilience of the book. I also want to address something directly that I know has been a topic of conversation in the BDC space broadly, the scrutiny around private credit marks and valuation rigor. We welcome that conversation because we believe that we have an extremely disciplined and transparent valuation process. We utilize four independent third-party valuation providers, and the vast majority of our portfolio is subject to full independent review and scrutiny every quarter. We believe that process is comprehensive and rigorous, and we are committed to maintaining that standard.

Speaker #2: This is an important distinction and one that gives us confidence in the underlying resilience of the book. I also want to address something directly that I know has been a topic of conversation in the BDC space broadly.

Speaker #2: The scrutiny around private credit marks and valuation rigor. We welcome that conversation because we believe that we have an extremely disciplined and transparent valuation process.

Mark Gatto: We welcome that conversation because we believe that we have an extremely disciplined and transparent valuation process. We utilize four independent third-party valuation providers, and the vast majority of our portfolio is subject to full independent review and scrutiny every quarter. We believe that process is comprehensive and rigorous, and we are committed to maintaining that standard.

Speaker #2: We utilize four independent third-party valuation providers and the vast majority of our portfolio is subject to full independent review and scrutiny every quarter. We believe that process is comprehensive and rigorous and we are committed to maintaining that standard.

Speaker #2: At the same time, the incorporation of third-party macro assumptions and market-level inputs can at times introduce marks on certain assets that may not fully reflect the underlying credit fundamentals of those positions.

Mark Gatto: At the same time, the incorporation of third-party macro assumptions and market-level inputs can at times introduce marks on certain assets that may not fully reflect the underlying credit fundamentals of those positions, particularly given the secured and senior nature of our first lien holdings, which represents approximately 81% of the portfolio at the end of Q1. We believe that the heightened need to focus on softer credit quality across the private credit industry may have contributed to a broader tightening of third-party valuation assumptions that, given the sector-wide nature of that scrutiny, could have affected our portfolio in a manner disproportionate to our actual exposure.

Speaker #2: Particularly given the secured and senior nature of our first lien holdings, which represents approximately 81% of the portfolio at the end of Q1. We believe that the heightened need to focus on software credit quality across the private credit industry may have contributed to a broader tightening of third-party valuation assumptions that, given the sector-wide nature of that scrutiny, could have affected our portfolio in a manner disproportionate to our actual exposure.

Mark Gatto: We believe that the heightened need to focus on softer credit quality across the private credit industry may have contributed to a broader tightening of third-party valuation assumptions that, given the sector-wide nature of that scrutiny, could have affected our portfolio in a manner disproportionate to our actual exposure.

Speaker #2: With software representing just 1.8% of our portfolio, well below the 20% to 25% average reported across many private credit portfolios, we do not believe the degree of mark-to-market pressure we experienced this quarter is fully consistent with our underlying fundamentals.

Mark Gatto: With software representing just 1.8% of our portfolio, well below the 20% to 25% average reported across many private credit portfolios, we do not believe the degree of mark-to-market pressure we experienced this quarter is fully consistent with our underlying fundamentals. On credit quality more broadly, I am pleased to report that our portfolio continues to hold up very well. Our first lien book remains the core of our strategy and continues to perform well. Weighted average interest coverage across the debt portfolio was a healthy 2.08x for the quarter, a level we view as consistent with the defensive construction of our portfolio. Weighted average net leverage on our debt portfolio was 4.62x. Essentially flat with 4.7x in the prior quarter.

Speaker #2: On credit quality more broadly, I am pleased to report that our portfolio continues to hold up very well. Our first lien book remains the core of our strategy and continues to perform well.

Speaker #2: Weighted average interest coverage across the debt portfolio was a healthy 2.08 times for the quarter. A level we view as consistent with the defensive construction of our portfolio.

Mark Gatto: Weighted average interest coverage across the debt portfolio was a healthy 2.08x for the quarter, a level we view as consistent with the defensive construction of our portfolio. Weighted average net leverage on our debt portfolio was 4.62x. Essentially flat with 4.7x in the prior quarter.

Speaker #2: Weighted average net leverage on our debt portfolio was 4.62 times, essentially flat with 4.7 times in the prior quarter. From an internal risk rating perspective, our weighted average risk rating was essentially unchanged at 2.08 versus 2.09 in the prior quarter.

Mark Gatto: From an internal risk rating perspective, our weighted average risk rating was essentially unchanged at 2.08 versus 2.09 in the prior quarter. Our risk rated 4 names improved quarter-over-quarter to 1.55% of the portfolio at fair value, down from 1.9% in Q4. Our risk rated 5 names remained a very small portion of the portfolio at 0.54%. We had 7 upgrades and 8 downgrades in the quarter. A largely balanced picture that we believe reflects no meaningful deterioration in the overall composition of the book. On non-accruals, I am pleased to share some positive news. Our non-accrual percentage on a fair value basis improved to 1.53% as of 31 March, down from 1.78% in Q4.

Speaker #2: And our risk rated four names improved quarter over quarter to 1.55% of the portfolio at fair value. Down from 1.9% in Q4. Our risk rated five names remained a very small portion of the portfolio at 0.54%.

Speaker #2: We had seven upgrades and eight downgrades in the quarter. A largely balanced picture that we believe reflects no meaningful deterioration in the overall composition of the book.

Speaker #2: On non-accruals, I am pleased to share some positive news. Our non-accrual percentage on a fair value basis improved to 1.53% as of March 31st, down from 1.78% in the fourth quarter.

Mark Gatto: On non-accruals, I am pleased to share some positive news. Our non-accrual percentage on a fair value basis improved to 1.53% as of 31 March, down from 1.78% in Q4. The principal new addition to non-accrual status this quarter was Lux Credit Consultants, which was in the midst of a sale process through quarter end. I'm glad to report that subsequent to quarter close, that sale was successfully completed. As a result, we expect that Lux will be removed from non-accrual status in Q2.

