-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VOS5E081RpS0GC+h1rpA1X9BAb/8J2HF/S36YHI9O8hY64eZEmEgB5aFZcc5lhkO m2YJo4hKPhG0BjsLjKo0dg== 0000909012-09-001250.txt : 20090904 0000909012-09-001250.hdr.sgml : 20090904 20090904122715 ACCESSION NUMBER: 0000909012-09-001250 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20090630 FILED AS OF DATE: 20090904 DATE AS OF CHANGE: 20090904 EFFECTIVENESS DATE: 20090904 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORNERSTONE STRATEGIC VALUE FUND INC CENTRAL INDEX KEY: 0000814083 IRS NUMBER: 133407699 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-05150 FILM NUMBER: 091055436 BUSINESS ADDRESS: STREET 1: ULTIMUS FUND SOLUTIONS, LLC STREET 2: 305 MADISON AVE. - SUITE 740 CITY: NEW YORK STATE: NY ZIP: 10165 BUSINESS PHONE: 2126526155 MAIL ADDRESS: STREET 1: ULTIMUS FUND SOLUTIONS, LLC STREET 2: 305 MADISON AVE. - SUITE 740 CITY: NEW YORK STATE: NY ZIP: 10165 FORMER COMPANY: FORMER CONFORMED NAME: CORNERSTONE STRATEGIC VALUE FUND INC/ NEW DATE OF NAME CHANGE: 20010503 FORMER COMPANY: FORMER CONFORMED NAME: CLEMENTE STRATEGIC VALUE FUND INC DATE OF NAME CHANGE: 19990622 FORMER COMPANY: FORMER CONFORMED NAME: CLEMENTE GLOBAL GROWTH FUND INC DATE OF NAME CHANGE: 19920703 N-CSRS 1 t305606.txt CLM OMB APPROVAL ------------------------ OMB Number: 3235-0570 Expires: August 31, 2011 Estimated average burden hours per response: 18.9 ------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-05150 --------- CORNERSTONE STRATEGIC VALUE FUND, INC. (Exact name of registrant as specified in charter) 305 MADISON AVENUE, SUITE 740 NEW YORK, NEW YORK 10165 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Frank J. Maresca ULTIMUS FUND SOLUTIONS, LLC 305 MADISON AVENUE, SUITE 740 NEW YORK, NY 10165 - -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (212) 652-6155 -------------- Date of fiscal year end: DECEMBER 31, 2009 ---------------------------- Date of reporting period: JUNE 30, 2009 ---------------------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. ================================================================================ DIRECTORS AND CORPORATE OFFICERS Ralph W. Bradshaw Chairman of the Board of Directors and President Thomas H. Lenagh Director Edwin Meese III Director Scott B. Rogers Director Andrew A. Strauss Director Glenn W. Wilcox, Sr. Director Gary A. Bentz Chief Compliance Officer, Secretary, and Assistant Treasurer William A. Clark Vice President Frank J. Maresca Treasurer STOCK TRANSFER AGENT INVESTMENT MANAGER AND REGISTRAR Cornerstone Advisors, Inc. American Stock Transfer & One West Pack Square Trust Co. Suite 1650 59 Maiden Lane Asheville, NC 28801 New York, NY 10038 INDEPENDENT REGISTERED ADMINISTRATOR PUBLIC ACCOUNTING FIRM Ultimus Fund Solutions, LLC Tait, Weller & Baker LLP 305 Madison Avenue 1818 Market Street New York, NY 10165 Suite 2400 Philadelphia, PA 19103 CUSTODIAN LEGAL COUNSEL JPMorgan Chase Bank, N.A. Blank Rome LLP 14201 North Dallas Pkwy. 405 Lexington Avenue Second Floor New York, NY 10174 Dallas, TX 75254 EXECUTIVE OFFICES 305 Madison Avenue New York, NY 10165 For shareholder inquiries, registered shareholders should call (800) 937-5449. For general inquiries, please call (513) 326-3597. CLM LISTED ALTERNEXT. ================================================================================ CORNERSTONE STRATEGIC VALUE FUND, INC. SEMI-ANNUAL REPORT JUNE 30, 2009 ================================================================================ CONTENTS Portfolio Summary 1 Summary Schedule of Investments 2 Statement of Assets and Liabilities 4 Statement of Operations 5 Statement of Changes in Net Assets 6 Financial Highlights 7 Notes to Financial Statements 8 Results of Annual Meeting of Stockholders 14 Description of Dividend Reinvestment Plan 15 Investment Management Agreement Approval Disclosure 17 Proxy Voting and Portfolio Holdings Information 18 Privacy Policy Notice 18 Summary of General Information 19 Shareholder Information 19 ================================================================================ - -------------------------------------------------------------------------------- CORNERSTONE STRATEGIC VALUE FUND, INC. PORTFOLIO SUMMARY - AS OF JUNE 30, 2009 (UNAUDITED) - -------------------------------------------------------------------------------- SECTOR ALLOCATION Percent of Sector Net Assets - -------------------------------------------------------------------------------- Information Technology 17.3 - -------------------------------------------------------------------------------- Healthcare 12.9 - -------------------------------------------------------------------------------- Energy 11.7 - -------------------------------------------------------------------------------- Consumer Staples 11.1 - -------------------------------------------------------------------------------- Financials 10.5 - -------------------------------------------------------------------------------- Closed-End Funds 9.6 - -------------------------------------------------------------------------------- Industrials 8.8 - -------------------------------------------------------------------------------- Consumer Discretionary 8.0 - -------------------------------------------------------------------------------- Utilities 3.6 - -------------------------------------------------------------------------------- Telecommunication Services 3.2 - -------------------------------------------------------------------------------- Materials 2.6 - -------------------------------------------------------------------------------- Other 0.7 - -------------------------------------------------------------------------------- TOP TEN HOLDINGS, BY ISSUER Percent of Holding Sector Net Assets - -------------------------------------------------------------------------------- 1. Exxon Mobil Corporation Energy 4.7 - -------------------------------------------------------------------------------- 2. Liberty All-Star Equity Fund Closed-End Funds 3.1 - -------------------------------------------------------------------------------- 3. JPMorgan Chase & Company Financial 2.6 - -------------------------------------------------------------------------------- 4. Microsoft Corporation Information Technology 2.5 - -------------------------------------------------------------------------------- 5. Zweig Fund, Inc. (The) Closed-End Funds 2.4 - -------------------------------------------------------------------------------- 6. Apple, Inc. Information Technology 2.3 - -------------------------------------------------------------------------------- 7. Johnson & Johnson Healthcare 2.2 - -------------------------------------------------------------------------------- 8. Procter & Gamble Company (The) Consumer Staples 2.1 - -------------------------------------------------------------------------------- 9. Chevron Corporation Energy 2.1 - -------------------------------------------------------------------------------- 10. Intel Corporation Information Technology 1.9 - -------------------------------------------------------------------------------- ================================================================================ 1
