|
ASSETS
|
|
|
|
|
|
Investments, at value (cost – $1,004,624,999) (Notes B and C)
|
|
$
|
1,219,582,537
|
|
|
Cash
|
|
|
19
|
|
|
Receivables:
|
|
|
|
|
|
Investments sold
|
|
|
3,025,576
|
|
|
Dividends
|
|
|
754,132
|
|
|
Prepaid expenses
|
|
|
37,871
|
|
|
Total Assets
|
|
|
1,223,400,135
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Payables:
|
|
|
|
|
|
Investments purchased
|
|
|
517,167
|
|
|
Investment management fees (Note D)
|
|
|
994,371
|
|
|
Administration and fund accounting fees (Note D)
|
|
|
76,041
|
|
|
Directors’ fees and expenses
|
|
|
60,967
|
|
|
Other accrued expenses
|
|
|
101,156
|
|
|
Total Liabilities
|
|
|
1,749,702
|
|
|
|
|
|
|
|
|
NET ASSETS (applicable to 117,878,707 shares of common stock)
|
|
$
|
1,221,650,433
|
|
|
|
|
|
|
|
|
NET ASSET VALUE PER SHARE ($1,221,650,433 ÷ 117,878,707)
|
|
$
|
10.36
|
|
|
|
|
|
|
|
|
NET ASSETS CONSISTS OF
|
|
|
|
|
|
Common stock, $0.001 par value; 117,878,707 shares issued and outstanding (200,000,000 shares authorized)
|
|
$
|
117,879
|
|
|
Paid-in capital
|
|
|
1,007,031,242
|
|
|
Accumulated earnings
|
|
|
214,501,312
|
|
|
Net assets applicable to shares outstanding
|
|
$
|
1,221,650,433
|
|
See accompanying notes to financial statements.
|
Cornerstone Strategic Value Fund, Inc.
Statement of Operations – for the Six Months Ended June 30, 2021 (unaudited)
|
|
INVESTMENT INCOME
|
|
|
|
|
|
Income:
|
|
|
|
|
|
Dividends
|
|
$
|
7,129,039
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
Investment management fees (Note D)
|
|
|
4,306,139
|
|
|
Administration and fund accounting fees (Note D)
|
|
|
212,141
|
|
|
Directors’ fees and expenses
|
|
|
123,161
|
|
|
Printing
|
|
|
69,232
|
|
|
Custodian fees
|
|
|
45,576
|
|
|
Legal and audit fees
|
|
|
35,649
|
|
|
Transfer agent fees
|
|
|
21,919
|
|
|
Stock exchange listing fees
|
|
|
16,178
|
|
|
Insurance
|
|
|
10,263
|
|
|
Miscellaneous
|
|
|
16,821
|
|
|
Total Expenses
|
|
|
4,857,079
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
2,271,960
|
|
|
|
|
|
|
|
|
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
|
|
|
|
|
|
Net realized gain from investments
|
|
|
72,575,864
|
|
|
Long-term capital gain distributions from regulated investment companies
|
|
|
59,959
|
|
|
Net change in unrealized appreciation/(depreciation) in value of investments
|
|
|
30,125,717
|
|
|
Net realized and unrealized gain on investments
|
|
|
102,761,540
|
|
|
|
|
|
|
|
|
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
|
$
|
105,033,500
|
|
See accompanying notes to financial statements.
|
Cornerstone Strategic Value Fund, Inc.
