# EDGAR Filing Document

**Accession Number:** 0001628040
**File Stem:** 0001398344-26-010619
**Filing Date:** 2026-6
**Character Count:** 204994
**Document Hash:** 8a429bbd9ec2f17566cd5ff3b527d050
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001398344-26-010619.hdr.sgml**: 20260609

**ACCESSION NUMBER**: 0001398344-26-010619

**CONFORMED SUBMISSION TYPE**: N-CSRS

**PUBLIC DOCUMENT COUNT**: 12

**CONFORMED PERIOD OF REPORT**: 20260331

**FILED AS OF DATE**: 20260609

**DATE AS OF CHANGE**: 20260609

**EFFECTIVENESS DATE**: 20260609

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Alternative Credit Income Fund
- **CENTRAL INDEX KEY:** 0001628040

**ORGANIZATION NAME:**
- **EIN:** 472522233
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** N-CSRS
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-23016
- **FILM NUMBER:** 261075578

**BUSINESS ADDRESS:**
- **STREET 1:** C/O SIERRA CREST INVESTMENT MANAGEMENT L
- **STREET 2:** 650 MADISON AVENUE, 23RD FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10022
- **BUSINESS PHONE:** 212-891-2880

**MAIL ADDRESS:**
- **STREET 1:** 650 MADISON AVENUE
- **STREET 2:** 23RD FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10022

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Resource Credit Income Fund
- **DATE OF NAME CHANGE:** 20141215

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

**FORM N-CSR**

**CERTIFIED SHAREHOLDER REPORT OF REGISTERED**

**MANAGEMENT INVESTMENT COMPANIES**

<u>811-23016</u>

(Investment Company Act file number)

<u>Alternative Credit Income Fund</u>

(Exact name of Registrant as specified in charter)

<u>650 Madison Avenue, 3<sup>rd</sup> Floor</u>

<u>New York, NY 10022</u>

(Address of principal executive offices) (Zip code)

<u>The Corporation Trust Company</u>

<u>Corporation Trust Center, 1209 Orange Street</u>

<u>Wilmington, DE 19801</u>

(Name and address of agent for service)

Registrant's telephone number, including area code: <u>(212) 891-2880</u>

Date of fiscal year end: <u>September 30</u>

Date of reporting period: <u>October 1, 2025– March 31, 2026</u>

**Item 1. Reports to Stockholders.**

(a) ![](fp0098621-1_01.jpg)

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| Shareholder Letter | 3 |
| Portfolio Update | 14 |
| Consolidated Schedule of Investments | 16 |
| Consolidated Statement of Assets and Liabilities | 23 |
| Consolidated Statement of Operations | 24 |
| Consolidated Statements of Changes in Net Assets | 26 |
| Consolidated Statement of Cash Flows | 28 |
| Consolidated Financial Highlights |  |
| &nbsp;&nbsp;&nbsp;Class A | 29 |
| &nbsp;&nbsp;&nbsp;Class C | 31 |
| &nbsp;&nbsp;&nbsp;Class I | 33 |
| &nbsp;&nbsp;&nbsp;Class L | 35 |
| &nbsp;&nbsp;&nbsp;Class W | 37 |
| Notes to Consolidated Financial Statements | 39 |
| Additional Information | 53 |
| Privacy Notice | 55 |

---

![](fp0098621-1_02.jpg)

Alternative Credit Income Fund Shareholder Letter

March 31, 2026 (Unaudited)

Dear Shareholders,

We are happy to share with our friends and partners the semi-annual shareholder letter for the Alternative Credit Income Fund (ticker: RCIXX) for the six-month period ended March 31, 2026—our fiscal 1H 2026 timeframe.

The Fund generated a total return of 2.93% in the period<sup>i</sup>, compared to 1.05% for the Bloomberg U.S. Aggregate Total Return Index, 0.66% for the Morningstar / LSTA Loan Total Return Index and 0.79% for the Bank of America U.S. High Yield Index.<sup>1</sup>

As noted below, the Fund continues to outpace all relevant benchmarks on a cumulative basis as well:

<u>Cumulative Returns, Since Inception</u> 

---

| | |
|:---|:---|
| Alternative Credit Income Fund (RCIIX)<sup>ii</sup> | 89.2% |
| Bloomberg U.S. Aggregate Total Return Value Index<sup>iii</sup> | 20.5% |
| Morningstar / LSTA Loan Total Return Index<sup>iv</sup> | 71.7% |
| Bank of America High Yield Index<sup>v</sup> | 77.1% |

---

Source: Bloomberg, total return from 10/27/2015 through March 31, 2026

**Macro Backdrop**

As always, we begin these letters by framing the macro-environment. Events in Iran have overshadowed nearly all other factors and make predictions even more precarious than usual. Nevertheless, we do our best to assess the rapidly shifting environment below.

**<u>The Concerning</u>**

*Clouds darkening, not lifting*

 

With some chagrin, we highlight this paragraph from our 2026 Outlook letter:

*As we turn the page to 2026, the outlook looks materially more constructive—fiscal and monetary policy provide accelerants to an already stable economy and with midterm elections looming, markets should benefit from less policy uncertainty.*

 

It took only three days into the new year to discredit our expectation for less policy uncertainty in 2026, following the clandestine snatching of Nicolás Maduro. Further, the attack on Iran has potentially shifted the monetary outlook given the resulting spike in oil prices. A divided government after the midterms appears increasingly likely, which would mute fiscal impulse; we are 0 for 3 after just a few weeks into the year.

Policy uncertainty appears likely to prevail throughout this year, which we expect will weigh both risk assets and the economy, broadly.

*Jobs*

Job creation largely halted in 2025 as the economy generated only around 580,000 jobs— compared to around 2 million in 2024—marking the lowest labor expansion since 2020.<sup>2</sup> 

*Past performance does not guarantee future results. Please see page 14 for standardized returns.*

 

Semi-Annual Report \| March 31, 2026 3

Alternative Credit Income Fund Shareholder Letter

March 31, 2026 (Unaudited)

Amid many macro data points, the following may cause us the greatest concern: Americans are now more concerned about their jobs than they were during the Great Financial Crisis and COVID:

**Job Market Sentiment**

![](fp0098621-1_03.jpg)

Source: Alpine Macro (03/04/2026)

We recall hiding cash in the freezer during the Global Financial Crisis and seeing people wearing ski outfits to the grocery store during the pandemic. Job worries are more pronounced now than during those wildly disruptive periods of American history.

Policy uncertainty and AI overhang likely explain much of the job slowdown. With neither factor likely to disappear soon, these "known unknowns" will likely present a semi-permanent drag on employment for the foreseeable future.

4 www.altcif.com

Alternative Credit Income Fund Shareholder Letter

March 31, 2026 (Unaudited)

*Depleted consumer*

 

Consumer spending remained strong throughout much of 2025, but with depleted COVID surpluses and years of compounded price pressures, many households reduced their savings to maintain spending:

**U.S. Savings Rate**

![](fp0098621-1_04.jpg)

Source: January Chartbook Pantheon Macro (01/23/2026)

Heightened job uncertainty and AI fears may prompt households to rebuild their savings, which could present a near-term economic headwind.

Plus, higher gas prices effectively rob consumers of their discretionary spending—a regressive tax on households.

**The Good**

We adjusted this section due to events in Iran, and with that caveat, here are reasons for a positive outlook:

*Profit bonanza*

 

Corporate profits in the U.S. are booming thanks to a marked increase in productivity due, in part, from companies having reduced their workforces both through policy (e.g. return to work mandates) and attrition (fewer new hires).

Semi-Annual Report \| March 31, 2026 5

Alternative Credit Income Fund Shareholder Letter

March 31, 2026 (Unaudited)

These factors have propelled profitability for U.S. companies, as illustrated below:

**Corporate Profit per Private Sector Employee:**

![](fp0098621-1_05.jpg)

Source: Alpine Macro (03/02/2026)

In isolation, higher profitability should power markets, or at minimum, prevent their collapse.

*Potential monetary boost*

 

Doing more with less is arguably the dream of any central banker because it enables non-inflationary, if not deflationary, economic growth.

Investors may recall that former Federal Reserve chairman Alan Greenspan refrained from hiking rates despite the roaring growth of the Dot-Com Era. Greenspan accurately anticipated the efficiency gains of information technology and held rates, allowing the economy to run.

Fed chair-designee Kevin Warsh seems inclined to follow a similar playbook.

Warsh signaled that productivity gains should enable further cuts even with inflation above target. If events in the Middle East de-escalate, we expect the Fed to push for cuts in 2H, particularly with the midterms in sight.

**AI / Software**

Beyond the macro-economy, we'd like to address a question we have heard from LPs—specifically, our thoughts on artificial intelligence and software.

6 www.altcif.com

Alternative Credit Income Fund Shareholder Letter

March 31, 2026 (Unaudited)

*<u>Leaning (but not racing) in</u>*

 

Firstly, we do not believe the processing power of artificial intelligence foretells doom for all software companies. Given entrenched market structures and durability of incumbency, technological superiority does not predetermine success for any business.

As a clear illustration, U.S. bonds and loans continue to trade through brokered markets, employing legacy technology like the telephone (invented in 1876) and Bloomberg Terminals (1982). More efficient tech definitely exists, but trillions of transactions are conducted every year using these anachronistic tools and processes.

AI could prove paradigm-busting, but historically, changing structures of business and society requires time.

*<u>The software coding widget maker?</u>*

We find the "buy" versus "build" debate somewhat specious. Can businesses potentially, in time, write their own software? Perhaps — but crucially, will they?

If the core of my business is making widgets, why re-engineer my operations to become a widget code-writing and widget making company? We believe few companies will endeavor to build coding platforms on top of their core business.

*<u>"Opportunity" doesn't mean jump right in</u>*

 

We expect opportunities to surface amid the recent selloff given the disconnect between price and fundamentals.

Software likely faces a permanent valuation reappraisal. Capital structures levered 8.0x may have been viable in an era of 20x EBITDA valuations but will become Liability Management Exercise candidates in the new market paradigm. Suffice to say, lower leverage detach points have become paramount.

Plus, market technical factors will likely be challenging for some time.

Funds once specializing in software may soon have limited capital to deploy for the foreseeable future. These managers' ability to raise new dollars will be limited as the market attempts to simultaneously lower software exposure. Excess capital will likely be funneled toward deleveraging newly impaired legacy positions rather than fresh allocations.

New software buyers will be funds like ACIF—those who have historically been less focused on the category and therefore face a higher-diligence hurdle.

We have been dabbling in names we like but see little need to buy in size in this market. There is no reason to attempt to bottom tick, and we see few signs that negative sentiment will lift in the near-term.

*<u>Where we see opportunity</u>*

 

We believe companies will be reticent to remove software solutions that serve as systems of record; proprietary data and information will remain sacrosanct.

Applications with tight systems and/or process integration or that facilitates industry specific workflows should demonstrate more resilience; programs supporting regulatory or compliance functions should enjoy lower displacement risk.

From a sector standpoint, healthcare—with its regulatory hurdles and high cost of error—will likely be more isolated from AI's encroachment while content creation, management and design applications appear more vulnerable due to lower platform integration.

Content and IP itself should remain valuable as brands will be increasingly important amid the coming slop of low-cost media.

Assessing end markets will become paramount. Software targeting legal and accounting firms —both seemingly in AI's crosshairs—may prove less compelling than applications supporting manufacturing and supply chain, for example.

Lastly, we believe ARR-based valuations may fade (given uncertainty about the durability of these "recurring revenue") as the market reverts to traditional cash flow and EBITDA metrics in this vertical.

Semi-Annual Report \| March 31, 2026 7

Alternative Credit Income Fund Shareholder Letter

March 31, 2026 (Unaudited)

*<u>The illogic of AI catastrophizing</u>*

 

A certain high-profile research report predicting the death of white-collar work contains a logical flaw that obviates its argument.

Readers may recall the guarded outlook of AI we have articulated in the past. The capabilities of AI are undeniable, but its staggering capital consumption and infrastructure requirements may ultimately thwart its full realization.

**Cash Burn of Certain Emerging Technology Companies**

![](fp0098621-1_06.jpg)

Source: Bloomberg, The Information, OpenAI's cash burn forecasted 2026 - 2029 (03/04/2026)

Inherently, AI's success could sow the seeds of its own demise—a self-destructive reflexivity, of sorts.

In our consumer-led economy, AI cannot simultaneously eliminate the nation's highest paying jobs and retain access to the capital required to scale. Mass layoffs would crush aggregate demand, leading to the collapse in the economy/markets, which would in turn, choke AI spending.

Data centers and computer power are not free and therefore, AI cannot exist without a robust economy at its foundation.

**Private credit in the headlines**

Starting with high-profile bankruptcies last year and now entangled in software's woes, private credit has been trapped in negative headlines for several months.

8 www.altcif.com

Alternative Credit Income Fund Shareholder Letter

March 31, 2026 (Unaudited)

*<u>Lessons NOT learned</u>*

 

Private credit as an asset class is not impaired. Lost among the histrionic headlines, non-accruals of ~3% and write-offs remain consistent with historical averages.<sup>3</sup> 

We would also highlight the startling inconsistency of a recently published forecast for 15% defaults in private credit.<sup>6</sup> Much as yield represents a global phenomenon, spread products (ergo default assumptions) apply across all credit instruments.

U.S. High Yield Spreads have widened ~40 basis points ("bps") since the escalation of events in the Middle East. Much of this selloff has been driven by rates (not credit risk) as evidenced by BB's relative weakness.<sup>4</sup> 

Even at these moderately wider levels, and assuming only 200bps of Excess Spread, U.S. High Yield spread of 320bps implies a default rate in the 2.0% context.<sup>5</sup> 

Bluntly, we believe it is absurd to suggest one corporate credit product will realize 15% defaults while the other U.S. corporate credit market in signaling ~2.0%.

Further, quarterly liquidity funds are not fundamentally flawed. Rather, they have the ability to protect investors' hard-earned savings from periods of market irrationality and enable access to otherwise unavailable assets.

Has too much money been allocated to private credit? Relative to the Total Addressable Market, unambiguously no. Has too much money been allocated to too few funds? Again, we believe the answer appears clear.

*<u>Market recalibration?</u>*

 

We are hopeful that recent private market tremors prompt a reassessment by allocators.

Far too many investors blindly selected funds under the flawed assumption that size provides safety. In our view, concentration of capital can result in lower yields and the degradation of investor protections as platforms race to deploy dollars and win deals rather than engage in asset selection.

**The Opportunity**

AI caused modest market recalibration, but valuations remain elevated.

Historically, high starting valuation for the Standard & Poor's 500 Index ("S&P 500") provides little predictive power for measuring returns one year in the future. However, high valuation demonstrates a strong ability to forecast potential gains over a five-year time horizon. As demonstrated below, from today's starting point, investors can expect a five-year annualized return of 0.0% from the S&P 500:

Semi-Annual Report \| March 31, 2026 9

Alternative Credit Income Fund Shareholder Letter

March 31, 2026 (Unaudited)

Forward Price to Earnings ("P/E") and subsequent 1-year returns and 5-year annualized returns (S&P 500 Total Return Index)

![](fp0098621-1_07.jpg)

Source: "Guide to the Markets," JP Morgan (10/07/2025)

In the current backdrop, equities offer investors risk, with little hope for return.

Similarly, credit spreads have widened modestly amid the software selloff and Middle Eastern conflict but remain within range of historic tights.

With public markets affording investors little potential return, private credit—despite the noise—remains one of the few segments to provide potential for excess return.

**Fund Performance**

Again, the Fund generated a total return of 2.93% in the period, compared to 1.05% for the Bloomberg U.S. Aggregate Total Return Index, 0.66% for the Morningstar / LSTA Loan Total Return Index and 0.79% for the Bank of America U.S. High Yield Index.<sup>1</sup> 

We remain focused on cumulative returns, which better aligns with our investment perspective. As evident below, the Fund continues to notably outpace all fixed income benchmarks:

<u>Cumulative Returns, Since Inception</u> 

---

| | |
|:---|:---|
| Alternative Credit Income Fund (RCIIX)<sup>ii</sup> | 89.2% |
| Bloomberg U.S. Aggregate Total Return Value Index<sup>iii</sup> | 20.5% |
| Morningstar / LSTA Loan Total Return Indexi<sup>v</sup> | 71.7% |
| Bank of America High Yield Index<sup>v</sup> | 77.1% |

---

Source: Bloomberg. Total return from 10/27/2015 through March 31, 2026

10 www.altcif.com

Alternative Credit Income Fund Shareholder Letter

March 31, 2026 (Unaudited)

*<u>What didn't work (yet)</u>*

 

The largest detractor in the period stemmed from the restructuring of Vortex Opco (doing business as United Site Services).

Our long-term partners may recall that the Fund has been in-and-out of United Site Services many times since ~2018. As the dominant player in the porta potty business—a category essentially immune from e-commerce or AI—United Site Services had been among our favorite businesses.

Despite its business merits, United Site Service proved not to be immune to poor management. We were slow to recognize the degree to which leadership (who had helped generate one of the Fund's biggest gains during their tenure as CEO of BlueLine Rental) had impaired this once dominant industry player.

*<u>What worked</u>*

 

We still find the middle market to be a fertile hunting ground as many market participants have left this market behind or have chosen to eschew this diligence-intensive segment.

Almost a year ago ACIF provided financing for a founder owned and operated whiskey distillery in the Midwest. We believe many lenders overlooked the opportunity given the industry's well-documented post-COVID oversupply. However, the business enjoyed significant asset value and contractual revenue, which more than offset the market's challenges. A year after close (almost to the day), our partner sold a portion of its barrel inventory, providing a positive outcome for holders of the Alternative Credit Income Fund.

Further, loans backing pet supply company Phillips Pet & Supply traded up more than 10% during the six months on stronger fundamentals. Further, after period end, Phillips merged its business with the pet supply assets of a publicly listed company, forming a NewCo with significant greater scale—vital in this category.

Highlighting another "win" for our shareholders in the period, recall, in early 2025 the Fund largely exited its exposure to public BDCs. Concerned by valuations and market frenzy, we knowingly reduced the assets to around 1% of AUM—down from greater than 20% at its peak. These decisions enable our shareholders to sidestep the pronounced volatility that public BDCs demonstrated in 4Q 2025 and 1Q 2026.

*<u>What we are excited about going forward</u>*

 

To reiterate, there is not a problem with private credit as an asset class. There is not a problem with vehicle structure. We only have a market structure problem: too much capital has chased the same trade—large cap private market.

These concentration dynamics have been an unambiguous positive for ACIF's investment strategy and we now enjoy a less competitive environment in our segment. Other credit managers have either raced upmarket or sold to other platforms.

Recent headlines may prompt investors to pull back, but savvy allocators know this is the exact time to lean into private credit.

*Past performance does not guarantee future results. Please see page 14 for standardized returns.*

We feel our pipeline remains robust. Despite all the headlines, there has been no disruption in demand for capital from our country's small and medium-sized businesses. Media reports about the machinations of fund managers or fund structures are of little concern to business owners; they simply want money to grow.

Plus, as many investors retreat, more opportunities will arise for those who remain dedicated to private credit.

**Positioning**

As noted above, the Fund has significantly reduced its public market exposure given valuation concerns. We nevertheless remain mindful that opportunities in public markets can surface quickly during periods of market dislocation. Hence, we remain watchful for attractive entry points.

**Conclusion**

Our partners are likely aware of plans to merge the Alternative Credit Income Fund with another vehicle, the BC Partners Lending Corporation (or BCPL). We would distill the rationale for this decision to one word: Resilience.

Semi-Annual Report \| March 31, 2026 11

Alternative Credit Income Fund Shareholder Letter

March 31, 2026 (Unaudited)

Amid the hostile narrative surrounding private lending, we must provide investors with a vehicle to better navigate the uncertainty. Private vehicles simply provide greater protection than mutual funds.

Further, shareholders will enjoy operating leverage as part of a larger vehicle. As our shareholders know expense ratio can migrate lower with a greater base of assets, which will compound to provide a meaningful benefit to our holders.

The biggest benefit, we believe, will result from a greater ability to scale as part of a larger vehicle.

When we launched more than 10 years ago, the fixed income markets looked structurally quite different. What had once been a widely distributed market with many asset managers—providing room for the Resource America's of the world—has rapidly consolidated into a handful of monster firms.

Mystifyingly, the market had decided to reward size for the sake of size, providing little oxygen for the Alternative Credit Income Fund to raise new dollars. We simply lacked the size to compete against the huge funds.

Again, we hope that recent tumult in private credit will force a reconciliation in the market and perhaps the recognition that "bigger" is not better. In fact, as we have seen in recent months "bigger" often hurts shareholders as large platforms lower standards to deploy their capital hordes; we highlight the disappearance of covenants from large deals as evidence of this dynamic.

The market shifting its perspective on size is something we hope for but cannot expect. Hence, merging the Alternative Credit Income Fund with BCPL provides the best step to achieve the scale needed to compete in this backdrop.

I started this fund with just $2.4 million in October 2015 based on a belief in semi-liquid vehicles and a conviction that retail investors deserve access to private markets. More than 10 years later, we remain unwavering in these beliefs.

It may sound hackneyed, but the faith you have shown me (amid two market panics and three different owners) is the greatest honor of my life. I had hoped for a better outcome, but market structure is beyond my control. Other than becoming a father and a husband, the Alternative Credit Income Fund is the greatest achievement of my life.

With every fiber of my being, thank you.