Speaker #2: The principal new addition to non-accrual status this quarter was Lux Credit Consultants, which was in the midst of a sale process through quarter-end. And I'm glad to report that subsequent to quarter close, that sale was successfully completed.

Mark Gatto: The principal new addition to non-accrual status this quarter was Lux Credit Consultants, which was in the midst of a sale process through quarter end. I'm glad to report that subsequent to quarter close, that sale was successfully completed. As a result, we expect that Lux will be removed from non-accrual status in Q2. Generally, our non-accruals for the quarter were stable and consistent with our historical levels. More broadly, despite the volume of commentary out there about stress in private credit, we are simply not seeing broad-based deterioration across our middle market borrowers, and that is an important message. We believe that the domestic economy, while not without risks, continues to demonstrate underlying resilience. Our portfolio companies, the majority of which serve B2B end markets, continue to operate in line with or close to our expectations.

Speaker #2: As a result, we expect that Lux will be removed from non-accrual status in Q2. Generally, our non-accruals for the quarter were stable and consistent with our historical levels.

Mark Gatto: Generally, our non-accruals for the quarter were stable and consistent with our historical levels. More broadly, despite the volume of commentary out there about stress in private credit, we are simply not seeing broad-based deterioration across our middle market borrowers, and that is an important message. We believe that the domestic economy, while not without risks, continues to demonstrate underlying resilience. Our portfolio companies, the majority of which serve B2B end markets, continue to operate in line with or close to our expectations.

Speaker #2: More broadly, despite the volume of commentary out there about stress in private credit, we are simply not seeing our middle-market borrowers. And that is an important message.

Speaker #2: We believe that the domestic economy, while not without risks, continues to demonstrate underlying resilience. Our portfolio companies, the majority of which serve B2B end markets, continue to operate in line with or close to our expectations.

Speaker #2: We remain mindful of the ongoing geopolitical developments and the uncertain macro backdrop, but our ground-level view across 89 portfolio companies in 23 industries reflects a book that we believe is performing well and does not support the broad distress narrative that circulates private credit portfolios in the press.

Mark Gatto: We remain mindful of the ongoing geopolitical developments and the uncertain macro backdrop. Our ground-level view across 89 portfolio companies in 23 industries reflects a book that we believe is performing well and does not support the broad distress narrative that circulates private credit portfolios in the press. Finally, we repurchased approximately 1.1 million shares during the quarter at an average price of $8.71. We believe current prices represent a compelling opportunity to acquire our shares at a meaningful discount to fair value. We intend to continue such repurchases while seeking to simultaneously reduce our overall leverage through debt repayments. A combination we believe will position CION well for the remainder of 2026. Keith will provide additional details on our capital structure and distribution activity.

Speaker #2: Finally, we repurchased approximately 1.1 million shares during the quarter at an average price of $8.71. And we believe current prices represent a compelling opportunity to acquire our shares at a meaningful discount to fair value.

Mark Gatto: We believe current prices represent a compelling opportunity to acquire our shares at a meaningful discount to fair value. We intend to continue such repurchases while seeking to simultaneously reduce our overall leverage through debt repayments. A combination we believe will position CION well for the remainder of 2026. Keith will provide additional details on our capital structure and distribution activity. With that, I will now turn the call over to Gregg to discuss our portfolio and investment activity during the quarter.

Speaker #2: We intend to continue such repurchases while seeking to simultaneously reduce our overall leverage through debt repayments. A combination we believe will position CION well for the remainder of 2026.

Speaker #2: Keith will provide additional details on our capital structure and distribution activity. With that, I will now turn the call over to Greg to discuss our portfolio and investment activity during the quarter.

Mark Gatto: With that, I will now turn the call over to Gregg to discuss our portfolio and investment activity during the quarter.

Speaker #1: Thank you, Mark, and good morning, everyone. Prior to covering our investment and portfolio activity for Q1, I would like to expand on Mark's comments regarding our nominal level of software exposure within the portfolio.

Gregg Bresner: Thank you, Mark. Good morning, everyone. Prior to covering our investment and portfolio activity for Q1, I would like to expand on Mark's comments regarding our nominal level of SOFR exposure within the portfolio. We have 3 SOFR portfolio companies totaling approximately 1.8% of portfolio fair value or 2% on an amortized cost basis. We have no ARR loans in the portfolio. As a firm, we've historically not invested in SOFR as we were unwilling to lend against an ARR growth methodology with negative EBITDA profile at closing. In terms of our Q1 investment activity, we remained highly selective with new portfolio investments and focused on transactions within our portfolio companies and the repurchase of our shares. We also worked to balance the timing of investments versus repayment amounts while working to reduce leverage towards our targeted net leverage range.

Speaker #1: We have three software portfolio companies totaling approximately 1.8% of portfolio fair value or 2% on an amortized cost basis. We have no ARR loans in the portfolio.

Speaker #1: As a firm, we've historically not invested in software as we were unwilling to lend against an ARR growth methodology with negative EBITDA profile at closing.

Speaker #1: In terms of our Q1 investment activity, we remained highly selective with new portfolio investments and focused on transactions within our portfolio companies and the repurchase of our shares.

Gregg Bresner: In terms of our Q1 investment activity, we remained highly selective with new portfolio investments and focused on transactions within our portfolio companies and the repurchase of our shares. We also worked to balance the timing of investments versus repayment amounts while working to reduce leverage towards our targeted net leverage range.

Speaker #1: We also worked to balance the timing of investments versus repayment amounts while working to reduce leverage towards our targeted net leverage range. Overall, we had fewer exiting repayments for the quarter versus our Q4 level as certain repayments slipped into Q2.