- -------------------------------------------------------------------------------- CORNERSTONE STRATEGIC VALUE FUND, INC. SUMMARY SCHEDULE OF INVESTMENTS - JUNE 30, 2009 (UNAUDITED) - -------------------------------------------------------------------------------- No. of Description Shares Value - -------------------------------------------------------------------------------- EQUITY SECURITIES - 99.44% CLOSED-END FUNDS - 9.55% Adams Express Company (The) (a) 40,100 $ 336,840 Advent/Claymore Enhanced Growth & Income Fund 61,070 553,905 Liberty All-Star Equity Fund 475,030 1,638,853 Liberty All-Star Growth Fund 283,601 774,231 Zweig Fund, Inc. (The) 452,850 1,281,565 Other Closed-End Funds (b) 494,600 ------------ 5,079,994 ------------ CONSUMER DISCRETIONARY - 8.04% McDonald's Corporation 16,900 971,581 Walt Disney Company (The) 24,200 564,586 Other Consumer Discretionary ^ (b) 2,740,142 ------------ 4,276,309 ------------ CONSUMER STAPLES - 11.12% Coca-Cola Company (The) 15,000 719,850 Colgate-Palmolive Company 7,400 523,476 CVS Caremark Corporation 10,430 332,404 PepsiCo, Inc. 7,100 390,216 Procter & Gamble Company (The) 22,297 1,139,377 Wal-Mart Stores, Inc. 17,600 852,544 Other Consumer Staples ^ (b) 1,953,632 ------------ 5,911,499 ------------ ENERGY - 11.74% Baker Hughes, Inc. 10,600 386,264 Chevron Corporation 17,032 1,128,370 Conocophillips 10,474 440,537 Exxon Mobil Corporation 35,500 2,481,805 Marathon Oil Corporation 11,500 346,495 Occidental Petroleum Corporation 5,000 329,050 Schlumberger Ltd. 8,000 432,880 Other Energy (b) 697,340 ------------ 6,242,741 ------------ No. of Description Shares Value - -------------------------------------------------------------------------------- FINANCIALS - 10.52% Charles Schwab Corporation (The) 22,000 $ 385,880 JPMorgan Chase & Company 40,132 1,368,902 Travelers Companies, Inc. (The) 9,476 388,895 Wells Fargo & Company 39,900 967,974 Other Financials ^ (b) 2,480,944 ------------ 5,592,595 ------------ HEALTHCARE - 12.93% Abbott Laboratories 9,200 432,768 Amgen, Inc. * 9,900 524,106 Becton, Dickinson and Company 5,400 385,074 Bristol-Myers Squibb Company 23,500 477,285 Gilead Sciences, Inc. * 7,000 327,880 Johnson & Johnson 20,400 1,158,720 Medtronic, Inc. 10,000 348,900 Merck & Company, Inc. 12,500 349,500 Pfizer, Inc. 23,560 353,400 UnitedHealth Group, Inc. ^ 13,500 337,230 Wyeth 9,200 417,588 Other Health Care ^ (b) 1,765,242 ------------ 6,877,693 ------------ INDUSTRIALS - 8.75% Burlington Northern Santa Fe Corporation ^ 5,400 397,116 General Electric Company 56,900 666,868 Other Industrials ^(b) 3,592,024 ------------ 4,656,008 ------------ INFORMATION TECHNOLOGY - 17.26% Apple, Inc. * 8,500 1,210,655 Cisco Systems, Inc. * 38,900 725,096 EMC Corporation * 39,148 512,839 Google, Inc. - Class A * 2,000 843,180 Hewlett-Packard Company 16,900 653,185 Intel Corporation 62,500 1,034,375 ================================================================================ See accompanying notes to financial statements. 2 - -------------------------------------------------------------------------------- CORNERSTONE STRATEGIC VALUE FUND, INC. SUMMARY SCHEDULE OF INVESTMENTS - JUNE 30, 2009 (UNAUDITED)(CONCLUDED) - -------------------------------------------------------------------------------- No. of Description Shares Value - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY (CONTINUED) International Business Machines Corporation 9,100 $ 950,222 Microsoft Corporation 56,200 1,335,874 Oracle Corporation 26,272 562,746 QUALCOMM, Inc. 10,000 452,000 Other Information Technology ^ (b) 900,727 ------------ 9,180,899 ------------ MATERIALS - 2.57% Monsanto Company 4,660 346,424 Other Materials ^ (b) 1,018,673 ------------ 1,365,097 ------------ REAL ESTATE INVESTMENT TRUST - 0.20% Total Real Estate Investment Trust ^ (b) 106,203 ------------ TELECOMMUNICATION SERVICES - 3.15% AT&T, Inc. 40,539 1,006,989 Verizon Communications, Inc. 21,800 669,914 ------------ 1,676,903 ------------ UTILITIES - 3.61% Other Utilities ^ (b) 1,918,015 ------------ TOTAL EQUITY SECURITIES (cost - $57,916,625) 52,883,956 ------------ SHORT-TERM INVESTMENTS - 7.80% MONEY MARKET SECURITY - 0.60% JPMorgan U.S. Government Money Market Fund 320,260 320,260 ------------ Principal Amount Description (000's) Value - -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 7.20% J.P. Morgan Securities Inc.+++ (Agreement dated 6/30/2009 to be repurchased at $3,829,743)(b) $ 3,830 $ 3,829,717 ------------ TOTAL SHORT-TERM INVESTMENTS (cost - $4,149,977) 4,149,977 ------------ TOTAL INVESTMENTS - 107.24% (cost - $62,066,602) 57,033,933 ------------ LIABILITIES IN EXCESS OF OTHER ASSETS - (7.24)% (3,851,257) ------------ NET ASSETS - 100.00% $ 53,182,676 ============ - ----------- (a) Affiliated investment. The Fund holds 0.63% (based on net assets) of Adams Express Company. A director of the Fund also serves as a director to such company. During the six months ended June 30, 2009 the Fund sold 9,400 shares of this security. There were no purchases during this period. (b) Represents issuers not identified as a top 50 holding in terms of market value and issues or issuers not exceeding 1% of net assets individually or in the aggregate, respectively, as of June 30, 2009. ^ Security or a portion thereof is out on loan. * Non-income producing security. + The maturity date for all repurchase agreements held was July 1, 2009, with interest rates ranging from 0.12% to 0.24% and collater- alized by $3,944,251 in United States Treasury Bills maturing August 13, 2009. Stated interest rate, before rebate earned by borrower of securities on loan. ++ Represents investment purchased with collateral received for securities on loan. ================================================================================ See accompanying notes to financial statements. 3
- -------------------------------------------------------------------------------- CORNERSTONE STRATEGIC VALUE FUND, INC. STATEMENT OF ASSETS AND LIABILITIES - JUNE 30, 2009 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS Investments, at value, including collateral for securities on loan of $3,829,717: Unaffiliated issuers (cost - $61,576,313)(1) $ 56,697,093 Affiliated issuer (cost - $490,289) 336,840 ------------ Total investments (cost - $62,066,602) 57,033,933 Receivables: Dividends 65,074 Investment sold 27,485 Prepaid expenses 6,690 ------------ Total Assets 57,133,182 ------------ LIABILITIES Payables: Upon return of securities loaned 3,829,717 Investment management fees (net of fee waivers) 42,666 Directors' fees 25,499 Other accrued expenses 52,624 ------------ Total Liabilities 3,950,506 ------------ NET ASSETS (applicable to 6,907,814 shares of common stock outstanding) $ 53,182,676 ============ NET ASSET VALUE PER SHARE ($53,182,676/6,907,814) $ 7.70 ============ NET ASSETS CONSISTS OF Capital stock, $0.001 par value; 6,907,814 shares issued and outstanding (100,000,000 shares authorized) $ 6,908 Paid-in capital 65,876,011 Accumulated net realized loss on investments (7,667,574) Net unrealized depreciation in value of investments (5,032,669) ------------ Net assets applicable to shares outstanding $ 53,182,676 ============ - ---------- (1) Includes securities out on loan to brokers with a market value of $3,656,934. ================================================================================ See accompanying notes to financial statements. 4
- -------------------------------------------------------------------------------- CORNERSTONE STRATEGIC VALUE FUND, INC. STATEMENT OF OPERATIONS - FOR THE SIX MONTHS ENDED JUNE 30, 2009 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME Income: Dividends (including $3,490 earned from an affiliated issuer) $ 890,064 Securities lending 2,135 ----------- Total Investment Income 892,199 ----------- Expenses: Investment management fees 262,112 Legal and audit fees 214,135 Directors' fees 54,199 Printing 27,273 Administration fees 26,489 Accounting fees 17,906 Transfer agent fees 10,507 Custodian fees 8,927 Stock exchange listing fees 5,455 Insurance 3,674 Miscellaneous 1,736 ----------- Total Expenses 632,413 Less: Management fee waivers (28,834) Less: Fees paid indirectly (38,591) ----------- Net Expenses 564,988 ----------- Net Investment Income 327,211 ----------- NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS Net realized loss from unaffiliated investments (1,984,853) Net realized loss from affiliated investments (40,223) Capital gain distributions from regulated investment companies and real estate investment trust 990 Net change in unrealized depreciation in value of investments 1,962,550 ----------- Net realized and unrealized loss on investments (61,536) ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 265,675 =========== ================================================================================ See accompanying notes to financial statements. 5