Regards,

Michael Terwilliger, CFA

Portfolio Manager\*

Alternative Credit Income Fund

*<sup>1</sup>* *Bloomberg, Total Return from 09/30/2025 – 03/31/2026, for Alternative Credit Income Fund (RCIIX), Bloomberg U.S. Aggregate Total Return Index, Morningstar Loan Total Return Index and Bank of America U.S. High Yield Index.*

*<sup>2</sup>* *Bureau of Labor Statistics*

*<sup>3</sup>* *"BDC Sector Outlook – Weak Sentiment but Stable Credit Quality," Clear Street (03/13/2026).*

*<sup>4</sup>* *BB bonds typically outperform in a credit/spread driven selloff and underperform in an interest rate lead selloff, given the added duration.*

*<sup>5</sup>* *Applying 200bps of Excess Spread, which is below long-term averages, and applying at 40% loss given default.*

*<sup>6</sup>* *Private Credit Fears Deepen with UBS Warning of 15% Defaults," Bloomberg (02/24/2026).*

*\** *Effective October, 31, 2020, Sierra Crest Investment Management LLC ("Sierra Crest") replaced Resource Alternative Advisor, LLC ("Resource") as the Fund's investment adviser. Michael Terwilliger has joined Sierra Crest as a portfolio manager to the Fund.*

*<sup>i</sup>* *Fund performance refers to that of Class I. Reflects six-month returns through 03/31/2026. Past performance is not indicative of future results. The investment return and principal value of an investment will fluctuate. An investor's shares when redeemed, may be worth more or less than the original cost. Total return is calculated assuming reinvestment of all dividends and distributions. Performance figures for periods less than one year are not annualized. For performance information current to the most recent month-end, please call toll-free 1-833-404-4103. The Adviser and the Fund have entered into an Expense Limitation Agreement under which the Adviser has agreed, until at least January 31, 2027, to waive its management fees (excluding any incentive fee) and to pay or absorb the ordinary annual operating expenses of the Fund (excluding incentive fees, borrowing costs, dividends, amortization/accretion and interest on securities sold short, brokerage commissions, acquired fund fees and expenses and extraordinary expenses), to the extent that its management fees plus the Fund's ordinary annual operating expenses exceed 2.59% per annum of the Fund's average daily net assets attributable to Class A shares. Such Expense Limitation Agreement may not be terminated by the Adviser, but it may be terminated by the Board of Trustees, upon 60 days written notice to the Adviser. Any waiver or reimbursement by the Adviser is subject to repayment by the Fund within the three (3) years from the date the Adviser (or the previous investment adviser) waived any payment or reimbursed any expense, if the Fund is able to make the repayment without exceeding the lesser of the expense limitation in place at the time of the waiver or the current expense limitation and the repayment is approved by the Board of Trustees. See "Management of the Fund."*

** 

12 www.altcif.com

Alternative Credit Income Fund Shareholder Letter

March 31, 2026 (Unaudited)

*<sup>ii</sup>* *Fund performance refers to that of Class I. Reflects cumulative returns 10/27/2015 through 03/31/2026. Past performance is not indicative of future results. The investment return and principal value of an investment will fluctuate. An investor's shares when redeemed, may be worth more or less than the original cost. Total return is calculated assuming reinvestment of all dividends and distributions. Performance figures for periods less than one year are not annualized. For performance information current to the most recent month-end, please call toll-free 1-833-404-4103.*

*<sup>iii</sup>* *Bloomberg U.S. Aggregate Total Return Value Index – The Bloomberg U.S. Aggregate Total Return Value Index is a broad-based flagship benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market. The index includes U.S. Treasuries, government-related and corporate securities, mortgage-backed securities, asset-backed securities and commercial mortgage-backed securities. The "total return" version reflects both price changes and income from the underlying bonds. Investors cannot invest directly in an index. Reflects cumulative return from 10/27/2015 through 03/31/2026.*

*<sup>iv</sup>* *Morningstar LSTA US Leveraged Loan TR USD Index - The Morningstar LSTA US Leveraged Loan TR USD Index is a market value-weighted index designed to measure the performance of the U.S. leveraged loan market based upon market weightings, spreads and interest payments. Investors cannot invest directly in an index.*

*<sup>v</sup>* *Bank of America High Yield Index (H0A0), 10/27/2015 through 03/31/2026.*

** 

***Important information:***

 ****

*An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. To obtain a prospectus containing this and other information, please call (800) 806-9756 or download the file from www.AltCIF.com. Read the prospectus carefully before you invest.*

 

*The Fund is distributed by ALPS Distributors, Inc. (ALPS Distributors, Inc. 1290 Broadway, Suite 1100, Denver, CO 80203). Sierra Crest Investment Management, LLC (the Fund's investment adviser), its affiliates, and ALPS Distributors, Inc. are not affiliated.*

 

*Investing involves risk. Investment return and principal value of an investment will fluctuate, and an investor's shares, when redeemed, may be worth more or less than their original cost. Alternative investment funds, ETFs, interval funds, and closed-end funds are subject to management and other expenses, which will be indirectly paid by the Fund. Debt instruments are subject to credit risk and interest rate risk and may be subordinated to more senior debt instruments. Business Development Companies (BDCs) often use leverage to enhance returns and are subject to interest rate risk, credit risk, and liquidity risk. CLOs are debt instruments but also carry additional risks related to the complexity and leverage inherent in the CLO structure. The use of leverage, such as borrowing money to purchase securities, will cause the Fund to incur additional expenses and magnify the Fund's gains or losses.*

 

*There currently is no secondary market for the Fund's shares and the Fund expects that no secondary market will develop. Shares of the Fund will not be listed on any securities exchange, which makes them inherently illiquid. An investment in the Fund's shares is not suitable for investors who cannot tolerate risk of loss or who require liquidity, other than the liquidity provided through the Fund's repurchase policy. The Fund's distributions policy may, under certain circumstances, have certain adverse consequences to the Fund and its shareholders because it may result in a return of capital, resulting in less of a shareholder's assets being invested in the Fund, and, over time, increase the Fund's expense ratio. Any invested capital that is returned to the shareholder will be reduced by the Fund's fees and expenses, as well as the applicable sales load. Limited liquidity is provided to shareholders only through the Fund's quarterly repurchase offers, regardless of how the Fund performs. Investments in lesser-known, small and medium capitalization companies may be more vulnerable than larger, more established organizations. The sales of securities to fund repurchases could reduce the market price of those securities, which in turn would reduce the Fund's Net Asset Value (NAV).*

 

*An investment in the Fund's shares is not suitable for investors who cannot tolerate risk of loss or who require liquidity, other than liquidity provided through the Fund's repurchase policy.*

 

*The Fund's distributions policy may, under certain circumstances, have certain adverse consequences to the Fund and its shareholders because it may result in a return of capital, resulting in less of a shareholder's assets being invested in the Fund, and, over time, increase the Fund's expense ratio.*

 

Semi-Annual Report \| March 31, 2026 13

Alternative Credit Income Fund Portfolio Update

March 31, 2026 (Unaudited)

**The Fund's performance figures for the periods ended March 31, 2026, compared to its benchmark:**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **1 Month** | **Quarter** | **6 Month** | **YTD** | **Inception** |
| **Alternative Credit Income Fund - A - Without Load** | 0.63% | 0.30% | 2.80% | 0.30% | 4/17/15 |
| **Alternative Credit Income Fund - A - With Load** | -5.18% | -5.47% | -3.15% | -5.47% | 4/17/15 |
| **Alternative Credit Income Fund - C - Without Load** | 0.56% | 0.02% | 2.42% | 0.02% | 4/17/15 |
| **Alternative Credit Income Fund - C - With Load<sup>(a)</sup>** | -0.43% | -0.96% | 1.43% | -0.96% | 4/17/15 |
| **Alternative Credit Income Fund - I - Without Load** | 0.58% | 0.36% | 2.93% | 0.36% | 4/17/15 |
| **Alternative Credit Income Fund - W - Without Load** | 0.52% | 0.30% | 2.80% | 0.30% | 4/17/15 |
| **Alternative Credit Income Fund - L - Without Load** | 0.56% | 0.24% | 2.67% | 0.24% | 7/28/17 |
| **Alternative Credit Income Fund - L - With Load** | -3.75% | -4.05% | -1.75% | -4.05% | 7/28/17 |
| Morningstar LSTA US Leveraged Loan Index | 0.54% | -0.55% | 0.66% | -0.55% | 4/17/15 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **1 Year** | **3 Year** | **5 Year** | **Since Inception\*** | **Inception** |
| **Alternative Credit Income Fund - A - Without Load** | 6.54% | 5.64% | 3.87% | 5.73% | 4/17/15 |
| **Alternative Credit Income Fund - A - With Load** | 0.39% | 3.58% | 2.65% | 5.08% | 4/17/15 |
| **Alternative Credit Income Fund - C - Without Load** | 5.87% | 4.88% | 3.09% | 5.12% | 4/17/15 |
| **Alternative Credit Income Fund - C - With Load<sup>(a)</sup>** | 4.88% | 4.88% | 3.09% | 5.12% | 4/17/15 |
| **Alternative Credit Income Fund - I - Without Load** | 6.82% | 5.90% | 4.11% | 5.97% | 4/17/15 |
| **Alternative Credit Income Fund - W - Without Load** | 6.54% | 5.64% | 3.85% | 5.68% | 4/17/15 |
| **Alternative Credit Income Fund - L - Without Load** | 6.27% | 5.43% | 3.62% | 4.63% | 7/28/17 |
| **Alternative Credit Income Fund - L - With Load** | 1.72% | 3.91% | 2.72% | 4.10% | 7/28/17 |
| Morningstar LSTA US Leveraged Loan Index | 4.81% | 8.00% | 5.93% | 4.92% | 4/17/15 |

---

*\** *Annualized total return*

*<sup>(a)</sup>* *Effective as of December 23, 2016, Class C shares no longer have a sales charge.*

** 

*The Morningstar LSTA US Leveraged Loan TR USD Index is a market value-weighted index designed to measure the performance of the U.S. leveraged loan market based upon market weightings, spreads and interest payments. Investors cannot invest directly in an index.*

 

*Past performance is not indicative of future results. The investment return and principal value of an investment will fluctuate. An investor's shares when redeemed, may be worth more or less than the original cost. Total return is calculated assuming reinvestment of all dividends and distributions. Performance figures for periods less than one year are not annualized. As of the Fund's most recent prospectus dated January 28, 2026, the Fund's total annual operating expenses, including acquired fund fees and expenses, before fee waivers is 5.13% for Class A, 5.82% for Class C, 5.15% for Class W, 4.93% for Class I and 5.45% for Class L shares. After fee waivers, the Fund's total annual operating expense is 4.54% for Class A, 5.29% for Class C, 4.54% for Class W, 4.29% for Class I and 4.79% for Class L shares. Class A shares are subject to maximum sales loads of 5.75% imposed on purchases. Class L shares are subject to a maximum sales load of 4.25% imposed on purchases. Share repurchases within 365 days may be subject to an early withdrawal charge of 0.50% for Class A and 1.00% for Class C shares. For performance information current to the most recent month-end, please call toll-free 1-833-404-4103.*

 

*The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.*

 

14 www.altcif.com

Alternative Credit Income Fund Portfolio Update

March 31, 2026 (Unaudited)

**Consolidated Portfolio Composition as of March 31, 2026**![](fp0098621-1_08.jpg)

---

| | |
|:---|:---|
| Asset Type | Percent of Net Assets |
| Bank Loans | 72.28% |
| Private Investment Funds | 17.53% |
| Common Equity | 9.36% |
| Asset-Backed Securities | 3.25% |
| Preferred Stock | 3.24% |
| Interval Fund | 2.38% |
| Corporate Bonds | 2.21% |
| Equipment Financing | 0.32% |
| Warrants | 0.27% |
| Joint Venture | 0.18% |
| Derivatives | –% |
| Total Investments | 111.02% |
| Liabilities in Excess of Other Net Assets | (11.02)% |
| **Net Assets** | **100.00%** |

---

Please see the Consolidated Schedule of Investments for a detailed listing of the Fund's holdings.

Semi-Annual Report \| March 31, 2026 15

Alternative Credit Income Fund Consolidated Schedule of Investments

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Coupon** | **Reference Rate & Spread** | **Maturity** | **Principal** | **Value** |
| **BANK LOANS (72.28%)<sup>(a)(b)</sup>** |  |  |  |  |  |
| ***Communication Services (3.54%)*** |  |  |  |  |  |
| Next Flight Ventures, Delayed Draw Term Loan<sup>(c)(d)(e)</sup> | 13.95% | 13.95% PIK | 12/26/2026 | $1144828 | $1115900 |
| Next Flight Ventures, First Lien Term Loan<sup>(c)(e)</sup> | 13.96% | 13.96% PIK | 12/26/2026 | 5267552 | 5149645 |
|  |  |  |  |  | 6265545 |
| ***Consumer Discretionary (4.83%)*** |  |  |  |  |  |
| Arrow Purchaser, Inc., First Lien Initial Term Loan<sup>(c)</sup> | 10.71% | 3M SOFR + 6.75%, 1.00% Floor | 04/15/2028 | 1937500 | 1923938 |
| Lucky Bucks Holdings LLC, Subordinated Note<sup>(c)(f)</sup> | –% | 3M SOFR + 4.75%, 0.75% Floor | 05/29/2028 | 10013460 | 1938606 |
| Needle Holdings LLC, First Lien Term Loan<sup>(c)(f)</sup> | –% | 1M SOFR + 9.00% | 06/22/2027 | 63661 |  |
| PMP OPCO, LLC, Delayed Draw Term Loan<sup>(c)(d)(g)</sup> | 12.28% | 6M SOFR + 8.50%, 2.00% Floor | 05/31/2029 | 383660 | 338875 |
| PMP OPCO, LLC, First Lien Term Loan<sup>(c)(g)</sup> | 12.13% | 6M SOFR + 8.50%, 2.00% Floor | 05/31/2029 | 1120078 | 1020727 |
| PMP OPCO, LLC, Revolver<sup>(c)(d)(g)</sup> | –% | 6M SOFR + 8.50%, 2.00% Floor | 05/31/2029 |  | (12473) |
| Riddell Inc., First Lien Term Loan<sup>(c)(g)</sup> | 9.68% | 1M SOFR + 6.00%, 1.00% Floor | 03/29/2029 | 3338669 | 3338669 |
|  |  |  |  |  | 8548342 |
| ***Consumer Staples (6.09%)*** |  |  |  |  |  |
| BrightPet, First Lien Term Loan<sup>(c)(e)</sup> | 10.82% | 3M SOFR + 4.00%, 3.00% PIK, 1.00% Floor | 01/04/2028 | 1935417 | 1446725 |
| BrightPet, Revolver<sup>(c)(e)</sup> | 10.82% | 3M SOFR + 4.00%, 1.00% Floor | 01/04/2028 | 526747 | 393743 |
| Florida Food Products, LLC, Second Lien Term Loan C<sup>(c)(e)</sup> | 8.76% | 3M SOFR + 3.00%, 2.00% PIK, 1.00% Floor | 10/15/2030 | 894767 | 657063 |
| Florida Food Products, LLC, Second Lien Term Loan D<sup>(c)(e)</sup> | 8.91% | 3M SOFR + 3.00%, 2.00% PIK | 10/15/2030 | 97356 | 71492 |
| Florida Food Products, LLC, Third Lien Term Loan<sup>(c)(e)</sup> | 11.76% | 3M SOFR + 8.00% PIK, 0.75% Floor | 04/15/2031 | 4761957 | 3309560 |
| Phillips Feed Service, Inc., First Lien Term Loan<sup>(c)</sup> | 10.77% | 1M SOFR + 7.00% | 12/31/2026 | 5250000 | 4906650 |
|  |  |  |  |  | 10785233 |
| ***Financials (16.51%)*** |  |  |  |  |  |
| BetaNXT, Inc., First Lien Term Loan<sup>(c)</sup> | 9.45% | 3M SOFR + 5.75% | 07/01/2029 | 2021559 | 1963135 |
| Cor Leonis Limited, Revolver<sup>(c)(d)</sup> | 10.95% | 3M SOFR + 7.25%, 1.50% Floor | 05/15/2028 | 3032521 | 3032521 |
| DeltaDx Limited, LP - Barri/Dolex<sup>(c)(e)</sup> | 15.00% | 15.00% PIK | 06/14/2028 | 412124 | 410063 |
| Hunter Point Capital Structured Notes Issuer, LLC, Subordinated Delayed Draw Notes<sup>(c)</sup> | –% | N/A | 07/15/2052 | 5694718 | 8834215 |
| Money Transfer Acquisition Inc., First Lien Term Loan<sup>(c)</sup> | 12.02% | 1M SOFR + 8.25%, 1.00% Floor | 12/14/2027 | 5775823 | 5746944 |
| PMA Parent Holdings LLC, First Lien Term Loan<sup>(c)</sup> | 8.45% | 3M SOFR + 4.75%, 0.75% Floor | 01/31/2031 | 2742918 | 2719055 |
| PMA Parent Holdings LLC, Revolver<sup>(c)(d)</sup> | –% | 3M SOFR + 4.75%, 0.75% Floor | 01/31/2031 |  | (2176) |
| PocketWatch, Inc., First Lien Term Loan<sup>(c)</sup> | 14.99% | N/A | 07/15/2027 | 1115612 | 1115612 |
| PocketWatch, Inc., First Lien Term Loan - Incremental<sup>(c)</sup> | 13.80% | N/A | 01/30/2028 | 887386 | 887386 |
| SouthStreet Securities Holdings, Inc., First Lien Term Loan<sup>(c)</sup> | 9.00% | N/A | 09/20/2027 | 2700000 | 2511000 |
| TA/WEG HOLDINGS, LLC, Delayed Draw Term Loan<sup>(c)</sup> | 7.91% | 3M SOFR + 4.25%, 5.50% Floor | 10/02/2028 | 1989786 | 1989786 |
| TA/WEG HOLDINGS, LLC, Revolver<sup>(c)(d)</sup> | –% | 3M SOFR + 4.25%, 5.50% Floor | 10/02/2028 |  | – |
|  |  |  |  |  | 29207541 |
| ***Health Care (13.36%)*** |  |  |  |  |  |
| American Academy Holdings, LLC, Delayed Draw Term Loan<sup>(c)(e)</sup> | 13.18% | 3M SOFR + 4.50%, 5.25% PIK, 1.00% Floor | 06/30/2027 | 424504 | 448913 |
| American Academy Holdings, LLC, First Lien Term Loan<sup>(c)(e)</sup> | 13.18% | 3M SOFR + 4.50%, 5.25% PIK, 1.00% Floor | 06/30/2027 | 2139499 | 2262520 |
| American Academy Holdings, LLC, Second Lien Term Loan<sup>(c)(e)</sup> | 14.50% | 14.50% PIK | 03/01/2028 | 5062826 | 5006123 |
| PhyNet Dermatology LLC, First Lien Term Loan<sup>(c)(e)</sup> | 10.17% | 3M SOFR + 6.50%, 1.00% Floor | 10/20/2029 | 1995955 | 1951046 |
| Premier Radiology Acquisition, Inc, First Lien Term Loan<sup>(c)</sup> | 10.77% | 1M SOFR + 7.00%, 3.00% Floor | 06/09/2028 | 1456802 | 1427666 |
| Upstream Newco, Inc., Amended Second Lien Term Loan<sup>(c)(e)</sup> | 12.69% | 3M SOFR + 9.00% | 05/20/2030 | 2386011 | 2991581 |
| Upstream Rehabilitation, Inc., Second Lien Term Loan<sup>(c)(e)</sup> | 13.29% | 3M SOFR + 9.50% | 05/20/2030 | 7749387 | 6470738 |

---

*See Notes to Consolidated Financial Statements.*

16 www.altcif.com

Alternative Credit Income Fund Consolidated Schedule of Investments

March 31, 2026 (Unaudited)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Coupon** | **Reference Rate & Spread** | **Maturity** | **Principal** | **Value** |
| **BANK LOANS (72.28%)<sup>(a)(b)</sup>** |  |  |  |  |  |
| ***Health Care (13.36%) (continued)*** |  |  |  |  |  |
| VBC Spine Opco LLC (DxTX Pain and Spine LLC), Delayed Draw Term Loan<sup>(c)</sup> | 10.24% | 1M SOFR + 6.50%, 2.00% Floor | 06/14/2029 | $1085617 | $1074760 |
| VBC Spine Opco LLC (DxTX Pain and Spine LLC), First Lien Term Loan<sup>(c)</sup> | 10.31% | 3M SOFR + 6.50%, 2.00% Floor | 06/14/2029 | 1869626 | 1850929 |
| VBC Spine Opco LLC (DxTX Pain and Spine LLC), Revolver<sup>(c)(d)</sup> | 10.17% | 3M SOFR + 6.50%, 2.00% Floor | 06/14/2029 | 161290 | 157258 |
|  |  |  |  |  | 23641534 |
| ***Industrials (8.12%)*** |  |  |  |  |  |
| Accordion Partners LLC, Delayed Draw Term Loan<sup>(c)</sup> | 8.68% | 3M SOFR + 5.00%, 0.75% Floor | 11/17/2031 | 334927 | 334927 |
| Accordion Partners LLC, First Lien Term Loan<sup>(c)</sup> | 8.68% | 3M SOFR + 5.00%, 0.75% Floor | 11/17/2031 | 1664805 | 1664805 |
| Accordion Partners LLC, Revolver<sup>(c)(d)</sup> | –% | 3M SOFR + 5.00%, 0.75% Floor | 11/17/2031 |  |  |
| Epic Staffing Group, First Lien Term Loan<sup>(c)</sup> | 9.73% | 6M SOFR + 6.00%, 0.50% Floor | 06/28/2029 | 1929185 | 1579617 |
| Marvel APS, Delayed Draw Term Loan<sup>(c)(e)(h)</sup> | 10.00% | 10.00% PIK | 12/21/2027 | 3812027 | 5177229 |
| Material Handling Systems, Inc., First Lien Term Loan<sup>(c)</sup> | 9.36% | 6M SOFR + 5.50%, 0.50% Floor | 06/08/2029 | 1863129 | 1014623 |
| Newbury Franklin Industrials, LLC, Delayed Draw Term Loan<sup>(c)(d)</sup> | 10.63% | 6M SOFR + 7.00%, 2.00% Floor | 12/11/2029 | 451678 | 442927 |
| Newbury Franklin Industrials, LLC, First Lien Term Loan<sup>(c)</sup> | 10.62% | 6M SOFR + 7.00%, 2.00% Floor | 12/11/2029 | 3962993 | 3906323 |
| VORTEX OPCO, LLC, First Lien Term Loan (Second Out)<sup>(c)(f)</sup> | –% | 3M SOFR + 4.25%, 0.50% Floor | 12/15/2028 | 1572384 | 243719 |
|  |  |  |  |  | 14364170 |
| ***Information Technology (19.83%)*** |  |  |  |  |  |
| Accurate Background, LLC, First Lien Term Loan<sup>(c)</sup> | 9.96% | 3M SOFR + 6.00%, 1.00% Floor | 03/26/2029 | 4310444 | 4308289 |
| Ancile Solutions, Inc., First Lien Term Loan<sup>(c)</sup> | 13.94% | 3M SOFR + 10.00%, 1.00% Floor | 06/11/2026 | 3261324 | 3336335 |
| Colonnade Intermediate, LLC, Delayed Draw Term Loan<sup>(c)(f)</sup> | –% | 1M SOFR + 7.00%, 1.00% Floor | 09/30/2026 | 1689686 | 1045071 |
| Colonnade Intermediate, LLC, First Lien Term Loan<sup>(c)(f)</sup> | –% | 1M SOFR + 7.00%, 1.00% Floor | 09/30/2026 | 1767935 | 1093468 |
| DCert Buyer, Inc. First Amendment Term Loan Refinancing, Second Lien Term Loan<sup>(c)</sup> | 10.67% | 1M SOFR + 7.00% | 02/16/2029 | 3600000 | 2781000 |
| Diamanti, Inc., Subordinated Note<sup>(c)(e)</sup> | 17.50% | 17.50% PIK | 04/01/2026 | 4961257 | 5261909 |
| Dun & Bradstreet Holdings, Inc., First Lien Term Loan<sup>(c)</sup> | 9.18% | 3M SOFR + 5.50%, 0.75% Floor | 08/26/2032 | 1692448 | 1681785 |
| Dun & Bradstreet Holdings, Inc., Revolver<sup>(c)(d)</sup> | –% | 3M SOFR + 5.50%, 0.75% Floor | 08/26/2032 |  | (1069) |
| Ivanti Security Holdings LLC, NewCo First Lien Term Loan<sup>(c)</sup> | 9.41% | 3M SOFR + 5.75%, 2.00% Floor | 06/01/2029 | 294580 | 294580 |
| Ivanti Software, Inc., Second Lien Initial Term Loan<sup>(c)</sup> | 11.17% | 3M SOFR + 7.25%, 1.00% Floor | 06/01/2029 | 4040000 | 1424100 |
| Kofax, Inc., Second Lien Term Loan<sup>(c)</sup> | 11.42% | 3M SOFR + 7.75%, 0.50% Floor | 07/20/2030 | 4000000 | 2460000 |
| Metrc Inc., Delayed Draw Term Loan<sup>(c)(d)</sup> | –% | 3M SOFR + 5.50%, 1.00% Floor | 09/30/2031 |  | 1267 |
| Metrc Inc., First Lien Term Loan<sup>(c)</sup> | 9.20% | 3M SOFR + 5.50%, 1.00% Floor | 09/30/2031 | 294236 | 287674 |
| Metrc Inc., Revolver<sup>(c)(d)</sup> | –% | 3M SOFR + 5.50%, 1.00% Floor | 09/30/2031 |  | (3457) |
| Phoenix Finance, Inc., First Lien Term Loan<sup>(c)(e)</sup> | 12.70% | 12.70% PIK | 08/14/2028 | 945798 | 927071 |
| Phoenix Finance, Inc., Second Lien Term Loan<sup>(c)(e)</sup> | 11.34% | 11.34% PIK, 1.00% Floor | 08/14/2028 | 1683612 | 1559361 |
| Precisely Software Incorporated, Second Lien Term Loan<sup>(c)</sup> | 11.18% | 3M SOFR + 7.25%, 0.75% Floor | 04/23/2029 | 3000000 | 2150625 |
| Spectrio, Delayed Draw Term Loan<sup>(c)(e)</sup> | 9.68% | 3M SOFR + 6.00%, 1.00% Floor | 12/09/2026 | 1174785 | 961914 |
| Spectrio, First Lien Term Loan<sup>(c)(e)</sup> | 9.67% | 3M SOFR + 6.00%, 1.00% Floor | 12/09/2026 | 2816509 | 2306157 |
| VTX Intermediate Holdings, Inc., First Lien Term Loan<sup>(c)(e)</sup> | 10.93% | 1M SOFR + 6.00%, 1.00% PIK, 2.00% Floor | 12/12/2029 | 1159143 | 1147552 |
| VTX Intermediate Holdings, Inc., Second Lien Term Loan<sup>(c)(e)</sup> | 12.50% | 12.50% PIK | 12/12/2030 | 2116980 | 2064055 |
|  |  |  |  |  | 35087687 |
| **TOTAL BANK LOANS** |  |  |  |  |  |
| **(Cost $141,424,916)** |  |  |  |  | **127900052** |
| **CORPORATE BONDS (2.21%)<sup>(a)(b)</sup>** |  |  |  |  |  |
| ***Communications (1.11%)*** |  |  |  |  |  |
| Spanish Broadcasting System, Inc.<sup>(j)</sup> | 9.75% | N/A | 03/01/2026 | 3000000 | 1980000 |
| ***Consumer Discretionary (–%)*** |  |  |  |  |  |
| Monitronics - Escrow<sup>(c)</sup> | –% | N/A | 12/31/2049 | 2650000 |  |

