Company: PRIF-PJ
Filing Date: 2025-08-28
Form Type: N-CSR
Source: 0001554625-25-000057
Chunk: 104

Company: Priority Income Fund, Inc.
Filing Date: 2025-08-28
Form: N-CSR
Chunk 104
---
 of senior securities that we may incur, we may increase our leverage to the extent then permitted by the 1940 Act and the risks associated with an investment in us may increase.

If our asset coverage declines below 300% (or 200%, as applicable), we would not be able to incur additional debt or issue additional preferred stock, and could be required by law to sell a portion of our investments to repay some debt or redeem shares of Preferred Stock when it is disadvantageous to do so, which could have a material adverse effect on our operations, and we may not be able to make certain distributions or pay dividends of an amount necessary to continue to be subject to tax as a RIC. The amount of leverage that we employ will depend on the Adviser’s and our board of directors’ assessment of market and other factors at the time of any proposed borrowing. We cannot assure you that we will be able to obtain credit at all or on terms acceptable to us.

In addition, any debt facility into which we may enter would likely impose financial and operating covenants that restrict our business activities, including limitations that could hinder our ability to finance additional loans and investments or to make the distributions required to maintain our ability to be subject to tax as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

Illustration. The following table is furnished in response to the requirements of the SEC and illustrates the effect of leverage on returns from an investment in our common stock assuming various annual returns, net of expenses. The calculation assumes (i) $556.7 million in total assets, (ii) an average cost of funds of 6.64%, (iii) $27.4 million in Series D Term Preferred Stock outstanding for 12 months, $39.5 million in Series J Term Preferred Stock outstanding for 12 months, $40 million in Series K Cumulative Preferred Stock outstanding for 12 months and $27.5 million in Series L Term Preferred Stock outstanding for 12 months, as well as $30 million in aggregate principal amount of the 2035 Notes and $9.7 million under the Facility, and (iv) $380.9 million of shareholders’ equity. In order to cover the annual interest and dividend payments on our senior securities, our portfolio would need a 2.1% return on our assets. The calculations in the table below are hypothetical and actual returns may be higher or lower than those appearing in the table below.

| Assumed Return