Good morning. And welcome to CION Investment Corporation’s Fourth Quarter and Year End 2023 Earnings Conference Call. An earning press release was distributed earlier this morning before market opened. A copy of the release, along with the supplement 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. Speaking on today’s call will be Michael Reisner, 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 Michael Reisner. Please go ahead, Michael.

Thank you. Good morning, everyone, and thank you for joining us. As mentioned, I am joined today by Gregg and Keith, as well as other members of senior management. I will start our call today with an overview of our fourth quarter and year end results, Gregg will review our investment activity during the quarter and Keith will provide additional detail on our financial results. After Keith’s prepared remarks, we will open the call to questions. As we reported this morning, we had a very strong fourth quarter and 2023 overall, which saw a continued to demoted solid credit performance with an increase of almost 3% to our net asset value quarter-over-quarter and almost 2% year-over-year and net income of $0.94 per share, an increase of 8% quarter-over-quarter. Our ROE was 23.4% for the quarter and 11% for the year. Our net investment income ROE was 10% for the quarter 12.1% for the year. Our net investment income of $0.40 per share once again out earned our base dividend. Because of our continued ability to out earn our base dividends, coupled with our ability to drive returns by our yield enhancing features and opportunistic buying of lightly syndicated deals at discounts, which Gregg will speak more about, we are announcing today our intention to declare a midyear supplemental dividend payable July 12th to shareholders of record as of June 28th. The exact amount of the supplemental dividends will be announced next quarter. Our portfolio continued to deliver resilient credit performance as the percentage of our portfolio on nonaccrual is now below 1% of fair value. Perhaps an even better indication of our credit performance, the percentage of names that we have risk rated 4 or 5, which represents our higher credit risk names, is also below 1% of the portfolio…

Thank you, Michael, and good morning, everyone. Our Q4 net investment income benefited from a diverse combination of the direct pass through of higher floating interest rates from our loan assets, origination and amendment fees and other prepayment premiums and other yield enhancing provisions embedded within our primarily first lien portfolio. As Michael referenced, there remains a clear distinction between the increased levels of competition in the large cap markets between the larger asset management platforms and the middle market direct lending sector remains robust and continues to take market share from the lower rated single B syndicated markets, which is consistent with what we are experiencing with our platform as our private direct transaction sourcing remains vibrant. We continue to see attractive direct investment opportunities for which we remain highly selective. While M&A activity remains subdued in Q4, we saw an increase in refinancing opportunities particularly in conjunction with add on acquisitions where additional debt capital was required that was beyond the capacity of the incumbent lender groups or the private equity sponsor chose to refinance to provide an additional 2 years to pursue M&A or sales strategies. We do expect M&A activity to increase in 2024 as we believe buyers and sellers are now accepting the higher for longer reality regarding interest rates. In addition, we continue to benefit from technically driven disruptions in the syndicated loan market where we acquired lightly syndicated first lien loan tranches at significant discounts to par due to issues such as rate exchanges which truly expansions, exchanges or restructurings that were not suitable for the exiting syndicate holders and where we can expect to have active role in the process that drive the refinancing or restructuring of the investments. We remain highly selective with new investments as we're still cautious with respect…

Okay. Thank you, Gregg, and good morning, everyone. As Michael mentioned, we reported another quarter of solid financial results, driven by the benefits of higher base rates on our mostly floating rate portfolio and fees generated from a quarterly investment activity. During the fourth quarter, net investment income was $21.8 million or $0.40 per share as compared to $30 million or $0.55 per share reported in the third quarter. For the full year, net investment income was $105 million dollars or $1.92 per share as compared to $88.2 million or $1.56 per share for the prior year. This is an increase of $0.36 per share with 23% year-over-year. On the expense side, total operating expenses were $38.2 million as compared to $37.6 million reported in the third quarter. The increase was driven by higher interest expense under our financing arrangements due to an increase in our average debt outstanding when compared to the prior quarter. At December 31st, we had total assets of approximately $2 billion, and total equity or net assets of $880 million dollars with total debt outstanding of $1.1 billion and 54.2 million shares outstanding. At the end of the quarter, our net debt to equity ratio was 1.10 times, which is slightly higher than 1.03 times at the end of Q3. During the year, our total debt outstanding increased by $134 million or 14% from the prior year, reflecting the measured growth of our portfolio using additional debt capital. Our portfolio at fair value ended the quarter at $1.8 billion up $113 million from the third quarter, reflecting the combination of net funding and net unrealized gains from the portfolio. The weighted average yield on our debt and other income producing investments and amortized cost was 13.4% at December 31st, which increased 36 basis points from…

Thanks, Keith. As a final thought before we open the line for questions, we would like to reiterate our message that we believe CION is undervalued, continues to perform well, and is well positioned to continue to provide solid returns to its shareholders. And with that, operator, we're ready to take any questions.