Gregg Bresner: Overall, we had fewer exiting repayments for the quarter versus our Q4 level as certain repayments slipped into Q2. During the quarter, we continued to pass on new investment opportunities based on credit and pricing considerations. While secondary credit market conditions remained choppy based on macro concerns and potential cracks in private credit, there remained a significant bifurcation from the new issue market. New issue cohort pricing continued to be driven by the hangover of record 2024 and 2025 private debt fundraising, which translated into lower coupon spreads, higher leverage levels, and looser credit documents in the new issue market. We focused our Q1 investment activities on incremental opportunities with our portfolio companies. We believe our continued investment selectivity and proportional deployment levels help us to invest in first lien loans at higher spreads when compared to the overall private and public loan markets.

Speaker #1: During the quarter, we continued to pass on new investment opportunities based on credit and pricing considerations. While secondary credit market conditions remain choppy based on macro concerns and potential cracks in private credit, there remained a significant bifurcation from the new issue market.

Speaker #1: New issue cohort pricing continued to be driven by the hangover of record 2024 and 2025 private debt fundraising, which translated into lower coupon spreads, higher leverage levels, and looser credit documents in the new issue market.

Gregg Bresner: New issue cohort pricing continued to be driven by the hangover of record 2024 and 2025 private debt fundraising, which translated into lower coupon spreads, higher leverage levels, and looser credit documents in the new issue market. We focused our Q1 investment activities on incremental opportunities with our portfolio companies. We believe our continued investment selectivity and proportional deployment levels help us to invest in first lien loans at higher spreads when compared to the overall private and public loan markets.

Speaker #1: We focused our Q1 investment activities on incremental opportunities with our portfolio companies. We believe our continued investment selectivity and proportional deployment levels help us to invest in first-lean loans at higher spreads when compared to the overall private and public loan markets.

Speaker #1: The weighted average yield for our new direct first-lean investments for the quarter based on our SOFR plus 6.1%. As we discussed in previous quarters, the majority of our annual pick income is strategically derived from either highly structured first-lean investments or where pick income is incremental to our cash coupon.

Gregg Bresner: The weighted average yield for our new direct first lien investments for the quarter based on our investment cost was the equivalent of SOFR plus 6.1%. As we discussed in previous quarters, the majority of our annual PIK income is strategically derived from either highly structured first lien investments or where PIK income is incremental to our cash coupon. Together, these categories represented approximately 82% of our total PIK investments in Q1, up from 75% in Q4 of 2025. Over 99% of our PIK investments are in first lien assets. As a result, we believe this PIK income does not compare to restructured PIK income resulting from a deterioration in credit. Turning now to our Q1 investment and portfolio activity.

Speaker #1: Together, these categories represented approximately 82% of our total pick investments in Q1, up from 75% in Q4 of 2025. Over 99% of our pick investments are in first-lean assets.

Gregg Bresner: Together, these categories represented approximately 82% of our total PIK investments in Q1, up from 75% in Q4 of 2025. Over 99% of our PIK investments are in first lien assets. As a result, we believe this PIK income does not compare to restructured PIK income resulting from a deterioration in credit. Turning now to our Q1 investment and portfolio activity.

Speaker #1: As a result, we believe this pick income does not compare to restructured pick income resulting from a deterioration in credit. Turning now to our Q1 investment and portfolio activity, our Q1 investment activity consisted of investments in two new portfolio companies, Anchor QEA and Dependable Acquisition, both specialty business service providers, and incremental add-on investments in secondary purchases in existing portfolio companies including American Clinical, CareStream Health, CoinMark, David's Bridal, Healthway, JuicePlus, StatenMed, Stanglehill, and WorkGenius.

Gregg Bresner: Our Q1 investment activity consisted of investments in 2 new portfolio companies, Anchor QEA and Dependable Acquisition, both specialty business service providers, and incremental add-on investments and secondary purchases in existing portfolio companies, including American Clinical, Carestream Health, Coinmach, David's Bridal, HealthWay, Juice Plus+, Stat-Med, Stengel Hill, and WorkGenius. During Q1, we made it a total of approximately $69 million in investment commitments across 2 new and 9 existing portfolio companies, of which $54 million was funded. We also funded a total of $12 million of previously unfunded commitments. We had sales and repayments totaling $38 million for the quarter, which consisted of the full repayment of our first lien holdings in I&W and Men's Wearhouse. As a result of all these activities, our net funded investments increased by approximately $28 million during the quarter.

Speaker #1: During Q1, we made a total of investment commitments across two new and nine existing portfolio companies of which $54 million was funded. We also funded a total of $12 million of previously unfunded commitments.

Gregg Bresner: We also funded a total of $12 million of previously unfunded commitments. We had sales and repayments totaling $38 million for the quarter, which consisted of the full repayment of our first lien holdings in I&W and Men's Wearhouse. As a result of all these activities, our net funded investments increased by approximately $28 million during the quarter.

Speaker #1: We had sales and repayments totaling $38 million for the quarter, which consisted of the full repayment of our first-lien holdings in IMW and The Men's Wearhouse.

Speaker #1: As a result of all of these activities, our net funded investments increased by approximately $28 million during the quarter. As Mark referenced, our NAV decreased during the quarter was driven primarily by declines in the unrealized mark-to-market value of our portfolio.

Gregg Bresner: As Mark referenced, our NAV decrease during the quarter was driven primarily by declines in the unrealized mark-to-market value of our portfolio. This was in large part driven by reductions in market multiples and resulting valuations due to macro headwinds ranging from the tariff war and widespread market concerns regarding potential crack in private credit, most specifically the software concentrations within the private capital sector and potential AI impact to those investments. For the quarter, the ratio of mark-to-market declines versus mark-to-market increases for our investments was approximately 2 to 1. Our largest unrealized declines for the quarter were from our investments in Lux Credit, FuseFX, Lab Gear, which is also known as 4Wall Entertainment, STATinMED, and the common equity of David's Bridal.

