SCHEDULE: Herzfeld Fund Insider Boosts Stake to 37.95%

Erik M. Herzfeld and affiliated clients increased their beneficial ownership in Herzfeld Credit Income Fund, Inc. to 37.95% following a December 2025 distribution.

Summary

• Erik M. Herzfeld, along with advisory clients, beneficially owns an aggregate of 7,394,580 shares of Herzfeld Credit Income Fund, Inc. common stock.
• This aggregate ownership represents 37.95% of the 19,483,671 shares outstanding as of December 30, 2025.
• Erik M. Herzfeld holds sole voting and dispositive power over 714,113 shares.
• Shared voting and dispositive power is held over 6,680,467 shares, primarily through advisory clients' accounts.
• On December 30, 2025, the Fund paid a distribution of $0.6867 per share, payable in cash or common stock.
• The cash portion of the distribution was limited to 20% of the total, with the remaining approximately 80% paid in shares of common stock.
• The price per share for stock distribution was $2.5799, based on the volume weighted average price on December 12, 15, and 16, 2025.
• Erik M. Herzfeld personally received 120,584 shares of common stock from the December 2025 Distribution.
• Advisory clients received 1,140,165 shares of common stock from the December 2025 Distribution.
• Advisory clients engaged in open market sales of common stock on multiple dates: 8,308 shares at $2.60 on December 24, 2025; 42,346 shares at $2.7619 on December 30, 2025; 11,237 shares at $2.2117 on January 2, 2026; 38,866 shares at $2.0806 on January 5, 2026; and 22,617 shares at $1.9612 on January 7, 2026.

Sentiment

Score: 7

Explanation: The significant increase in beneficial ownership by Erik M. Herzfeld and affiliated entities, reaching nearly 38% of the outstanding shares, indicates strong insider confidence. While advisory clients did engage in some sales, the overall reported beneficial ownership has substantially increased, which is generally viewed positively by the market as it aligns management's interests with shareholders.

Positives

• Erik M. Herzfeld and affiliated entities significantly increased their beneficial ownership to 37.95%, indicating strong insider confidence and alignment with shareholder interests.
• The December 2025 Distribution provided shareholders with a return of $0.6867 per share, offering flexibility with cash or stock election.

Negatives

• Advisory clients engaged in multiple open market sales of shares between December 24, 2025, and January 7, 2026, at varying prices, which could signal some profit-taking or portfolio rebalancing.

Risks

• 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 a pro-rata limitation, introducing uncertainty regarding the final composition of the distribution for individual shareholders.
• An amended Form 4 may be filed to report the actual number of shares received by the reporting person once final allocations from the distribution are determined, indicating potential for slight adjustments to reported ownership.

Future Outlook

An amended Form 4 will be filed if necessary to report the exact number of shares actually received by the reporting person in connection with the cash or stock distribution once final allocations are determined.

Management Comments

• Erik M. Herzfeld certified that the information set forth in the statement is true, complete, and correct to the best of his knowledge and belief.

Industry Context

This filing pertains to a closed-end credit income fund. The significant beneficial ownership by the fund's namesake and related advisory clients is a common characteristic in such specialized funds, where management often holds a substantial stake, aligning their interests with those of other shareholders. The distribution strategy, offering both cash and stock, is a mechanism used by funds to manage capital and provide shareholder returns.

Related Party Transactions

• Erik M. Herzfeld, the reporting person, received 120,584 shares of common stock from the December 2025 Distribution paid by the Herzfeld Credit Income Fund, Inc.

Stakeholder Impact

• Shareholders received a distribution of $0.6867 per share, offering a return on investment and flexibility in receiving cash or additional shares.
• The increased beneficial ownership by Erik M. Herzfeld and advisory clients could lead to greater influence over corporate decisions and strategic direction, potentially aligning management's long-term interests more closely with those of other shareholders.

Next Steps

• Filing of an amended Form 4 if necessary, to report the final number of shares received by the reporting person from the December 2025 Distribution.

Key Dates

Keywords

Herzfeld Credit Income Fund, Erik M. Herzfeld, Schedule 13D, beneficial ownership, common stock, distribution, insider ownership, investment fund, shareholder stake