- -------------------------------------------------------------------------------- CORNERSTONE STRATEGIC VALUE FUND, INC. STATEMENT OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- For the Six Months Ended June 30, 2009 For the Year Ended (unaudited) December 31, 2008 -------------- ------------------ DECREASE IN NET ASSETS Operations: Net investment income $ 327,211 $ 984,743 Net realized loss from investments (2,025,076) (3,741,734) Capital gain distributions from regulated investment companies and real estate investment trust 990 8,983 Net change in unrealized appreciation/(depreciation) in value of investments 1,962,550 (33,698,235) ------------- ------------- Net increase/(decrease) in net assets resulting from operations 265,675 (36,446,243) ------------- ------------- Dividends and distributions to shareholders: Net investment income (327,211) (984,743) Return-of-capital (6,864,270) (27,088,110) ------------- ------------- Total dividends and distributions to shareholders (7,191,481) (28,072,853) ------------- ------------- Capital stock transactions: Cash in lieu of fractional shares from the reverse stock split -- (544) Proceeds from 72,113 and 196,609 shares newly issued in reinvestment of dividends and distributions, respectively 598,919 3,761,155 ------------- ------------- Total Capital stock transactions 598,919 3,760,611 ------------- ------------- Total decrease in net assets (6,326,887) (60,758,485) ------------- ------------- NET ASSETS Beginning of period 59,509,563 120,268,048 ------------- ------------- End of period $ 53,182,676 $ 59,509,563 ============= ============= ================================================================================ See accompanying notes to financial statements. 6
- -------------------------------------------------------------------------------- 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 For the Years Ended December 31,* June 30, 2009 ------------------------------------------------------------- (unaudited) 2008 2007 2006 2005 2004 ------------- -------- --------- ---------- --------- --------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period $ 8.71 $ 18.12 $ 21.28 $ 22.60 $ 25.92 $ 27.60 -------- -------- --------- ---------- --------- --------- Net investment income # 0.05 0.15 0.16 0.20 0.12 0.20 Net realized and unrealized gain/(loss) on investments (0.01) (5.55) 0.96 2.64 0.72 2.20 -------- -------- --------- ---------- --------- --------- Net increase/(decrease) in net assets resulting from operations 0.04 (5.40) 1.12 2.84 0.84 2.40 -------- -------- --------- ---------- --------- --------- Dividends and distributions to shareholders: Net investment income (0.05) (0.15) (0.16) (0.16) (0.16) (0.20) Net realized capital gains -- -- (1.32) -- (4.00) -- Return-of-capital (1.00) (4.01) (3.00) (4.00) -- (3.96) -------- -------- --------- ---------- --------- --------- Total dividends and distributions to (1.05) (4.16) (4.48) (4.16) (4.16) (4.16) -------- -------- --------- ---------- --------- --------- shareholders Capital stock transactions: Anti-dilutive effect due to shares issed in reinvestment of dividends and distributions -- 0.15 0.20 -- -- 0.08 -------- -------- --------- ---------- --------- --------- Net asset value, end of period $ 7.70 $ 8.71 $ 18.12 $ 21.28 $ 22.60 $ 25.92 ======== ======== ========= ========== ========= ========= Market value, end of period $ 10.09 $ 7.62 $ 20.20 $ 33.80 $ 28.20 $ 34.04 ======== ======== ========= ========== ========= ========= Total investment return (a) 50.25%(b) (49.92)% (29.04)% 45.36% (1.32)% 8.38% ======== ======== ========= ========== ========= ========= RATIOS/SUPPLEMENTAL DATA Net assets, end of year (000 omitted) $ 53,183 $ 59,510 $ 120,268 $ 136,344 $ 139,706 $ 154,690 Ratio of expenses to average net assets, net of fee waivers, if any (c) 2.16%(e) 1.40% 1.23% 1.22% 1.20% 1.28% Ratio of expenses to average net assets, excluding fee waivers, if any (d) 2.41%(e) 1.54% 1.35% 1.32% 1.36% 1.50% Ratio of expenses to average net assets, net of fee waivers, if any (d) 2.30%(e) 1.44% 1.25% 1.25% 1.26% 1.36% Ratio of net investment income to average net assets 1.25%(e) 1.08% 0.86% 0.85% 0.58% 0.73% Portfolio turnover rate 3.51%(b) 13.24% 10.38% 10.59% 21.60% 39.05% - --------- * Effective December 23, 2008, a reverse stock split of 1:4 occurred. All per share amounts have been restated according to the terms of the split. # Based on average shares outstanding. (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. (b) Not annualized. (c) Expenses are net of fees paid indirectly. (d) Expenses exclude the reduction for fees paid indirectly. (e) Annualized. ================================================================================ See accompanying notes to financial statements. 7
- -------------------------------------------------------------------------------- CORNERSTONE STRATEGIC VALUE FUND, INC. NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- NOTE A. ORGANIZATION Cornerstone Strategic Value Fund, Inc. (the "Fund") 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. NOTE B. SIGNIFICANT ACCOUNTING POLICIES MANAGEMENT ESTIMATES: The preparation of financial statements in accordance 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. In May 2009, the Financial Accounting Standards Board ("FASB") issued FASB Statement No. 165, "SUBSEQUENT EVENTS." The Fund has adopted FAS 165 with these financial statements. FAS 165 requires the Fund to recognize in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the Statement of Assets and Liabilities. For nonrecognized subsequent events that must be disclosed to keep the financial statements from being misleading, the Fund will be required to disclose the nature of the event as well as an estimate of its financial effect, or a statement that such an estimate cannot be made. In addition, FAS 165 requires the Fund to disclose the date through which the subsequent events have been evaluated. Management has evaluated any matters requiring such disclosure through the date when such financial statements were issued (August 31, 2009). Other than disclosures contained in these notes to the financial statements, subsequent events after such date have not been evaluated with respect to the impact on such financial statements. PORTFOLIO VALUATION: Investments are stated at value in the accompanying financial statements. Readily marketable portfolio securities listed on the 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 closing price. Readily marketable securities traded in the over-the counter market, including listed securities whose primary market is believed by Cornerstone Advisors, Inc. (the "Investment Adviser" 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 most closely the value of such securities. At June 30, 2009, 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 ================================================================================ 8 - -------------------------------------------------------------------------------- CORNERSTONE STRATEGIC VALUE FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- exception of those days on which the NYSE Alternext US LLC is closed. On March 19, 2008, Financial Accounting Standards Board released Statement of Financial Accounting Standards No. 161, "Disclosures about Derivative instruments and Hedging Activities" ("FAS 161"). FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The application of FAS 161 is required for fiscal years beginning after November 15, 2008 and interim periods within those fiscal years. Management has evaluated the implications of FAS 161 and its impact on the financial statements are not material. REPURCHASE AGREEMENTS: The Fund has agreed to purchase securities from financial institutions subject to the seller's agreement to repurchase them at an agreed-upon time and price ("repurchase agreements"). The financial institutions with whom the Fund enters into repurchase agreements are banks and broker/dealers, which Cornerstone considers creditworthy. The seller under a repurchase agreement will be required to maintain the value of the securities as collateral, subject to the agreement at not less than the repurchase price plus accrued interest. Cornerstone monitors the mark-to-market of the value of the collateral, and, if necessary, requires the seller to maintain additional securities, so that the value of the collateral is not less than the repurchase price. Default by or bankruptcy of the seller would, however, expose the Fund to possible loss because of adverse market action or delays in connection with the disposition of the underlying securities. 