---

*See Notes to Consolidated Financial Statements.*

Semi-Annual Report \| March 31, 2026 17

Alternative Credit Income Fund Consolidated Schedule of Investments

March 31, 2026 (Unaudited)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Coupon** | **Reference Rate & Spread** | **Maturity** | **Principal Value** | **Principal Value** |
| **CORPORATE BONDS (2.21%)<sup>(a)(b)</sup>** |  |  |  |  |  |
| ***Financials (1.07%)*** |  |  |  |  |  |
| EJF CRT 2024-R1 LLC, Class R1<sup>(c)</sup> | 11.51% | 1M CMTR + 7.75%, 7.75% Floor | 12/17/2055 | $1886943 | $1886943 |
| ***Industrials (0.03%)*** |  |  |  |  |  |
| VORTEX OPCO, LLC<sup>(f)(j)</sup> | –% | 0 | 04/30/2030 | 3126046 | 45843 |
| **TOTAL CORPORATE BONDS** |  |  |  |  |  |
| **(Cost $6,128,786)** |  |  |  |  | **3912786** |
| **ASSET BACKED SECURITIES (3.25%)<sup>(b)</sup>** |  |  |  |  |  |
| ***Financials (3.25%)*** |  |  |  |  |  |
| Canyon Capital CLO 2014-1, Ltd., Class ER<sup>(f)(j)</sup> | –% | 3M SOFR + 7.70% | 01/30/2031 | 1000000 | 206272 |
| JMP Credit Advisors CLO IV, Ltd.<sup>(c)(f)(g)</sup> | –% | N/A | 07/17/2029 | 4836540 | 15961 |
| JMP Credit Advisors CLO V, Ltd.<sup>(c)(f)(g)</sup> | –% | N/A | 07/17/2030 | 4486426 | 294758 |
| Mount Logan Funding 2018-1 <sub>LP</sub><sup>(c)(g)(j)</sup> | 17.20% | 0 | 01/22/2033 | 7798575 | 4084114 |
| Octagon Investment Partners 36, Ltd., Class <sub>F</sub><sup>(j)</sup> | 11.68% | 3M SOFR + 7.75% | 04/15/2031 | 1000000 | 365223 |
| Octagon Investment Partners XIV, Ltd., Class ER<sup>(f)(j)</sup> | –% | 3M SOFR + 8.35% | 07/15/2029 | 2132000 |  |
| Saranac CLO VII, Ltd., Class ER<sup>(f)(j)</sup> | –% | 3M SOFR + 6.72% | 11/20/2029 | 558276 | 53242 |
| Tralee CLO II, Ltd., Class ER, Class ER<sup>(j)</sup> | 11.78% | 3M SOFR + 7.85% | 07/20/2029 | 1000000 | 727552 |
| Tralee CLO II, Ltd., Class FR, Class FR<sup>(f)(j)</sup> | –% | 3M SOFR + 8.85% | 07/20/2029 | 1000000 | 139 |
|  |  |  |  |  | 5747261 |
| **TOTAL ASSET BACKED SECURITIES** | **TOTAL ASSET BACKED SECURITIES** |  |  |  |  |
| **(Cost $9,226,188)** |  |  |  |  | **5747261** |
| **EQUIPMENT FINANCING (0.32%)<sup>(a)(b)</sup>** |  |  |  |  |  |
| ***Financials (0.32%)*** |  |  |  |  |  |
| White Oak Equipment Finance 1, LLC<sup>(c)(k)</sup> | 10.75% | N/A | 01/01/2027 | 562292 | 562292 |
| **TOTAL EQUIPMENT FINANCING** |  |  |  |  |  |
| **(Cost $562,292)** |  |  |  |  | **562292** |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Dividend**<br>**Rate** |<br>**Shares** |<br>**Value** |
| **PREFERRED STOCK (3.24%)<sup>(b)</sup>** |  |  |  |
| ***Communication Services (1.73%)*** |  |  |  |
| Invisible Narratives, LLC, Preferred<sup>(c)(i)</sup> |  | 8733625 | 3056438 |
| ***Consumer Discretionary (0.87%)*** |  |  |  |
| EBSC Holdings LLC, Preferred<sup>(c)(e)(g)</sup> | 10.00% PIK | 1218077 | 1389948 |
| Princeton Medspa Partners, LLC, Preferred<sup>(c)(e)(g)(k)</sup> | 12.50% PIK | 310013 | 147984 |
|  |  |  | 1537932 |
| ***Consumer Staples (0.31%)*** |  |  |  |
| Middle West Spirits Holdings, LLC, Preferred<sup>(c)(e)</sup> | 10.00% PIK | 482058 | 543954 |
| ***Health Care (0.08%)*** |  |  |  |
| American Academy Holdings. Inc., Preferred Units<sup>(c)(k)</sup> |  | 90970 | 151897 |
| ***Industrials (0.25%)*** |  |  |  |
| GreenPark Infrastructure, LLC Series <sub>A</sub><sup>(c)(g)(i)(k)</sup> |  | 400 | 60563 |
| Phoenix Aviation Capital LLC, Preferred<sup>(c)(e)(g)(k)</sup> | 7.00% PIK | 462512 | 393135 |
|  |  |  | 453698 |
| **TOTAL PREFERRED STOCK** |  |  |  |
| **(Cost $5,583,850)** |  |  | **5743919** |

---

---

| | | |
|:---|:---|:---|
|  | **Shares** | **Value** |
| **COMMON EQUITY (9.36%)<sup>(b)</sup>** |  |  |
| ***Communication Services (0.03%)*** |  |  |
| Next Flight Ventures<sup>(c)(i)</sup> | 88 | 45106 |

---

*See Notes to Consolidated Financial Statements.*

18 www.altcif.com

Alternative Credit Income Fund Consolidated Schedule of Investments

March 31, 2026 (Unaudited)

---

| | | |
|:---|:---|:---|
|  | **Shares** | **Value** |
| **COMMON EQUITY (9.36%)<sup>(b)</sup> (continued)** |  |  |
| ***Communication Services (0.03%) (continued)*** |  |  |
| NFV Co-Pilot, Inc.<sup>(c)(i)</sup> | 441 | $14593 |
|  |  | 59699 |
| ***Consumer Discretionary (0.61%)*** |  |  |
| CEC Entertainment, Inc.<sup>(i)</sup> | 79564 | 1074114 |
| JoAnn Inc.<sup>(c)(i)</sup> | 1570371 | – |
|  |  | 1074114 |
| ***Consumer Staples (2.69%)*** |  |  |
| Cooper OH Originations, LLC SPV<sup>(c)(k)</sup> | 40000 | 4728815 |
| Middle West Spirits Holdings, LLC, Common Stock<sup>(c)(i)</sup> | 45 | 26467 |
|  |  | 4755282 |
| ***Diversified (1.51%)*** |  |  |
| BCP Investment Corporation<sup>(g)</sup> | 31482 | 236745 |
| CION Investment Corp. | 120800 | 826272 |
| Franklin BSP Capital Corp. | 60386 | 819608 |
| WhiteHorse Finance, Inc. | 107328 | 794227 |
|  |  | 2676852 |
| ***Financials (0.78%)*** |  |  |
| AIP Capital, LLC<sup>(c)(i)(k)</sup> | 30 | 12368 |
| Aperture Dodge 18 LLC<sup>(c)(i)</sup> | 2070110 | 1373010 |
|  |  | 1385378 |
| ***Health Care (0.34%)*** |  |  |
| American Academy Holdings. Inc., Common Units<sup>(c)(i)(k)</sup> | 0.05 | 318658 |
| DxTx Pain and Spine LLC, Common Units<sup>(c)(i)(k)</sup> | 98854 | 277618 |
|  |  | 596276 |
| ***Industrials (0.57%)*** |  |  |
| GreenPark Infrastructure, LLC Series M-1<sup>(c)(g)(i)(k)</sup> | 2565 | 884946 |
| Incora Top Holdco LLC<sup>(c)(i)</sup> | 5350 |  |
| Phoenix Aviation Capital LLC, Common Stock<sup>(c)(g)(i)(k)</sup> | 1.26 | 118043 |
|  |  | 1002989 |
| ***Information Technology (0.67%)*** |  |  |
| BGPT Maverick, L.P.<sup>(c)(i)</sup> | 1000000 | 1184745 |
| VTX Holdings, LLC<sup>(c)(i)</sup> | 932474 | 3784 |
|  |  | 1188529 |
| ***Real Estate (2.16%)*** |  |  |
| Copper Property CTL Pass Through Trust<sup>(k)</sup> | 319520 | 3469987 |
| Rebound Investment LP<sup>(c)(d)</sup> | 335000 | 349076 |
|  |  | 3819063 |
| **TOTAL COMMON EQUITY** |  |  |
| **(Cost $21,673,501)** |  | **16558182** |

---

---

| | |
|:---|:---|
|  | **Value** |
| **PRIVATE INVESTMENT FUNDS (17.53%)<sup>(b)</sup>** | |
| BlackRock Global Credit Opportunities Fund, <sub>LP</sub><sup>(d)(l)(m)</sup> | 6316394 |
| CVC European Mid-Market Solutions Fund<sup>(d)(l)(m)</sup> | 1128696 |
| EJF Financial Debt Strategies Fund LP<sup>(m)</sup> | 792471 |
| GSO Credit Alpha Fund II <sub>LP</sub><sup>(d)(l)(m)</sup> | 1035843 |
| Monroe Capital Private Credit Fund III <sub>LP</sub><sup>(d)(l)(m)</sup> | 3429573 |
| Pelham S2K SBIC II, L.P.<sup>(d)(l)(m)</sup> | 518458 |

---

*See Notes to Consolidated Financial Statements.*

Semi-Annual Report \| March 31, 2026 19

Alternative Credit Income Fund Consolidated Schedule of Investments

March 31, 2026 (Unaudited)

---

| | | |
|:---|:---|:---|
|  | **Shares** | **Value** |
| **PRIVATE INVESTMENT FUNDS (17.53%)<sup>(b)</sup> (continued)** |  |  |
| Tree Line Credit Strategies LP<sup>(l)(m)</sup> |  | $17800341 |
|  |  | 31021776 |
| **TOTAL PRIVATE INVESTMENT FUNDS** |  |  |
| **(Cost $35,393,546)** |  | **31021776** |
| **JOINT VENTURE (0.18%)<sup>(b)</sup>** |  |  |
| ***Joint Venture (0.18%)*** |  |  |
| Series B - Great Lakes Funding II <sub>LLC</sub><sup>(d)(g)(m)(n)</sup> | 362064 | 327197 |
| **TOTAL JOINT VENTURE** |  |  |
| **(Cost $362,064)** |  | **327197** |

---

---

| | | |
|:---|:---|:---|
|  | **Shares** | **Value** |
| **INTERVAL FUND (2.38%)<sup>(b)</sup>** |  |  |
| ***Diversified (2.38%)*** |  |  |
| Opportunistic Credit Interval Fund<sup>(g)</sup> | 362837 | 4208906 |
| **TOTAL INTERVAL FUND** |  |  |
| **(Cost $4,368,554)** |  | **4208906** |
| **WARRANTS (0.27%)<sup>(b)</sup>** |  |  |
| ***Consumer Discretionary (0.00%)*** |  |  |
| Princeton Medspa Partners, LLC<sup>(c)(g)(k)</sup> | 0.01 | 1992 |
| ***Financials (0.27%)*** |  |  |
| SouthStreet Securities Holdings, Expires 09/20/2027<sup>(c)</sup> | 3400 | 469336 |
| ***Information Technology (–%)*** |  |  |
| Diamanti, Inc., Class A, Strike Price $0.01, Expires 4/29/2032<sup>(c)</sup> | 146413 |  |
| **TOTAL WARRANTS** |  |  |
| **(Cost $390,456)** |  | **471328** |

---

---

| | | |
|:---|:---|:---|
|  | **Number of**<br>**Contracts** |<br>**Value** |
| **DERIVATIVES (–%)<sup>(b)</sup>** |  |  |
| ***Consumer Discretionary (–%)*** |  |  |
| Princeton Medspa Partners, LLC, Put Option<sup>(c)(g)(k)(o)</sup> | 250000 |  |
| **TOTAL DERIVATIVES** |  |  |
| **(Cost $–)** |  | **–** |
| **INVESTMENTS, AT VALUE (111.02%)** |  |  |
| **(COST $225,114,153)** |  | $**196453699** |
| **LIABILITIES IN EXCESS OF OTHER ASSETS (-11.02%)** |  | **(19497966)** |
| **NET ASSETS - (100.00%)** |  | $**176955733** |

---

**Investment Abbreviations:**

SOFR - Secured Overnight Financing Rate

PIK - Payment in-Kind

**Reference Rates:**

1M SOFR - 1 Month US SOFR as of March 31, 2026 was 3.65%

3M SOFR - 3 Month US SOFR as of March 31, 2026 was 3.68%

6M SOFR - 6 Month US SOFR as of March 31, 2026 was 3.86%

1M CMTR - 1 Month Constant Maturity Treasury Rate was 3.74%

*See Notes to Consolidated Financial Statements.*

20 www.altcif.com

Alternative Credit Income Fund Consolidated Schedule of Investments

March 31, 2026 (Unaudited)

*<sup>(a)</sup>* *Variable rate investment, unless otherwise noted above. Interest rates reset periodically. Interest rate shown reflects the rate in effect at March 31, 2026. For securities based on a published reference rate and spread, the reference rate and spread are indicated in the description above. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above.*

*<sup>(b)</sup>* *These investments are pledged to secure the Fund's debt obligations.*

*<sup>(c)</sup>* *As a result of the use of significant unobservable inputs to determine fair value, these investments have been classified as Level 3 assets.*

*<sup>(d)</sup>* *All or a portion of this commitment was unfunded as of March 31, 2026.*

*<sup>(e)</sup>* *Payment in kind security which may pay interest in additional par.*

*<sup>(f)</sup>* *Non-accrual investment. Beginning during the six month ended March 31, 2026, the Company recognized interest income to the extent that it is received in cash on its loans to Colonnade Intermediate, LLC (cash basis income recognition).*

*<sup>(g)</sup>* *Affiliate company.*

*<sup>(h)</sup>* *Principal balance denominated in euros.*

*<sup>(i)</sup>* *Non-income producing security.*

*<sup>(j)</sup>* *Securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be sold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. As of March 31, 2026, the aggregate market value of those securities was $7,462,385, representing 4.21% of net assets.*

*<sup>(k)</sup>* *Investment held through ACIF Master Blocker, LLC, a wholly-owned subsidiary. As of March 31, 2026, the aggregate market value of those securities was $11,128,298, representing 6.29% of net assets.*

*<sup>(l)</sup>* *Investment is held through CIF Investments LLC, a wholly-owned subsidiary. As of March 31, 2026, the aggregate market value of those securities was $30,229,305, representing 17.08% of net assets.*

*<sup>(m)</sup>* *Restricted security.*

*<sup>(n)</sup>* *During the three-month period ended March 31, 2026, the Fund invested $27,428 in Series B – Great Lakes Funding II LLC units, received a return of capital distribution of $-, and reported change in unrealized depreciation of $18,927. Additionally, Series B – Great Lakes Funding II LLC declared distributions of $11,294 during the three-month period ended March 31, 2026.*

*<sup>(o)</sup>* *Information related to the Fund's derivatives is presented below as of March 31, 2026:*

 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Description** | **Counterparty** | **Number of Shares** | **Notional Amount** | **Exercise Price** | **Expiration Date** | **Value** |
| Put Option | Princeton Medspa Partners, LLC | 250000 | 250 | 2 | N/A |  |

---

Securities determined to be restricted under the procedures approved by the Fund's Board of Trustees are as follows.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Date(s) of Purchases** | **Security** | **Cost** | **Value** | **% of Net Assets** |
| 03/31/2018 - 06/30/2025 | BlackRock Global Credit Opportunities Fund, LP | $9158434 | $6316394 | 3.56% |
| 09/30/2017 - 09/30/2021 | CVC European Mid-Market Solutions Fund | 2911406 | 1128696 | 0.64% |
| 06/30/2024 - 09/30/2024 | EJF Financial Debt Strategies Fund LP | 750000 | 792471 | 0.45% |
| 06/30/2018 - 03/31/2021 | GSO Credit Alpha Fund II LP |  | 1035843 | 0.59% |
| 09/30/2018 - 12/31/2020 | Monroe Capital Private Credit Fund III LP | 3061035 | 3429573 | 1.94% |
| 11/14/2022 - 06/30/2025 | Pelham S2K SBIC II, L.P. | 512671 | 518458 | 0.29% |
| 08/05/2022 - 12/31/2025 | Series B - Great Lakes Funding II LLC | 362064 | 327197 | 0.18% |
| 12/31/2017 - 06/30/2025 | Tree Line Credit Strategies LP | 19000000 | 17800341 | 10.06% |
|  | **Total** | $35755610 | $31348973 | 17.71% |

---

Additional information on investments in private investment funds and unfunded commitments:

---

| | | | | |
|:---|:---|:---|:---|:---|
| <br>**Security** |<br>**Value** | <br>**Redemption**<br>**Frequency** | <br>**Redemption**<br>**Notice(Days)** | **Unfunded**<br>**Commitments as of**<br>**March 31, 2026** |
| BlackRock Global Credit Opportunities Fund, LP<sup>(a)</sup> | $6316394 | N/A | N/A | $3259801 |
| CVC European Mid-Market Solutions Fund | 1128696 | N/A | N/A | 206342 |
| EJF Financial Debt Strategies Fund LP | 792471 | N/A | N/A |  |
| GSO Credit Alpha Fund II LP<sup>(a)</sup> | 1035843 | N/A | N/A | 7382124 |
| Monroe Capital Private Credit Fund III LP | 3429573 | N/A | N/A | 1498740 |

---

*See Notes to Consolidated Financial Statements.*

Semi-Annual Report \| March 31, 2026 21

Alternative Credit Income Fund Consolidated Schedule of Investments

March 31, 2026 (Unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
| <br>**Security** | | <br>**Redemption**<br>**Frequency** |<br>**Redemption**<br>**Notice(Days)** | **Unfunded**<br>**Commitments as of**<br>**March 31, 2026** |
| Pelham S2K SBIC II, L.P. | $518458 | N/A | N/A | $1487329 |
| Series B - Great Lakes Funding II LLC | 327197 | N/A | N/A | 114392 |
| Tree Line Credit Strategies LP | 17800341 | Quarterly | 90 | – |
| Total | $31348973 |  |  | $13948728 |

---

**Unfunded Commitments:**

---

| | | | |
|:---|:---|:---|:---|
| <br>**Security** |<br>**Value** | <br>**Maturity** | **Unfunded**<br>**Commitments as of**<br>**March 31, 2026** |
| Accordion Partners LLC, Revolver | $– | 11/17/2031 | $196285 |
| Cor Leonis Limited, Revolver | 3032521 | 05/15/2028 | 64606 |
| Dun & Bradstreet Holdings, Inc., Revolver | (1069) | 08/26/2032 | 169669 |
| Metrc Inc., Delayed Draw Term Loan | 1267 | 09/30/2031 | 49286 |
| Metrc Inc., Revolver | (3457) | 09/30/2031 | 155000 |
| Newbury Franklin Industrials, LLC, Delayed Draw Term Loan | 442927 | 12/11/2029 | 532895 |
| Next Flight Ventures, Delayed Draw Term Loan | 1115900 | 12/26/2026 | 266700 |
| PMA Parent Holdings LLC, Revolver | (2176) | 01/31/2031 | 250075 |
| PMP OPCO, LLC, Delayed Draw Term Loan | 338875 | 05/31/2029 | 136652 |
| PMP OPCO, LLC, Revolver | (12473) | 05/31/2029 | 140625 |
| Rebound Investment LP | 349076 | N/A | 665000 |
| TA/WEG HOLDINGS, LLC, Revolver |  | 10/02/2028 | 75248 |
| VBC Spine Opco LLC (DxTX Pain and Spine LLC), Revolver | 157258 | 06/14/2029 | 241935 |
| Total | $5418649 |  | $2943976 |
| **Total Unfunded Commitments** |  |  | $16892704 |

---

*<sup>(a)</sup>* *A voluntary withdrawal may be permitted at the General Partner's discretion with the General Partner's consent.*

** 

*See Notes to Consolidated Financial Statements.*

22 www.altcif.com

Alternative Credit Income Fund Consolidated Statement of Assets and Liabilities

March 31, 2026 (Unaudited)

---

| | |
|:---|:---|
| **ASSETS** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investments, at value (Cost $207,152,868) | $179603609 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Affiliated investments, at value (Cost $17,961,285) | 16850090 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign currency, at value (Cost $1,343) | 1347 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash | 2168247 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest and distributions receivable | 2093715 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 668165 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Assets | 201385173 |
| **LIABILITIES** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;USB Credit Facility (Proceeds $23,154,410) | 23298738 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest on line of credit payable | 110376 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to Adviser | 104531 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Administration fees payable | 209616 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Custody fees payable | 8828 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transfer agency fees payable | 69726 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred tax liability | 158222 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | 469403 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 24429440 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commitments and contingencies (Note 2) |  |
| **NET ASSETS** | $176955733 |
| **NET ASSETS CONSIST OF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Paid-in capital | $214525529 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total accumulated deficit | (37569796) |
| **NET ASSETS** | $176955733 |
| **Common Shares:** |  |
| **Class A:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net assets | $22780109 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares of beneficial interest outstanding (no par value; unlimited shares) | 2525719 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net asset value<sup>(a)</sup> | $9.02 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Maximum offering price per share (maximum sales charge of 5.75%) | $9.54 |
| **Class C:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net assets | $18501043 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares of beneficial interest outstanding (no par value; unlimited shares) | 2021831 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net asset value<sup>(a)</sup> | $9.15 |
| **Class I:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net assets | $94560792 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares of beneficial interest outstanding (no par value; unlimited shares) | 10482887 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net asset value | $9.02 |
| **Class L:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net assets | $7439885 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares of beneficial interest outstanding (no par value; unlimited shares) | 824057 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net asset value | $9.03 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Maximum offering price per share (maximum sales charge of 4.25%) | $9.42 |
| **Class W:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net assets | $33673904 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares of beneficial interest outstanding (no par value; unlimited shares) | 3736414 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net asset value | $9.01 |

---

*<sup>(a)</sup>* *Redemption price varies based on length of time held (Note 6).*

 

*See Notes to Consolidated Financial Statements.*

Semi-Annual Report \| March 31, 2026 23

Alternative Credit Income Fund Consolidated Statement of Operations

For the Six Months Ended March 31, 2026 (Unaudited)

