CION Investment Corp. Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed on July 12, 2017, covering events occurring on July 10 and July 11, 2017. The filing details a significant restructuring of the company's investment advisory arrangement and changes to the Board of Directors.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. This report focuses on corporate governance and contractual agreements rather than financial performance data.
Material Changes
- Termination of Sub-Advisory Agreement: The Investment Sub-Advisory Agreement dated June 26, 2012, between CION Investment Management, LLC (CIM), CION Investment Corporation (CION), and Apollo Investment Management, L.P. (AIM) was terminated effective July 11, 2017.
- Formation of Joint Venture: CIM and AIM entered into a new Limited Liability Company Agreement creating a joint venture. Under this agreement, CION Investment Group, LLC (CIG) and AIM each hold a 50% economic interest in CIM.
- Compensation Structure Change: AIM will no longer receive a separate fee for investment sub-advisory services. Instead, AIM will receive distributions as a member of CIM based on the joint venture terms.
- Board Expansion: The Board of Directors increased in size from six to seven members.
Guidance, Outlook, and Management Commentary
Management confirmed that despite the termination of the Sub-Advisory Agreement, AIM will continue to perform identical services for CIM and CION, including identifying investment opportunities and making recommendations. The filing notes that AIM has the right to appoint an individual to the Board of CION, the board of directors of CIM, and the investment committee of CIM.
Important Facts for Investor Verification
- New Director Appointment: Joseph Glatt, General Counsel and Vice President of Apollo Capital Management, L.P., was appointed as an interested director effective July 11, 2017.
- Board Composition: Following the appointment, the Board consists of three interested directors and four independent directors.
- Service Continuity: Verify that AIM's transition from a fee-based sub-adviser to a 50% equity partner in CIM does not alter the quality or nature of investment services provided to CION.
- Contractual Terms: Review the specific voting rights and profit-sharing mechanisms detailed in the new CIM LLC Agreement.