Statements of Changes in Net Assets
|
|
|
|
For the Six
Months Ended
June 30, 2021
(Unaudited)
|
|
|
|
For the
Year Ended
December 31,
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCREASE/(DECREASE) IN NET ASSETS
|
|
|
|
|
|
|
|
|
|
|
Operations:
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
2,271,960
|
|
|
|
$
|
3,454,805
|
|
|
Net realized gain from investments
|
|
|
72,635,823
|
|
|
|
|
58,789,922
|
|
|
Net change in unrealized appreciation/(depreciation) in value of investments
|
|
|
30,125,717
|
|
|
|
|
41,098,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in net assets resulting from operations
|
|
|
105,033,500
|
|
|
|
|
103,343,017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions to stockholders (Note B):
|
|
|
|
|
|
|
|
|
|
|
From earnings
|
|
|
(74,193,353
|
)
|
|
|
|
(62,663,445
|
)
|
|
Return-of-capital
|
|
|
(7,024,685
|
)
|
|
|
|
(106,452,386
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total distributions to stockholders
|
|
|
(81,218,038
|
)
|
|
|
|
(169,115,831
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock transactions:
|
|
|
|
|
|
|
|
|
|
|
Proceeds from rights offering of 39,026,477 and 0 shares of newly issued common stock, respectively
|
|
|
415,241,715
|
|
|
|
|
—
|
|
|
Offering expenses associated with rights offering
|
|
|
(297,236
|
)
|
|
|
|
(3,877
|
)
|
|
Proceeds from 1,376,559 and 2,732,291 shares newly issued in reinvestment of dividends and distributions, respectively
|
|
|
13,859,442
|
|
|
|
|
26,246,791
|
|
|
Payments for 0 and 299,198 shares repurchased, respectively
|
|
|
—
|
|
|
|
|
(2,037,253
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in net assets from common stock transactions
|
|
|
428,803,921
|
|
|
|
|
24,205,661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total increase/(decrease) in net assets
|
|
|
452,619,383
|
|
|
|
|
(41,567,153
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
NET ASSETS
|
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
769,031,050
|
|
|
|
|
810,598,203
|
|
|
End of period
|
|
$
|
1,221,650,433
|
|
|
|
$
|
769,031,050
|
|
See accompanying notes to financial statements.
|
Cornerstone Strategic Value Fund, Inc.
Financial Highlights
|
|
Contained below is per share operating performance data for a share of common stock outstanding, total investment return, ratios to average net assets and other supplemental data for each period indicated. This information has been derived from information provided in the financial statements and market price data for the Fund’s shares.
|
|
|
|
For the Six
Months
Ended
June 30,
|
|
|
For the Years Ended December 31,
|
|
|
|
|
2021
(Unaudited)
|
|
|
2020
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
PER SHARE OPERATING PERFORMANCE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
9.93
|
|
|
$
|
10.80
|
|
|
$
|
10.50
|
|
|
$
|
13.55
|
|
|
$
|
13.24
|
|
|
$
|
15.11
|
|
|
Net investment income #
|
|
|
0.02
|
|
|
|
0.05
|
|
|
|
0.10
|
|
|
|
0.11
|
|
|
|
0.15
|
|
|
|
0.23
|
|
|
Net realized and unrealized gain/(loss) on investments
|
|
|
1.02
|
|
|
|
1.31
|
|
|
|
2.66
|
|
|
|
(0.85
|
)
|
|
|
2.65
|
|
|
|
1.01
|
|
|
Net increase/(decrease) in net assets resulting from operations
|
|
|
1.04
|
|
|
|
1.36
|
|
|
|
2.76
|
|
|
|
(0.74
|
)
|
|
|
2.80
|
|
|
|