Speaker #1: This was a large part driven by reductions in market multiples and resulting valuations due to macro headwinds ranging from the Iranian war and widespread market concerns regarding potential crack in private credit, most specifically the software concentrations within the private capital sector and potential AI impact to those investments.

Speaker #1: For the quarter, the ratio of mark-to-market declines versus mark-to-market increases for our investments was approximately 2 to 1. Our largest unrealized declines for the quarter were from our investments in Lux Credit, FuseFX, Lab Deer, which is also known as Fourwheel Entertainment, SIMR StatenMed, and the Common Equity of David's Bridal.

Gregg Bresner: For the quarter, the ratio of mark-to-market declines versus mark-to-market increases for our investments was approximately 2 to 1. Our largest unrealized declines for the quarter were from our investments in Lux Credit, FuseFX, Lab Gear, which is also known as 4Wall Entertainment, STATinMED, and the common equity of David's Bridal.

Speaker #1: Lux Credit represented our largest decline as the sale process for the company resulted in final bids well below the initial indications of interest based on the company's significant asset base and EBITDA profile.

Gregg Bresner: Lux Credit represented our largest decline as the sale process for the company resulted in final bids well below the initial indications of interest based on the company's significant asset base and EBITDA profile. Rather than the lenders restructuring and recapitalizing the company with additional investment, the majority of lenders decided to pursue a cash sale transaction and move on rather than restructure and invest. The sale closed early in Q2. The mark value of our investments in FuseFX and Lab Gear were negatively impacted by reduced trailing EBITDA performance and lower multiples as the sector rebuilds event and production pipelines from the writer strike that delayed the release queue of new scripts and production content throughout the industry. Through January and February 2026, Lab Gear's performance demonstrated stronger than projected recovery that we expect to continue into Q2.

Speaker #1: Rather than the lender's restructuring and recapitalizing the company with additional investment, the majority of lenders decided to pursue a cash sale transaction and move on rather than restructuring invest.

Speaker #1: The sale closed early in the second quarter. The mark value of our investments in FuseFX and Lab Deer were negatively impacted by reduced trailing EBITDA performance and lower multiples as the sector rebuilds event and production pipelines from the writer's strike that delayed the release queue of new scripts and production content throughout the industry.

Gregg Bresner: The mark value of our investments in FuseFX and Lab Gear were negatively impacted by reduced trailing EBITDA performance and lower multiples as the sector rebuilds event and production pipelines from the writer strike that delayed the release queue of new scripts and production content throughout the industry. Through January and February 2026, Lab Gear's performance demonstrated stronger than projected recovery that we expect to continue into Q2.

Speaker #1: Through genuine February of 2026, Lab Deer's performance demonstrated stronger than projected recovery that we expect to continue into Q2. The unrealized decline in the mark of our SIMR StatenMed term loan was driven by both the relative increase in value to priority senior tranches where SION has a larger pro-rata interest and lower revenue multiples derived from quasi-comparable large-cap biopharma service companies impacted by AI and software concerns.

Gregg Bresner: The unrealized decline in the mark of our STATinMED term loan was driven by both the relative increase in value to priority senior tranches, where CION has a larger pro rata interest, and lower revenue multiples derived from quasi-comparable large cap biopharma service companies impacted by AI and software concerns. As we have mentioned on previous quarterly calls, we expect to see significant quarter-to-quarter volatility in the marks of David's Bridal equity due to the larger overall relative size of our investment, as well as the highly seasonal nature of the company's operations and working capital profile. In the face of difficult macro market sentiment, we also had a number of portfolio companies where the marks increased for the quarter due to stronger financial performance and projected outlook, including Longview Power, Hollander, TriMark, Avison Young, and CSI Compressco.

Speaker #1: As we have mentioned on previous quarterly calls, we expect to see significant quarter-to-quarter volatility in the marks of David's Bridal equity due to the larger overall relative size of our investment, as well as the highly seasonal nature of the company's operations and working capital profile.

Gregg Bresner: As we have mentioned on previous quarterly calls, we expect to see significant quarter-to-quarter volatility in the marks of David's Bridal equity due to the larger overall relative size of our investment, as well as the highly seasonal nature of the company's operations and working capital profile. In the face of difficult macro market sentiment, we also had a number of portfolio companies where the marks increased for the quarter due to stronger financial performance and projected outlook, including Longview Power, Hollander, TriMark, Avison Young, and CSI Compressco.

Speaker #1: In the face of difficult macro market sentiment, we also had a number of portfolio companies where the marks increased for the quarter due to stronger financial performance and projected outlook, including Longview Power, Hollander, Trimark, Avison Young, and Services Compression.

Speaker #1: From a portfolio credit perspective, our non-accruals decreased from 1.78% of fair value in Q4 to 1.53% at the end of Q1. On an amortized cost basis, the number increased from 4.32% of cost to 5.35%.

Gregg Bresner: From a portfolio credit perspective, our non-accruals decreased from 1.78% of fair value in Q4 to 1.53% at the end of Q1. On an amortized cost basis, the number increased from 4.32% of cost to 5.35%. We added 1 new name to non-accrual, our term loan investment in Lux Credit Consultants. Given the sale of the company in early Q2, Lux Credit will be removed from non-accrual next quarter. On an absolute basis, non-accruals continue to be in line with historical experience, and we are pleased with the continued credit performance of our portfolio, particularly in the current macro environment. Overall, our portfolio remains defensive in nature with approximately 81% in first lien investments. Approximately 98% of our portfolio remains risk-graded 3 or better.