---

| | |
|:---|:---|
| **INVESTMENT INCOME** |  |
| &nbsp;&nbsp;&nbsp;Interest - Non-Affiliated | $5802704 |
| &nbsp;&nbsp;&nbsp;Interest - Affiliated | 853668 |
| &nbsp;&nbsp;&nbsp;Dividends - Non-Affiliated | 1114668 |
| &nbsp;&nbsp;&nbsp;Dividends - Affiliated | 217586 |
| &nbsp;&nbsp;&nbsp;Payment-in-kind interest - Non-Affiliated | 2341230 |
| &nbsp;&nbsp;&nbsp;Payment-in-kind interest - Affiliated | 92502 |
| &nbsp;&nbsp;&nbsp;Other income | 11598 |
| &nbsp;&nbsp;&nbsp;Total investment income | 10433956 |
| **EXPENSES** |  |
| &nbsp;&nbsp;&nbsp;Investment advisory fees (Note 4) | 1686046 |
| &nbsp;&nbsp;&nbsp;Administrative fees (Note 4) | 215975 |
| &nbsp;&nbsp;&nbsp;Transfer agent fees | 153981 |
| &nbsp;&nbsp;&nbsp;Interest expense (Note 7) | 569815 |
| &nbsp;&nbsp;&nbsp;Shareholder servicing fees (Note 4) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class A | 23282 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class C | 21943 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class L | 9565 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class W | 41199 |
| &nbsp;&nbsp;&nbsp;Distribution fees (Note 4) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class C | 65829 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class L | 9565 |
| &nbsp;&nbsp;&nbsp;Professional fees | 202838 |
| &nbsp;&nbsp;&nbsp;Printing expense | 75052 |
| &nbsp;&nbsp;&nbsp;Insurance expense | 56215 |
| &nbsp;&nbsp;&nbsp;Registration fees | 50208 |
| &nbsp;&nbsp;&nbsp;Trustee fees and expenses | 24759 |
| &nbsp;&nbsp;&nbsp;Custody fees | 11801 |
| &nbsp;&nbsp;&nbsp;Networking Fees: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class A | 4365 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class C | 2836 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class I | 11399 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class L | 1821 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class W | 436 |
| &nbsp;&nbsp;&nbsp;Other expenses | 429125 |
| &nbsp;&nbsp;&nbsp;Total expenses | 3668055 |
| &nbsp;&nbsp;&nbsp;Contractual fees waived by Adviser (Note 4) | (778095) |
| &nbsp;&nbsp;&nbsp;Recoupment of previously waived fees (Note 4) |  |
| &nbsp;&nbsp;&nbsp;Voluntary fees waived by Adviser (Note 4) | (49546) |
| &nbsp;&nbsp;&nbsp;Total net expenses | 2840414 |

---

*See Notes to Consolidated Financial Statements.*

24 www.altcif.com

Alternative Credit Income Fund Consolidated Statement of Operations

For the Six Months Ended March 31, 2026 (Unaudited)

---

| | |
|:---|:---|
| **NET INVESTMENT INCOME** | 7593542 |
| **REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS** |  |
| &nbsp;&nbsp;&nbsp;Net realized loss on investments - Non-Affiliated | (1337615) |
| &nbsp;&nbsp;&nbsp;Net realized loss on investments - Affiliated | (3691791) |
| &nbsp;&nbsp;&nbsp;Net realized gain on foreign currency transactions | 135 |
| &nbsp;&nbsp;&nbsp;Total net realized loss | (5029271) |
| &nbsp;&nbsp;&nbsp;Net change in unrealized appreciation on investments - Non-Affiliated | 561371 |
| &nbsp;&nbsp;&nbsp;Net change in unrealized appreciation on investments - Affiliated | 2145959 |
| &nbsp;&nbsp;&nbsp;Net change in unrealized depreciation on debt denominated in foreign currency | 58233 |
| &nbsp;&nbsp;&nbsp;Net change in unrealized depreciation on translation of assets and liabilities in foreign currencies | (460) |
| &nbsp;&nbsp;&nbsp;Total net change in unrealized appreciation | 2765103 |
| &nbsp;&nbsp;&nbsp;Tax (provision) benefit on realized and unrealized gains (losses) on investments | (158222) |
| **NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS, net of taxes** | (2422390) |
| **NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS** | $5171152 |

---

*See Notes to Consolidated Financial Statements.*

Semi-Annual Report \| March 31, 2026 25

Consolidated Statements of <br> Alternative Credit Income Fund Changes in Net Assets

---

| | | |
|:---|:---|:---|
| | **For the Six**<br> **Months Ended**<br> **March 31, 2026**<br> **(Unaudited)** | **For the**<br> **Year Ended**<br> **September 30, 2025** |
| **OPERATIONS:** |  |  |
| &nbsp;&nbsp;&nbsp;Net investment income | $7593542 | $18692719 |
| &nbsp;&nbsp;&nbsp;Net realized gain/(loss) on investments | (5029406) | (11529825) |
| &nbsp;&nbsp;&nbsp;Net realized gain/(loss) on foreign currency transactions | 135 | (1816) |
| &nbsp;&nbsp;&nbsp;Net change in unrealized appreciation/(depreciation) on investments | 2707330 | (1255144) |
| &nbsp;&nbsp;&nbsp;Net change in unrealized (appreciation)/depreciation on debt denominated in foreign currency | 58233 | (194668) |
| &nbsp;&nbsp;&nbsp;Net change in unrealized depreciation on translation of assets and liabilities in foreign currencies | (460) |  |
| &nbsp;&nbsp;&nbsp;Tax (provision) benefit on realized and unrealized gains (losses) on investments | (158222) |  |
| &nbsp;&nbsp;&nbsp;Net increase in net assets resulting from operations | 5171152 | 5711266 |
| **DISTRIBUTIONS TO SHAREHOLDERS:** |  |  |
| &nbsp;&nbsp;&nbsp;Total distributable earnings |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class A | (879574) | (2285980) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class C | (657629) | (2133118) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class I | (3835205) | (9962971) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class L | (280771) | (736556) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class W | (1324143) | (3818179) |
| &nbsp;&nbsp;&nbsp;Total distributions to shareholders | (6977322) | (18936804) |
| **COMMON SHARE TRANSACTIONS** |  |  |
| &nbsp;&nbsp;&nbsp;**Class A** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from sales of shares | 148598 | 912274 |
| &nbsp;&nbsp;&nbsp;Distributions reinvested | 282205 | 784236 |
| &nbsp;&nbsp;&nbsp;Cost of shares redeemed | (946319) | (4042556) |
| &nbsp;&nbsp;&nbsp;Net transferred in(out) | (27294) | (249916) |
| &nbsp;&nbsp;&nbsp;Net Decrease from share transactions | (542810) | (2595962) |
| &nbsp;&nbsp;&nbsp;**Class C** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from sales of shares | 125591 | 303044 |
| &nbsp;&nbsp;&nbsp;Distributions reinvested | 224595 | 971707 |
| &nbsp;&nbsp;&nbsp;Cost of shares redeemed | (1708835) | (3669897) |
| &nbsp;&nbsp;&nbsp;Net transferred in(out) | (1979427) | (4096289) |
| &nbsp;&nbsp;&nbsp;Net Decrease from share transactions | (3338076) | (6491435) |
| &nbsp;&nbsp;&nbsp;**Class I** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from sales of shares | 1097232 | 9529278 |
| &nbsp;&nbsp;&nbsp;Distributions reinvested | 1308546 | 3297709 |
| &nbsp;&nbsp;&nbsp;Cost of shares redeemed | (9774230) | (23222126) |
| &nbsp;&nbsp;&nbsp;Net transferred in(out) | 2090479 | 4339353 |
| &nbsp;&nbsp;&nbsp;Net Decrease from share transactions | (5277973) | (6055786) |
| &nbsp;&nbsp;&nbsp;**Class L** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from sales of shares | 11977 | 16974 |
| &nbsp;&nbsp;&nbsp;Distributions reinvested | 184397 | 458649 |
| &nbsp;&nbsp;&nbsp;Cost of shares redeemed | (688904) | (731688) |
| &nbsp;&nbsp;&nbsp;Net transferred in(out) | (83758) |  |
| &nbsp;&nbsp;&nbsp;Net Decrease from share transactions | (576288) | (256065) |
| &nbsp;&nbsp;&nbsp;**Class W** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from sales of shares | 618971 | 4172704 |
| &nbsp;&nbsp;&nbsp;Distributions reinvested | 364545 | 953870 |
| &nbsp;&nbsp;&nbsp;Cost of shares redeemed | (5934483) | (10860309) |
| &nbsp;&nbsp;&nbsp;Net transferred in(out) |  | 6852 |

---

*See Notes to Consolidated Financial Statements.*

26 www.altcif.com

Consolidated Statements of <br> Alternative Credit Income Fund Changes in Net Assets

---

| | | |
|:---|:---|:---|
| | **For the Six**<br> **Months Ended**<br> **March 31, 2026**<br> **(Unaudited)** | **For the**<br> **Year Ended**<br> **September 30, 2025** |
| &nbsp;&nbsp;&nbsp;Net Decrease from share transactions | (4950967) | (5726883) |
| &nbsp;&nbsp;&nbsp;Total net decrease in net assets | (16492284) | (34351669) |
| **NET ASSETS** |  |  |
| &nbsp;&nbsp;&nbsp;Beginning of period | 193448017 | 227799686 |
| &nbsp;&nbsp;&nbsp;End of period | $176955733 | $193448017 |
| **Other Information** |  |  |
| **Common Shares Transactions** |  |  |
| &nbsp;&nbsp;&nbsp;**Class A** |  |  |
| &nbsp;&nbsp;&nbsp;Issued | 16561 | 97071 |
| &nbsp;&nbsp;&nbsp;Distributions reinvested | 31419 | 84478 |
| &nbsp;&nbsp;&nbsp;Redeemed | (103446) | (435487) |
| &nbsp;&nbsp;&nbsp;Exchanged out | (2970) | (26066) |
| &nbsp;&nbsp;&nbsp;Net decrease in shares | (58436) | (280004) |
| &nbsp;&nbsp;&nbsp;**Class C** |  |  |
| &nbsp;&nbsp;&nbsp;Issued | 13742 | 32317 |
| &nbsp;&nbsp;&nbsp;Distributions reinvested | 24638 | 102748 |
| &nbsp;&nbsp;&nbsp;Redeemed | (184235) | (390603) |
| &nbsp;&nbsp;&nbsp;Exchanged out | (212722) | (436446) |
| &nbsp;&nbsp;&nbsp;Net decrease in shares | (358577) | (691984) |
| &nbsp;&nbsp;&nbsp;**Class I** |  |  |
| &nbsp;&nbsp;&nbsp;Issued | 120882 | 1018087 |
| &nbsp;&nbsp;&nbsp;Distributions reinvested | 145636 | 355819 |
| &nbsp;&nbsp;&nbsp;Redeemed | (1067849) | (2495275) |
| &nbsp;&nbsp;&nbsp;Exchanged in | 227703 | 467156 |
| &nbsp;&nbsp;&nbsp;Net decrease in shares | (573628) | (654213) |
| &nbsp;&nbsp;&nbsp;**Class L** |  |  |
| &nbsp;&nbsp;&nbsp;Issued | 1333 | 1832 |
| &nbsp;&nbsp;&nbsp;Distributions reinvested | 20508 | 49542 |
| &nbsp;&nbsp;&nbsp;Redeemed | (75187) | (79397) |
| &nbsp;&nbsp;&nbsp;Exchanged out | (9075) |  |
| &nbsp;&nbsp;&nbsp;Net decrease in shares | (62421) | (28023) |
| &nbsp;&nbsp;&nbsp;**Class W** |  |  |
| &nbsp;&nbsp;&nbsp;Issued | 68644 | 448454 |
| &nbsp;&nbsp;&nbsp;Distributions reinvested | 40638 | 102983 |
| &nbsp;&nbsp;&nbsp;Redeemed | (649650) | (1168509) |
| &nbsp;&nbsp;&nbsp;Exchanged in |  | 767 |
| &nbsp;&nbsp;&nbsp;Net decrease in shares | (540368) | (616305) |

---

*See Notes to Consolidated Financial Statements.*

Semi-Annual Report \| March 31, 2026 27

Alternative Credit Income Fund Consolidated Statement of Cash Flows

For the Six Months Ended March 31, 2026 (Unaudited)

---

| | |
|:---|:---|
| | **For the Six Months Ended**<br> **March 31, 2026**<br> **(Unaudited)** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |
| Net increase in net assets from operations | $5171152 |
| Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities: |  |
| &nbsp;&nbsp;&nbsp;Purchase of investments securities | (24496926) |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of investments securities | 24776849 |
| &nbsp;&nbsp;&nbsp;Amortization of premium and accretion of discount on investments | (1145987) |
| &nbsp;&nbsp;&nbsp;Payment-in-kind income | (2433732) |
| Net realized (gain)/loss on: |  |
| &nbsp;&nbsp;&nbsp;Investments | 5029406 |
| Net change in unrealized (appreciation)/depreciation on: |  |
| &nbsp;&nbsp;&nbsp;Investments | (2707330) |
| &nbsp;&nbsp;&nbsp;Debt | (58233) |
| (Increase)/Decrease in assets: |  |
| &nbsp;&nbsp;&nbsp;Interest and distributions receivable | 335874 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | (539815) |
| Increase/(Decrease) in liabilities: |  |
| &nbsp;&nbsp;&nbsp;Due to Adviser | (144800) |
| &nbsp;&nbsp;&nbsp;Interest on line of credit payable | 31313 |
| &nbsp;&nbsp;&nbsp;Administration fees payable | 38760 |
| &nbsp;&nbsp;&nbsp;Custody fees payable | (1497) |
| &nbsp;&nbsp;&nbsp;Transfer agency fees payable | 38480 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | (71267) |
| &nbsp;&nbsp;&nbsp;Deferred tax liability | 158222 |
| **Net cash provided by operating activities** | $3980469 |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |
| Proceeds from sales of shares | 2049739 |
| Cost of shares redeemed | (19052771) |
| Borrowings on US Bank Line of Credit | 25900000 |
| Repayment on US Bank Line of Credit | (10300000) |
| Cash distributions paid | (4613034) |
| **Net cash used in financing activities** | $(6016066) |
| **Net Change in cash & cash equivalents** | $(2035597) |
| **Restricted and unrestricted cash, beginning of period** | $4205191 |
| **Restricted and unrestricted cash, end of period<sup>\*</sup>** | $2169594 |
| **SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION** |  |
| Cash paid for interest: | $538502 |
| **SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING TRANSACTIONS** |  |
| Reinvestment of distributions: | $2364288 |

---

*\** *Consists of cash and foreign currency, at value.*

 

*See Notes to Consolidated Financial Statements.*

28 www.altcif.com

Alternative Credit Income Fund – Class A Consolidated Financial Highlights

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the Six Months Ended March 31, 2026 (Unaudited)** | **For the Year Ended September 30, 2025** | **For the Year Ended September 30, 2024** | **For the Year Ended September 30, 2023** | **For the Year Ended September 30, 2022** | **For the Year Ended September 30, 2021** |
| **NET ASSET VALUE, BEGINNING OF PERIOD** | $9.12 | $9.69 | $9.79 | $10.09 | $11.09 | $9.75 |
| **INCOME FROM INVESTMENT OPERATIONS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net investment income<sup>(a)</sup> | 0.38 | 0.85 | 0.97 | 0.93 | 0.61 | 0.74 |
| &nbsp;&nbsp;&nbsp;Net realized and unrealized gain/(loss), before tax | (0.12) | (0.57) | (0.37) | (0.53) | (0.91) | 1.30 |
| &nbsp;&nbsp;&nbsp;Tax (provision) benefit on realized and unrealized gains (losses) on investments | (0.01) |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net realized and unrealized gain/(loss), after tax | (0.13) | (0.57) | (0.37) | (0.53) | (0.91) | 1.30 |
| &nbsp;&nbsp;&nbsp;**Total income/(loss) from investment operations** | 0.25 | 0.28 | 0.60 | 0.40 | (0.30) | 2.04 |
| **DISTRIBUTIONS TO SHAREHOLDERS** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;From net investment income | (0.35) | (0.85) | (0.70) | (0.70) | (0.66) | (0.63) |
| &nbsp;&nbsp;&nbsp;From return of capital | – | – | – | – | (0.04) | (0.07) |
| &nbsp;&nbsp;&nbsp;**Total distributions** | (0.35) | (0.85) | (0.70) | (0.70) | (0.70) | (0.70) |
| **INCREASE/(DECREASE) IN NET ASSET VALUE** | (0.10) | (0.57) | (0.10) | (0.30) | (1.00) | 1.34 |
| **NET ASSET VALUE, END OF PERIOD** | $9.02 | $9.12 | $9.69 | $9.79 | $10.09 | $11.09 |
| **TOTAL RETURN<sup>(b)</sup>** | 2.80 %<sup>(c)(d)</sup> | 3.12 %<sup>(c)(e)</sup> | 6.33 %<sup>(c)</sup> | 4.19 %<sup>(c)</sup> | (2.85)% | 21.33 %<sup>(c)</sup> |
| **RATIOS AND SUPPLEMENTAL DATA:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net assets, end of period (000s) | $22780 | $23561 | $27767 | $36233 | $38452 | $41519 |
| **RATIOS TO AVERAGE NET ASSETS<sup>(f)</sup>** |  |  |  |  |  |  |
| Including incentive fees, interest expense and interest amortization/accretion on securities sold short: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Expenses, gross | 4.06 %<sup>(g)</sup> | 3.38% | 3.29% | 3.00% | 2.60% | 2.84% |
| &nbsp;&nbsp;&nbsp;Expenses, net of voluntary waiver | 4.00 %<sup>(g)</sup> | 3.32% | 3.29% | 3.00% | 2.60% | 2.84% |
| &nbsp;&nbsp;&nbsp;Expenses, net of all fees waived/expenses reimbursed by Adviser | 3.16 %<sup>(g)</sup> | 2.79% | 2.92% | 2.87% | 2.60% | 2.65% |
| Excluding incentive fees, interest expense and interest amortization/accretion on securities sold short: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Expenses, gross | 3.43 %<sup>(g)</sup> | 3.13% | 2.96% | 2.72% | 2.59% | 2.78% |
| &nbsp;&nbsp;&nbsp;Expenses, net of voluntary waiver | 3.38 %<sup>(g)</sup> | 3.08% | 2.96% | 2.72% | 2.59% | 2.78% |
| &nbsp;&nbsp;&nbsp;Expenses, net of all fees waived/expenses reimbursed by Adviser | 2.54 %<sup>(g)</sup> | 2.54% | 2.59% | 2.59% | 2.59% | 2.59% |
| Net investment income | 8.30 %<sup>(g)</sup> | 9.06% | 9.91% | 9.36% | 5.60% | 6.87% |
| Portfolio turnover rate | 13 %<sup>(h)</sup> | 21% | 19% | 23% | 26% | 49% |
| **BORROWINGS AT END OF YEAR** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Aggregate amount outstanding (000s) | $23299 | $7757 | $3562 | $3879 | $– | $– |
| &nbsp;&nbsp;&nbsp;Asset coverage per $1,000 (000s) | $8595 | $25939 | $64951 | $66093 | $– | $– |

---

*See Notes to Consolidated Financial Statements.*

Semi-Annual Report \| March 31, 2026 29

Alternative Credit Income Fund – Class A Consolidated Financial Highlights

For a Share Outstanding Throughout the Years Presented

*<sup>(a)</sup>* *Per share numbers have been calculated using the average shares method.*

*<sup>(b)</sup>* *Total returns shown are historical in nature and assume changes in share price, reinvestment of dividends and capital gains distribution, if any. Had the Adviser not absorbed a portion of Fund expenses, total returns would have been lower. Returns shown exclude applicable sales charges.*

*<sup>(c)</sup>* *Includes adjustments in accordance with accounting principles generally accepted in the United States of America and, as such, the net asset values for financial reporting purposes and the returns based upon those net asset values may differ from net asset values and returns for shareholder transactions.*

*<sup>(d)</sup>* *0.03% of the Fund's total return consists of a reimbursement by the Adviser for a loss on a transaction. Excluding this item, total return would have been 2.77%.*

*<sup>(e)</sup>* *0.11% of the Fund's total return consists of a reimbursement by the Adviser for a loss on a transaction. Excluding this item, total return would have been 3.01%.*

*<sup>(f)</sup>* *Ratios do not include expenses of underlying investment companies and private investment funds in which the Fund invests.*

*<sup>(g)</sup>* *Annualized.*

*<sup>(h)</sup>* *Not annualized.*

 

*See Notes to Consolidated Financial Statements.*

30 www.altcif.com

Alternative Credit Income Fund – Class C Consolidated Financial Highlights

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the Six Months Ended March 31, 2026 (Unaudited)** | **For the Year Ended September 30, 2025** | **For the Year Ended September 30, 2024** | **For the Year Ended September 30, 2023** | **For the Year Ended September 30, 2022** | **For the Year Ended September 30, 2021** |
| **NET ASSET VALUE, BEGINNING OF PERIOD** | $9.25 | $9.81 | $9.90 | $10.21 | $11.21 | $9.86 |
| **INCOME FROM INVESTMENT OPERATIONS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net investment income<sup>(a)</sup> | 0.35 | 0.79 | 0.91 | 0.86 | 0.53 | 0.66 |
| &nbsp;&nbsp;&nbsp;Net realized and unrealized gain/(loss), before tax | (0.12) | (0.58) | (0.37) | (0.54) | (0.90) | 1.31 |
| &nbsp;&nbsp;&nbsp;Tax (provision) benefit on realized and unrealized gains (losses) on investments | (0.01) |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net realized and unrealized gain/(loss), after tax | (0.13) | (0.58) | (0.37) | (0.54) | (0.90) | 1.31 |
| &nbsp;&nbsp;&nbsp;**Total income/(loss) from investment operations** | 0.22 | 0.21 | 0.54 | 0.32 | (0.37) | 1.97 |
| **DISTRIBUTIONS TO SHAREHOLDERS** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;From net investment income | (0.32) | (0.77) | (0.63) | (0.63) | (0.59) | (0.56) |
| &nbsp;&nbsp;&nbsp;From return of capital | – | – | – | – | (0.04) | (0.06) |
| &nbsp;&nbsp;&nbsp;**Total distributions** | (0.32) | (0.77) | (0.63) | (0.63) | (0.63) | (0.62) |
| **INCREASE/(DECREASE) IN NET ASSET VALUE** | (0.10) | (0.56) | (0.09) | (0.31) | (1.00) | 1.35 |
| **NET ASSET VALUE, END OF PERIOD** | $9.15 | $9.25 | $9.81 | $9.90 | $10.21 | $11.21 |
| **TOTAL RETURN<sup>(b)</sup>** | 2.42 %<sup>(c)(d)</sup> | 2.32 %<sup>(c)(e)</sup> | 5.64 %<sup>(c)</sup> | 3.33 %<sup>(c)</sup> | (3.48)% | 20.36 %<sup>(c)</sup> |
| **RATIOS AND SUPPLEMENTAL DATA:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net assets, end of period (000s) | $18501 | $22017 | $30135 | $40947 | $43391 | $47640 |
| **RATIOS TO AVERAGE NET ASSETS<sup>(f)</sup>** |  |  |  |  |  |  |
| Including incentive fees, interest expense and interest amortization/accretion on securities sold short: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Expenses, gross | 4.75 %<sup>(g)</sup> | 4.07% | 4.06% | 3.74% | 3.38% | 3.59% |
| &nbsp;&nbsp;&nbsp;Expenses, net of voluntary waiver | 4.70 %<sup>(g)</sup> | 4.02% | 4.06% | 3.74% | 3.38% | 3.59% |
| &nbsp;&nbsp;&nbsp;Expenses, net of all fees waived/expenses reimbursed by Adviser | 3.91 %<sup>(g)</sup> | 3.54% | 3.68% | 3.62% | 3.35% | 3.40% |
| Excluding incentive fees, interest expense and interest amortization/accretion on securities sold short: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Expenses, gross | 4.13 %<sup>(g)</sup> | 3.82% | 3.73% | 3.46% | 3.37% | 3.53% |
| &nbsp;&nbsp;&nbsp;Expenses, net of voluntary waiver | 4.07 %<sup>(g)</sup> | 3.77% | 3.73% | 3.46% | 3.37% | 3.53% |
| &nbsp;&nbsp;&nbsp;Expenses, net of all fees waived/expenses reimbursed by Adviser | 3.29 %<sup>(g)</sup> | 3.29% | 3.34% | 3.34% | 3.34% | 3.34% |
| Net investment income | 7.54 %<sup>(g)</sup> | 8.30% | 9.22% | 8.61% | 4.87% | 6.12% |
| Portfolio turnover rate | 13 %<sup>(h)</sup> | 21% | 19% | 23% | 26% | 49% |
| **BORROWINGS AT END OF YEAR** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Aggregate amount outstanding (000s) | $23299 | $7757 | $3562 | $3879 | $– | $– |
| &nbsp;&nbsp;&nbsp;Asset coverage per $1,000 (000s) | $8595 | $25939 | $64951 | $66093 | $– | $– |