1.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends and distributions to stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
(0.03
|
)
|
|
|
(0.05
|
)
|
|
|
(0.10
|
)
|
|
|
(0.11
|
)
|
|
|
(0.13
|
)
|
|
|
(0.22
|
)
|
|
Net realized capital gains
|
|
|
(0.85
|
)
|
|
|
(0.78
|
)
|
|
|
(0.52
|
)
|
|
|
(0.26
|
)
|
|
|
(1.29
|
)
|
|
|
(0.71
|
)
|
|
Return-of-capital
|
|
|
(0.08
|
)
|
|
|
(1.40
|
)
|
|
|
(1.84
|
)
|
|
|
(2.47
|
)
|
|
|
(1.37
|
)
|
|
|
(2.47
|
)
|
|
Total dividends and distributions to stockholders
|
|
|
(0.96
|
)
|
|
|
(2.23
|
)
|
|
|
(2.46
|
)
|
|
|
(2.84
|
)
|
|
|
(2.79
|
)
|
|
|
(3.40
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anti-dilutive effect due to shares issued:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rights offering
|
|
|
0.35
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.53
|
|
|
|
0.30
|
|
|
|
0.29
|
|
|
Reinvestment of dividends and distributions
|
|
|
0.00
|
+
|
|
|
0.00
|
+
|
|
|
0.00
|
+
|
|
|
0.00
|
+
|
|
|
0.00
|
+
|
|
|
0.00
|
+
|
|
Common stock repurchases
|
|
|
—
|
|
|
|
0.00
|
+
|
|
|
—
|
|
|
|
0.00
|
+
|
|
|
—
|
|
|
|
—
|
|
|
Total common stock transactions
|
|
|
0.35
|
|
|
|
0.00
|
+
|
|
|
0.00
|
+
|
|
|
0.53
|
|
|
|
0.30
|
|
|
|
0.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of period
|
|
$
|
10.36
|
|
|
$
|
9.93
|
|
|
$
|
10.80
|
|
|
$
|
10.50
|
|
|
$
|
13.55
|
|
|
$
|
13.24
|
|
|
Market value, end of period
|
|
$
|
11.61
|
|
|
$
|
11.73
|
|
|
$
|
11.21
|
|
|
$
|
11.18
|
|
|
$
|
15.47
|
|
|
$
|
15.17
|
|
|
Total investment return (a)
|
|
|
8.85
|
%(b)
|
|
|
31.58
|
%
|
|
|
25.42
|
%
|
|
|
(9.44
|
)%
|
|
|
25.48
|
%
|
|
|
23.73
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RATIOS/SUPPLEMENTAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000 omitted)
|
|
$
|
1,221,650
|
|
|
$
|
769,031
|
|
|
$
|
810,598
|
|
|
$
|
762,236
|
|
|
$
|
596,439
|
|
|
$
|
380,024
|
|
|
Ratio of net expenses to average net assets (c)
|
|
|
1.13
|
%(d)
|
|
|
1.14
|
%
|
|
|
1.13
|
%(e)
|
|
|
1.14
|
%
|
|
|
1.20
|
%
|
|
|
1.25
|
%
|
|
Ratio of net investment income to average net assets (f)
|
|
|
0.53
|
%(d)
|
|
|
0.47
|
%
|
|
|
0.95
|
%(e)
|
|
|
0.84
|
%
|
|
|
1.13
|
%
|
|
|
1.66
|
%
|
|
Portfolio turnover rate
|
|
|
59
|
%(b)
|
|
|
95
|
%
|
|
|
45
|
%
|
|
|
58
|
%
|
|
|
81
|
%
|
|
|
88
|
%
|
|
|
#
|
Based on average shares outstanding.
|
|
|
+
|
Amount rounds to less than $0.01 per share.
|
|
|
(a)
|
Total investment return at market value is based on the changes in market price of a share during the period and assumes reinvestment of dividends and distributions, if any, at actual prices pursuant to the Fund’s dividend reinvestment plan. Total investment return does not reflect brokerage commissions.
|
|
|
(c)
|
Expenses do not include expenses of investment companies in which the Fund invests.
|
|
|
(e)
|
Includes the reimbursement of proxy solicitation costs by the investment manager. If these costs had not been reimbursed by the investment manager, the ratio of expenses to average net assets would have been 1.14% for the year ended December 31, 2019.
|
|
|
(f)
|
Recognition of net investment income by the Fund may be affected by the timing of the declaration of dividends, if any, by investment companies in which the Fund invests.
|
See accompanying notes to financial statements.
|
Cornerstone Strategic Value Fund, Inc.