Speaker #1: We added one new name to non-accrual, our term one investment in Lux Credit Consultants. Given the sale of the company in early Q2, Lux Credit will be removed from non-accrual next quarter.

Speaker #1: On an absolute basis, non-accruals continue to be in line with historical experience, and we are pleased with the continued credit performance of our portfolio, particularly in the current macro environment.

Gregg Bresner: On an absolute basis, non-accruals continue to be in line with historical experience, and we are pleased with the continued credit performance of our portfolio, particularly in the current macro environment. Overall, our portfolio remains defensive in nature with approximately 81% in first lien investments. Approximately 98% of our portfolio remains risk-graded 3 or better.

Speaker #1: Overall, our portfolio remains defensive in nature with approximately 81% in first-lean investments. Approximately 98% of our portfolio remains risk-rated 3 or better. Our risk-rated 3 investments which are investments where we expect full repayment but are either spending more engagement time and/or have seen increased risks the initial asset purchase increased from approximately 11.5% in Q4 to 12.9% in Q1.

Gregg Bresner: Our risk-graded 3 investments, which are investments where we expect full repayment but are either spending more engagement time and/or have seen increased risks, the initial asset purchase increased from approximately 11.5% in Q4 to 12.9% in Q1. I'll now turn the call over to Keith.

Speaker #1: I'll now turn the call over to Keith.

Speaker #2: Okay. Thank you, Greg, and good morning, everyone. During the first quarter, net investment income was $12.9 million, or 25 cents per share, compared to 18.3 million or 35 cents per share reported in the fourth quarter.

Keith Franz: Okay. Thank you, Gregg, good morning, everyone. During Q1, net investment income was $12.9 million or $0.25 per share, compared to $18.3 million or $0.35 per share reported in Q4. Total investment income was $49.5 million during Q1, compared to $53.8 million reported during Q4. The decrease in total investment income was driven primarily by lower transaction fees recorded during Q1 due to lower prepayment and investment activity and lower dividend income earned on our investments when compared to the prior quarter. On the expense side, total operating expenses were $36.7 million compared to $35.5 million reported in Q4.

Speaker #2: Total investment income was $49.5 million during the first quarter, compared to $53.8 million reported during the fourth quarter. The decrease in total investment income was driven primarily by lower transaction fees recorded during the first quarter, due to lower prepayment and investment activity, and lower dividend income earned on our investments when compared to the prior quarter.

Speaker #2: On the expense side, total operating expenses were $36.7 million, compared to $35.5 million reported in the fourth quarter. The increase in operating expenses was primarily driven by higher interest expense due to an increase in the average debt balance outstanding and a higher weighted average cost of our debt capital during the quarter.

Keith Franz: On the expense side, total operating expenses were $36.7 million compared to $35.5 million reported in Q4. The increase in operating expenses was primarily driven by higher interest expense due to an increase in the average debt balance outstanding at a higher weighted average cost of our debt capital during the quarter. These increases were driven as a direct result of refinancing our lower yielding fixed rate notes and the repayment of a portion of our lower yielding senior secured debt using the proceeds from our newly issued higher yielding fixed-rate baby bonds.

Keith Franz: The increase in operating expenses was primarily driven by higher interest expense due to an increase in the average debt balance outstanding at a higher weighted average cost of our debt capital during the quarter. These increases were driven as a direct result of refinancing our lower yielding fixed rate notes and the repayment of a portion of our lower yielding senior secured debt using the proceeds from our newly issued higher yielding fixed-rate baby bonds. The increase in our operating expenses was partially offset by lower advisory fees earned due to lower investment income recorded during the quarter. At March 31, we had total assets of approximately $1.8 billion and total equity or net assets of $660 million, with total debt outstanding of $1.2 billion and 50.3 million shares outstanding.

Speaker #2: These increases were driven as a direct result of refinancing our lower-yielding fixed-rate notes and the repayment of a portion of our lower-yielding senior-secured debt using the proceeds from our newly issued higher-yielding fixed-rate baby bonds.

Keith Franz: The increase in our operating expenses was partially offset by lower advisory fees earned due to lower investment income recorded during the quarter. At March 31, we had total assets of approximately $1.8 billion and total equity or net assets of $660 million, with total debt outstanding of $1.2 billion and 50.3 million shares outstanding.

Speaker #2: The increase in our operating expenses was partially offset by lower advisory fees earned due to lower investment income recorded during the quarter. At March 31st, we had total assets of approximately $1.8 billion and total equity, or net assets, of $660 million, with total debt outstanding of $1.2 billion and $50.3 million shares outstanding.

Speaker #2: Our portfolio at fair value ended the quarter at $1.7 billion and the weighted average yield on our debt and other income-producing investments at amortized cost was 10.4%.

Keith Franz: Our portfolio at fair value ended the quarter at $1.7 billion. The weighted average yield on our debt and other income-producing investments at amortized cost was 10.4%, which is slightly down from 10.7% in Q4. At 31 March, our NAV was $13.11 per share as compared to $13.76 per share at the end of December. The decrease of $0.65 per share, or 4.7%, was primarily due to unrealized mark-to-market price decreases in our portfolio and underearning our distributions during Q1. The decrease in NAV was partially offset by the accretive nature of our share repurchase program during the quarter.

Speaker #2: Which is slightly down from 10.7% in the fourth quarter. At March 31st, our NAV was $13.11 per share as compared to $13.76 per share at the end of December.

Speaker #2: The decrease of 65 cents per share, or 4.7%, was primarily due to unrealized mark-to-market price decreases in our portfolio and the under-earning our distributions during the first quarter.

Speaker #2: The decrease in NAV was partially offset by the accretive nature of our share repurchase program during the quarter. We ended the first quarter with a strong and flexible balance sheet with about $1.3 billion in unencumbered assets, a strong debt servicing capacity with an interest coverage ratio of about two times, and solid liquidity.