---

*See Notes to Consolidated Financial Statements.*

Semi-Annual Report \| March 31, 2026 31

Alternative Credit Income Fund – Class C Consolidated Financial Highlights

For a Share Outstanding Throughout the Years Presented

*<sup>(a)</sup>* *Per share numbers have been calculated using the average shares method.*

*<sup>(b)</sup>* *Total returns shown are historical in nature and assume changes in share price, reinvestment of dividends and capital gains distribution, if any. Had the Adviser not absorbed a portion of Fund expenses, total returns would have been lower. Returns shown exclude applicable sales charges.*

*<sup>(c)</sup>* *Includes adjustments in accordance with accounting principles generally accepted in the United States of America and, as such, the net asset values for financial reporting purposes and the returns based upon those net asset values may differ from net asset values and returns for shareholder transactions.*

*<sup>(d)</sup>* *0.03% of the Fund's total return consists of a reimbursement by the Adviser for a loss on a transaction. Excluding this item, total return would have been 2.39%.*

*<sup>(e)</sup>* *0.11% of the Fund's total return consists of a reimbursement by the Adviser for a loss on a transaction. Excluding this item, total return would have been 2.21%.*

*<sup>(f)</sup>* *Ratios do not include expenses of underlying investment companies and private investment funds in which the Fund invests.*

*<sup>(g)</sup>* *Annualized.*

*<sup>(h)</sup>* *Not annualized.*

 

*See Notes to Consolidated Financial Statements.*

32 www.altcif.com

Alternative Credit Income Fund – Class I Consolidated Financial Highlights

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the Six Months Ended March 31, 2026 (Unaudited)** | **For the Year Ended September 30, 2025** | **For the Year Ended September 30, 2024** | **For the Year Ended September 30, 2023** | **For the Year Ended September 30, 2022** | **For the Year Ended September 30, 2021** |
| **NET ASSET VALUE, BEGINNING OF PERIOD** | $9.12 | $9.70 | $9.80 | $10.11 | $11.11 | $9.77 |
| **INCOME FROM INVESTMENT OPERATIONS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net investment income<sup>(a)</sup> | 0.39 | 0.87 | 0.98 | 0.95 | 0.63 | 0.76 |
| &nbsp;&nbsp;&nbsp;Net realized and unrealized gain/(loss), before tax | (0.12) | (0.57) | (0.35) | (0.53) | (0.90) | 1.30 |
| &nbsp;&nbsp;&nbsp;Tax (provision) benefit on realized and unrealized gains (losses) on investments | (0.01) |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net realized and unrealized gain/(loss), after tax | (0.13) | (0.57) | (0.35) | (0.53) | (0.90) | 1.30 |
| &nbsp;&nbsp;&nbsp;**Total income/(loss) from investment operations** | 0.26 | 0.30 | 0.63 | 0.42 | (0.27) | 2.06 |
| **DISTRIBUTIONS TO SHAREHOLDERS** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;From net investment income | (0.36) | (0.88) | (0.73) | (0.73) | (0.69) | (0.65) |
| &nbsp;&nbsp;&nbsp;From return of capital | – | – | – | – | (0.04) | (0.07) |
| &nbsp;&nbsp;&nbsp;**Total distributions** | (0.36) | (0.88) | (0.73) | (0.73) | (0.73) | (0.72) |
| **INCREASE/(DECREASE) IN NET ASSET VALUE** | (0.10) | (0.58) | (0.10) | (0.31) | (1.00) | 1.34 |
| **NET ASSET VALUE, END OF PERIOD** | $9.02 | $9.12 | $9.70 | $9.80 | $10.11 | $11.11 |
| **TOTAL RETURN<sup>(b)</sup>** | 2.93 %<sup>(c)(d)</sup> | 3.34 %<sup>(c)(e)</sup> | 6.60 %<sup>(c)</sup> | 4.36 %<sup>(c)</sup> | (2.58)% | 21.61 %<sup>(c)</sup> |
| **RATIOS AND SUPPLEMENTAL DATA:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net assets, end of period (000s) | $94561 | $100819 | $113632 | $110739 | $110512 | $93970 |
| **RATIOS TO AVERAGE NET ASSETS<sup>(f)</sup>** |  |  |  |  |  |  |
| Including incentive fees, interest expense and interest amortization/accretion on securities sold short: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Expenses, gross | 3.84 %<sup>(g)</sup> | 3.18% | 3.15% | 2.74% | 2.36% | 2.59% |
| &nbsp;&nbsp;&nbsp;Expenses, net of voluntary waiver | 3.78 %<sup>(g)</sup> | 3.13% | 3.15% | 2.74% | 2.36% | 2.59% |
| &nbsp;&nbsp;&nbsp;Expenses, net of all fees waived/expenses reimbursed by Adviser | 2.91 %<sup>(g)</sup> | 2.54% | 2.67% | 2.62% | 2.35% | 2.40% |
| Excluding incentive fees, interest expense and interest amortization/accretion on securities sold short: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Expenses, gross | 3.21 %<sup>(g)</sup> | 2.93% | 2.82% | 2.46% | 2.35% | 2.53% |
| &nbsp;&nbsp;&nbsp;Expenses, net of voluntary waiver | 3.16 %<sup>(g)</sup> | 2.88% | 2.82% | 2.46% | 2.35% | 2.53% |
| &nbsp;&nbsp;&nbsp;Expenses, net of all fees waived/expenses reimbursed by Adviser | 2.29 %<sup>(g)</sup> | 2.29% | 2.34% | 2.34% | 2.34% | 2.34% |
| Net investment income | 8.54 %(g) | 9.33% | 10.05% | 9.63% | 5.78% | 7.12% |
| Portfolio turnover rate | 13 %<sup>(h)</sup> | 21% | 19% | 23% | 26% | 49% |
| **BORROWINGS AT END OF YEAR** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Aggregate amount outstanding (000s) | $23299 | $7757 | $3562 | $3879 | $– | $– |
| &nbsp;&nbsp;&nbsp;Asset coverage per $1,000 (000s) | $8595 | $25939 | $64951 | $66093 | $– | $– |

---

*See Notes to Consolidated Financial Statements.*

Semi-Annual Report \| March 31, 2026 33

Alternative Credit Income Fund – Class I Consolidated Financial Highlights

For a Share Outstanding Throughout the Years Presented

*<sup>(a)</sup>* *Per share numbers have been calculated using the average shares method.*

*<sup>(b)</sup>* *Total returns shown are historical in nature and assume changes in share price, reinvestment of dividends and capital gains distribution, if any. Had the Adviser not absorbed a portion of Fund expenses, total returns would have been lower. Returns shown exclude applicable sales charges.*

*<sup>(c)</sup>* *Includes adjustments in accordance with accounting principles generally accepted in the United States of America and, as such, the net asset values for financial reporting purposes and the returns based upon those net asset values may differ from net asset values and returns for shareholder transactions.*

*<sup>(d)</sup>* *0.03% of the Fund's total return consists of a reimbursement by the Adviser for a loss on a transaction. Excluding this item, total return would have been 2.90%.*

*<sup>(e)</sup>* *0.11% of the Fund's total return consists of a reimbursement by the Adviser for a loss on a transaction. Excluding this item, total return would have been 3.23%.*

*<sup>(f)</sup>* *Ratios do not include expenses of underlying investment companies and private investment funds in which the Fund invests.*

*<sup>(g)</sup>* *Annualized.*

*<sup>(h)</sup>* *Not annualized.*

 

*See Notes to Consolidated Financial Statements.*

34 www.altcif.com

Alternative Credit Income Fund – Class L Consolidated Financial Highlights

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the Six Months Ended March 31, 2026 (Unaudited)** | **For the Year Ended September 30, 2025** | **For the Year Ended September 30, 2024** | **For the Year Ended September 30, 2023** | **For the Year Ended September 30, 2022** | **For the Year Ended September 30, 2021** |
| **NET ASSET VALUE, BEGINNING OF PERIOD** | $9.13 | $9.70 | $9.79 | $10.09 | $11.08 | $9.75 |
| **INCOME FROM INVESTMENT OPERATIONS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net investment income<sup>(a)</sup> | 0.37 | 0.82 | 0.95 | 0.90 | 0.58 | 0.71 |
| &nbsp;&nbsp;&nbsp;Net realized and unrealized gain/(loss), before tax | (0.12) | (0.57) | (0.36) | (0.53) | (0.90) | 1.29 |
| &nbsp;&nbsp;&nbsp;Tax (provision) benefit on realized and unrealized gains (losses) on investments | (0.01) |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net realized and unrealized gain/(loss), after tax | (0.13) | (0.57) | (0.36) | (0.53) | (0.90) | 1.29 |
| &nbsp;&nbsp;&nbsp;**Total income/(loss) from investment operations** | 0.24 | 0.25 | 0.59 | 0.37 | (0.32) | 2.00 |
| **DISTRIBUTIONS TO SHAREHOLDERS** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;From net investment income | (0.34) | (0.82) | (0.68) | (0.67) | (0.63) | (0.60) |
| &nbsp;&nbsp;&nbsp;From return of capital | – | – | – | – | (0.04) | (0.07) |
| &nbsp;&nbsp;&nbsp;**Total distributions** | (0.34) | (0.82) | (0.68) | (0.67) | (0.67) | (0.67) |
| **INCREASE/(DECREASE) IN NET ASSET VALUE** | (0.10) | (0.57) | (0.09) | (0.30) | (0.99) | 1.33 |
| **NET ASSET VALUE, END OF PERIOD** | $9.03 | $9.13 | $9.70 | $9.79 | $10.09 | $11.08 |
| **TOTAL RETURN<sup>(b)</sup>** | 2.67 %<sup>(c)(d)</sup> | 2.79 %<sup>(c)(e)</sup> | 6.17 %<sup>(c)</sup> | 3.93 %<sup>(c)</sup> | (3.01)% | 20.92 %<sup>(c)</sup> |
| **RATIOS AND SUPPLEMENTAL DATA:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net assets, end of period (000s) | $7440 | $8090 | $8868 | $11119 | $11930 | $14026 |
| **RATIOS TO AVERAGE NET ASSETS<sup>(f)</sup>** |  |  |  |  |  |  |
| Including incentive fees, interest expense and interest amortization/accretion on securities sold short: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Expenses, gross | 4.36 %<sup>(g)</sup> | 3.70% | 3.64% | 3.25% | 2.89% | 3.11% |
| &nbsp;&nbsp;&nbsp;Expenses, net of voluntary waiver | 4.31 %<sup>(g)</sup> | 3.64% | 3.64% | 3.25% | 2.89% | 3.11% |
| &nbsp;&nbsp;&nbsp;Expenses, net of all fees waived/expenses reimbursed by Adviser | 3.41 %<sup>(g)</sup> | 3.04% | 3.17% | 3.12% | 2.85% | 2.90% |
| Excluding incentive fees, interest expense and interest amortization/accretion on securities sold short: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Expenses, gross | 3.74 %<sup>(g)</sup> | 3.45% | 3.31% | 2.97% | 2.88% | 3.05% |
| &nbsp;&nbsp;&nbsp;Expenses, net of voluntary waiver | 3.68 %<sup>(g)</sup> | 3.39% | 3.31% | 2.97% | 2.88% | 3.05% |
| &nbsp;&nbsp;&nbsp;Expenses, net of all fees waived/expenses reimbursed by Adviser | 2.79 %<sup>(g)</sup> | 2.79% | 2.84% | 2.84% | 2.84% | 2.84% |
| Net investment income | 8.04 %<sup>(g)</sup> | 8.82% | 9.69% | 9.11% | 5.37% | 6.61% |
| Portfolio turnover rate | 13 %<sup>(h)</sup> | 21% | 19% | 23% | 26% | 49% |
| **BORROWINGS AT END OF YEAR** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Aggregate amount outstanding (000s) | $23299 | $7757 | $3562 | $3879 | $– | $– |
| &nbsp;&nbsp;&nbsp;Asset coverage per $1,000 (000s) | $8595 | $25939 | $64951 | $66093 | $– | $– |

---

*See Notes to Consolidated Financial Statements.*

Semi-Annual Report \| March 31, 2026 35

Alternative Credit Income Fund – Class L Consolidated Financial Highlights

For a Share Outstanding Throughout the Years Presented

---

| | |
|:---|:---|
| *<sup>(a)</sup>* | *Per share numbers have been calculated using the average shares method.* |
|  | *Total returns shown are historical in nature and assume changes in share price, reinvestment of dividends and capital gains distribution, if any. Had the Adviser* |
| *<sup>(b)</sup>* | *not absorbed a portion of Fund expenses, total returns would have been lower. Returns shown exclude applicable sales charges. Includes adjustments in accordance with accounting principles generally accepted in the United States of America and, as such, the net asset values for financial* |
| *<sup>(c)</sup>* | *reporting purposes and the returns based upon those net asset values may differ from net asset values and returns for shareholder transactions.* |
| *<sup>(d)</sup>* | *0.03% of the Fund's total return consists of a reimbursement by the Adviser for a loss on a transaction. Excluding this item, total return would have been 2.64%.* |
| *<sup>(e)</sup>* | *0.11% of the Fund's total return consists of a reimbursement by the Adviser for a loss on a transaction. Excluding this item, total return would have been 2.68%.* |
| *<sup>(f)</sup>* | *Ratios do not include expenses of underlying investment companies and private investment funds in which the Fund invests.* |
| *<sup>(g)</sup>* | *Annualized.* |
| *<sup>(h)</sup>* | *Not annualized.* |

---

 

*See Notes to Consolidated Financial Statements.*

36 www.altcif.com

Alternative Credit Income Fund – Class W Consolidated Financial Highlights

For a Share Outstanding Throughout the Years Presented

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the Six Months Ended March 31, 2026 (Unaudited)** | **For the Year Ended September 30, 2025** | **For the Year Ended September 30, 2024** | **For the Year Ended September 30, 2023** | **For the Year Ended September 30, 2022** | **For the Year Ended September 30, 2021** |
| **NET ASSET VALUE, BEGINNING OF PERIOD** | $9.11 | $9.69 | $9.78 | $10.08 | $11.08 | $9.74 |
| **INCOME FROM INVESTMENT OPERATIONS:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net investment income<sup>(a)</sup> | 0.38 | 0.85 | 0.96 | 0.93 | 0.61 | 0.74 |
| &nbsp;&nbsp;&nbsp;Net realized and unrealized gain/(loss), before tax | (0.12) | (0.58) | (0.35) | (0.53) | (0.91) | 1.30 |
| &nbsp;&nbsp;&nbsp;Tax (provision) benefit on realized and unrealized gains (losses) on investments | (0.01) |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net realized and unrealized gain/(loss), after tax | (0.13) | (0.58) | (0.35) | (0.53) | (0.91) | 1.30 |
| &nbsp;&nbsp;&nbsp;**Total income/(loss) from investment operations** | 0.25 | 0.27 | 0.61 | 0.40 | (0.30) | 2.04 |
| **DISTRIBUTIONS TO SHAREHOLDERS** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;From net investment income | (0.35) | (0.85) | (0.70) | (0.70) | (0.66) | (0.63) |
| &nbsp;&nbsp;&nbsp;From return of capital | – | – | – | – | (0.04) | (0.07) |
| &nbsp;&nbsp;&nbsp;**Total distributions** | (0.35) | (0.85) | (0.70) | (0.70) | (0.70) | (0.70) |
| **INCREASE/(DECREASE) IN NET ASSET VALUE** | (0.10) | (0.58) | (0.09) | (0.30) | (1.00) | 1.34 |
| **NET ASSET VALUE, END OF PERIOD** | $9.01 | $9.11 | $9.69 | $9.78 | $10.08 | $11.08 |
| **TOTAL RETURN<sup>(b)</sup>** | 2.80 %<sup>(c)(d)</sup> | 3.00 %<sup>(c)(e)</sup> | 6.44 %<sup>(c)</sup> | 4.19 %<sup>(c)</sup> | (2.86)% | 21.35 %<sup>(c)</sup> |
| **RATIOS AND SUPPLEMENTAL DATA:** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net assets, end of period (000s) | $33674 | $38960 | $47398 | $53123 | $58382 | $61915 |
| **RATIOS TO AVERAGE NET ASSETS<sup>(f)</sup>** |  |  |  |  |  |  |
| Including incentive fees, interest expense and interest amortization/accretion on securities sold short: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Expenses, gross | 4.05 %<sup>(g)</sup> | 3.40% | 3.34% | 2.98% | 2.60% | 2.81% |
| &nbsp;&nbsp;&nbsp;Expenses, net of voluntary waiver | 4.00 %<sup>(g)</sup> | 3.35% | 3.34% | 2.98% | 2.60% | 2.81% |
| &nbsp;&nbsp;&nbsp;Expenses, net of all fees waived/expenses reimbursed by Adviser | 3.16 %<sup>(g)</sup> | 2.79% | 2.92% | 2.87% | 2.60% | 2.65% |
| Excluding incentive fees, interest expense and interest amortization/accretion on securities sold short: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Expenses, gross | 3.43 %<sup>(g)</sup> | 3.15% | 3.01% | 2.70% | 2.59% | 2.75% |
| &nbsp;&nbsp;&nbsp;Expenses, net of voluntary waiver | 3.37 %<sup>(g)</sup> | 3.10% | 3.01% | 2.70% | 2.59% | 2.75% |
| &nbsp;&nbsp;&nbsp;Expenses, net of all fees waived/expenses reimbursed by Adviser | 2.54 %<sup>(g)</sup> | 2.54% | 2.59% | 2.59% | 2.59% | 2.59% |
| Net investment income | 8.28 %<sup>(g)</sup> | 9.06% | 9.86% | 9.36% | 5.63% | 6.89% |
| Portfolio turnover rate | 13 %<sup>(h)</sup> | 21% | 19% | 23% | 26% | 49% |
| **BORROWINGS AT END OF YEAR** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Aggregate amount outstanding (000s) | $23299 | $7757 | $3562 | $3879 | $– | $– |
| &nbsp;&nbsp;&nbsp;Asset coverage per $1,000 (000s) | $8595 | $25939 | $64951 | $66093 | $– | $– |

---

*See Notes to Consolidated Financial Statements.*

Semi-Annual Report \| March 31, 2026 37

Alternative Credit Income Fund – Class W Consolidated Financial Highlights

For a Share Outstanding Throughout the Years Presented

*<sup>(a)</sup>* *Per share numbers have been calculated using the average shares method.*

*<sup>(b)</sup>* *Total returns shown are historical in nature and assume changes in share price, reinvestment of dividends and capital gains distribution, if any. Had the Adviser not absorbed a portion of Fund expenses, total returns would have been lower. Returns shown exclude applicable sales charges.*

*<sup>(c)</sup>* *Includes adjustments in accordance with accounting principles generally accepted in the United States of America and, as such, the net asset values for financial reporting purposes and the returns based upon those net asset values may differ from net asset values and returns for shareholder transactions.*

*<sup>(d)</sup>* *0.03% of the Fund's total return consists of a reimbursement by the Adviser for a loss on a transaction. Excluding this item, total return would have been 2.77%.*

*<sup>(e)</sup>* *0.11% of the Fund's total return consists of a reimbursement by the Adviser for a loss on a transaction. Excluding this item, total return would have been 2.89%.*

*<sup>(f)</sup>* *Ratios do not include expenses of underlying investment companies and private investment funds in which the Fund invests.*

*<sup>(g)</sup>* *Annualized.*

*<sup>(h)</sup>* *Not annualized.*

 

*See Notes to Consolidated Financial Statements.*

38 www.altcif.com

Alternative Credit Income Fund Notes to Consolidated Financial Statements

March 31, 2026 (Unaudited)

**1. ORGANIZATION**

Alternative Credit Income Fund (the "Fund") is a closed-end, diversified management Investment Company that is registered under the Investment Company Act of 1940, as amended (the "1940 Act"). The Fund is structured as an interval fund and continuously offers its shares. The Fund was organized as a Delaware statutory trust on December 11, 2014.

The Fund's investment objectives are to produce current income and to achieve capital preservation with moderate volatility and low to moderate correlation to the broader equity markets. The Fund pursues its investment objectives by investing, under normal circumstances, at least 80% of its assets (defined as net assets plus the amount of any borrowing for investment purposes) in fixed-income and fixed-income related securities.

Sierra Crest Investment Management LLC (the "Adviser") has served as the Fund's investment adviser since October 31, 2020.

On February 3, 2020, the Fund formed a wholly-owned subsidiary, CIF Investments LLC, a Delaware corporation. To the extent permitted by the 1940 Act, the Fund may make investments through CIF Investments LLC, which is a pass-through entity.

On March 22, 2022, the Fund formed a wholly-owned taxable subsidiary, ACIF Master Blocker, LLC (the "Taxable Subsidiary"), a Delaware corporation, which is taxed as a corporation for U.S. federal income tax purposes. The Taxable Subsidiary allows the Fund to make equity investments in companies organized as pass-through entities while continuing to satisfy the requirements of a Regulated Investment Company under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code").

On February 24, 2026, the Fund's board of trustees (the "Board", "Trustees", or "Board of Trustees") approved a proposed agreement and plan of merger (the "Merger Agreement") with BC Partners Lending Corporation ("BCPL"). Pursuant to the Merger Agreement and subject to shareholder approval, the Fund will ultimately merge with and into BCPL, with BCPL continuing as the surviving company (the "Merger"). BCPL is a non-diversified, closed-end management investment company that has elected to be regulated as a business development company (a "BDC") under the 1940 Act.

**2. SIGNIFICANT ACCOUNTING POLICIES**

The following is a summary of significant accounting policies followed by the Fund in preparation of its consolidated financial statements. These policies are in conformity with U.S. generally accepted accounting principles ("U.S. GAAP"). The Fund is an investment company and follows the accounting and reporting guidance under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 946, Financial Services – Investment Companies. These consolidated financial statements reflect adjustments that in the opinion of the Fund are necessary for the fair presentation of the financial position and results of operations as of and for the periods presented herein.

The Fund is considered an investment company for financial reporting purposes under U.S. GAAP and therefore applies the accounting and reporting guidance applicable to investment companies. The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the year. Actual results could differ from those estimates, and such difference could be material. In accordance with U.S. GAAP guidance on consolidation, the Fund will generally not consolidate its investment in a portfolio company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Fund. Accordingly, the Fund consolidated the accounts of the Fund's wholly-owned subsidiaries, CIF Investments LLC and the Taxable Subsidiary, in its consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation. All references made to the "Fund" herein include Alternative Credit Income Fund and its consolidated subsidiaries, except as stated otherwise.