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 shareholders which will be sufficient to relieve it from all or substantially all U.S. federal income and excise taxes. In July 2006, the Financial Accounting Standards Board ("FASB") released FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes ("FIN 48"), an interpretation of FASB Statement No. 109. FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the accounting and disclosure of tax positions taken or expected to be taken in the course of preparing the Fund's tax returns to determine whether the tax positions are "more likely than not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more likely than not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is effective during the first required financial reporting period for fiscal years beginning after December 15, 2006. Management adopted FIN 48 on June 29, 2007 and reviewed any uncertain tax positions for open tax years 2005 through 2008 and for the period ended June 30, 2009. The Fund has initiated discussions with the Internal Revenue Service's New York Regional Office regarding a technical tax issue relating to whether the Fund's historic dividend reinvestment plan may have resulted in a violation of certain Subchapter M requirements of the Internal Revenue Code for certain prior tax years. The outcome of this matter is currently uncertain including, whether ultimately it might negatively affect the tax status of the Fund. The Fund will continue to monitor this matter closely and is pursuing a potential resolution with the Internal Revenue Service by seeking to obtain a closing letter that, if successful, will avoid a material negative tax impact to the Fund. There was no material impact to the financial statements or, other than as described herein, the disclosures thereto as a result of the adoption of this pronouncement. ================================================================================ 9 - -------------------------------------------------------------------------------- CORNERSTONE STRATEGIC VALUE FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS: Effective June 25, 2002, the Fund initiated a fixed, monthly distribution to shareholders. 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 shareholders 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 basis of an investor's shares in the Fund. Dividends and distributions to shareholders are recorded by the Fund on the ex-dividend date. NOTE C. FAIR VALUE The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements ("FAS 157"), effective January 1, 2008. In accordance with FAS 157, fair value is defined as the price that the Fund would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. FAS 157 established a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of 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, for example, the risk inherent in a particular valuation technique used to measure fair value including such a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability 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 developed based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below. o Level 1 - quoted prices in active markets for identical investments o Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) o Level 3 - significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments) The inputs or methodology used in valuing securities are not necessarily an indication of the risk associated with investing in those securities. ================================================================================ 10 - -------------------------------------------------------------------------------- CORNERSTONE STRATEGIC VALUE FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- The following is a summary of the inputs used as of June 30, 2009 in valuing the Fund's investments carried at value: INVESTMENTS IN OTHER FINANCIAL VALUATION INPUTS SECURITIES INSTRUMENTS* - -------------------------------------------------------------------------------- Level 1 - Quoted Prices Equity Investments $52,883,956 -- Short-term Investments 4,149,977 -- Level 2 - Other Significant Observable Inputs -- -- Level 3 - Significant Unobservable Inputs -- -- ----------- --------- Total $57,033,933 -- =========== ========= - ----------- * Other financial instruments include futures, forwards and swap contracts. 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, 2009. NOTE D. AGREEMENTS 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. During the six months ended June 30, 2009, Cornerstone voluntarily agreed to waive its management fees from the Fund to the extent that the Fund's net monthly operating expenses (including basic legal fees but excluding other legal and extraordinary expenses) exceeded an annual rate of 0.11% and 0.125% of average annual weekly net assets, through February 28, 2009, and thereafter, respectively. For the six months ended June 30, 2009, Cornerstone earned $262,112 for investment management services, of which it waived $28,834. Effective July 1, 2009, the Investment Manager suspended it's voluntary fee waiver. Included in the Statement of Operations, under the caption FEES PAID INDIRECTLY, are expense offsets of $38,591 arising from credits earned on portfolio transactions executed with brokers, pursuant to directed brokerage arrangements. ADMINISTRATION AGREEMENT Under the terms of the Administration Agreement, Ultimus supplies executive, administrative and regulatory services for the Fund. Ultimus supervises the preparation of reports to stockholders for the Fund, reports to and filings with the Securities and Exchange Commission and materials for meetings of the Board of Directors. For these services, the Fund pays Ultimus a monthly fee at an annual rate of 0.100% of its average daily net assets up to $250 million and 0.075% of such assets in excess of $250 million, subject to an annual minimum fee of $50,000. FUND ACCOUNTING AGREEMENT Under the terms of the Fund Accounting Agreement, Ultimus calculates the net asset value per share and maintains the financial books and records of the Fund. For the performance of these services, the Fund pays Ultimus a base fee of $2,500 per month plus an asset based fee of 0.010% of the first $500 million of average daily net assets and 0.005% of such assets in excess of $500 million. ================================================================================ 11 - -------------------------------------------------------------------------------- CORNERSTONE STRATEGIC VALUE FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- NOTE E. AFFILIATED INVESTMENTS Transactions in affiliates for the six month ended June 30, 2009 were as follows: ADAMS EXPRESS COMPANY --------- Market value at beginning of period $ 397,485 ========= Shares at beginning of period 49,500 Shares purchased during the period -- Shares sold during the period (9,400) --------- Shares at end of period 40,100 ========= Dividend income earned during the period 3,490 ========= Cost of purchases during the period -- ========= Proceeds from sales during the period 75,310 ========= Net realized loss during the period (40,223) ========= Market value at end of period $ 336,840 ========= NOTE F. INVESTMENT IN SECURITIES For the six month ended June, 30, 2009, purchases and sales of securities, other than short-term investments, were $1,877,310 and $7,837,592 respectively. NOTE G. SHARES OF COMMON STOCK The Fund has 100,000,000 shares of common stock authorized and 6,907,814 shares outstanding at June 30, 2009. Transactions in common stock for the six months ended June 30, 2009 were as follows: Shares at beginning of period 6,835,701 Shares newly issued in reinvestment of dividends and distributions 72,113 --------- Shares at end of period 6,907,814 ========= NOTE H. SHARE REPURCHASE PROGRAM As has been done in the past to enhance shareholder value, pursuant to Section 23 of the Investment Company Act of 1940, as amended, the Fund may again in the future purchase shares of its common stock on the open market from time to time, at such times, and in such amounts as may be deemed advantageous to the Fund. Nothing herein shall be considered a commitment to purchase such shares. The Fund had no repurchases during the six months ended June 30, 2009. No limit has been placed on the number of shares to be repurchased by the Fund other than those imposed by federal securities laws. All purchases are made in accordance with federal securities laws, with shares repurchased held in treasury effective January 1, 2002, for future use by the Fund. NOTE I. SECURITIES LENDING To generate additional income, the Fund may lend up to 33(1)/3% of its total assets. