Company: CLM
Filing Date: 2025-02-21
Form Type: N-2
Source: 0001398344-25-003234
Chunk: 64

Company: Cornerstone Strategic Investment Fund, Inc.
Filing Date: 2025-02-21
Form: N-2
Chunk 64
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 even if a return-of-capital distribution
would exceed an investor’s tax basis and therefore be a taxable distribution. The Board currently plans to maintain this Distribution
Policy even if regulatory requirements would make part of a return-of-capital, necessary to maintain the distribution, taxable to Stockholders
and to disclose that portion of the distribution that is classified as ordinary income. Although it has no current intention to do so,
the Board may terminate the Distribution Policy at any time and such termination may have an adverse effect on the market price for the
Fund’s Shares.

What are the benefits of the Distribution Policy?

The Distribution Policy historically has maintained
a stable, high rate of distribution. The Board remains convinced that the Fund’s Stockholders are well served by a policy of regular
distributions which increase liquidity and provide flexibility to individual Stockholders in managing their investments. Stockholders
have the option of reinvesting all or a portion of these distributions in additional Shares through the Fund’s dividend reinvestment
plan or receiving them in cash. For more information regarding the Fund’s dividend reinvestment plan, Stockholders should carefully
read the description of the dividend reinvestment plan contained in the Fund’s Reports to Stockholders.

What are the risks of the Distribution Policy?

The Fund makes level distributions on a monthly basis
and these distributions are not tied to the Fund’s net investment income and capital gains and may not represent yield or investment
return on the Fund’s portfolio. Under the Distribution Policy, the Fund makes monthly distributions to Stockholders at a rate that
may include periodic distributions of its Net Earnings or a return of capital. As noted above, Stockholders have the option of reinvesting
all or a portion of these distributions in additional shares of the Fund through the Fund’s dividend reinvestment plan or receiving
them in cash. In any fiscal year where total cash distributions exceed Net Earnings and unrealized gain or loss for the year, such excess
will decrease the Fund’s total assets and, as a result, will have the likely effect of increasing the Fund’s expense ratio.
There is a risk that the total Net Earnings and unrealized gain or loss for years from the Fund’s portfolio would not be great
enough to fully offset the amount of cash distributions paid to Fund stockholders. If this were to be the case, the Fund’s assets
would be partially reduced by an equal amount, 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