**Securities Transactions and Investment Income** – Investment transactions are recorded on the trade date. Realized gains or losses on investments are calculated using the specific identification method for both financial statement and federal income tax purposes. Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Premiums on securities are amortized to the earliest call date and purchase discounts are accreted over the life of the respective securities using the effective interest method.

Loans are generally placed on non-accrual status when there is reasonable doubt that principal or interest will be collected in full. The Fund considers many factors relevant to an investment when placing it on or removing it from non-accrual status including, but not limited to, the delinquency status of the investment, economic and business conditions, the overall financial condition of the underlying investment, the value of the underlying collateral, bankruptcy status, if any, and any other facts or circumstances relevant to the investment. Accrued interest is generally reversed when a loan is placed on non-accrual status. Payments received on non-accrual loans may be recognized as income or applied to principal depending upon management's judgment regarding collectability of the outstanding principal and interest. Generally non-accrual loans may be restored to accrual status when past due principal and interest is paid current and are likely to remain current based on management's judgment.

Semi-Annual Report \| March 31, 2026 39

Alternative Credit Income Fund Notes to Consolidated Financial Statements

March 31, 2026 (Unaudited)

**Fees and other income** - Origination fees (to the extent services are performed to earn such income upon closing), amendment fees, consent fees, and other fees associated with investments in portfolio companies are recognized as income when they are earned. Prepayment penalties received by the Fund for debt instruments repaid prior to maturity date are recorded as income upon receipt. For the six months ended March 31, 2026 $11,598 of investment income was attributable to fees and other income.

**Securities Valuation** – Securities listed on an exchange are valued at the last reported sale price at the close of the regular trading session of the exchange on the business day the value is being determined, or in the case of securities listed on NASDAQ, at the NASDAQ Official Closing Price. In the absence of a sale, such securities shall be valued at the mid-price. Short-term investments that mature in 60 days or less may be valued at amortized cost, provided such valuations represent fair value. Investments in money market funds are valued at their respective net asset value ("NAV").

Structured credit and other similar debt securities including, but not limited to, collateralized loan obligations ("CLO") debt and equity securities, asset-backed securities ("ABS"), commercial mortgage-backed securities ("CMBS") and other securitized investments backed by certain debt or other receivables (collectively, "Structured Credit Securities"), are valued on the basis of valuations provided by dealers in those instruments and/or independent pricing services recommended by the Adviser and approved by the Board. In determining fair value, dealers and pricing services will generally use information with respect to transactions in the securities being valued, quotations from other dealers, market transactions in comparable securities, analyses and evaluations of various relationships between securities and yield to maturity information. The Adviser will, based on its reasonable judgment, select the dealer or pricing service quotation that most accurately reflects the fair market value of the Structured Credit Security while taking into account the information utilized by the dealer or pricing service to formulate the quotation in addition to any other relevant factors. In the event that there is a material discrepancy between quotations received from third-party dealers or the pricing services, the Adviser may (i) use an average of the quotations received or (ii) select an individual quotation that the Adviser, based upon its reasonable judgment, determines to be reasonable.

When price quotations for certain securities are not readily available, or if the available quotations are not believed to be reflective of market value by the Adviser, those securities will be valued at fair value as determined in good faith by the Adviser in its capacity as the Board of Trustees' valuation designee pursuant to Rule 2a-5 under the 1940 Act. As fair valuation involves subjective judgments, the Fund cannot ensure that fair values determined by the Board or persons acting in their direction would accurately reflect the price that the Fund could obtain for a security if the security was sold. As the valuation designee, the Adviser acts under the Board of Trustees' oversight. The Adviser's fair valuation policies and procedures are approved by the Board of Trustees.

Fair valuation procedures may be used to value a substantial portion of the assets of the Fund. The Fund may use the fair value of a security to calculate its NAV when, for example, (1) a portfolio security is not traded in a public market or the principal market in which the security trades is closed, (2) trading in a portfolio security is suspended and not resumed prior to the normal market close, (3) a portfolio security is not traded in significant volume for a substantial period, or (4) the Adviser determines that the quotation or price for a portfolio security provided by a broker-dealer or independent pricing service is inaccurate.

The fair value of securities may be difficult to determine and thus judgment plays a greater role in the valuation process. The fair valuation methodology may include or consider the following guidelines, as appropriate: (1) evaluation of all relevant factors, including but not limited to, pricing history, current market level and supply and demand of the respective security; (2) comparison to the values and current pricing of securities that have comparable characteristics; (3) knowledge of historical market information with respect to the security; and (4) other factors relevant to the security which would include, but not be limited to, duration, yield, fundamental analytical data, the Treasury yield curve and credit quality.

**Valuation of Private Investment Funds** – The Fund invests a portion of its assets in private investment funds ("Private Investment Funds"). Private Investment Funds, including an investment in Great Lakes Funding II LLC ("Great Lakes II Joint Venture"), value their investment assets at fair value and generally report a NAV or its equivalent in accordance with U.S. GAAP on a calendar quarter basis. The Fund has elected to apply the practical expedient and to value its investments in Private Investment Funds at their respective NAVs at each quarter-end in accordance with U.S. GAAP. For non-calendar quarter-end days, the Valuation Committee estimates the fair value of each Private Investment Fund by adjusting the most recent NAV for such Private Investment Fund, as necessary, by the change in a relevant benchmark that the Valuation Committee has deemed to be representative of the underlying securities in the Private Investment Fund.

**Loan Participation and Assignments** – The Fund invests in debt instruments, which are interests in amounts owed to lenders (the "Lenders") by corporate, governmental or other borrowers. The Fund's investments in loans may be in the form of direct investments, loans originated by the Fund, participations in loans or assignments of all or a portion of the loans from third parties or exposure to investments in loans through investment in Private Investment Funds or other pooled investment vehicles. When the Fund purchases an interest in a loan in the form of an assignment, the Fund acquires all of the direct rights and obligations of a lender (as such term is defined in the related credit agreement), including the right to vote on amendments or waivers of such credit agreement. However, the Fund generally has no right to enforce compliance with the terms of the loan agreement with the borrower. Instead, the administration of the loan agreement is often performed by a bank or other financial institution (the "Agent") that acts as agent for the Lenders. Circumstances may arise in connection with which the Agent takes action that contradicts the will of the Lenders. For example, under certain circumstances, an Agent may refuse to declare the borrower in default, despite having received a notice of default from the Lenders. When the Fund purchases an interest in a loan in the form of a participation, the Fund purchases such participation interest from another existing Lender, and consequently, the Fund does not obtain the rights and obligations of the Lenders under the credit agreement, such as the right to vote on amendments or waivers. The Fund has the right to receive payments of principal, interest and any fees to which it is entitled only from the Lender from which the Fund has received that participation interest. In this instance, the Fund is subject to both the credit risk of the borrower and the credit risk of the Lender that sold the Fund such participation interest.

40 www.altcif.com

Alternative Credit Income Fund Notes to Consolidated Financial Statements

March 31, 2026 (Unaudited)

**Unfunded Commitments** – The Fund may enter into unfunded loan commitments, which are contractual obligations for future funding, such as delayed draw term loans or revolving credit arrangements. Unfunded loan commitments represent a future obligation in full, even though a percentage of the notional loan amounts may not be utilized by the borrower. The Fund may receive a commitment fee based on the undrawn portion of the underlying line of credit portion of a floating rate loan.

Additionally, when the Fund invests in a Private Investment Fund, the Fund makes a commitment to invest a specified amount of capital in the applicable Private Investment Fund. The capital commitment may be drawn by the general partner of the Private Investment Fund either all at once or through a series of capital calls at the discretion of the general partner. The unfunded commitment represents the portion of the Fund's overall capital commitment to a particular Private Investment Fund that has not yet been called by the general partner of the Private Investment Fund.

As of March 31, 2026, the Fund had unfunded commitments of $16,892,704.

**Short Sales** – The Fund may sell securities short. To do this the Fund will borrow and then sell (take short positions in) securities. To complete such a transaction, the Fund must borrow the security to deliver to the buyer. The Fund is then obligated to replace, or cover, the security borrowed by purchasing it in the open market at some later date. The Fund will generally have to pay a fee or premium to borrow a security and be obligated to repay the lender any dividend or interest that accrues on those securities during the period of the loan. The Fund bears the risk of a loss, unlimited in size, if the market price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund will realize a gain, limited to the price that the Fund sold the security short, if the security declines in value between those dates. There can be no assurance that securities necessary to cover a short position will be available for purchase. To mitigate leverage risk, the Fund will segregate liquid assets (which may include its long positions) at least equal to its short position exposure, marked-to-market daily.

**Foreign Currency** – Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.

**Fair Value Measurements** – In accordance with ASC 820 "Fair Value Measurement" ("ASC 820") a three-tier hierarchy has been established to classify fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available. In accordance with U.S. GAAP guidance on fair value measurements and disclosure, the Fund discloses the fair value of its investments in a hierarchy that categorizes the inputs to valuation techniques used to measure the fair value.

Various inputs are used in determining the fair value of the Fund's investments. These inputs are categorized in the following hierarchy under applicable accounting guidance:

---

| | |
|:---|:---|
| Level 1 – | Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that the Fund has the ability to access at the measurement date; |
| Level 2 – | Quoted prices in markets that are not active, or quoted prices for similar assets or liabilities in active markets, or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability at the measurement date; and |
| Level 3 – | Significant unobservable prices or inputs (including the Fund's own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date. |

---

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.

Semi-Annual Report \| March 31, 2026 41

Alternative Credit Income Fund Notes to Consolidated Financial Statements

March 31, 2026 (Unaudited)

An investment level within the fair value hierarchy is based on the lowest level input, individually or in the aggregate, that is significant to fair value measurement. The valuation techniques used by the Fund to measure fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs.

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk or liquidity associated with investing in those securities. The following is a summary of the fair values according to the inputs used in valuing the Fund's investments as of March 31, 2026:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Investments in Securities at Value** | **Level 1** | **Level 2** | **Level 3** | **Total** |
| BANK LOANS<sup>(a)</sup> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Communication Services | $– | $– | $6265545 | $6265545 |
| &nbsp;&nbsp;&nbsp;Consumer Discretionary |  |  | 8548342 | 8548342 |
| &nbsp;&nbsp;&nbsp;Consumer Staples |  |  | 10785233 | 10785233 |
| &nbsp;&nbsp;&nbsp;Financials |  |  | 29207541 | 29207541 |
| &nbsp;&nbsp;&nbsp;Health Care |  |  | 23641534 | 23641534 |
| &nbsp;&nbsp;&nbsp;Industrials |  |  | 14364170 | 14364170 |
| &nbsp;&nbsp;&nbsp;Information Technology |  |  | 35087687 | 35087687 |
| COMMON EQUITY<sup>(a)</sup> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Communication Services |  |  | 59699 | 59699 |
| &nbsp;&nbsp;&nbsp;Consumer Discretionary |  | 1074114 |  | 1074114 |
| &nbsp;&nbsp;&nbsp;Consumer Staples |  |  | 4755282 | 4755282 |
| &nbsp;&nbsp;&nbsp;Diversified | 1857244 |  |  | 1857244 |
| &nbsp;&nbsp;&nbsp;Financials |  |  | 1385378 | 1385378 |
| &nbsp;&nbsp;&nbsp;Health Care |  |  | 596276 | 596276 |
| &nbsp;&nbsp;&nbsp;Industrials |  |  | 1002989 | 1002989 |
| &nbsp;&nbsp;&nbsp;Information Technology |  |  | 1188529 | 1188529 |
| &nbsp;&nbsp;&nbsp;Real Estate |  | 3469987 | 349076 | 3819063 |
| ASSET BACKED SECURITIES<sup>(a)</sup> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Financials |  | 1352428 | 4394833 | 5747261 |
| &nbsp;&nbsp;&nbsp;CORPORATE BONDS<sup>(a)</sup> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Communications |  | 1980000 |  | 1980000 |
| &nbsp;&nbsp;&nbsp;Consumer Discretionary |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Financials |  |  | 1886943 | 1886943 |
| &nbsp;&nbsp;&nbsp;Industrials |  | 45843 |  | 45843 |
| EQUIPMENT FINANCING<sup>(a)</sup> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Financials |  |  | 562292 | 562292 |
| &nbsp;&nbsp;&nbsp;INTERVAL FUND<sup>(a)</sup> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Diversified | 4208906 |  |  | 4208906 |
| PREFERRED STOCK<sup>(a)</sup> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Communication Services |  |  | 3056438 | 3056438 |
| &nbsp;&nbsp;&nbsp;Consumer Discretionary |  |  | 1537932 | 1537932 |
| &nbsp;&nbsp;&nbsp;Consumer Staples |  |  | 543954 | 543954 |
| &nbsp;&nbsp;&nbsp;Health Care |  |  | 151897 | 151897 |
| &nbsp;&nbsp;&nbsp;Industrials |  |  | 453698 | 453698 |
| WARRANTS<sup>(a)</sup> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Consumer Discretionary |  |  | 1992 | 1992 |
| &nbsp;&nbsp;&nbsp;Financials |  |  | 469336 | 469336 |
| &nbsp;&nbsp;&nbsp;Information Technology |  |  |  |  |
| DERIVATIVES<sup>(a)</sup> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Consumer Discretionary | – | – | – | – |
| TOTAL | $6066150 | $7922372 | $150296596 | $164285118 |
| Investments measured at net asset value<sup>(a)</sup> |  |  |  | $32168581 |
| Total Investments, at fair value |  |  |  | $196453699 |

---

*<sup>(a)</sup>* *For detailed descriptions, see the accompanying Consolidated Schedule of Investments.*

** 

42 www.altcif.com

Alternative Credit Income Fund Notes to Consolidated Financial Statements

March 31, 2026 (Unaudited)

The following table provides a reconciliation of the beginning and ending balances of investments for which the Fund has used Level 3 inputs to determine the fair value:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Investments in Securities at Value** | **Fair Value as of September 30, 2025** | **Purchases** | **Sales** | **Accretion of original issue discount** | **Realized Gain (Loss)** | **Change in**<br> **Unrealized Appreciation/ (Depreciation)** | **Fair Value as of March 31, 2026** | **Net change in unrealized appreciation/ (depreciation) included in results of operations related to**<br> **Level 3 investments still held at reporting date** |
| **Bank Loans** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Communication Services | $5747986 | $434123 | $– | $5170 | $– | $78266 | $6265545 | $78266 |
| &nbsp;&nbsp;&nbsp;Consumer Discretionary | 8524441 | 383662 | (587463) | 12414 |  | 215288 | 8548342 | 215288 |
| &nbsp;&nbsp;&nbsp;Consumer Staples | 12505032 | 3800986 | (5557841) | 177474 | (1696521) | 1556103 | 10785233 | (149416) |
| &nbsp;&nbsp;&nbsp;Financials | 24546655 | 3659810 | (779280) | 66860 | (2723) | 1716219 | 29207541 | 1716219 |
| &nbsp;&nbsp;&nbsp;Healthcare | 17323029 | 12194661 | (7927305) | 14737 | 4376 | 2032036 | 23641534 | (664809) |
| &nbsp;&nbsp;&nbsp;Industrials | 13614743 | 2214669 | (770795) | 29752 | (9014) | (715185) | 14364170 | (719585) |
| &nbsp;&nbsp;&nbsp;Information Technology | 37661736 | 649314 | (105530) | 116976 |  | (3234809) | 35087687 | (3234809) |
| **Asset-Backed Securities** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Financials | 5125771 |  | (483162) | 586219 | (3691791) | 2857796 | 4394833 | 2857796 |
| **Corporate Bonds** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Financials | 1990791 |  | (103848) |  |  |  | 1886943 |  |
| **Equipment Financing** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Financials | 876369 |  | (314077) |  |  |  | 562292 |  |
| **Preferred Stock** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Communication Service |  | 3000000 |  |  |  | 56438 | 3056438 | 56438 |
| &nbsp;&nbsp;&nbsp;Consumer Discretionary | 7625629 | 179799 | (6209492) | 205 | 96259 | (154468) | 1537932 | (58209) |
| &nbsp;&nbsp;&nbsp;Consumer Staples | 473314 | 23332 |  |  |  | 47308 | 543954 | 47308 |
| &nbsp;&nbsp;&nbsp;Healthcare | 170791 |  |  |  |  | (18894) | 151897 | (18894) |
| &nbsp;&nbsp;&nbsp;Industrials | 595513 | 15604 |  |  |  | (157419) | 453698 | (157419) |
| **Common Equity** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Communication Services | 84521 |  |  |  |  | (24822) | 59699 | (24822) |
| &nbsp;&nbsp;&nbsp;Consumer Discretionary |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Consumer Staples | 4029260 |  | (383848) |  |  | 1109870 | 4755282 | 1109870 |
| &nbsp;&nbsp;&nbsp;Financials | 1259555 | 12270 |  |  |  | 113553 | 1385378 | 113553 |
| &nbsp;&nbsp;&nbsp;Healthcare | 437707 |  |  |  |  | 158569 | 596276 | 158569 |
| &nbsp;&nbsp;&nbsp;Industrials | 1101746 |  |  |  |  | (98757) | 1002989 | (98757) |
| &nbsp;&nbsp;&nbsp;Information Technology | 1008324 |  |  |  |  | 180205 | 1188529 | 180205 |
| &nbsp;&nbsp;&nbsp;Real Estate |  | 335000 |  |  |  | 14076 | 349076 | 14076 |
| **Warrants** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Consumer Discretionary | 7029 |  |  |  |  | (5037) | 1992 | (5037) |
| &nbsp;&nbsp;&nbsp;Financials | 460972 | – | – | – | – | 8364 | 469336 | 8364 |
| **Total** | $**145170914** | $**26903230** | $**(23222641)** | $**1009807** | $**(5299414)** | $**5734700** | $**150296596** | $**1424195** |

---

There were no transfers into or out of Level 3 during the period ended March 31, 2026.

Semi-Annual Report \| March 31, 2026 43

Alternative Credit Income Fund Notes to Consolidated Financial Statements

March 31, 2026 (Unaudited)

There are significant unobservable valuation inputs for material Level 3 investments, and a change to the unobservable input may result in a significant change to the value of the investment. Level 3 investment valuation techniques and inputs as of March 31, 2026 are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Asset Category** | **Fair Value at March**<br> **31, 2026** | **Valuation Technique** | **Unobservable Input<sup>(a)</sup>** | **Range of Input**<br> **(Weighted Average)<sup>(b)</sup>** |
| **Bank Loans** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Communication Services | $6265545 | Discounted Cash Flows | Market Yield | 13.8% |
| &nbsp;&nbsp;&nbsp;Consumer Discretionary | 6609736 | Discounted Cash Flows | Market Yield | 8.4% - 15.6% (11.0%) |
| &nbsp;&nbsp;&nbsp;Consumer Discretionary | 1938606 | Enterprise Market Value | Recovery Percentage | 19.4% |
| &nbsp;&nbsp;&nbsp;Consumer Staples | 1840468 | Enterprise Market Value | EBITDA Multiple | 10.3x |
| &nbsp;&nbsp;&nbsp;Consumer Staples | 4906650 | Discounted Cash Flows | Market Yield | 21.9% |
| &nbsp;&nbsp;&nbsp;Consumer Staples | 4038115 | Market | Broker/Dealer Quotes | N/A |
| &nbsp;&nbsp;&nbsp;Financials | 29207541 | Discounted Cash Flows | Market Yield | 5.8% - 16.6% (12.0%) |
| &nbsp;&nbsp;&nbsp;Healthcare | 17170796 | Discounted Cash Flows | Market Yield | 10.9% - 20.0% (14.8%) |
| &nbsp;&nbsp;&nbsp;Healthcare | 6470738 | Market | Broker/Dealer Quotes | N/A |
| &nbsp;&nbsp;&nbsp;Industrials | 13105828 | Discounted Cash Flows | Market Yield | 8.6% - 17.9% (14.2%) |
| &nbsp;&nbsp;&nbsp;Industrials | 1258342 | Market | Broker/Dealer Quotes | N/A |
| &nbsp;&nbsp;&nbsp;Information Technology | 26593423 | Discounted Cash Flows | Market Yield | 7.1% - 27.1% (17.4%) |
| &nbsp;&nbsp;&nbsp;Information Technology | 2138539 | Enterprise Market Value | EBITDA Multiple | 7.0x |
| &nbsp;&nbsp;&nbsp;Information Technology | 6355725 | Market | Broker/Dealer Quotes | N/A |
| **Asset Backed Securities** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Financials | 4084114 | Discounted Cash Flows | Market Yield | 19.6% |
| &nbsp;&nbsp;&nbsp;Financials | 310719 | Enterprise Market Value | Recovery Percentage | 0.3% - 6.6% (6.2%) |
| **Corporate Bonds** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Financials | 1886943 | Discounted Cash Flows | Market Yield | 12.8% |
| **Equipment Financing** |  |  |  |  |
| Financials | 562292 | Discounted Cash Flows | Market Yield | 10.8% |
| **Preferred Stock** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Communication Services | 3056438 | Enterprise Value | Stock Price | $0.4 |
|  |  |  | Time | 4.5 years |
|  |  |  | Volatility | 70.0% |
| &nbsp;&nbsp;&nbsp;Consumer Discretionary | 694974 | Discounted Cash Flows | Market Yield | 13.0% |
| &nbsp;&nbsp;&nbsp;Consumer Discretionary | 694974 | Enterprise Market Value | Liquidation Preference MOIC | 1.4x |
| &nbsp;&nbsp;&nbsp;Consumer Discretionary | 147984 | Enterprise Value | Stock Price | $0.5 |
|  |  |  | Time | 3.7 years |
|  |  |  | Volatility | 58.9% |
| &nbsp;&nbsp;&nbsp;Consumer Staples | 543954 | Discounted Cash Flows | Market Yield | 19.2% |
| &nbsp;&nbsp;&nbsp;Healthcare | 151897 | Discounted Cash Flows | Market Yield | 18.2% |
| &nbsp;&nbsp;&nbsp;Industrials | 395135 | Discounted Cash Flows | Market Yield | 10.5% |
| &nbsp;&nbsp;&nbsp;Industrials | 60563 | Enterprise Market Value | Multiple on Invested Capital | 1.3x |
| **Common Equity** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Communication Services | 59699 | Enterprise Market Value | EBITDA Multiple | 1.5x |
| &nbsp;&nbsp;&nbsp;Consumer Staples | 26467 | Enterprise Market Value | EBITDA Multiple | 8.0x |
| &nbsp;&nbsp;&nbsp;Consumer Staples | 4728815 | Recent Transaction | Transaction Price | $1700.0 |
| &nbsp;&nbsp;&nbsp;Financials | 1373010 | Enterprise Market Value | EBITDA Multiple | 6.3x |
| &nbsp;&nbsp;&nbsp;Financials | 12368 | Recent Transaction | Option Purchase Price | $408.1 |
| &nbsp;&nbsp;&nbsp;Healthcare | 596276 | Enterprise Market Value | EBITDA Multiple | 10.2x - 17.3x (14.0x) |
| &nbsp;&nbsp;&nbsp;Industrials | 118043 | Enterprise Market Value | Book Value Multiple | 1.7x |
| &nbsp;&nbsp;&nbsp;Industrials | 884946 | Enterprise Market Value | Multiple on Invested Capital | 1.3x |
| &nbsp;&nbsp;&nbsp;Information Technology | 1184745 | Enterprise Market Value | EBITDA Multiple | 10.1x |
| &nbsp;&nbsp;&nbsp;Information Technology | 3784 | Enterprise Market Value | Revenue Multiple | 2.8x |
| &nbsp;&nbsp;&nbsp;Real Estate | 349076 | Enterprise Value | Stock Price | $15.5 |
|  |  |  | Time | 2.6 years |
|  |  |  | Volatility | 30.0% |
| **Warrants** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Consumer Discretionary | 1992 | Enterprise Value | Stock Price | $0.5 |
|  |  |  | Time | 3.7 years |
|  |  |  | Volatility | 58.9% |
| &nbsp;&nbsp;&nbsp;Financials | 469336 | Enterprise Value | Stock Price | $139.0 |
|  |  |  | Time | 1.5 years |
|  |  |  | Volatility | 30.0% |
| **Total** | $**150296596** |  |  |  |

---

44 www.altcif.com

Alternative Credit Income Fund Notes to Consolidated Financial Statements

March 31, 2026 (Unaudited)

*<sup>(a)</sup>* *An increase in market yield would result in a decrease in fair value. A decrease in market yield would result in an increase in fair value. An increase in the transaction price would result in an increase in fair value. A decrease in the transaction price would result in a decrease in fair value. An increase in the EBITDA or Revenue multiple would result in an increase in fair value. A decrease in the EBITDA or Revenue multiple would result in a decrease in fair value.*

*<sup>(b)</sup>* *The weighted averages disclosed in the table above were weighted by their relative fair value.*

 

**Concentration of Credit Risk** – The Fund places its cash with one banking institution, which is insured by the Federal Deposit Insurance Corporation ("FDIC"). The FDIC limit is $250,000. At various times throughout the year, the amount on deposit may exceed the FDIC limit and subject the Fund to a credit risk.