Notes to Financial Statements (unaudited)
|
NOTE A. ORGANIZATION
Cornerstone Strategic Value Fund, Inc. (the “Fund” or “CLM”) was incorporated in Maryland on May 1, 1987 and commenced investment operations on June 30, 1987. Its investment objective is to seek long-term capital appreciation through investment primarily in equity securities of U.S. and non-U.S. companies. The Fund is registered under the Investment Company Act of 1940, as amended, as a closed-end, diversified management investment company. As an investment company, the Fund follows the accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, “Financial Services–Investment Companies.”
NOTE B. SIGNIFICANT ACCOUNTING POLICIES
Management Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that may affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
New Regulation: On December 3, 2020, the U.S. Securities and Exchange Commission (the “SEC”) adopted new rule 2a-5 under the Investment Company Act of 1940, as amended (the “1940 Act”), which establishes a framework for fund valuation practices and clarifies how the board of directors of a fund can satisfy its valuation obligations under the 1940 Act. The SEC provided an eighteen-month transition period beginning on the effective date of rule 2a-5 (March 8, 2021) until its compliance date (September 8, 2022). Management is currently evaluating the impact to the financial statement disclosures, if any.
Subsequent Events: The Fund has evaluated the need for additional disclosures and/or adjustments resulting from subsequent events through the date its financial statements were issued. Based on this evaluation, no additional disclosures or adjustments were required to such financial statements.
Portfolio Valuation: Investments are stated at value in the accompanying financial statements. Readily marketable portfolio securities listed on the New York Stock Exchange (“NYSE”) are valued, except as indicated below, at the last sale price reflected on the consolidated tape at the close of the NYSE on the business day as of which such value is being determined. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices on such day. If no bid or asked prices are quoted on such day or if market prices may be unreliable because of events occurring after the close of trading, then the security is valued by such method as the Board of Directors shall determine in good faith to reflect its fair market value. Readily marketable securities not listed on the NYSE but listed on other domestic or foreign securities exchanges are valued in a like manner. Portfolio securities traded on more than one securities exchange are valued at the last sale price on the business day as of which such value is being determined as reflected on the consolidated tape at the close of the exchange representing the principal market for such securities. Securities trading on the Nasdaq Stock Market, Inc. (“NASDAQ”) are valued at the NASDAQ Official Closing Price.
Readily marketable securities traded in the over-the counter market, including listed securities whose primary market is believed by Cornerstone Advisors, LLC (the “Investment Manager” or “Cornerstone”) to be over-the-counter, are valued at the mean of the current bid and asked prices as reported by the NASDAQ or, in the case of securities not reported by the NASDAQ or a comparable source, as the Board of Directors deem appropriate to reflect their fair market value. Where securities are traded on more than one exchange and also over-the-counter, the securities will generally be valued using the quotations the Board of Directors believes reflect
|
Cornerstone Strategic Value Fund, Inc.
Notes to Financial Statements (unaudited) (continued)
|
most closely the value of such securities. At June 30, 2021, the Fund held no securities valued in good faith by the Board of Directors.
The net asset value per share of the Fund is calculated weekly and on the last business day of the month with the exception of those days on which the NYSE is closed.
The Fund is exposed to financial market risks, including the valuations of its investment portfolio. During the six months ended June 30, 2021, the Fund did not invest in derivative instruments or engage in hedging activities.
Investment Transactions and Investment Income: Investment transactions are accounted for on the trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes. Interest income is recorded on an accrual basis; dividend income is recorded on the ex-dividend date.
Taxes: No provision is made for U.S. federal income or excise taxes as it is the Fund’s intention to continue to qualify as a regulated investment company and to make the requisite distributions to its stockholders which will be sufficient to relieve it from all or substantially all U.S. federal income and excise taxes.
The Accounting for Uncertainty in Income Taxes Topic of the FASB Accounting Standards Codification defines the threshold for recognizing the benefits of tax-return positions in the financial statements as “more-likely-than-not” to be sustained by the taxing authority and requires measurement of a tax position meeting the more-likely-than-not criterion, based on the largest benefit that is more than 50 percent likely to be realized. The Fund’s policy is to classify interest and penalties associated with underpayment of federal and state income taxes, if any, as income tax expense on its Statement of Operations. As of June 30, 2021, the Fund does not have any interest or penalties associated with the under-payment of any income taxes. Management reviewed any uncertain tax positions for open tax years 2018 through 2020, and for the six months ended June 30, 2021. There was no material impact to the financial statements.