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities lent while simultaneously seeking to earn interest on the investment of cash collateral. Loans are subject to termination by the Fund or the borrower at any time, and are, therefore, not considered to be illiquid investments. Loans of securities are required at all times to be secured by collateral equal to at least 100% of the market value of securities on loan. However, in the event of default or bankruptcy of the other party to the agreement, realization and/or retention of the collateral may be subject to legal proceedings. In the event that the borrower fails to return securities, and collateral maintained by the lender is insufficient to cover the value of loaned securities, the borrower is obligated to pay the amount of the shortfall (and interest thereon) to the Fund. However, there can be no assurance the Fund can recover this amount. The value of securities on loan to brokers at June 30, 2009, was $3,656,934. During the six months ended June 30, 2009, the Fund earned $2,135 in securities lending income which is included under the caption SECURITIES LENDING in the Statement of Operations. NOTE J. 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 and Post-October losses (as later defined), and excise tax regulations. ================================================================================ 12 - -------------------------------------------------------------------------------- CORNERSTONE STRATEGIC VALUE FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONCLUDED) - -------------------------------------------------------------------------------- The tax character of dividends and distributions paid during the year ended December 31, 2008 for the Fund was ordinary income of $984,743 and return-of-capital $27,088,110. Accounting principles generally accepted in the United States of America require that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. Under current tax law, certain capital losses realized after October 31 within a taxable year may be deferred and treated as occurring on the first day of the following tax year ("Post-October losses"). At December 31, 2008, the Fund had a capital loss carryforward for U.S. federal income tax purposes of $5,171,824 of which $1,139,305 expires in 2009, $250,210 expires in 2010, $484,687 expires in 2011, and $3,297,622 expires in 2016. These capital loss carryfor-wards are subject to an annual limitation of $1,139,305 for the year ended December 31, 2009. At June 30, 2009, the identified cost for federal income tax purposes, as well as the gross unrealized appreciation from investments for those securities having an excess of value over cost, gross unrealized depreciation from investments for those securities having an excess of cost over value and the net unrealized appreciation from investments were $62,066,602, $5,866,323, $(10,898,992) and $(5,032,669), respectively. ================================================================================ 13 RESULTS OF ANNUAL MEETING OF STOCKHOLDERS (UNAUDITED) On April 21, 2009, the Annual Meeting of Stockholders of Cornerstone Strategic Value Fund, Inc. was held and the following matter was voted upon based on 6,844,896 shares of common stock outstanding on February 17, 2009: (1) To approve the re-election of two Class II Directors until the 2012 Annual Meeting. NAME OF CLASS II DIRECTORS FOR WITHHELD -------------------------- --- -------- Thomas H. Lenagh 5,549,204 405,756 Scott B. Rogers 5,578,097 376,863 ================================================================================ 14 DESCRIPTION OF DIVIDEND REINVESTMENT PLAN (UNAUDITED) Cornerstone Strategic Value Fund, Inc. (the "Fund") operates a Dividend Reinvestment Plan (the "Plan"), sponsored and administered by American Stock Transfer & Trust Company (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. Shareholders automatically participate in the Fund's Plan, unless and until an election is made to withdraw from the Plan on behalf of such participating shareholder. Shareholders who do not wish to have Distributions automatically reinvested should so notify their broker, or if a registered shareholder, the Agent in writing at P.O. Box 922, Wall Street Station, New York, New York 10269-0560. Such written notice must be received by the Agent prior to the record date of the Distribution or the shareholder will receive such Distribution in shares through the Plan. Under the Plan, the Fund's Distributions to shareholders are reinvested in full and fractional shares as described below. When the Fund declares a Distribution the Agent, on the shareholder's behalf, will (i) receive additional authorized shares from the Fund either newly issued or repurchased from shareholders by the Fund and held as treasury stock ("Newly Issued Shares") or (ii) purchase outstanding shares on the open market, on the NYSE Alternext US LLC or elsewhere, with cash allocated to it by the Fund ("Open Market Purchases"). The method for determining the number of shares to be received when Distributions are reinvested will vary depending upon whether the net asset value of the Fund's shares is higher or lower than its market price. If the net asset value of the Fund's shares is lower than its market price, the number of Newly Issued Shares received will be determined by dividing the amount of the Distribution either by the Fund's net asset value per share or by 95% of its market price, whichever is higher. If the net asset value of the Fund's shares is higher than its market price, shares acquired by the Agent in Open Market Purchases will be allocated to the reinvesting shareholders based on the average cost of such Open Market Purchases. Whenever the Fund declares a Distribution and the 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 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. 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. When a Participant withdraws from the Plan, or upon suspension or termination of the Plan at the sole discretion of the Fund's Board of Directors, certificates for whole shares credited to his or her account under the Plan will, upon request, be issued. Whether or not a participant requests that certificates for whole shares be issued, a cash payment will be made for any fraction of a share credited to such account. The Agent will maintain all shareholder accounts in the Plan and furnish written confirmations of all transactions in the accounts, including information needed by shareholders 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 shareholder's proxy will include those shares purchased pursuant to the Plan. Each participant, nevertheless, has the ================================================================================ 15 DESCRIPTION OF DIVIDEND REINVESTMENT PLAN (UNAUDITED) (CONCLUDED) right to receive certificates for whole shares owned. The Agent will distribute all proxy solicitation materials to participating shareholders. In the case of shareholders, 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 shareholder as representing the total amount of shares registered in the shareholder'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. All correspondence concerning the Plan should be directed to the Agent at P.O. Box 922, Wall Street Station, New York, New York 10269-0560. Certain transactions can be performed online at www.amstock.com or by calling the toll free number 877-864-483. ================================================================================ 16 INVESTMENT MANAGEMENT AGREEMENT APPROVAL DISCLOSURE (UNAUDITED) The Board of Directors including, the Independent Directors, (the "Board") of Cornerstone Strategic Value Fund, Inc.