Company: CLM
Filing Date: 2025-02-21
Form Type: N-2
Source: 0001398344-25-003234
Chunk: 47

Company: Cornerstone Strategic Investment Fund, Inc.
Filing Date: 2025-02-21
Form: N-2
Chunk 47
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 likely effect of increasing the Fund’s expense ratio. There is a risk that the total Net Earnings from the Fund’s
portfolio would not be great enough to offset the amount of cash distributions paid to Stockholders. If this were to be the case, the
Fund’s assets would be depleted, and there is no guarantee that the Fund would be able to replace the assets. In addition, in order
to make such distributions, the Fund may have to sell a portion of its investment portfolio, including securities purchased with the
proceeds of the Offering, at a time when independent investment judgment might not dictate such action. Furthermore, such assets used
to make distributions will not be available for investment pursuant to the Fund’s investment objective. The Fund adopted the Distribution
Policy in 2002, and during recent years the Fund’s distributions have exceeded its Net Earnings. The Fund may use the proceeds
of the Offering to maintain the Distribution Policy by providing funding for future distributions, which may constitute a return of capital
to Stockholders and lower the tax basis in their Shares which, for the taxable Stockholders, will defer any potential gains until the
Shares are sold. For the taxable Stockholders, the portion of distribution that constitutes ordinary income and/or capital gains is taxable
to such Stockholders in the year the distribution is declared. A return of capital is non-taxable to the extent of the Stockholder’s
basis in the shares. The Stockholders would reduce their basis (but not below zero) in the Shares by the amount of the distribution and
therefore may result in an increase in the amount of any taxable gain on a subsequent disposition of such Shares, even if such Shares
are sold at a loss to the Stockholder’s original investment amount. Any return of capital will be separately identified when Stockholders
receive their tax statements. Any return of capital that exceeds cost basis may be treated as capital gain. Stockholders are advised
to consult their own tax advisers with respect to the tax consequences of their investment in the Fund. The Fund may need to raise additional
capital in order to maintain the Distribution Policy.

The following table is provided to demonstrate the
historical components of the Distribution Policy. The average annual returns indicated below include the return of Stockholders’
capital invested in the Fund. A return of capital distribution does not reflect positive investment performance. Stockholders should
not draw any conclusions about the Fund’s investment performance from the amount of its managed distributions or from the terms
of the Distribution Policy. The Fund