**Federal and Other Taxes** – No provision for income taxes, except for the Taxable Subsidiary, is included in the accompanying consolidated financial statements, as the Fund intends to distribute to shareholders all taxable investment income and realized gains and otherwise comply with Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), applicable to regulated investment companies.

The Fund evaluates tax positions taken (or expected to be taken) in the course of preparing the Fund's tax provisions to determine whether these positions meet a "more-likely-than-not" standard that, based on the technical merits, have a more than fifty percent likelihood of being sustained by a taxing authority upon examination. A tax position that meets the "more-likely-than-not" recognition threshold is measured to determine the amount of benefit to recognize in the consolidated financial statements.

As of and during the period ended March 31, 2026, the Fund did not have a liability for any unrecognized tax benefits. The Fund and the Taxable Subsidiary file U.S. federal, state and local tax returns as required. The Fund's tax returns are subject to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return for federal purposes and four years for most state returns. Tax returns for open years have incorporated no uncertain tax positions that require a provision for income taxes.

The Taxable Subsidiary records deferred tax assets or liabilities related to temporary book versus tax differences on the income or loss generated by the underlying equity investments held by the Taxable Subsidiary.

**Distributions to Shareholders** – Distributions from net investment income, if any, are declared and paid quarterly. Distributions from net realized capital gains, if any, are declared and paid annually and are recorded on the ex-dividend date. The character of income and gains to be distributed is determined in accordance with income tax regulations, which may differ from U.S. GAAP.

**Early Withdrawal Charge** – Selling brokers, or other financial intermediaries that have entered into distribution agreements with the Distributor (as defined below in Note 4), will receive a commission of (a) up to 1.00% of the purchase price of Class C shares and (b) up to 0.50% of the purchase of Class A shares of $1 million or more. Shareholders who tender for repurchase of such shareholder's Class C shares fewer than 365 days after the original purchase date will be subject to an early withdrawal charge of 1.00% of the original purchase price. Shareholders tendering Class A shares fewer than 365 days after the original purchase date will be subject to an early withdrawal charge of 0.50% of the original purchase price, which will be deducted from repurchase proceeds, if (i) the original purchase was for amounts of $1 million or more and (ii) the selling broker received the reallowance of the dealer manager fee. The Distributor may waive the imposition of the early withdrawal charge in the event of shareholder death or shareholder disability. Any such waiver does not imply that the early withdrawal charge will be waived at any time in the future or that such early withdrawal charge will be waived for any other shareholder. Class A shares (with respect to purchases of less than $1 million) will not be subject to an early withdrawal charge.

**Indemnification** – The Fund indemnifies its officers and Trustees for certain liabilities that may arise from the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. However, based on industry experience, the Fund expects the risk of loss due to these warranties and indemnities to be remote.

**Segment Reporting** – In accordance with ASC Topic 280 - Segment Reporting ("ASC 280"), the Fund has determined that it has a single operating and reporting segment, the "Investment Management Segment". As a result, the Fund's segment accounting policies are the same as described herein and the Fund does not have any intra-segment sales or transfers of assets. The CODM is the Fund's chief executive officer, and the CODM assesses the performance and makes operating decisions of the Fund on a consolidated basis primarily based on the Fund's net increase in net assets resulting from operations ("net income"). Net income is comprised of total investment income ("segment revenues") and total expenses ("significant segment expenses"), which are considered the key segment measures of profit or loss reviewed by the CODM. In addition to numerous other factors and metrics, the CODM utilizes net income as a key metric in determining the amount of dividends to be distributed to the Fund's shareholders, implementing investment policy decisions and strategic initiatives, managing the Fund's portfolio, allocating assets, and assessing the performance of the portfolio.

**Recent Accounting Pronouncements** – In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income— Expense Disaggregation Disclosures ("ASU 2024-03"), which requires disaggregated disclosure of certain costs and expenses, including purchases of inventory, employee compensation, depreciation, amortization and depletion, within relevant income statement captions. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning in the first quarter ended March 31, 2028. Early adoption and retrospective application is permitted. The Fund is currently assessing the impact of this guidance, however, the Fund does not expect a material impact on its consolidated financial statements.

Semi-Annual Report \| March 31, 2026 45

Alternative Credit Income Fund Notes to Consolidated Financial Statements

March 31, 2026 (Unaudited)

**3. GREAT LAKES FUNDING II LLC**

In August 2022, the Fund invested in Series A ("Series A") of Great Lakes Funding II LLC (the "Great Lakes II Joint Venture"), a joint venture with an investment strategy to underwrite and hold senior, secured unitranche loans made to middle-market companies. The Fund treats its investment in the Great Lakes II Joint Venture as a joint venture since an affiliate of the Adviser controls a 50% voting interest in the Great Lakes II Joint Venture. In connection with the launch of the Great Lakes II Joint Venture, the Fund entered into a series of transactions pursuant to which the Fund's prior investment in BCP Great Lakes Holdings LP, a vehicle formed as a co-investment vehicle to facilitate the participation of certain co-investors to invest, directly or indirectly, in BCP Great Lakes Funding, LLC (the "Prior Great Lakes Joint Venture") which the Fund invested in during the fourth quarter of 2022, and the corresponding assets held by the Prior Great Lakes Joint Venture in respect of the Fund's investment in BCP Great Lakes Holdings LP, were transferred to the Great Lakes II Joint Venture in complete redemption of the Fund's investment in BCP Great Lakes Holdings LP.

The Great Lakes II Joint Venture is a Delaware series limited liability company, and pursuant to the terms of the Great Lakes Funding II LLC Limited Liability Company Agreement (the "Great Lakes II LLC Agreement"), prior to the end of the investment period with respect to each series established under the Great Lakes II LLC Agreement, each member of the predecessor series would be offered the opportunity to roll its interests into any subsequent series of the Great Lakes II Joint Venture. The Fund does not pay any advisory fees in connection with its investment in the Great Lakes II Joint Venture. Certain other funds managed by the Adviser or its affiliates have also invested in the Great Lakes II Joint Venture.

On August 1, 2025, pursuant to the Great Lakes II LLC Agreement, the Fund elected to participate in a rollover transaction from Series A of Great Lakes II Joint Venture to Series B ("Series B") of Great Lakes II Joint Venture. As part of the transaction, the portion of the Fund's remaining unfunded commitment in Series A became the Fund's remaining unfunded commitment in Series B, thus reducing the Fund's remaining unfunded commitment in Series A to zero. In connection with the rollover transaction, Series A transferred to Series B a pro rata portion of the underlying portfolio assets held by Series A that corresponded to the interest of the members of Series A who elected to participate in the transaction in addition to a pro rata portion of the principal outstanding under Great Lakes II Joint Venture's credit facility.

The fair value of the Fund's investment in Series B as of March 31, 2026 was $327,197. Fair value has been determined utilizing the practical expedient in accordance with U.S. GAAP. Pursuant to the terms of the Great Lakes II LLC Agreement, the Fund generally may not affect any direct or indirect sale, transfer, assignment, hypothecation, pledge or other disposition of or encumbrance upon its interests in the Great Lakes II Joint Venture, except that the Fund may sell or otherwise transfer its interests with the consent of the managing members of the Great Lakes II Joint Venture or to an affiliate or a successor to substantially all of the assets of the Fund.

As of March 31, 2026, the Fund had a $114,392 unfunded commitment to the Great Lakes II Joint Venture.

**4. ADVISORY FEES AND OTHER TRANSACTIONS WITH SERVICE PROVIDERS**

**Advisory Fees** – On October 31, 2020, the Fund entered into a management agreement (the "Management Agreement") with the Adviser. Under the terms of the Management Agreement, the Adviser provides certain investment advisory and administrative services to the Fund and in consideration of the advisory services provided, the Adviser is entitled to a fee consisting of two components — a base management fee and an incentive fee, or collectively "investment advisory fees".

The base management fee is payable monthly in arrears at an annual rate of 1.85% of the average daily net assets of the Fund. For the six months ended March 31, 2026, the Fund incurred $1,686,046 in base management fees.

The incentive fee is calculated and payable quarterly in arrears based upon the Fund's "pre-incentive fee net investment income" for the immediately preceding quarter and is subject to a hurdle rate, expressed as a rate of return on the Fund's "adjusted capital," equal to 2.25% per quarter (or an annualized hurdle rate of 9.0%), subject to a "catch-up" feature. For this purpose, "pre-incentive fee net investment income" means interest income, dividend income and any other income accrued during the calendar quarter, less the Fund's operating expenses for the quarter (including the management fee, expenses reimbursed to the Adviser and any interest expenses and distributions paid on any issued and outstanding preferred shares, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as OID, debt instruments with paid-in-kind ("PIK") interest and zero coupon securities), accrued income that the Fund has not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. "Adjusted capital" means the cumulative gross proceeds received by the Fund from the sale of shares (including pursuant to the Fund's distribution reinvestment plan), reduced by amounts paid in connection with purchases of shares pursuant to the Fund's share repurchase program.

46 www.altcif.com

Alternative Credit Income Fund Notes to Consolidated Financial Statements

March 31, 2026 (Unaudited)

No incentive fee is payable in any calendar quarter in which the Fund's pre-incentive fee net investment income does not exceed the quarterly hurdle rate of 2.25%. For any calendar quarter in which the Fund's pre-incentive fee net investment income is greater than the hurdle rate, but less than or equal to 2.8125%, the incentive fee will equal the amount of the Fund's pre-incentive fee net investment income in excess of the hurdle rate. This portion of the Fund's pre-incentive fee net investment income which exceeds the hurdle rate but is less than or equal to 2.8125% is referred to as the "catch-up." The "catch-up" provision is intended to provide the Adviser with an incentive fee of 20.0% on all of the Fund's pre-incentive fee net investment income when the Fund's pre-incentive fee net investment income reaches 2.8125% in any calendar quarter. For any calendar quarter in which the Fund's pre-incentive fee net investment income exceeds 2.8125% of adjusted capital, the incentive fee will equal 20.0% of pre-incentive fee net investment income. For the period ended March 31, 2026, the Adviser didn't earn an incentive fee.

Under the Expense Limitation Agreement, dated October 31, 2020, renewed on November 26, 2024, the Adviser has contractually agreed to waive all or part of its management fees (excluding any incentive fee) and/or make payments to limit Fund expenses (excluding incentive fees, all borrowing costs, dividends, amortization/accretion and interest on securities sold short, brokerage commissions, acquired fund fees and expenses and extraordinary expenses) at least until January 31, 2027, such that the total annual operating expenses of the Fund do not exceed 2.59% per annum of Class A average daily net assets, 3.34% per annum of Class C average daily net assets, 2.59% per annum of Class W average daily net assets, 2.34% per annum of Class I average daily net assets, and 2.84% per annum of Class L average daily net assets. Fee waivers and expense payments may be recovered by the Adviser from the Fund, for a period of up to three years following the date of waiver or expense payment, if the Fund is able to make the repayment without exceeding the expense limitation in place at the time of waiver and the current expense limitation and the repayment is approved by the Board. For the six months ended March 31, 2026, the Adviser waived fees of $778,095 in accordance with the Expense Limitation Agreement.

As of March 31, 2026, the following amounts may be subject to reimbursement to the Adviser based upon their potential expiration dates:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **2026** | **2027** | **2028** | **2029** |
| Alternative Credit Income Fund | $222220 | $1054309 | $1165375 | $780401 |

---

During the six months ended March 31, 2026, the Adviser did not recover $136,999 of previously waived fees under the Expense Limitation Agreement which expired.

The Adviser voluntarily waived $49,546 during the period which is not subject to reimbursement to the Adviser.

During the period, the Adviser didn't recover any previously waived fees under the Expense Limitation Agreement.

**Fund Accounting Fees and Expenses** – ALPS Fund Services, Inc. ("ALPS") serves as the Fund's administrator and accounting agent (the "Administrator") and receives customary fees from the Fund for such services.

**Transfer Agent** – SS&C Global Investor & Distribution Solutions, Inc. ("SS&C GIDS") (the "Transfer Agent"), an affiliate of ALPS, serves as transfer, dividend paying and shareholder servicing agent for the Fund.

**Distributor** – The Fund has entered into a distribution agreement with ALPS Distributors, Inc. (the "Distributor"), an affiliate of ALPS, to provide distribution services to the Fund. There are no fees paid to the Distributor pursuant to the distribution agreement. The Board has adopted, on behalf of the Fund, a shareholder servicing plan under which the Fund may compensate financial industry professionals for providing ongoing services in respect of clients with whom they have distributed shares of the Fund. Under the shareholder servicing plan, Class A, Class C, Class W and Class L shares are subject to a shareholder servicing fee at an annual rate of 0.25% of the average daily net assets attributable to that share class. For the six months ended March 31, 2026, the Class A, Class C, Class W and Class L shares incurred shareholder servicing fees of $95,989. The Class C and Class L shares also pay to the Distributor a distribution fee, pursuant to a distribution plan adopted by the Board, that are subject to annual rates equal to 0.75% and 0.25%, respectively, of the Fund's average daily net assets attributable to Class C and Class L shares, respectively, and is payable on a quarterly basis. Class A, Class I and Class W shares are not currently subject to a distribution fee. For the six months ended March 31, 2026, Class C and Class L shares incurred $75,394 in distribution fees.

The Distributor acts as the Fund's principal underwriter in a continuous public offering of the Fund's shares. During the six months ended March 31, 2026, no fees were retained by the Distributor.

**Trustees** – Each Trustee who is not affiliated with the Fund or the Adviser receives an annual fee of $10,000, an additional $2,000 for attending the annual in-person meeting of the Board, and $500 for attending each of the remaining telephonic meetings, as well as reimbursement for any reasonable expenses incurred attending the meetings. None of the executive officers or interested Trustees receives compensation from the Fund.

**5. INVESTMENT TRANSACTIONS**

The cost of purchases and proceeds from the sale of securities, other than short-term securities, for the six months ended March 31, 2026 amounted to $24,496,926 and $24,776,849, respectively.

Semi-Annual Report \| March 31, 2026 47

Alternative Credit Income Fund Notes to Consolidated Financial Statements

March 31, 2026 (Unaudited)

**6. CAPITAL SHARES**

The Fund, pursuant to an exemptive order granted by the SEC on July 22, 2014, offers multiple classes of shares. Class A, Class C, Class W, and Class I shares commenced operations on April 20, 2015. Class L shares commenced operations on July 28, 2017. Class C, Class W and Class I shares are offered at NAV. Class A shares are offered at NAV plus a maximum sales charge of 5.75% and may also be subject to a 0.50% early withdrawal charge, which will be deducted from repurchase proceeds, for shareholders tendering shares fewer than 365 days after the original purchase date, if (i) the original purchase was for amounts of $1 million or more and (ii) the selling broker received the reallowance of the dealer-manager fee. Class C shares are subject to a 1.00% early withdrawal charge. Class L shares are offered at NAV plus a maximum sales charge of 4.25%. Each class represents an interest in the same assets of the Fund and classes are identical except for differences in their sales charge structures, ongoing service and distribution charges and early withdrawal charges. All classes of shares have equal voting privileges except that each class has exclusive voting rights with respect to its service and/or distribution plans. The Fund's income, non-class specific expenses and realized and unrealized gains and losses are allocated proportionately daily based upon the relative net assets of each class. Class specific expenses, where applicable, include distribution fees, shareholder servicing fees, and networking fees.

**Share Repurchase Program** - As an interval fund, the Fund offers its shareholders the option of redeeming shares on a quarterly basis, at NAV, no less than 5% of the Fund's issued and outstanding shares as of the close of regular business hours on the New York Stock Exchange on the Repurchase Pricing Date. If shareholders tender for repurchase more than 5% of the outstanding shares of the Fund, the Fund may, but is not required to, repurchase up to an additional 2% of the outstanding shares of the Fund. If the Fund determines not to repurchase up to an additional 2% of the outstanding shares of the Fund, or if more than 7% of the outstanding shares of the Fund are tendered, then the Fund will repurchase shares on a pro rata basis based upon the number of shares tendered by each shareholder. There can be no assurance that the Fund will be able to repurchase all shares that each shareholder has tendered. In the event of an oversubscribed offer, shareholders may not be able to tender all shares that they wish to tender and may have to wait until the next quarterly repurchase offer to tender the remaining shares, subject to any proration. Subsequent repurchase requests will not be given priority over other shareholder requests.

For the six months ended March 31, 2026, the Fund completed four quarterly repurchase offers. In these repurchase offers, the Fund offered to repurchase up to 5% of the number of its outstanding shares (up to 7% at the discretion of the officers of the Fund) as of the Repurchase Pricing Dates. For the six months ended, each of the quarterly repurchase offers were oversubscribed such that pro-ration was required.

The result of those repurchase offers were as follows:

---

| | | |
|:---|:---|:---|
| | **Repurchase**<br>**Offer # 1** | **Repurchase**<br>**Offer # 2** |
| Commencement Date | September 12, 2025 | December 10, 2025 |
| Repurchase Request Deadline | October 10, 2025 | January 9, 2026 |
| Repurchase Pricing Date | October 10, 2025 | January 9, 2026 |
| Amount Repurchased | $9687920 | $9364851 |
| Shares Repurchased | 1059900 | 1020467 |

---

**7. BANK LINE OF CREDIT**

On October 4, 2023, the Fund entered into a multi-currency revolving bank line of credit (the "Credit Facility") with U.S. Bank National Association ("USB"). The Credit Facility has a committed, available facility size of $50 million. The Credit Facility is an evergreen facility terminable by either party upon 364 days of receipt of written notice. The Credit Facility is secured by a first-priority perfected security interest in all the Fund's assets with a facility fee of 0.25% per annum, payable quarterly, pro-rated for the life of the Credit Facility if the Credit Facility is terminated, a commitment fee of 0.35% on the unused portion of the maximum facility size and the interest on the used portion is based on the Fund's option, either daily simple US SOFR, 1 month US SOFR plus the applicable margin of 1.80% or the USB Prime rate.

During the six months ended March 31, 2026, the Fund incurred $569,815 of interest and financing expenses related to the Credit Facility. Average borrowings during the six months ended March 31, 2026, and the average interest rate for the days the line of credit was outstanding during the six months ended March 31, 2026, were $17,183,742 and 5.19%, respectively. The largest outstanding borrowing during the six months ended March 31, 2026, was $26,381,120. As of March 31, 2026, the Fund had borrowings of $23,298,738 (Proceeds $23,154,410) and an average stated interest rate of 5.27%. Included in this amount is $3,698,738 (Proceeds: $3,554,410) of borrowings denominated in euros. As collateral for the Credit Facility, the Fund grants USB a first position security interest in and lien on substantially all securities of any kind or description held by the Fund in the pledge account. The fair value of the USB Credit Facility was approximated at carrying value on the consolidated statement of assets and liabilities.

Under the 1940 Act, the Fund is not permitted to incur indebtedness, including through the issuance of debt securities, unless immediately thereafter the Fund will have an asset coverage of at least 300%. In general, the term "asset coverage" for this purpose means the ratio which the value of the total assets of the Fund, less all liabilities and indebtedness not represented by senior securities, bears to the aggregate amount of senior securities representing indebtedness of the Fund. In addition, the Fund may be limited in its ability to declare any cash distribution on its capital stock or purchase its capital stock unless, at the time of such declaration or purchase, the Fund has an asset coverage (on its indebtedness) of at least 300% after deducting the amount of such distribution or purchase price, as applicable. As of March 31, 2026, our asset coverage ratio was 860%.

48 www.altcif.com

Alternative Credit Income Fund Notes to Consolidated Financial Statements

March 31, 2026 (Unaudited)

**8. TAX BASIS INFORMATION**

For the six months ended March 31, 2026, there were no permanent book-and tax-basis differences that resulted in reclassifications to paid-in capital.

The following information is computed on a tax basis for each item as of March 31, 2026:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Gross Appreciation** | **Gross Depreciation <br> (excess of tax cost over value)** | **Net Appreciation (Depreciation) of Line of Credit and Foreign Currency** | **Net Depreciation** | **Cost of Investments for Income Tax Purposes** |
| $11709901 | $(38700014) | $– $| (26990113) | $223443812 |

---

The difference between book basis and tax basis distributable earnings and unrealized appreciation/(depreciation) is primarily attributable to the tax deferral of losses, investments in partnerships and certain other investments.

The tax characteristics of distributions paid for the years ended September 30, 2025, were as follows:

---

| | | | |
|:---|:---|:---|:---|
| <br>**Year** |<br>**Ordinary Income** | **Long-Term**<br>**Capital Gain** |<br>**Return of Capital** |
|  | $(18936804) | $– | $– |

---

Under current law, capital losses maintain their character as short-term or long-term and are carried forward to the next tax year without expiration. As of the most recent fiscal year end, the following amounts are available as carry forwards to the next tax year:

---

| | |
|:---|:---|
| **Short-Term Capital**<br>**Losses** | **Long-Term Capital**<br>**Losses** |
| $690149 | $9770629 |

---

The Fund has formed a Taxable Subsidiary, which is taxed as a corporation for income tax purposes. The Taxable Subsidiary allows the Fund to make equity investments in companies organized as pass-through entities while continuing to satisfy the requirements of a RIC under the Code. The Taxable Subsidiary is a wholly owned subsidiary and consolidated in these financial statement statements for financial reporting purposes.

Deferred U.S. federal income taxes reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting and U.S. federal income tax purposes. Components of deferred tax assets (liabilities) as of March 31, 2026, were as follows:

---

| | |
|:---|:---|
| Deferred tax assets: |  |
| &nbsp;&nbsp;&nbsp;Net operating loss carryforwards | $– |
| &nbsp;&nbsp;&nbsp;Capital loss carryforwards |  |
| &nbsp;&nbsp;&nbsp;Other deferred tax assets |  |
| &nbsp;&nbsp;&nbsp;Less valuation allowance | – |
| &nbsp;&nbsp;&nbsp;Total deferred tax assets | $– |
| Deferred tax liabilities: |  |
| &nbsp;&nbsp;&nbsp;Net Unrealized/(depreciation) on investments | 158222 |
| &nbsp;&nbsp;&nbsp;Total deferred tax liability | 158222 |
| Net deferred tax liability | $158222 |

---

Semi-Annual Report \| March 31, 2026 49

Alternative Credit Income Fund Notes to Consolidated Financial Statements

March 31, 2026 (Unaudited)

The Fund's income tax provision consists of the following as of March 31, 2026:

---

| | |
|:---|:---|
| Deferred and other: |  |
| &nbsp;&nbsp;&nbsp;Federal and state | $158222 |
|  | $158222 |

---

**9. RISK FACTORS**

In the normal course of business, the Fund faces certain risks and uncertainties. Set forth below is a summary of certain principal risks associated with the Fund. The following is not intended to be a complete list of all the potential risks associated with the Fund. For a more comprehensive list of potential risks the Fund may be subject to, please refer to the Fund's Prospectus and Statement of Additional Information.