Keith Franz: We ended the Q1 with a strong and flexible balance sheet with about 1.3 billion in unencumbered assets, a strong debt servicing capacity with an interest coverage ratio of about 2 times and solid liquidity. We had over $100 million in cash and short-term investments and another $100 million available under our credit facilities. In terms of our debt capital, at 31 March, we continue to have a healthy debt mix with about 75% in unsecured and 25% in senior secured bank debt. About 60% of our debt capital is in floating rate, which aligns well and creates a natural hedge with our mostly floating-rate investment portfolio. Our well-diversified debt structure is focused on unsecured debt in order to maximize our balance sheet flexibility and at the same time creates a strong buffer for our financial covenants.

Speaker #2: We had over $100 million in cash and short-term investments and another $100 million available under our credit facilities. In terms of our debt capital, at March 31st, we continued to have a healthy debt mix with about 75% in unsecured and 25% in senior-secured bank debt.

Speaker #2: About 60% of our debt capital is in floating rate, which aligns well and creates a natural hedge with our mostly floating rate investment portfolio.

Keith Franz: About 60% of our debt capital is in floating rate, which aligns well and creates a natural hedge with our mostly floating-rate investment portfolio. Our well-diversified debt structure is focused on unsecured debt in order to maximize our balance sheet flexibility and at the same time creates a strong buffer for our financial covenants.

Speaker #2: A well-diversified debt structure is focused on unsecured debt in order to maximize our balance sheet flexibility and, at the same time, creates a strong buffer for our financial covenants.

Speaker #2: At the end of the quarter, our net debt-to-equity ratio increased to 1.62 times from 1.44 times at the end of December. And the weighted average cost of our debt capital was about 7.52%.

Keith Franz: At the end of the quarter, our net debt-to-equity ratio increased to 1.62x from 1.44x at the end of December, and the weighted average cost of our debt capital was about 7.52%, which is slightly up from Q4. The increase in our weighted average cost of debt capital was directly due to refinancing our lower-yielding unsecured fixed-rate debt and increasing our higher-yielding unsecured debt mix during the quarter. The increase in our net leverage ratio was primarily impacted by the quarterly decrease in our NAV and an increase in the average debt outstanding during the quarter.

Speaker #2: Which is slightly up from the fourth quarter. The increase in our weighted average cost of debt capital was directly due to refinancing our lower-yielding unsecured fixed-rate debt and increasing our higher-yielding unsecured debt mix during the quarter.

Speaker #2: The increase in our net leverage ratio was primarily impacted by the quarterly decrease in our NAV and an increase in the average debt outstanding during the quarter.

Speaker #2: During the quarter, total debt increased by $35 million due to the timing of paying down a portion of our senior secured debt with a portion of the net proceeds raised from the new unsecured baby bond offering completed in February.

Keith Franz: During the quarter, total debt increased by $35 million due to the timing of paying down a portion of our senior secured debt with a portion of the net proceeds raised from the new unsecured baby bond offering completed in February. During the quarter, on 9 February, we completed a public baby bond offering, issuing $135 million of new senior unsecured notes with a fixed interest rate of 7.5% due 2031, which listed and commenced trading on the New York Stock Exchange under the ticker symbol CICC on 12 February. A portion of the net proceeds from this offering was used to repay $100 million under our JPMorgan credit facility at the end of March.

Speaker #2: During the quarter, on February 9th, we completed the public baby bond offering issuing $135 million of new senior unsecured notes with a fixed interest rate of 7.5% due 2031.

Speaker #2: We listed and commenced trading on the New York Stock Exchange under the ticker symbol CICC on February 12th. A portion of the net proceeds from this offering was used to repay $100 million under our JPMorgan credit facility at the end of March.

Keith Franz: A portion of the net proceeds from this offering was used to repay $100 million under our JPMorgan credit facility at the end of March. We expect to use the remaining proceeds from this offering along with proceeds from recent and expected repayment and sales activities to further reduce our leverage level over the next few quarters. We will also consider right-sizing our leverage levels when we refinance our near-term maturity wall. In terms of our 2026 debt maturities, we continue to work with our banking partners and debt investors on refinancing our 2026 maturities over the next few months.

Speaker #2: We expect to use the remaining proceeds from this offering along with proceeds from recent and expected repayment and sales activities to further reduce our leverage level over the next few quarters.

Keith Franz: We expect to use the remaining proceeds from this offering along with proceeds from recent and expected repayment and sales activities to further reduce our leverage level over the next few quarters. We will also consider right-sizing our leverage levels when we refinance our near-term maturity wall. In terms of our 2026 debt maturities, we continue to work with our banking partners and debt investors on refinancing our 2026 maturities over the next few months. Turning to distributions. As previously announced, we changed the timing of paying base distributions to our shareholders from quarterly to monthly beginning in January 2026 to better align with our shareholder expectations. During Q1, we paid monthly base distributions to our shareholders totaling $0.30 per share.

Speaker #2: In addition, we will also consider rightsizing our leverage levels when we refinance our near-term maturity wall. In terms of our 2026 debt maturities, we continue to work with our banking partners and debt investors on refinancing our 2026 maturities over the next few months.

Speaker #2: Now turning to distributions, as previously announced, we changed the timing of paying base distributions to our shareholders from quarterly to monthly beginning in January 2026 to better align with our shareholder expectations.

Keith Franz: Turning to distributions. As previously announced, we changed the timing of paying base distributions to our shareholders from quarterly to monthly beginning in January 2026 to better align with our shareholder expectations. During Q1, we paid monthly base distributions to our shareholders totaling $0.30 per share. We also declared our Q2 monthly base distributions totaling $0.30 per share, which were paid or will be paid at $0.10 per share per month for each of April, May, and June.