(the "Fund") considers the approval of the Investment Management Agreement (the "Agreement") between Cornerstone Advisors, Inc. (the "Investment Manager") and the Fund on an annual basis. The most recent approval of the Agreement occurred at an in person meeting of the Board held on February 13, 2009. In determining whether to approve the Agreement, the Board requested and received extensive materials and information from the Investment Manager to assist them in considering the approval of the continuance of the Agreement. Based on their review of the information requested and provided, and the discussions with management of the Investment Manager, the Board determined that the approval of the Agreement was consistent with the best interests of the Fund and its shareholders, and would enable the Fund to continue to receive high quality services at a cost that is appropriate, reasonable, and in the best interests of the Fund and its shareholders. The Board made these determinations on the basis of the following factors, among others: (1) the nature and quality of the services provided by the Investment Manager; (2) the cost to the Investment Manager for providing such services, with special attention to the Investment Manager's profitability (and whether the Investment Manager realizes any economies of scale); (3) the direct and indirect benefits received by the Investment Manager from its relationship with the Fund and the other investment companies advised by the Investment Manager; and (4) comparative information as to the management fees, expense ratios and performance of other similarly situated closed-end investment companies. The materials provided by the Investment Manager to the Board described the services provided by the Investment Manager to the Fund and included an overview of the Investment Manager's investment philosophy, management style and plan, including the Investment Manager's extensive knowledge and experience in the closed-end fund industry. The Board also discussed the knowledge of the Investment Manager with respect to managing the Fund's monthly distribution policy and the extent to which such policy contributes to the market's positive valuation of the Fund. The Board also favorably received the Investment Manager's continued commitment to voluntarily waive its management fees from the Fund to the extent that monthly operating expenses exceed 0.125% of average net assets calculated monthly (including basic legal fees but excluding other legal and extraordinary expenses). The Board also reviewed and discussed a comparison of the Fund's performance with comparable closed-end funds and a comparison of the Fund's expense ratios and management fees with those comparable funds. Additionally, the Investment Manager presented an analysis of its profitability based on its contractual relationship with the Fund and the other investment companies advised by the Investment Manager. The Board carefully evaluated this information, taking into consideration many factors including, the overall high quality of the personnel, operations, financial condition, investment management capabilities, methodologies, and performance of the Investment Manager, and was advised by independent legal counsel with respect to its deliberations. Based on its review of the information requested and provided, the Board determined that the management fees payable to the Investment Manager under the Agreement are fair and reasonable in light of the services to be provided, the performance of the Fund, the profitability of the Investment Manager's relationship with the Fund, the comparability of the proposed fee to fees paid by comparable closed-end funds, and the level of quality of investment management personnel. The Board determined that the Agreement is consistent with the best interests of the Fund and its shareholders, and enables the Fund to receive high quality services at a cost that is appropriate, reasonable, and in the best interests of the Fund and its shareholders. Accordingly, in light of the above considerations and such other factors and information it considered relevant, the Board by a unanimous vote (including a separate vote of all the Independent Directors present in person at the meeting) approved the continuance of the Agreement with respect to the Fund. ================================================================================ 17 PROXY VOTING AND PORTFOLIO HOLDINGS INFORMATION (UNAUDITED) Information regarding how Cornerstone Strategic Value Fund, Inc. (the "Fund") voted proxies related to its portfolio securities during the 12-month period ended June 30 of each year as well as the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities are available by calling (513) 326-3597 or on the website of the Securities and Exchange Commission, http://www.sec.gov. This report incorporates a Summary Schedule of Investments for the Fund. A complete Schedule of Investments for the Fund may be obtained free of charge by contacting the Fund at (513) 326-3597. The Fund files a complete schedule of its portfolio holdings for the first and third quarters of its fiscal year with the SEC on Form N-Q. The Fund's Forms N-Q are available on the SEC's website at http://www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling (202) 551-8090. PRIVACY POLICY NOTICE (UNAUDITED) The following is a description of Cornerstone Strategic Value Fund, Inc.'s (the "Fund") policies regarding disclosure of nonpublic personal information that you provide to the Fund or that the Fund collects from other sources. In the event that you hold shares of the Fund through a broker-dealer or other financial intermediary, the privacy policy of the financial intermediary would govern how your nonpublic personal information would be shared with unaffiliated third parties. CATEGORIES OF INFORMATION THE FUND COLLECTS. The Fund collects the following nonpublic personal information about you: 1. Information from the Consumer: this category includes information the Fund receives from you on or in applications or other forms, correspondence, or conversations (such as your name, address phone number, social security number, assets, income and date of birth); and 2. Information about the Consumer's transactions: this category includes information about your transactions with the Fund, its affiliates, or others (such as your account number and balance, payment history, parties to transactions, cost basis information, and other financial information). CATEGORIES OF INFORMATION THE FUND DISCLOSES. The Fund does not disclose any nonpublic personal information about their current or former shareholders to unaffiliated third parties, except as required or permitted by law. The Fund is permitted by law to disclose all of the information it collects, as described above, to its service providers (such as the Fund's custodian, administrator and transfer agent) to process your transactions and otherwise provide services to you. CONFIDENTIALITY AND SECURITY. The Fund restricts access to your nonpublic personal information to those persons who require such information to provide products or services to you. The Fund maintains physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information. ================================================================================ 18 SUMMARY OF GENERAL INFORMATION (UNAUDITED) Cornerstone Strategic Value Fund, Inc. is a closed-end, diversified investment company whose shares trade on the NYSE Alternext US LLC. 