UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Check the appropriate box:
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Preliminary Proxy Statement | ||||
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||||
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Definitive Proxy Statement | ||||
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Soliciting Material under §240.14a-12 | ||||
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Priority Income Fund, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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No fee required. | |||||||
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Fee paid previously with preliminary materials. | |||||||
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||||||
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PRIORITY INCOME FUND, INC.
10 East 40
th
Street, 42
nd
Floor
New York, New York 10016
September 19, 2024
Dear Stockholder:
You are cordially invited to attend the 2024 Annual Meeting of Stockholders (the “Annual Meeting”) of Priority Income Fund, Inc. (the “Fund”), a Maryland corporation, to be held virtually on December 17, 2024, at 1:30 p.m., Eastern Time, at
www.virtualshareholdermeeting.com/PRIFA2024
. By accessing this live audio webcast, you will be able to participate in the Annual Meeting, including by voting and submitting questions. The Annual Meeting will be held solely on the Internet by virtual means.
The notice of Annual Meeting and proxy statement accompanying this letter provide an outline of the business to be conducted at the Annual Meeting. At the Annual Meeting, holders of the outstanding shares of the Fund’s common stock and the outstanding shares of the Fund’s preferred stock, voting together as a single class, will be asked to elect one director of the Fund. Additionally, holders of the outstanding shares of the Fund’s preferred stock, voting as a single class, will be asked to elect one director of the Fund.
It is important that you be represented at the Annual Meeting. Please complete, sign, date and return your proxy card to us in the enclosed, postage-prepaid envelope at your earliest convenience, even if you plan to attend the Annual Meeting virtually via the live audio webcast. If you prefer, you can authorize your proxy through the Internet or by telephone as described in the proxy statement and on the enclosed proxy cards. If you attend the Annual Meeting, you may revoke your proxy prior to its exercise and vote at the Annual Meeting virtually. Your vote is very important to us. I urge you to submit your proxy as soon as possible.
If you have any questions about the proposals to be voted on, please call EQ Fund Solutions, LLC, the Fund’s proxy solicitor, at (800) 884-4725.
Further, from time to time the Fund may repurchase a portion of its common and preferred stock and is notifying you of such intention as required by applicable securities law.
Sincerely yours,
M. Grier Eliasek
Chief Executive Officer
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PRIORITY INCOME FUND, INC.
10 East 40
th
Street, 42
nd
Floor
New York, New York 10016
(212) 448-0702
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 17, 2024
To the Stockholders of Priority Income Fund, Inc.:
The 2024 Annual Meeting of Stockholders, or the Annual Meeting, of Priority Income Fund, Inc. (“Priority,” the “Fund,” “we,” “us,” or “our”), a Maryland corporation, will be held virtually on December 17, 2024, at 1:30 p.m., Eastern Time, at
www.virtualshareholdermeeting.com/PRIFA2024
. By accessing this live audio webcast, you will be able to participate in the Annual Meeting, including by voting and submitting questions. The Annual Meeting will be held solely on the Internet by virtual means.
The Annual Meeting is being held for the following purposes:
1.
to elect two Class III directors of the Fund, as outlined below and more fully described in the accompanying proxy statement for the Annual Meeting (the “Proxy Statement”):
◦
Mr. M. Grier Eliasek, to be voted upon by holders of the outstanding shares of the Fund’s common stock and preferred stock, voting together as a single class, to serve until the 2027 annual meeting of stockholders and until his successor is duly elected and qualifies; and
◦
Mr. Andrew C. Cooper, to be voted upon by holders of the outstanding shares of the Fund’s preferred stock, voting as a single class, to serve until the 2027 annual meeting of stockholders and until his successor is duly elected and qualifies.
2.
to transact such other business as may properly come before the Annual Meeting and any adjournments, postponements or delays thereof.
The Fund’s Board of Directors unanimously recommends that you vote FOR each of the proposals to be considered and voted on at the Annual Meeting.
You have the right to receive notice of and to vote at the Annual Meeting if you were a stockholder of record of the Fund’s outstanding common or preferred stock at the close of business on September 18, 2024 (the “Record Date”). Please complete, sign, date and return your proxy card to the Fund in the enclosed, postage-prepaid envelope at your earliest convenience, even if you plan to attend the Annual Meeting virtually via the live audio webcast. If you prefer, you can authorize your proxy through the Internet or by telephone as described in the proxy statement and on the enclosed proxy card(s). If you attend the Annual Meeting, you may revoke your proxy prior to its exercise and vote at the Annual Meeting virtually. In the event that there are not sufficient stockholders present for a quorum or sufficient votes to approve a proposal at the time the Annual Meeting is convened, the Annual Meeting may be adjourned from time to time in order to permit further solicitation of proxies by the Fund.