Speaker #2: During the first quarter, we paid monthly base distributions to our shareholders totaling $0.30 per share. We also declared our second quarter monthly base distributions totaling $0.30 per share.

Keith Franz: We also declared our Q2 monthly base distributions totaling $0.30 per share, which were paid or will be paid at $0.10 per share per month for each of April, May, and June. As a result, the trailing 12-month distribution yield through Q1 based on the average NAV was about 9.8%, and the trailing 12-month distribution yield based on the quarter-end market price was 20.2%. As announced this morning, we declared our Q3 base distributions totaling $0.30 per share, which is the same as Q2. The Q3 base distributions will be paid monthly in July, August, and September at $0.10 per share per month. Okay. With that, I will now turn the call back to the operator who will open the line for questions.

Speaker #2: Which were paid or will be paid at $0.10 per share per month for each of April, May, and June. As a result, the trailing 12-month distribution yield through the first quarter based on the average NAV was about 9.8%, and the trailing 12-month distribution yield based on the quarter-end market price was 20.2%.

Keith Franz: As a result, the trailing 12-month distribution yield through Q1 based on the average NAV was about 9.8%, and the trailing 12-month distribution yield based on the quarter-end market price was 20.2%. As announced this morning, we declared our Q3 base distributions totaling $0.30 per share, which is the same as Q2. The Q3 base distributions will be paid monthly in July, August, and September at $0.10 per share per month. Okay. With that, I will now turn the call back to the operator who will open the line for questions.

Speaker #2: As announced this morning, we declared our third quarter base distributions totaling $0.30 per share which is the same as the second quarter. The third quarter base distributions will be paid monthly in July/August and September at $0.10 per share per month.

Speaker #2: Okay, with that, I will now turn the call back to the operator who will open the line for questions.

Speaker #1: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press *1 on your telephone keypad.

David Brown: Thank you. We will now be conducting a question-and-answer session. Our first question comes from the line of Erik Zwick with Lucid Capital Markets. Please proceed with your question.

Operator: Thank you. We will now be conducting a question-and-answer session. If you like to ask a question ,please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participant using speaker equipment, it maybe necessary to pick up you hands up before pressing these star keys. One moment please while we [pause] for the questions. Our first question comes from the line of Erik Zwick with Lucid Capital Markets. Please proceed with your question.

Speaker #1: A confirmation tone will indicate your line is in the question queue. You may press *2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the *keys.

Speaker #1: One moment, please, while we pull for questions. Our first question comes from the line of Eric Zwick with Lucid Capital Markets. Please proceed with your question.

Erik Zwick: Thank you. Good morning, all. Wanted to start with a question on your commentary about kind of gradually reducing leverage, wondering if you could?

Speaker #2: Thank you. Good morning, all. Wanted to start with a question on your commentary about kind of gradually reducing leverage wondering if you could potentially provide just maybe a little kind of quantitative thoughts there in terms of where is your target to get there and potentially what is the time frame to achieve that target.

Erik Zwick: Thank you. Good morning, all. Wanted to start with a question on your commentary about kind of gradually reducing leverage, wondering if you could? Potentially provide just maybe a little kind of, you know, quantitative thoughts there in terms of, you know, where is your target to get there and potentially, you know, what is the timeframe to achieve that target?

Erik Zwick: Potentially provide just maybe a little kind of, you know, quantitative thoughts there in terms of, you know, where is your target to get there and potentially, you know, what is the timeframe to achieve that target?

Speaker #3: Yeah. Good morning, Eric. It's Keith. Yeah, we're focused on getting those and driving those leverage levels down over the course of the remaining few quarters.

Keith Franz: Good morning, Erik, it's Keith. We're focused on getting those and driving those leverage levels down over the course of the remaining few quarters. You know, we got a few tranches that are in the queue to be repaid or matures this year. We're going to take advantage of either a combination of both, right-sizing leverage through refinancing and/or using sales and repayments to reduce and drive down the leverage levels.

Speaker #3: We got a few tranches that are in the queue to be repaid or matures this year. So we're going to take the advantage take advantage of either a combination of both rightsizing leverage through refinancing and/or using sales and repayments to reduce and drive down the leverage levels.

Speaker #2: Okay. But no, no specific kind of quantitative target at this point. Just in terms of where you'd like the debt-to-equity ratio to kind of where that where you feel comfortable having that today.

Erik Zwick: Okay. No specific kind of.

Keith Franz: Timeline?

Erik Zwick: -quantitative target at this point? Or just in terms of, you know, where you'd like that equity ratio to?

Erik Zwick: where you feel comfortable having that today.

Keith Franz: Yeah.

Erik Zwick: where you feel comfortable having that today.

Speaker #3: Yeah, for sure. With the majority of our debt capital in unsecured, I think our leverage range is around 130, 135. Obviously, we're way above that.

Keith Franz: Yeah, for sure. You know, with the majority of our debt capital and unsecured, I think our leverage range is around 130, 135. Obviously, we're way above that. It's gonna take some time and some wood to chop to get us back there. You know, just looking at how our portfolio churns each and every year, at least 25%, that generates enormous amount of capital. We intend to use that and other levers to, you know, drive the leverage levels down over the next couple of quarters.

Speaker #3: So it's going to take some time and some wood to chop to get us back there. But just looking at how our portfolio churns each and every year at least 25%, that generates enormous amount of capital.

Speaker #3: So we intend to use that. And other levers to drive the leverage levels down over the next couple of quarters.

Speaker #2: Thanks. That's helpful, Keith. And then just curious with regard to Lux Credit Consultants and the sale there, was the final sales price consistent with the 331 fair value marks?

