Company: CLM
Filing Date: 2025-02-21
Form Type: N-2
Source: 0001398344-25-003234
Chunk: 65

Company: Cornerstone Strategic Investment Fund, Inc.
Filing Date: 2025-02-21
Form: N-2
Chunk 65
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 need to sell a portion of its investment portfolio at a time when independent investment
judgment might not dictate such action. Furthermore, the cash used to make distributions will not be available for investment pursuant
to the Fund’s investment objective.

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Funds maintain varying degrees of cash levels pursuant
to market conditions and the judgment of the portfolio managers. In addition, portfolio managers must raise cash periodically to cover
operating expenses. For any fund, to the extent that cash is held at any given time for operating expenses or other purposes, it will
not be available for investment pursuant to that fund’s investment objective. In addition to these general cash requirements, a
fund’s distribution policy may also require that securities be sold to raise cash for those stockholders who elect to take cash
distributions rather than reinvest in shares of the fund, in which case, it will also not be available for investment pursuant to the
fund’s investment objective. It is possible that a situation will occur where the Distribution Policy contributes to a reduction
of assets over an extended period of time such that the assets of the Fund are reduced to a point where the Fund would no longer be economically
viable. In such event, the Fund would need to take additional actions, which may include, for example, liquidation or merger, to address
the situation. While this is one of the risk factors of any managed distribution policy, including the Distribution Policy, it is important
to note that the Distribution Policy was not designed to be a mechanism for the dissolution of the Fund or a short-term liquidation policy,
and it is not the intention of the Board to allow the Fund to self-liquidate through the unsupervised effects of the Distribution Policy.
The Board monitors the Distribution Policy and the Fund’s asset levels regularly, and remains ready to modify the terms of the
Distribution Policy if, in its judgment, the Board believes it is in the best interests of the Fund and its Stockholders. The Board may
consider additional rights offerings in the future.

A return-of-capital distribution reduces the tax
basis of an investor’s Shares, which may make record-keeping by certain Stockholders more difficult.

The Fund discloses the characterization of its distributions
in notices to Stockholders and press releases to the public. Notwithstanding these communications, it is possible that the Distribution
Policy may create potential confusion in the marketplace as to whether the Fund’s distributions are comprised of income or return
of capital and how such characterization may influence the market price of the Fund