**Credit Risk** - It is possible that the Fund's debt investments may not make scheduled interest and/or principal payments on their loans and/or debt securities, which may result in losses or reduced cash flow to the Fund, either or both of which may cause the Net Asset Value of, or the distributions by, the Fund to decrease. In addition, the credit quality of securities held by the Fund may fall if the underlying borrowers' financial condition deteriorates. This also may negatively impact the value of and the Fund's returns on its investment in such securities.

**Debt Securities and Interest Rate Risks** - Because the Fund invests in debt securities, the value of your investment in the Fund may fluctuate with changes in interest rates. Typically, a rise in market interest rates will cause a decline in the value of fixed rate or other debt instruments. If market interest rates increase, there is a significant risk that the value of the Fund's investment in fixed rate debt securities may fall, and that it may be more difficult for the Fund to raise capital. Related risks include credit risk (the debtor may default) and prepayment risk (the debtor may pay its obligation early, reducing the amount of interest payments).

**Investment Risk** - An investment in the Fund involves a considerable amount of risk. Before making an investment decision, a prospective investor should (i) consider the suitability of this investment with respect to his, her or its investment objectives and personal situation and (ii) consider factors such as his, her or its personal net worth, income, age, risk tolerance and liquidity needs. An investment in the Fund's shares is subject to investment risk, including the possible loss of the entire principal amount invested. At any point in time, an investment in the Fund's shares may be worth less than the original amount invested, even after taking into account distributions paid by the Fund and the ability of shareholders to reinvest dividends.

**Leverage Risk** - The Fund is permitted to obtain leverage using any form or combination of financial leverage instruments, including through funds borrowed from banks or other financial institutions (i.e., a credit facility), margin facilities, the issuance of preferred shares or notes and leverage attributable to reverse repurchase agreements, dollar rolls or similar transactions. The Fund may use leverage opportunistically and may choose to increase or decrease its leverage, or use different types or combinations of leveraging instruments, at any time based on the Fund's assessment of market conditions and the investment environment. The use of leverage, such as borrowing money to purchase securities, will cause the Fund (or a Public Investment Fund or Private Investment Fund in which the Fund has invested) to incur additional expenses and significantly magnify the Fund's losses in the event of underperformance of the Fund's (or Public Investment Fund's or Private Investment Fund's) underlying investments.

**Market Disruption Risk** - Unexpected local, regional or global events, such as war; acts of terrorism; financial, political or social disruptions; natural, environmental or man-made disasters; climate-change and climate-related events; the spread of infectious illnesses or other public health issues; recessions and depressions; or other events may result in market volatility, may have long-term effects on the United States and worldwide financial markets and may cause further economic uncertainties in the United States and worldwide. The Fund cannot predict the effects of such events in the future on the U.S. economy and securities markets.

**Public Investment Funds Risk** - The Fund's performance depends in part upon the performance of the Public Investment Fund managers and selected strategies, the adherence by such Public Investment Fund managers to such selected strategies, the instruments used by such Public Investment Fund managers and the Adviser's ability to select Public Investment Fund managers and strategies and effectively allocate Fund assets among them. Fund shareholders will bear two layers of fees and expenses: (1) asset-based fees, incentive allocations or fees, and expenses at the Fund level and (2) asset-based fees, incentive allocations or fees, and expenses at the Public Investment Fund level.

**Private Investment Funds Risk** - The Fund's performance depends in part upon the performance of the Private Investment Fund managers and selected strategies, the adherence by such Private Investment Fund managers to such selected strategies, the instruments used by such Private Investment Fund managers and the Adviser's ability to select Private Investment Fund managers and strategies and effectively allocate Fund assets among them. Fund shareholders will bear two layers of fees and expenses: asset-based fees, incentive fees and allocations, and expenses at the Fund level, and asset-based fees, incentive fees and allocations, and expenses at the Private Investment Fund level.

**Structured Products Risk** - The Fund may invest in CDOs and other structured products, consisting of CBOs, CLOs and credit-linked notes. Holders of structured products bear risks of the underlying investments, index or reference obligation and are subject to counterparty risk. While certain structured products enable the investor to acquire interests in a pool of securities without the brokerage and other expenses associated with directly holding the same securities, investors in structured products generally pay their share of the structured product's administrative and other expenses. Although it is difficult to predict whether the prices of indices and securities underlying structured products will rise or fall, these prices (and, therefore, the prices of structured products) will be influenced by the same types of political and economic events that affect issuers of securities and capital markets generally. If the issuer of a structured product uses shorter term financing to purchase longer term securities, the issuer may be forced to sell its securities at below market prices if it experiences difficulty in obtaining short-term financing, which may adversely affect the value of the structured products owned by the Fund. Certain structured products may be thinly traded or have a limited trading market. CLOs and credit-linked notes are typically privately offered and sold.

50 www.altcif.com

Alternative Credit Income Fund Notes to Consolidated Financial Statements

March 31, 2026 (Unaudited)

**10. AFFILIATE TRANSACTIONS**

The following investments represent affiliated investments transactions during the six months ended March 31, 2026, and the related positions as of March 31, 2026:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Security Name** | **Fair Value as of September 30, 2025** | **Purchases<sup>(a)</sup>** | **Sales<sup>(b)</sup>** | **Realized Gain (Loss)** | **Change in**<br> **Unrealized Appreciation/ (Depreciation)** | **Fair Value as of March 31, 2026** | **Share/ Balance as of March 31, 2026** | **Interest income/ Dividends/ Payment-in - kind income** |
| BCP Investment Corporation | $362987 | $– | $– | $– | $(126242) | $236745 | 31482 | $24871 |
| EBSC Holdings LLC (Riddell, Inc.), Preferred | 1316076 | 58744 |  |  | 15128 | 1389948 | 1218077 | 58539 |
| GreenPark Infrastructure, LLC Series A | 200000 |  |  |  | (139437) | 60563 | 400 |  |
| GreenPark Infrastructure, LLC Series M-1 | 878444 |  |  |  | 6502 | 884946 | 2565 |  |
| JMP Credit Advisors CLO IV, Ltd. |  | 18152 |  |  | (2191) | 15961 | 4836540 |  |
| JMP Credit Advisors CLO V, Ltd. |  | 635182 |  |  | (340424) | 294758 | 4486426 |  |
| Mount Logan Funding 2018-1 LP | 4745433 | 586220 | (483161) | (3691791) | 2927413 | 4084114 | 7798575 | 586218 |
| Opportunistic Credit Interval Fund | 4219791 |  |  |  | (10885) | 4208906 | 362837 | 181421 |
| Phoenix Aviation Capital LLC, Common Stock |  | 137241 |  |  | (19198) | 118043 | 1.26 |  |
| Phoenix Aviation Capital LLC, Preferred Stock |  | 393243 |  |  | (108) | 393135 | 462512 | 15604 |
| PMP OPCO, LLC, Delayed Draw Term Loan | (20813) | 383660 |  |  | (23972) | 338875 | 383660 | 18294 |
| PMP OPCO, LLC, First Lien Term Loan | 1067080 | 2008 | (3164) |  | (45197) | 1020727 | 1120078 | 484 |
| PMP OPCO, LLC, Revolver | (7031) |  |  |  | (5442) | (12473) |  | 72928 |
| Princeton Medspa Partners, LLC, Preferred | 202962 | 18359 |  |  | (73337) | 147984 | 310013 | 18359 |
| Princeton Medspa Partners, LLC, Put Option |  |  |  |  |  |  | 250000 |  |
| Princeton Medspa Partners, LLC, Warrants | 7029 |  |  |  | (5037) | 1992 | 0.01 |  |

---

Semi-Annual Report \| March 31, 2026 51

Alternative Credit Income Fund Notes to Consolidated Financial Statements

March 31, 2026 (Unaudited)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Security Name** | **Fair Value as of September 30, 2025** | **Purchases<sup>(a)</sup>** | **Sales<sup>(b)</sup>** | **Realized Gain (Loss)** | **Change in**<br> **Unrealized Appreciation/ (Depreciation)** | **Fair Value as of March 31, 2026** | **Share/ Balance as of March 31, 2026** | **Interest income/ Dividends/ Payment-in - kind income** |
| Riddell Inc., First Lien Term Loan | 3415544 | 6721 | (90909) |  | 7313 | 3338669 | 3338669 | 175744 |
| Series B - Great Lakes Funding II LLC | 323196 | 27428 | (4500) | – | (18927) | 327197 | 362064 | 11294 |
| **Total** | $**16710698** | $**2266958** | $**(581734)** | $**(3691791)** | $**2145959** | $**16850090** |  | $**1163756** |

---

*<sup>(a)</sup>* *Purchases include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments, accrued PIK and accretion of original issue discount. Purchases also include transfers into Affiliate classification.*

*<sup>(b)</sup>* *Sales include decreases in the cost basis of investments resulting from principal repayments and sales. Sales also include transfers out of Affiliate classification.*

** 

**11. SUBSEQUENT EVENTS**

The Fund has evaluated subsequent events through the date of issuance of the financial statements and has determined that there have been no events that have occurred that would require adjustments to our disclosures in the financial statements except as stated below.

52 www.altcif.com

Alternative Credit Income Fund Additional Information

March 31, 2026 (Unaudited)

**1. PROXY VOTING POLICIES AND VOTING RECORD**

A description of the policies and procedures that the Fund uses to vote proxies relating to portfolio securities is available without charge upon request by calling toll-free 833-404-4103, or on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended March 31, 2026, is available without charge upon request by calling toll-free 833-404-4103, or on the SEC's website at http://www.sec.gov.

**2. QUARTERLY PORTFOLIO HOLDINGS**

The Fund files a complete listing of portfolio holdings for the Fund with the SEC as of the first and third quarters of each fiscal year on Form N-PORT. The filings are available upon request by calling 833-404-4103. Furthermore, you may obtain a copy of the filing on the SEC's website at http://www.sec.gov.

**3. APPROVAL OF INVESTMENT ADVISORY AGREEMENT**

At a meeting held on November 25, 2025 the Board, including a majority of the independent Trustees, considered the renewal of the Advisory Agreement between the Fund and the Adviser. In considering the renewal of the Advisory Agreement, the Trustees received materials specifically relating to the Adviser and the Advisory Agreement.

The Trustees considered the following material factors during their deliberations: (1) the nature, extent and quality of services to be provided by the Adviser; (2) the investment performance of the Fund and the Adviser; (3) the cost of services to be provided and the profits to be realized by the Adviser and its affiliates; (4) the extent to which economies of scale will be realized as the Fund grows; and (5) whether the fee levels reflect these economies of scale for the benefit of investors. The Trustees relied upon the advice of counsel and their own business judgment in determining the before-mentioned material factors to be considered in evaluating the Advisory Agreement and the weight to be given to each factor considered. The conclusions reached by the Trustees were based on a comprehensive evaluation of all of the information provided and were not the result of any one factor. Moreover, each Trustee may have afforded different weight to the various factors in reaching his conclusions with respect to the approval of the Advisory Agreement.

**Nature, Extent and Quality of Service.** The Board reviewed the Adviser's business and current staffing and organizational structure, and discussed the nature, extent and quality of the services provided by the Adviser under the Management Agreement. The Board discussed the nature of the Adviser's operations, the quality of the Adviser's compliance infrastructure and the experience and background of all key personnel of its fund management team. The Board noted that the Adviser was an affiliate of BC Partners, and the Adviser leveraged the established fund support and administration infrastructure of the broader BC Partners/Sierra Crest organization, including its ability to leverage the collective scale of the Adviser and its affiliates when sourcing investment opportunities, receiving allocations and negotiating with third-party vendors. The Board discussed the organization's significant investment in and commitment to hiring and retaining high quality professional personnel to support the Fund, noting one change to the key personnel serving the Fund since the last renewal of the Management Agreement. The Board discussed the seasoned investment team, the role of the portfolio manager, and the oversight provided by the investment committee. The Board noted that the Adviser had reported no regulatory actions or material compliance matters that would adversely impact the Adviser's ability to serve as adviser to the Fund. The Board discussed cybersecurity initiatives undertaken by the Adviser to mitigate cybersecurity risks and noted that there had been no incidents since the last renewal of the Management Agreement. The Board discussed the key risks associated with the Fund's investment strategy and considered the policies and procedures adopted by the Adviser to mitigate those risks. The Board then discussed the Adviser's services as Valuation Designee. The Board concluded that the Adviser had sufficient quality and depth of personnel, resources, investment methods and compliance policies and procedures essential to the continued performance of its duties under the Management Agreement. Accordingly, the Board agreed that the nature, overall quality and extent of the management services provided by the Adviser to the Fund were satisfactory.

**Performance.** The Board considered the performance of the Fund. Referring to the materials provided by the Adviser, the Board noted the Fund's positive return of 3.91% for the 1-year period ended September 30, 2025, underperforming the peer funds selected by the Adviser. The Board also noted that the Fund's Class I Share underperformed the ICE BofA US High Yield Index and the Morningstar/LSTA Leveraged Loan index over the 1-year period ended September 30, 2025, but outperformed both benchmarks from Fund inception through September 30, 2025. The Board discussed the Adviser's commentary regarding the factors that contributed to Fund performance, including among other things, limited use of leverage, which reduced downside risk amid market volatility during the period, and idiosyncratic credit issues with a few select positions. The Board acknowledged a potential merger was being considered with a closed-end investment company that has elected to be regulated as a business development company under the 1940 Act, while noting that, in the absence of a potential business combination the Adviser believed that the Fund's investment strategy remains appropriate and consistent with its stated objectives. After further discussion. the Board considered the objective of the Fund, and concluded that the Fund's performance was satisfactory.

**Fees and Expenses.** The Board noted that the Adviser charged a 1.85% annual advisory fee based on the average net assets of the Fund and was entitled to a performance fee if income exceeded certain hurdles. It further noted that while the fee was higher than the average of the Adviser selected peer group, the net expense ratio of the Fund remained below the average net expense ratio of the peer group. The Board acknowledged that the Adviser had agreed to waive its fees (excluding incentive fee) to limit total annual Fund operating expenses, exclusive of certain fees, so as not to exceed 2.59%, 3.34%, 2.59%, 2.34% and 2.84% per annum of the Fund's average daily net assets attributable to Class A, Class C, Class W, Class I and Class L shares, respectively. The Board considered the potential impact of the performance incentive fee which is calculated based upon the Fund's pre-incentive fee net investment income for the immediately preceding quarter, and is subject to a hurdle rate, noting that during the last twelve months, the Adviser did not earn an incentive fee. The Board concluded that the advisory fee was not unreasonable.

Semi-Annual Report \| March 31, 2026 53

Alternative Credit Income Fund Additional Information

March 31, 2026 (Unaudited)

**Economies of Scale.** The Board considered whether the Adviser had realized material economies of scale with respect to the management of the Fund. The Board discussed the growth projections provided by the Adviser in the 15(c) response materials and discussed the Adviser's willingness to cap Fund operating expenses. The Board then discussed the benefit to shareholders of reduced overall expenses with continued Fund growth. After further discussion, the Board concluded that the absence of breakpoints at this time was acceptable, but that economies of scale would be revisited in the future should the Fund grow materially in size.

**Profitability.** The Board reviewed the summary financial information provided by the Adviser and noted that the Adviser netted a pre-tax loss related to the Fund for the twelve months ended September 30, 2025. The Board discussed the costs associated with managing the Fund and the Board concluded that excessive profitability of the Adviser was not a concern at this time.

54 www.altcif.com

Alternative Credit Income Fund Privacy Notice

March 31, 2026 (Unaudited)

● Social
 Security number●Assets●Retirement
 Assets●Transaction
 History●Checking
 Account Information ● Purchase History ● Account Balances ● Account Transactions ● Wire Transfer Instructions

---

| | | |
|:---|:---|:---|
| **REASONS WE CAN SHARE YOUR PERSONAL INFORMATION** | **Does Alternative Credit**<br> **Income Fund share?** | **Can you limit this**<br> **sharing?** |
| **For our everyday business purposes** — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | Yes | No |
| **For our marketing purposes** — to offer our products and services to you | No | We don't share |
| **For joint marketing with other financial companies** | No | We don't share |
| **For our affiliates' everyday business purposes** — information about your transactions and experiences | No | We don't share |
| **For our affiliates' everyday business purposes** — information about your creditworthiness | No | We don't share |
| **For non-affiliates to market to you** | No | We don't share |

---

---

| | |
|:---|:---|
| **QUESTIONS?** | Call 1-833-404-4103 |

---

Semi-Annual Report \| March 31, 2026 55

Alternative Credit Income Fund Privacy Notice

March 31, 2026 (Unaudited)

---

| | |
|:---|:---|
| **WHO WE ARE** | |
| **Who is providing this notice?** | Alternative Credit Income Fund |
| **WHAT WE DO** | |
| **How does Alternative Credit Income Fund protect my personal information?** | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.<br>Our service providers are held accountable for adhering to strict policies and procedures to prevent any misuse of your nonpublic personal information. |
| **How does Alternative Credit Income Fund collect my personal information?** | We collect your personal information, for example, when you<br>● Open an account<br> ● Provide account information<br> ● Give us your contact information<br> ● Make deposits or withdrawals from your account<br> ● Make a wire transfer<br> ● Tell us where to send the money<br> ● Tells us who receives the money<br> ● Show your government-issued ID<br> ● Show your driver's license<br>We also collect your personal information from other companies. |
| **Why can't I limit all sharing?** | Federal law gives you the right to limit only<br>● Sharing for affiliates' everyday business purposes – information about your creditworthiness<br> ● Affiliates from using your information to market to you<br> ● Sharing for non-affiliates to market to you<br>State laws and individual companies may give you additional rights to limit sharing. |

---

---

| | |
|:---|:---|
| **DEFINITIONS** | |
| **Affiliates** | Companies related by common ownership or control. They can be financial and nonfinancial companies.<br>● *Alternative Credit Income Fund does not share with our affiliates.* |
| **Nonaffiliates** | Companies not related by common ownership or control. They can be financial and nonfinancial companies.<br>● *Alternative Credit Income Fund does not share with non-affiliates so they can market to you.* |
| **Joint marketing** | A formal agreement between nonaffiliated financial companies that together market financial products or services to you.<br>● *Alternative Credit Income Fund doesn't jointly market.* |

---

56 www.altcif.com

![](fp0098621-1_09.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;(b) Not applicable.

**Item 2. Code of Ethics.**

Not applicable to this report.

**Item 3. Audit Committee Financial Expert.**

Not applicable to this report.

**Item 4. Principal Accountant Fees and Services.**

Not applicable to this report.

**Item 5. Audit Committee of Listed Registrants.**

Not applicable to the Registrant.

**Item 6. Investments.**

&nbsp;&nbsp;&nbsp;&nbsp;(a) The schedule of investments is included as part of the Reports
to Shareholders filed under Item 1(a) of this report.

&nbsp;&nbsp;&nbsp;&nbsp;(b) Not applicable to the Registrant.

**Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies.**

Not applicable to the Registrant.

**Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies.** 

Not applicable to the Registrant.

**Item 9. Proxy Disclosures for Open-End Management Investment Companies.**

Not applicable to the Registrant.

**Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies.**

Not applicable to the Registrant.

**Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract.**

A statement regarding the basis for approval of the Fund's investment advisory contract is included as part of the Report to Stockholders filed under Item 1 of this report.

**Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.**

Not applicable to this report.

**Item 13. Portfolio Managers of Closed-End Management Investment Companies.**

&nbsp;&nbsp;&nbsp;&nbsp;(a) Not applicable to this report.

&nbsp;&nbsp;&nbsp;&nbsp;(b) Not applicable to this report.

**Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliates Purchasers.** 

None.

**Item 15. Submission of Matters to a Vote of Security Holders.** 

None.

**Item 16. Controls and Procedures.** 

&nbsp;&nbsp;&nbsp;&nbsp;(a) Based
on an evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this
report, the Registrant's principal executive officer and principal financial officer have concluded that the disclosure controls
and procedures are reasonably designed to ensure that the information required in filings on Form N-CSR is recorded, processed,
summarized and reported by the filing date, including that information required to be disclosed is accumulated and communicated to the
Registrant's management, including the Registrant's principal executive officer and principal financial officer, as appropriate
to allow timely decisions regarding required disclosure.

&nbsp;&nbsp;&nbsp;&nbsp;(b) There
were no significant changes in the Registrant's internal control over financial reporting that occurred during the period covered
by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control
over financial reporting.

**Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.**

None.

**Item 18. Recovery of Erroneously Awarded Compensation.**

&nbsp;&nbsp;&nbsp;&nbsp;(a) Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;(b) Not applicable.

**Item 19. Exhibits.** 

(a)(1) Not applicable.

---

| | |
|:---|:---|
| (a)(2) | Not applicable. |
| [(a)(3)](fp0098621-1_ex99cert.htm) | [Certifications pursuant to Rule 30a-2(a) under the 1940 Act are attached hereto as Exhibit 99.CERT.](fp0098621-1_ex99cert.htm) |
| (a)(4) | None. |
| (a)(5) | Not applicable.  |
| [(b)](fp0098621-1_ex99906cert.htm) | [Certifications pursuant to Rule 30a-2(b) under the 1940 Act are attached hereto as Exhibit 99.906CERT.](fp0098621-1_ex99906cert.htm) |

---

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ALTERNATIVE CREDIT INCOME FUND

---

| | |
|:---|:---|
| By: | /s/ Edward Goldthorpe |
|  | Edward Goldthorpe |
|  | President and Chief Executive Officer<br> (Principal Executive Officer) |

---

Date: June 9, 2026

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

---

| | |
|:---|:---|
| By: | /s/ Edward Goldthorpe |
|  | Edward Goldthorpe |
|  | President and Chief Executive Officer<br> (Principal Executive Officer) |

---

Date: June 9, 2026

---

| | |
|:---|:---|
| By: | /s/ Brandon Satoren |
|  | Brandon Satoren |
|  | Chief Financial Officer<br> (Principal Financial Officer) |

---

Date: June 9, 2026

## Ex-99.Cert

**Exhibit 99.CERT**

CERTIFICATIONS

I, Edward Goldthorpe, President, Chief Executive Officer (Principal Executive Officer) of the Alternative Credit Income Fund (the "Registrant"), certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have
reviewed this report on Form N-CSR of the Registrant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the Registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The Registrant's
other certifying officer(s) and I have disclosed to the Registrant's auditors and the audit committee of the Registrant's
board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize, and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: June 9, 2026 | /s/ Edward Goldthorpe |
|  | Edward Goldthorpe, Chief Executive Officer<br> (Principal Executive Officer) |

---

**Exhibit 99.CERT**

I, Brandon Satoren, Chief Financial Officer (Principal Financial Officer) of the Alternative Credit Income Fund (the "Registrant"), certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have
reviewed this report on Form N-CSR of the Registrant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the Registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The Registrant's other certifying officer(s) and I have disclosed to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize, and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: June 9, 2026 | /s/ Brandon Satoren |
|  | Brandon Satoren, Chief Financial Officer<br> (Principal Financial Officer) |

---

## Exhibit 99.906

**Exhibit 99.906CERT**

**Certifications Under Section 906**

**of the Sarbanes-Oxley Act of 2002**

Edward Goldthorpe, Chief Executive Officer and Principal Executive Officer, and Brandon Satoren, Chief Financial Officer and Principal Financial Officer of the Alternative Credit Income Fund (the "Registrant"), each certify to the best of their knowledge that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Registrant's
periodic report on Form N-CSR for the period ended March 31, 2026 (the "Form N-CSR") fully complies with the requirements
of sections 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information
contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

---

| | |
|:---|:---|
| Chief Executive Officer, Principal Executive Officer | Chief Financial Officer, Principal Financial Officer |
| Alternative Credit Income Fund | Alternative Credit Income Fund |
| /s/ Edward Goldthorpe | /s/ Brandon Satoren |
| Edward Goldthorpe | Brandon Satoren |
| Date: June 9, 2026 | Date: June 9, 2026 |

---

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission (the "Commission") or its staff upon request.

This certification is being furnished to the Commission solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Form N-CSR with the Commission.