If you were a stockholder as of the Record Date you may participate in the Annual Meeting via live audio webcast by visiting the following website and following the registration and participation instructions contained therein:
www.virtualshareholdermeeting.com/PRIFA2024
. If you hold your shares directly, please have the 16-digit control number located on your proxy card or notice available. If you hold your shares in “street name” (
i.e.
, through an account at a broker or other nominee), please follow your broker’s or nominee’s instructions you previously received to obtain your 16-digit control number. If you are a stockholder of record (
i.e.
, your shares are registered in your name with DST Systems Inc.) and want to participate in the Annual Meeting, including by voting and submitting questions, you must contact EQ Fund Solutions, LLC via email (
attendameeting@equiniti.com
; in the subject field write “Priority Income Fund, Inc. 2024 Annual Meeting”) to request a control number by December 10, 2024. If you do not have your control number, you may still attend the Annual Meeting via the
live audio webcast if you are a confirmed stockholder, but you will not have the option to ask questions or vote your shares during the meeting.
We encourage you to access the Annual Meeting via the live audio webcast 15 minutes prior to the start time. Online check-in will begin at 1:15 p.m. Eastern Time.
If you encounter any difficulties accessing the Annual Meeting during the check-in or meeting time, technical support, including technical support phone numbers, will be available at
www.virtualshareholdermeeting.com/PRIFA2024
. If you have already voted by mail, by telephone or online, you do not need to do anything further to vote your shares.
As always, the Fund encourages you to vote your shares at the Annual Meeting.
If you have any questions about the proposals to be voted on, please call EQ Fund Solutions, LLC, our proxy solicitor, at (800) 884-4725.
By Order of the Board of Directors,
Kristin Van Dask
Chief Financial Officer, Chief Compliance Officer,
Treasurer and Secretary
New York, New York
September 19, 2024
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This is an important meeting. To ensure proper representation at the Annual Meeting, please complete, sign, date and return the proxy card in the enclosed, postage-prepaid envelope, or authorize a proxy to vote your shares by telephone or through the Internet. Even if you authorize a proxy prior to the Annual Meeting, you still may attend the Annual Meeting, revoke your proxy, and vote your shares in person at the Annual Meeting.
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PRIORITY INCOME FUND, INC.
10 East 40
th
Street, 42
nd
Floor
New York, New York 10016
(212) 448-0702
PROXY STATEMENT
2024 Annual Meeting of Stockholders
This proxy statement (the “Proxy Statement”) is furnished in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Priority Income Fund, Inc., a Maryland corporation
(“Priority,” the “Fund” or “we,” “us,” or “our”),
for use at our 2024 Annual Meeting of Stockholders (the “Annual Meeting”) to be held virtually on December 17, 2024, at 1:30 p.m., Eastern Time, at
www.virtualshareholdermeeting.com/PRIFA2024
, and at any adjournment or postponement thereof
.
By accessing this live audio webcast, you will be able to participate in the Annual Meeting, including by voting and submitting questions. The Annual Meeting will be held solely on the Internet by virtual means.
The Board has fixed the close of business on September 18, 2024 as the record date (the “Record Date”) for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting. As of the Record Date, 60,314,941 shares of Priority’s common stock were issued and outstanding. As of the Record Date, 10,875,493 shares of Priority’s preferred stock were issued and outstanding. Each share of preferred stock is entitled to one vote on matters to be voted on by holders of the preferred stock, and each share of common stock is entitled to one vote on any matters to be voted on by holders of the common stock.
This Proxy Statement and the accompanying proxy cards are first being released to stockholders on or about September 26, 2024.
Unlike many companies where the majority of the outstanding shares are held by institutional investors, a majority of our stockholders are retail investors who generally hold smaller numbers of shares than institutional investors.
As a result, it is important that every stockholder authorize a proxy so that we can achieve a quorum and hold the Annual Meeting.
The presence at the Annual Meeting, by webcast or by proxy, of stockholders entitled to cast a majority of the votes entitled to be cast at the Annual Meeting will constitute a quorum for the transaction of business for the Fund. If a quorum is not met by the Fund, or if there are not sufficient votes to approve a proposal, then we may adjourn the Annual Meeting and may incur additional expenses to continue to solicit additional votes.
We have engaged EQ Fund Solutions, LLC as our proxy solicitor, who may call you and ask you to vote your shares. The proxy solicitor will not attempt to influence how you vote your shares, but will only ask that you take the time to cast a vote. You may also be asked if you would like to authorize your proxy over the telephone and to have your voting instructions transmitted to our proxy tabulation firm.
We encourage you to vote, either by voting at the Annual Meeting virtually or by granting a proxy (
i.e.
, authorizing someone to vote your shares). If you properly sign and date the accompanying proxy card or authorize a proxy to vote your shares by telephone or through the Internet, and we receive it in time for the Annual Meeting, the persons named as proxies will vote the shares registered directly in your name in the manner that you specified.
If you return a properly executed proxy card but give no voting instructions, your shares will be voted FOR the election of the nominees as directors.