Distributions to Stockholders: Effective June 25, 2002, the Fund initiated a fixed, monthly distribution to stockholders. On November 29, 2006, this distribution policy was updated to provide for the annual resetting of the monthly distribution amount per share based on the Fund’s net asset value on the last business day in each October. The terms of the distribution policy will be reviewed and approved at least annually by the Fund’s Board of Directors and can be modified at their discretion. To the extent that these distributions exceed the current earnings of the Fund, the balance will be generated from sales of portfolio securities held by the Fund, which will either be short-term or long- term capital gains or a tax-free return-of-capital. To the extent these distributions are not represented by net investment income and capital gains, they will not represent yield or investment return on the Fund’s investment portfolio. The Fund plans to maintain this distribution policy even if regulatory requirements would make part of a return-of-capital, necessary to maintain the distribution, taxable to stockholders and to disclose that portion of the distribution that is classified as ordinary income. Although it has no current intention to do so, the Board may terminate this distribution policy at any time and such termination may have an adverse effect on the market price for the Fund’s common shares. The Fund determines annually whether to distribute any net realized long-term capital gains in excess of net realized short-term capital losses, including capital loss carryovers, if any. To the extent that the Fund’s taxable income in any calendar year exceeds the aggregate amount distributed pursuant to this distribution policy, an additional distribution may be made to avoid the payment of a 4% U.S. federal excise tax, and to the extent that the aggregate amount distributed in any calendar year exceeds the Fund’s taxable income, the amount of that excess may constitute a return-of-capital for tax purposes. A return-of-capital distribution reduces the cost
|
Cornerstone Strategic Value Fund, Inc.
Notes to Financial Statements (unaudited) (continued)
|
basis of an investor’s shares in the Fund. Dividends and distributions to stockholders are recorded by the Fund on the ex-dividend date.
NOTE C. FAIR VALUE
As required by the Fair Value Measurement and Disclosures Topic of the FASB Accounting Standards Codification, the Fund has performed an analysis of all assets and liabilities measured at fair value to determine the significance and character of all inputs to their fair value determination.
The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into the following three broad categories:
|
|
●
|
Level 1 – quoted unadjusted prices for identical instruments in active markets to which the Fund has access at the date of measurement.
|
|
|
●
|
Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.
|
|
|
●
|
Level 3 – model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect the Fund’s own assumptions that market participants would use to price the asset or liability based on the best available information.
|
The following is a summary of the Fund’s investments and the inputs used as of June 30, 2021 in valuing the investments carried at value:
|
Valuation Inputs
|
|
Investments
in Securities
|
|
|
Other
Financial
Instruments*
|
|
|
Level 1 – Quoted Prices
|
|
|
|
|
|
|
|
|
|
Equity Securities
|
|
$
|
1,213,248,421
|
|
|
$
|
—
|
|
|
Short-Term Investment
|
|
|
6,334,116
|
|
|
|
—
|
|
|
Level 2 – Other Significant Observable Inputs
|
|
|
—
|
|
|
|
—
|
|
|
Level 3 – Significant Unobservable Inputs
|
|
|
—
|
|
|
|
—
|
|
|
Total
|
|
$
|
1,219,582,537
|
|
|
$
|
—
|
|
|
*
|
Other financial instruments include futures, forwards and swap contracts, if any.
|
The breakdown of the Fund’s investments into major categories is disclosed in its Schedule of Investments.
The Fund did not have any assets or liabilities that were measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at June 30, 2021.
NOTE D. AGREEMENTS WITH AFFILIATES
At June 30, 2021, certain officers of the Fund are also officers of Cornerstone or Ultimus Fund Solutions, LLC (“Ultimus”). Such officers are paid no fees by the Fund for serving as officers of the Fund.
