Form 4: Herzfeld Fund Advisor Boosts Stake via Distribution

Thomas J. Herzfeld, Chairman of the Advisor, received 313,444 shares of Herzfeld Credit Income Fund common stock as part of a December 2025 distribution.

Summary

• Thomas J. Herzfeld, Chairman of the Advisor for Herzfeld Credit Income Fund, Inc. (HERZ), reported a change in beneficial ownership.
• The transaction involved a distribution paid on December 30, 2025, consisting of cash and shares of common stock, totaling $0.6867 per share owned.
• The total cash distributed to all stockholders was limited to 20% of the total distribution, excluding cash for fractional shares.
• Approximately 80% of the distribution was paid in shares of the Fund's common stock.
• The price per share used for the stock distribution was $2.5799, calculated using the volume weighted average price on December 12, 15, and 16, 2025.
• Mr. Herzfeld received an estimated 313,444 shares of common stock in connection with this distribution.
• Following this transaction, Mr. Herzfeld beneficially owns 1,856,244 shares of the Fund's common stock directly.

Sentiment

Score: 7

Explanation: The distribution is a positive event for shareholders, providing a return on investment and increasing ownership for those receiving stock. The insider's increased stake is also a positive signal. However, it's a routine fund distribution rather than a new growth initiative.

Positives

• Shareholders received a distribution of $0.6867 per share, providing a return on investment.
• The distribution included a significant stock component, allowing shareholders to increase their ownership in the Fund.
• Thomas J. Herzfeld, a key figure, increased his direct beneficial ownership by 313,444 shares, signaling continued alignment with shareholder interests.

Negatives

• The stock component of the distribution could lead to minor dilution for existing shareholders who did not elect to receive stock or whose stock election was pro-rated.

Risks

• The reported number of shares received by the reporting person is an estimate, and an amended Form 4 may be filed if the final allocation differs, introducing a minor administrative uncertainty.

Future Outlook

An amended Form 4 may be filed to report the final number of shares actually received by the reporting person once the final allocations of the cash or stock distribution are determined.

Management Comments

• The distribution was paid in cash or shares of the Fund's common stock at the election of stockholders, with a 20% cash limitation.
• The exact distribution of cash and stock to any given stockholder was dependent upon their election as well as elections of other stockholders, subject to the pro-rata limitation.

Industry Context

Closed-end funds like Herzfeld Credit Income Fund often make regular distributions to shareholders, which can include a mix of cash and stock, reflecting their investment income and capital gains realization strategies. This distribution is consistent with typical fund operations.

Comparison to Industry Standards

• NA

Related Party Transactions

• Thomas J. Herzfeld, Chairman of the Advisor to Herzfeld Credit Income Fund, Inc., received shares as part of a distribution from the Fund, constituting a transaction with a related party.

Stakeholder Impact

• Shareholders: Received a distribution of $0.6867 per share, enhancing their return on investment and potentially increasing their equity stake in the Fund.

Next Steps

• An amended Form 4 may be filed to report the final number of shares received by the reporting person once final distribution allocations are determined.

Key Dates

Recommendation

The filing details a routine distribution by a closed-end fund, which is a positive event for shareholders receiving income and potentially increasing their stake. The insider's increased ownership is a good sign of alignment. However, this event does not fundamentally alter the investment thesis or suggest a significant change in the fund's underlying value or strategy that would warrant a 'buy' or 'sell' recommendation. It reflects ongoing operations and return of capital/earnings.

Keywords

Herzfeld Credit Income Fund, HERZ, SEC Form 4, Insider Transaction, Stock Distribution, Beneficial Ownership, Thomas J. Herzfeld, Closed-End Fund, Dividend