[Operator Instructions] Our first question is from Erik Zwick from Hovde Group.

I wanted to start with a question following the fourth quarter actions towards raising more unsecured debt. You noted that the mix is now kind of 60/40 secured versus unsecured. And curious, have you kind of reached your target mix there? Or do you anticipate potentially making some additional changes in the 2024?

Good morning, Erik. This is Keith. So in terms of our debt capital, we continue to work with our commercial banking partners on extending our current arrangements. Those conversations continue to be had today, so we'll probably have a better update for you over the next couple of weeks or months. And at the same time, we continue to explore opportunities in the debt capital markets, which would further diversify our mix between securities and unsecured, and also expand our lending partners that we do business with. So, yes, I don't think we're done. I think that we'll continue to explore opportunities as they present themselves.

And switching gears, just curious if you could provide any commentary on the current pipeline maybe in terms of the mix of new versus add-on opportunities as well as any if you're seeing any particular industries that are stronger and presenting maybe more attractive opportunities today?

Hi, Erik. It's Gregg. It really is diversified. There is no one specific industry focus from what we're seeing B2B remains strong. So you will see that in our business services focus. We're still seeing opportunities, niche opportunities in Healthcare and Industrial Services. So it's pretty broad based. I wouldn't say there's one particular theme to it.

Thanks. And any thoughts on kind of the mix between new and add on opportunities today?

Yes, we're seeing both. It's healthy on both sides. We do see platform M&A starting to pick up sales of companies, but we're also seeing a lot of incremental add-on activity where we step in. So it really is a combination of both.

And then previously you mentioned that your portfolio companies kind of have been growing at a single digit EBITDA. Hearing just from anecdotal evidence and talking to some other BDCs that some are starting to see some slowdowns in certain pockets of the economy. So just curious if you could provide any kind of insight into what you're seeing with your portfolio companies and whether they continue to grow and improve at this point?

Yes, we're still seeing the single digit growth. We haven't seen any pronounced slowdown. It varies industry by industry, but I think that single digit measure still holds.

And then last one for me. Can you provide any comments on what drove the unrealized gains in this past quarter?

Yes. So mark-to-market, obviously there was some spread compression which fit throughout our model. So we did see spreads tighten a bit. And also David's Bridal was strong in this quarter and that had to do with really the purchase accounting adjustments associated with closing the transaction. The auditors had the time to perform the revalue inventory, merchandise and things like that. So you saw a mark-to-market increase based on that analysis.

Our next question is from Steven Martin with Slater Capital Management.

Following up on your last response on David's Bridal, can you talk is there any incremental information on its performance, its turnaround? I see you extended additional credit and I assume it's current pay, etcetera?

So, it's really no not much material information we can share. Part of it too is you're going through the selling season now. So, we'll have a much better view in the next couple of quarters. The incremental debt this quarter was a synthetic letter of credit facility. So it wasn't a general loan. It was more to back LCs to free up capacity under traditional ABL. So, it really wasn't a corporate for use loan. It was really to help the company more efficiently on a cost of capital basis backstop standby LCs.

Are they now complete with all the closings and restructurings that were discussed previously?

Yes.

This is probably something you talked about on the third quarter. Interest income from Q2 to Q3 to Q4 went from 57% to 64% and then back down to 64% -- 56%. What was the anomaly in Q3 that accounted for that?

Yes. Good morning. This is Keith. So in Q3 we had some make whole fees that we recognized as a result of some exits and some additional income recognized as a result of some restructuring transaction that brought back and recaptured some income.

Yes. I figured you had mentioned it, but I just couldn't find a note on it. Where do you stand on PIK sequentially and going forward?

So, we discussed some in our conference today, our PIK income is diversified and it's usually driven by structured situations where we're picking up enhanced yield for the PIK flexibility. We do expect over time that number to come down as our current portfolio refinances or gets repaid in those structured situations. So, over time, we do expect it to come down. But again, it's more opportunistic. What we've chosen strategically is we would rather for special situations be PIK secured at the top of the capital structure than do equity co invest in mezz which are junior securities where you have a lot more capital structure risk. So for us, we find it's a good risk return trade-off.

And last on you did a good job on the nonperformings and nonaccruals. Are there any prospective restructurings that would reduce that further after the quarter, this quarter or next quarter?

No. This is Michael. Other than TriMark, as Gregg mentioned, which we expect to take off noncore this quarter, nothing else we know of right now.

Thank you. There are no further questions at this time. I'd like to hand the floor back over to management for closing comments.

Great. Well, we thank everyone for tuning in today. And we look forward to talking to you a couple of months after the close of the first quarter. Take care everyone. Thank you.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.