Investment Management Agreement
Cornerstone serves as the Fund’s Investment Manager with respect to all investments. As compensation for its investment management services, Cornerstone receives from the Fund an annual fee, calculated weekly and paid monthly, equal to 1.00% of the Fund’s average weekly net assets. For the six months ended June 30, 2021, Cornerstone earned $4,306,139 for investment management services.
|
Cornerstone Strategic Value Fund, Inc.
Notes to Financial Statements (unaudited) (concluded)
|
Fund Accounting and Administration Agreement
Under the fund accounting and administration agreement with the Fund, Ultimus is responsible for generally managing the administrative affairs of the Fund, including supervising the preparation of reports to stockholders, reports to and filings with the SEC and materials for meetings of the Board. Ultimus is also responsible for calculating the net asset value per share and maintaining the financial books and records of the Fund. Ultimus is entitled to receive a fee in accordance with the agreements. For the six months ended June 30, 2021, Ultimus earned $212,141 as fund accounting agent and administrator.
NOTE E. INVESTMENT IN SECURITIES
For the six months ended June 30, 2021, purchases and sales of securities, other than short-term investments, were $876,255,393 and $519,204,997, respectively.
NOTE F. SHARES OF COMMON STOCK
The Fund has 200,000,000 shares of common stock authorized and 117,878,707 shares issued and outstanding at June 30, 2021. Transactions in common stock for the six months ended June 30, 2021 were as follows:
|
Shares at beginning of period
|
|
|
77,475,671
|
|
|
Shares newly issued from rights offering
|
|
|
39,026,477
|
|
|
Shares issued in reinvestment of dividends and distributions
|
|
|
1,376,559
|
|
|
Shares at end of period
|
|
|
117,878,707
|
|
NOTE G. FEDERAL INCOME TAXES
Income and capital gains distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. These differences are primarily due to differing treatments of losses deferred due to wash sales.
The tax character of dividends and distributions paid to stockholders during the periods ended June 30, 2021 and December 31, 2020 was as follows:
|
|
|
June 30,
2021
|
|
|
December 31,
2020
|
|
|
Ordinary Income
|
|
$
|
2,271,960
|
|
|
$
|
6,812,616
|
|
|
Long-Term Capital Gains
|
|
|
71,921,393
|
|
|
|
55,850,829
|
|
|
Return-of-Capital
|
|
|
7,024,685
|
|
|
|
106,452,386
|
|
|
Total Distributions
|
|
$
|
81,218,038
|
|
|
$
|
169,115,831
|
|
At December 31, 2020, the components of accumulated earnings on a tax basis for the Fund were as follows:
|
Net unrealized appreciation
|
|
$
|
183,661,165
|
|
|
Total accumulated earnings
|
|
$
|
183,661,165
|
|
The following information is computed on a tax basis for each item as of June 30, 2021:
|
Cost of portfolio investments
|
|
$
|
1,005,081,225
|
|
|
Gross unrealized appreciation
|
|
$
|
225,132,536
|
|
|
Gross unrealized depreciation
|
|
|
(10,631,224
|
)
|
|
Net unrealized appreciation
|
|
$
|
214,501,312
|
|
Results of Annual Meeting of Stockholders (unaudited)
On April 6, 2021, the Annual Meeting of Stockholders of the Fund was held and the following matter was voted upon based on 77,672,435 shares of common stock outstanding on the record date of February 16, 2021:
|
|
(1)
|
To approve the election of one Class III Director to hold office until the year 2022 Annual Meeting of Stockholders and three Class II Directors to hold office until the year 2024 Annual Meeting of Stockholders.
|
|
Name of
Directors
|
|
For
|
|
Witheld
|
|
Frank J. Maresca (Class III)
|
|
39,536,885
|
|
2,703,671
|
|
Robert E. Dean (Class II)
|
|
41,133,992
|
|
1,106,564
|
|
Matthew W. Morris (Class II)
|
|
40,955,144
|
|
1,285,412
|
|
Scott B. Rogers (Class II)
|
|
40,923,865
|
|
1,316,691
|
Description of Dividend Reinvestment Plan (unaudited)
Cornerstone Strategic Value Fund, Inc. (the “Fund”) operates a Dividend Reinvestment Plan (the “Plan”), administered by American Stock Transfer & Trust Company, LLC (the “Agent”), pursuant to which the Fund’s income dividends or capital gains or other distributions (each, a “Distribution” and collectively, “Distributions”), net of any applicable U.S. withholding tax, are reinvested in shares of the Fund.