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 managed by Cornerstone Advisors, Inc. SHAREHOLDER INFORMATION (UNAUDITED) The Fund is listed on the NYSE Alternext US LLC (symbol "CLM"). The previous week's net asset value per share, market price, and related premium or discount are published each Monday in The Wall Street Journal under the designation "CornstnStrat" and Barron's under the designation "Cornerstone Str Val". Such information is available weekly and may be obtained by contacting the Fund at the general inquiry phone number. - -------------------------------------------------------------------------------- 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 CAPITAL STOCK IN THE OPEN MARKET. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- This report, including the financial statements herein, is sent to the shareholders of the Fund for their information. The financial information included herein is taken from the records of the Fund without examination by 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. - -------------------------------------------------------------------------------- ================================================================================ 19 This page intentionally left blank. CORNERSTONE STRATEGIC VALUE FUND, INC. ITEM 2. CODE OF ETHICS. Not required ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not required ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not required ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not required ITEM 6. SCHEDULE OF INVESTMENTS. (a)
CORNERSTONE STRATEGIC VALUE FUND, INC. SCHEDULE OF INVESTMENTS - JUNE 30, 2009 (UNAUDITED) DESCRIPTION NO. OF SHARES VALUE - ---------------------------------------------------------------------------------------------- EQUITY SECURITIES - 99.44% CLOSED-END FUNDS - 9.55% Adams Express Company (The) (a) 40,100 $ 336,840 Advent/Claymore Enhanced Growth & Income Fund 61,070 553,905 BlackRock Dividend Achievers Trust 15,600 114,504 Dreman/Claymore Dividend & Income Fund 11,120 114,314 General American Investors Company, Inc. 3,000 56,250 Liberty All-Star Equity Fund 475,030 1,638,853 Liberty All-Star Growth Fund 283,601 774,231 Tri-Continental Corporation 22,800 209,532 Zweig Fund, Inc. (The) 452,850 1,281,565 ------------ 5,079,994 ------------ CONSUMER DISCRETIONARY - 8.04% Amazon.com, Inc. * 3,000 250,980 Best Buy Company, Inc. 4,500 150,705 Comcast Corporation - Class A 11,555 167,432 DIRECTV Group, Inc. (The) ^ * 4,000 98,840 Gap, Inc. (The) 9,200 150,880 Home Depot, Inc. (The) 2,000 47,260 Lowe's Companies, Inc. 5,900 114,519 McDonald's Corporation 16,900 971,581 News Corporation - Class A 10,000 91,100 NIKE, Inc. - Class B 6,100 315,858 Omnicom Group, Inc. ^ 6,200 195,796 Staples, Inc. 12,800 258,176 Starbucks Corporation ^ * 2,800 38,892 Target Corporation 8,300 327,601 Time Warner Cable, Inc. ^ * 1,966 62,263 TJX Companies, Inc. (The) 5,000 157,300 Toyota Motor Corporation - ADR ^ 2,500 188,825 Viacom, Inc. - Class B * 5,450 123,715 Walt Disney Company (The) 24,200 564,586 ------------ 4,276,309 ------------ CONSUMER STAPLES - 11.12% Altria Group, Inc. 13,300 217,987 Archer-Daniels-Midland Company 3,960 106,009 Coca-Cola Company (The) 15,000 719,850 Colgate-Palmolive Company 7,400 523,476 ConAgra Foods, Inc. 3,400 64,804 CVS Caremark Corporation 10,430 332,404 CORNERSTONE STRATEGIC VALUE FUND, INC. SCHEDULE OF INVESTMENTS - JUNE 30, 2009 (UNAUDITED) (CONTINUED) CONSUMER STAPLES (CONTINUED) General Mills, Inc. 2,500 140,050 H.J. Heinz Company 4,000 142,800 Kimberly-Clark Corporation 2,500 131,075 Kraft Foods, Inc. - Class A 10,932 277,017 Kroger Company (The) 8,800 194,040 PepsiCo, Inc. 7,100 390,216 Philip Morris International, Inc. 7,300 318,426 Procter & Gamble Company (The) 22,297 1,139,377 Sysco Corporation 9,800 220,304 Walgreen Company ^ 4,800 141,120 Wal-Mart Stores, Inc. 17,600 852,544 ------------ 5,911,499 ------------ ENERGY - 11.74% Baker Hughes, Inc. 10,600 386,264 Chevron Corporation 17,032 1,128,370 Conocophillips 10,474 440,537 Exxon Mobil Corporation 35,500 2,481,805 Halliburton Company 13,200 273,240 Marathon Oil Corporation 11,500 346,495 Occidental Petroleum Corporation 5,000 329,050 Schlumberger Ltd. 8,000 432,880 Transocean Ltd. * 2,500 185,725 XTO Energy, Inc. 6,250 238,375 ------------ 6,242,741 ------------ FINANCIALS - 10.52% AFLAC, Inc. 3,500 108,815 Allstate Corporation (The) 6,800 165,920 American Express Company 3,400 79,016 Bank of America Corporation 16,138 213,022 Bank of New York Mellon Corporation (The) 5,754 168,650 Capital One Financial Corporation 2,500 54,700 Charles Schwab Corporation (The) 22,000 385,880 Goldman Sachs Group, Inc. (The) 1,800 265,392 Hudson City Bancorp, Inc. ^ 13,000 172,770 JPMorgan Chase & Company 40,132 1,368,902 Marsh & McLennan Companies, Inc. 10,000 201,300 MetLife, Inc. 5,700 171,057 Morgan Stanley 7,000 199,570 PNC Financial Services Group, Inc. 7,600 294,956 T. Rowe Price Group, Inc. 5,000 208,350 Travelers Companies, Inc. (The) 9,476 388,895 CORNERSTONE STRATEGIC VALUE FUND, INC. SCHEDULE OF INVESTMENTS - JUNE 30, 2009 (UNAUDITED) (CONTINUED) FINANCIALS (CONTINUED) U.S. Bancorp 9,901 177,426 Wells Fargo & Company 39,900 967,974 ------------ 5,592,595 ------------ HEALTH CARE - 12.93% Abbott Laboratories 9,200 432,768 Aetna, Inc. 5,000 125,250 Amgen, Inc. * 9,900 524,106 Baxter International, Inc. 5,000 264,800 Becton, Dickinson and Company 5,400 385,074 Biogen Idec, Inc. * 4,000 180,600 Bristol-Myers Squibb Company 23,500 477,285 Cardinal Health, Inc. ^ 7,950 242,872 Covidien PLC 2,599 97,307 Eli Lilly & Company 4,700 162,808 Gilead Sciences, Inc. * 7,000 327,880 Johnson & Johnson 20,400 1,158,720 McKesson Corporation 2,800 123,200 Medtronic, Inc. 10,000 348,900 Merck & Company, Inc. 12,500 349,500 Pfizer, Inc. 23,560 353,400 Schering-Plough Corporation 10,000 251,200 Stryker Corporation 3,500 139,090 UnitedHealth Group, Inc. ^ 13,500 337,230 WellPoint, Inc. * 3,500 178,115 Wyeth 9,200 417,588 ------------ 6,877,693 ------------ INDUSTRIALS - 8.75% 3M Company 4,400 264,440 Boeing Company (The) 2,200 93,500 Burlington Northern Santa Fe Corporation ^ 5,400 397,116 Caterpillar, Inc. ^ 6,800 224,672 CSX Corporation 6,500 225,095 Deere & Company ^ 6,500 259,675 Emerson Electric Company 6,000 194,400 General Dynamics Corporation 3,200 177,248 General Electric Company 56,900 666,868 Honeywell International, Inc. 5,000 157,000 Illinois Tool Works, Inc. 4,800 179,232 Lockheed Martin Corporation ^ 3,000 241,950 Norfolk Southern Corporation 5,500 207,185 Northrop Grumman Corporation 2,500 114,200 CORNERSTONE STRATEGIC VALUE FUND, INC. SCHEDULE OF INVESTMENTS - JUNE 30, 2009 (UNAUDITED) (CONTINUED) INDUSTRIALS (CONTINUED) Raytheon Company 6,000 266,580 Union Pacific Corporation 4,000 208,240 United Parcel Service, Inc. - Class B 4,100 204,959 United Technologies Corporation 6,000 311,760 Waste Management, Inc. 9,300 261,888 ------------ 4,656,008 ------------ INFORMATION TECHNOLOGY - 17.26% Adobe Systems, Inc. ^ * 4,200 118,860 Apple, Inc. * 8,500 1,210,655 Applied Materials, Inc. ^ 14,800 162,356 Automatic Data Processing, Inc. 4,400 155,936 Cisco Systems, Inc. * 38,900 725,096 Corning, Inc. ^ 11,500 184,690 Dell, Inc. * 2,700 37,071 eBay, Inc. * 2,500 42,825 EMC Corporation * 39,148 512,839 Google, Inc. - Class A * 2,000 843,180 Hewlett-Packard Company 16,900 653,185 Intel Corporation 62,500 1,034,375 International Business Machines Corporation 9,100 950,222 Microsoft Corporation 56,200 1,335,874 Nortel Networks Corporation * 660 29 Oracle Corporation 26,272 562,746 QUALCOMM, Inc. 10,000 452,000 Texas Instruments, Inc. ^ 6,400 136,320 Yahoo!, Inc. ^ * 4,000 62,640 ------------ 9,180,899 ------------ MATERIALS - 2.57% Alcoa, Inc. 11,400 117,762 Dow Chemical Company (The) 5,400 87,156 E.I. Du Pont de Nemours & Company 9,500 243,390 Freeport-McMoRan Copper & Gold, Inc. ^ * 5,000 250,550 Monsanto Company 4,660 346,424 Praxair, Inc. 4,500 319,815 ------------ 1,365,097 ------------ REAL ESTATE INVESTMENT TRUST - 0.20% Simon Property Group, Inc. ^ 2,065 106,203 ------------ TELECOMMUNICATION SERVICES - 3.15% AT&T, Inc. 40,539 1,006,989 CORNERSTONE STRATEGIC VALUE FUND, INC. SCHEDULE OF INVESTMENTS - JUNE 30, 2009 (UNAUDITED) (CONTINUED) TELECOMMUNICATION SERVICES (CONTINUED) Verizon Communications, Inc. 21,800 669,914 ------------ 1,676,903 ------------ UTILITIES - 3.61% American Electric Power Company, Inc. 5,000 144,450 Dominion Resources, Inc. ^ 7,700 257,334 Duke Energy Corporation ^ 15,800 230,522 Edison International 3,500 110,110 Exelon Corporation 3,000 153,630 FirstEnergy Corporation 5,000 193,750 FPL Group, Inc. 4,000 227,440 PG&E Corporation 5,000 192,200 Public Service Enterprises Group, Inc. ^ 4,500 146,835 Southern Company (The) ^ 8,400 261,744 ------------ 1,918,015 ------------ TOTAL EQUITY SECURITIES (cost - $57,916,625) 52,883,956 ------------ SHORT-TERM INVESTMENTS - 7.80% MONEY MARKET SECURITY - 0.60% JPMorgan U.S. Government Money Market Fund 320,260 320,260 ------------ PRINCIPAL AMOUNT (000'S) -------------- REPURCHASE AGREEMENTS - 7.20% J.P. Morgan Securities, Inc.