Erik Zwick: Thanks. That's helpful, Keith. Just curious with regard to Lux Credit Consultants and the sale there. Was the final sales price consistent with the 331 fair value marks?

Speaker #3: Yes.

Gregg Bresner: Yes.

Speaker #2: Okay. Okay. So nothing shouldn't be any additional kind of I think put in there. Okay. Great. And then one kind of just curious about the strong quarter of originations in one queue.

Erik Zwick: Okay. Okay. Nothing shouldn't be any additional kind of thing to put in there. Okay, great. One kind of just curious about the, you know, you had a strong quarter of originations in Q1. How is the pipeline looking, you know, at this point, and what are you seeing in terms of spreads and how that compares to the existing portfolio yield?

Speaker #2: How is the pipeline looking at this point, and what are you seeing in terms of spreads and how that compares to the existing portfolio yield?

Speaker #3: So Eric, we ended the quarter the quarter was a S610 profile of our new investments. I would say we're being very careful. There is definitely a disconnect between the new issue market and the secondary and public markets.

Gregg Bresner: Erik, we ended the quarter. The quarter was a S six ten profile of our new investments. I would say we're being very careful. There's definitely a disconnect between the new issue market and the secondary and public markets for direct. I think there's still a cohort of a lot of fundraising that happened over the last 18 months, where they're specifically targeted a new issue cohort. I would say we're, you know, we're still trying to maintain our S six target. We're being incredibly choosy 'cause we see better opportunities, candidly in the secondary markets in the portfolio and to buy back our stock, you know, compared to, you know, seeing spreads still relatively tied in new issues specifically.

Speaker #3: For direct, I think there's still a cohort of a lot of fundraising that happened over the last 18 months where there's specifically targeted a new issue cohort.

Speaker #3: So I would say we're we're still trying to maintain our S6 target. So we're being incredibly choosy because we see better opportunities candidly in the secondary markets in the portfolio and to buy back our stock compared to seeing spreads still relatively tight in new issues specifically.

Gregg Bresner: We're being incredibly choosy 'cause we see better opportunities, candidly in the secondary markets in the portfolio and to buy back our stock, you know, compared to, you know, seeing spreads still relatively tied in new issues specifically.

Erik Zwick: Thanks, Greg. How does the pipeline look in terms of opportunities? Is the kind of global and macroeconomic uncertainty impacting things at all, or are you still seeing quite a few, you know, attractive opportunities to invest in?

Speaker #2: Thanks, Greg. And how does the pipeline look in terms of opportunities? Is the kind of global and macroeconomic uncertainty impacting things at all, or are you still seeing quite a few attractive opportunities to invest in?

Speaker #3: No, we're still seeing attractive opportunities, but proportionally for us, I think it's we don't have to do a massive amount of deals to proportionally deploy money.

Gregg Bresner: No, we're still seeing attractive opportunities, but proportionally for us, I think it's, you know, we don't have to do a massive amount of deals to, you know, proportionally deploy money. I will say that the environment has definitely affected M&A. We are seeing, you know, reduced M&A activity because of macro as well as where interest rates are. But with our proportional deployments, you know, we're still seeing a pretty rich opportunity set. It's just a question of picking the best ones.

Speaker #3: But I will say that the environment has definitely affected M&A. We are seeing reduced M&A activity because of macro as well as where interest rates are.

Speaker #3: So but with our proportional deployments, we're still seeing a pretty rich opportunity set. It's just a question of picking the best ones.

Speaker #2: Got it. And the last one for me. I appreciate the commentary about David's bridal and the seasonality there. One, I guess, could you just remind me I think kind of typically the second and third quarters, are the strongest for them giving the traditional wedding season, but also curious if you could provide an update on the I believe it's the Pearl, is that the online initiative that had been introduced over the past year or so and how that's progressing?

Erik Zwick: Got it. The last one for me. I appreciate the commentary about David's Bridal and the seasonality there. One, I guess could you just remind me, I think kind of typically Q2 and Q3 are the strongest for them given the traditional wedding season. Also curious if you could provide an update on the, I believe it's the Pearl. Is that the online initiative that had been introduced over the past year or so and how that's progressing?

Speaker #3: Sure. So you're exactly right. Q2 and Q3 are the seasonally strongest quarters for David's bridal. And the Pearl marketplace segment is ramping is accelerating.

Gregg Bresner: Sure. You're exactly right. Q2 and Q3 are the seasonally strongest quarters for David's Bridal. The Pearl marketplace segment is ramping, is accelerating. We've been very pleased with the ramp in that particular part of the business. Strategically, that is the focus for bridal today as we move more and more of our business to digital. That's been a good growth part of the business.

Speaker #3: So we've been very pleased with the ramp in that particular part of the business. And strategically, that is the focus for bridal today as we move more and more of our business to digital and so that's been a good growth part of the business.

Speaker #2: Appreciate the update. Thanks for taking my questions.

Erik Zwick: Appreciate the update. Thanks for taking my questions.

Speaker #1: Thank you. And this concludes our Q&A session. I'll now turn the call back to management for a final comment.

David Brown: Thank you. This concludes our Q&A session. I'll now turn the call back to management for final comments.

Operator: Thank you. This concludes our Q&A session. I'll now turn the call back to management for final comments.

Speaker #3: Wanted to thank everybody for joining us today. We appreciate your support, interest in our CION Investment Corp, and we look forward to speaking to you next quarter.

Keith Franz: Wanted to thank everybody for joining us today. We appreciate your support and interest in our CION Investment Corp, and we look forward to speaking to you next quarter.

David Brown: Thank you. This concludes today's conference, and you may disconnect your lines at this time. We thank you for your participation.

Operator: Thank you. This concludes today's conference, and you may disconnect your lines at this time. We thank you for your participation.