Stockholders automatically participate in the Fund’s Plan, unless and until an election is made to withdraw from the Plan on behalf of such participating stockholder. Stockholders who do not wish to have Distributions automatically reinvested should so notify the Agent at 6201 15th Avenue, Brooklyn, NY 11219. Under the Plan, the Fund’s Distributions to stockholders are reinvested in full and fractional shares as described below.
When the Fund declares a Distribution the Agent, on the stockholder’s behalf, will (i) receive additional authorized shares from the Fund either newly issued or repurchased from stockholders by the Fund and held as treasury stock (“Newly Issued Shares”) or (ii) purchase outstanding shares on the open market, on the NYSE American or elsewhere, with cash allocated to it by the Fund (“Open Market Purchases”).
The method for determining the number of Newly Issued Shares received when Distributions are reinvested will be determined by dividing the amount of the Distribution either by the Fund’s last reported net asset value per share or by a price equal to the average closing price of the Fund over the five trading days preceding the payment date of the Distribution, whichever is lower. However, if the last reported net asset value of the Fund’s shares is higher than the average closing price of the Fund over the five trading days preceding the payment date of the Distribution ice (i.e., the Fund is selling at a discount), shares may be acquired by the Agent in Open Market Purchases and allocated to the reinvesting stockholders based on the average cost of such Open Market Purchases. Upon notice from the Fund, the Agent will receive the distribution in cash and will purchase shares of common stock in the open market, on the NYSE American or elsewhere, for the participants’ accounts, except that the Agent will endeavor to terminate purchases in the open market and cause the Fund to issue the remaining shares if, following the commencement of the purchases, the market value of the shares, including brokerage commissions, exceeds the net asset value at the time of valuation. These remaining shares will be issued by the Fund at a price equal to the net asset value at the time of valuation.
In a case where the Agent has terminated open market purchases and caused the issuance of remaining shares by the Fund, the number of shares received by the participant in respect of the cash dividend or distribution will be based on the weighted average of prices paid for shares purchased in the open market, including brokerage commissions, and the price at which the Fund issues the remaining shares. To the extent that the Agent is unable to terminate purchases in the open market before the Agent has completed its purchases, or remaining shares cannot be issued by the Fund because the Fund declared a dividend or distribution payable only in cash, and the market price exceeds the net asset value of the shares, the average share purchase price paid by the Agent may exceed the net asset value of the shares, resulting in the acquisition of fewer shares than if the dividend or distribution had been paid in shares issued by the Fund.
Whenever the Fund declares a Distribution and the last reported net asset value of the Fund’s shares is higher than its market price, the Agent will apply the amount of such Distribution payable to Plan participants of the Fund in Fund shares (less such Plan participant’s pro rata share of brokerage commissions incurred with respect to Open Market Purchases in connection with the reinvestment of such Distribution) to the purchase on the open market of Fund shares for such Plan participant’s account. Such purchases will be made on or after the payable date for such Distribution, and in no event more than 30 days after such date except where
Description of Dividend Reinvestment Plan (unaudited) (concluded)
temporary curtailment or suspension of purchase is necessary to comply with applicable provisions of federal securities laws. The Agent may aggregate a Plan participant’s purchases with the purchases of other Plan participants, and the average price (including brokerage commissions) of all shares purchased by the Agent shall be the price per share allocable to each Plan participant.