+++ (Agreement dated 6/30/2009 to be repurchased at $172,785, 0.12%, 7/1/2009, collateralized by $179,966 in United States Treasury Bills) $ 173 172,784 J.P. Morgan Securities, Inc.+++ (Agreement dated 6/30/2009 to be repurchased at $3,656,958, 0.24%, 7/1/2009, collateralized by $3,764,285 in United States Treasury Bills) 3,657 3,656,933 ------------ 3,829,717 ------------ TOTAL SHORT-TERM INVESTMENTS (cost - $4,149,977) 4,149,977 TOTAL INVESTMENTS - 107.24% (cost - $62,066,602) 57,033,933 ------------ LIABILITIES IN EXCESS OF OTHER ASSETS - (7.24)% (3,851,257) ------------ NET ASSETS - 100.00% $ 53,182,676 ============ CORNERSTONE STRATEGIC VALUE FUND, INC. SCHEDULE OF INVESTMENTS - JUNE 30, 2009 (UNAUDITED) (CONTINUED) ADR - American Depositary Receipt. (a) Affiliated investment. The Fund holds 0.04% (based on net assets) of Adams Express Company. A director of the Fund also serves as a director to such company. During the six months ended June 30, 2009 the Fund sold 9,400 shares of this security. There were no purchases during this period. * Non-income producing security. ^ Security or a portion thereof is out on loan. + Stated interest rate, before rebate earned by borrower of securities on loan. ++ Represents investment purchased with collateral received for securities on loan. See accompanying notes to financial statements.
(b) Not applicable ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not required ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. (a) Not required (b) There has not been a change in any of the Portfolio Managers identified in response to this Item in the registrant's most recent annual report on Form N-CSR. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. None ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors that have been implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) or this Item. ITEM 11. CONTROLS AND PROCEDURES. (a) Based on their evaluation of the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) 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 such disclosure controls and procedures are reasonably designed and are operating effectively to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to them by others within those entities, particularly during the period in which this report is being prepared, and that the information required in filings on Form N-CSR is recorded, processed, summarized, and reported on a timely basis. (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second fiscal quarter of 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 12. EXHIBITS. File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Not required (a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)): Attached hereto (a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons: Not applicable (b) Certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)): Attached hereto Exhibit 99.CERT Certifications required by Rule 30a-2(a) under the Act Exhibit 99.906CERT Certifications required by Rule 30a-2(b) under the Act 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. (Registrant) CORNERSTONE STRATEGIC VALUE FUND, INC. -------------------------------------- By (Signature and Title)* /S/ RALPH W. BRADSHAW --------------------------------------------- Ralph W. Bradshaw, Chairman and President (Principal Executive Officer) Date SEPTEMBER 4, 2009 --------------------------- 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 (Signature and Title)* /S/ RALPH W. BRADSHAW -------------------------------------------- Ralph W. Bradshaw, Chairman and President (Principal Executive Officer) Date SEPTEMBER 4, 2009 --------------------- By (Signature and Title)* /S/ FRANK J. MARESCA -------------------------------------------- Frank J. Maresca, Treasurer (Principal Financial Officer) Date SEPTEMBER 4, 2009 ---------------------- * Print the name and title of each signing officer under his or her signature. EX-99.CERT 2 cert99.txt EX-99.CERT CERTIFICATIONS I, Ralph W. Bradshaw, certify that: 1. I have reviewed this report on Form N-CSR of Cornerstone Strategic Value Fund, Inc.; 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; 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; 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: (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; (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; (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 (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of 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 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): (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 (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: September 4, 2009 /S/ RALPH W. BRADSHAW ---------------------- Ralph W. Bradshaw, Chairman and President (Principal Executive Officer) CERTIFICATIONS I, Frank J. Maresca, certify that: 1. I have reviewed this report on Form N-CSR of Cornerstone Strategic Value Fund, Inc.; 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; 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; 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: (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; (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; (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 (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of 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 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): (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 (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: September 4, 2009 /S/ FRANK J. MARESCA ------- -------------- Frank J. Maresca, Treasurer (Principal Financial Officer) EX-99.906CERT 3 cert906.txt EX-99.906CERT CERTIFICATIONS Ralph W. Bradshaw, Chief Executive Officer, and Frank J. Maresca, Chief Financial Officer, of Cornerstone Strategic Value Fund, Inc. (the "Registrant"), each certify to the best of his knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended June 30, 2009 (the "Form N-CSR") fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934, as amended; and 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. /S/ RALPH W. BRADSHAW /S/ FRANK J. MARESCA - ----------------------------------------- ------------------------------- Ralph W. Bradshaw, Chairman and President Frank J. Maresca, Treasurer (Principal Executive Officer) (Principal Financial Officer) Date: September 4, 2009 Date: September 4, 2009 A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906, OR OTHER DOCUMENT AUTHENTICATING, ACKNOWLEDGING OR OTHERWISE ADOPTING THE SIGNATURE THAT APPEARS IN TYPED FORM WITHIN THE ELECTRONIC VERSION OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906, HAS BEEN PROVIDED TO CORNERSTONE STRATEGIC VALUE FUND, INC. AND WILL BE RETAINED BY CORNERSTONE STRATEGIC VALUE FUND, INC. AND FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST. This certification is being furnished to the Securities and Exchange Commission solely pursuant to 18 U.S.C. 1350 and is not being filed as part of the Form N-CSR filed with the Commission. -----END PRIVACY-ENHANCED MESSAGE-----