Registered stockholders who do not wish to have their Distributions automatically reinvested should so notify the Fund in writing. If a stockholder has not elected to receive cash Distributions and the Agent does not receive notice of an election to receive cash Distributions prior to the record date of any Distribution, the stockholder will automatically receive such Distributions in additional shares.
Participants in the Plan may withdraw from the Plan by providing written notice to the Agent at least 30 days prior to the applicable Distribution payment date. The Agent will maintain all stockholder accounts in the Plan and furnish written confirmations of all transactions in the accounts, including information needed by stockholders for personal and tax records The Agent will hold shares in the account of the Plan participant in non-certificated form in the name of the participant, and each stockholder’s proxy will include those shares purchased pursuant to the Plan. The Agent will distribute all proxy solicitation materials to participating stockholders.
In the case of stockholders, such as banks, brokers or nominees, that hold shares for others who are beneficial owners participating in the Plan, the Agent will administer the Plan on the basis of the number of shares certified from time to time by the record stockholder as representing the total amount of shares registered in the stockholder’s name and held for the account of beneficial owners participating in the Plan.
Neither the Agent nor the Fund shall have any responsibility or liability beyond the exercise of ordinary care for any action taken or omitted pursuant to the Plan, nor shall they have any duties, responsibilities or liabilities except such as expressly set forth herein. Neither shall they be liable hereunder for any act done in good faith or for any good faith omissions to act, including, without limitation, failure to terminate a participants account prior to receipt of written notice of his or her death or with respect to prices at which shares are purchased or sold for the participants account and the terms on which such purchases and sales are made, subject to applicable provisions of the federal securities laws.
The automatic reinvestment of Distributions will not relieve participants of any federal, state or local income tax that may be payable (or required to be withheld) on such Distributions. The Fund reserves the right to amend or terminate the Plan. There is no direct service charge to participants with regard to purchases in the Plan.
Participants may at any time sell some or all their shares though the Agent. Shares may be sold via the internet at www.astfinancial.com or through the toll free number. Participants can also use the tear off portion attached to the bottom of their statement and mail the request to American Stock Transfer and Trust Company LLC, 6201 15th Avenue, Brooklyn, NY 11219. There is a commission of $0.05 per share.
All correspondence concerning the Plan should be directed to the Agent 6201 15th Avenue, Brooklyn, NY 11219. Certain transactions can be performed online at www.astfinancial.com or by calling the toll-free number (866) 668-6558.
Proxy Voting and Portfolio Holdings Information (unaudited)
The policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities are available:
|
|
●
|
without charge, upon request, by calling toll-free (866) 668-6558; and
|
|
|
●
|
on the website of the SEC, www.sec.gov.
|
Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling toll-free (866) 668-6558, and on the SEC’s website at www.sec.gov or on the Fund’s website at www.cornerstonestrategicvaluefund.com (See Form N-PX).
The Fund files a complete schedule of its portfolio holdings for the first and third quarters of its fiscal year with the SEC as an exhibit to Form N-PORT. The Fund’s Form N-PORT is available on the SEC’s website at www.sec.gov.
Summary of General Information (unaudited)
Cornerstone Strategic Value Fund, Inc. is a closed-end, diversified investment company whose shares trade on the NYSE American. Its investment objective is to seek long-term capital appreciation through investment in equity securities of U.S. and non-U.S. companies. The Fund is managed by Cornerstone Advisors, LLC.
Stockholder Information (unaudited)
The Fund is listed on the NYSE American (symbol “CLM”). The previous week’s net asset value per share, market price, and related premium or discount are available on the Fund’s website at www.cornerstonestrategicvaluefund.com.
|
Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that Cornerstone Strategic Value Fund, Inc. may from time to time purchase shares of its common stock in the open market.
|
|
This report, including the financial statements herein, is sent to the stockholders of the Fund for their information. The financial information included herein is taken from the records of the Fund without examination by the independent registered public accountants who do not express an opinion thereon. It is not a prospectus, circular or representation intended for use in the purchase or sale of shares of the Fund or of any securities mentioned in the report.
|
Cornerstone Strategic Value Fund, Inc.