If you are a “stockholder of record” (
i.e.
, you hold shares directly in your name), you may revoke a proxy at any time before it is exercised by notifying the Fund’s Secretary in writing, by submitting a properly executed, later-dated proxy, or by voting at the Annual Meeting virtually. Any stockholder of record attending the Annual Meeting virtually via the live audio webcast may vote whether or not he or she has previously authorized a proxy.
If your shares are registered in the name of a bank or brokerage firm, you may be eligible to vote your shares electronically via the Internet or by telephone.
If you attend the Annual Meeting virtually, you may revoke your proxy prior to its exercise and vote at the Annual Meeting virtually. No stockholders of the Fund have any dissenters’ or appraisal rights in connection with the proposals described herein.
If you are a stockholder as of the Record Date you may participate in the Annual Meeting via live audio webcast by visiting the following website and following the registration and participation instructions contained therein:
www.virtualshareholdermeeting.com/PRIFA2024
. If you hold your shares directly, please have the 16-digit control number located on your proxy card or notice available. If you hold your shares in “street name” (
i.e.
, through an account at a broker or other nominee), please follow your broker’s or nominee’s instructions you previously received to obtain your 16-digit control number. If you are a stockholder of record (
i.e.
, your shares are registered in your name with DST Systems Inc.) and want to participate in the Annual Meeting, including by voting and submitting questions, you must contact EQ Fund Solutions, LLC via email (
attendameeting@equiniti.com
; in the subject field write “Priority Income Fund, Inc. 2024 Annual Meeting”) to request a control number by December 10, 2024. If you do not have your control number, you may still attend the Annual Meeting via the live audio webcast if you are a confirmed stockholder, but you will not have the option to ask questions or vote your shares during the meeting.
We encourage you to access the Annual Meeting via the live audio webcast 15 minutes prior to the start time. Online check-in will begin at 1:15 p.m. Eastern Time. If you encounter any difficulties accessing the Special Meeting during the check-in or meeting time, technical support, including technical support phone numbers, will be available at
www.virtualshareholdermeeting.com/PRIFA2024
. If you have already voted by mail, by telephone or online, you do not need to do anything further to vote your shares. If you have any other questions about the Annual Meeting or about voting, please call our solicitor, EQ Fund Solutions, LLC, at (800) 884-4725.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDER MEETING TO BE HELD ON DECEMBER 17, 2024
The following materials relating to this Proxy Statement are available at
https://vote.proxyonline.com/priority/docs/pris.pdf
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• this Proxy Statement; and
• the accompanying Notice of Annual Meeting.
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Purpose of Annual Meeting
The Annual Meeting has been called for the following purposes:
1.
to elect two Class III directors of the Fund, as outlined below and more fully described in this Proxy Statement:
◦
Mr. M. Grier Eliasek, to be voted upon by holders of the outstanding shares of the Fund’s common stock and preferred stock, voting together as a single class, to serve until the 2027 annual meeting of stockholders and until his successor is duly elected and qualifies; and
◦
Mr. Andrew C. Cooper, to be voted upon by holders of the outstanding shares of the Fund’s preferred stock, voting as a single class, to serve until the 2027 annual meeting of stockholders and until his successor is duly elected and qualifies.
2.
to transact such other business as may properly come before the Annual Meeting and any adjournments, postponements or delays thereof.
Quorum Required
A quorum must be present at the Annual Meeting for any business to be conducted for the Fund. The Fund’s bylaws provide that the presence at the Annual Meeting, by webcast or by proxy, of the holders of shares of the Fund’s outstanding stock entitled to cast a majority of the votes entitled to be cast with respect thereto as of the Record Date will constitute a quorum, except with respect to any such matter that, under our charter, applicable statutes or regulatory requirements, requires approval by a separate vote of one or more classes of stock, in which case the presence in person or by proxy of the holders of shares entitled to cast a majority of the votes entitled to be cast by each such class on such a matter shall constitute a quorum.
Shares that are present at the Annual Meeting, but then abstain, including by reason of so called “broker non-votes,” will be treated as present for purposes of establishing a quorum. However, abstentions and “broker non-votes” on a matter are not treated as votes cast on such matter. A broker non-vote with respect to a matter occurs when a nominee holding shares for a beneficial owner is present at the meeting with respect to such shares, has not received voting instructions from the beneficial owner on the matter in question and does not have, or chooses not to exercise, discretionary authority to vote the shares on such matter.
If a quorum is not present at the Annual Meeting, or if there are not sufficient votes to approve a proposal, or if the chairman of the Annual Meeting otherwise determines that additional solicitation of proxies is in the best interests of the Fund, the chairman of the Annual Meeting or, if a stockholder vote is called, the stockholders who are present by webcast at the Annual Meeting, may adjourn the Annual Meeting from time to time to permit further solicitation of proxies.
Votes Required
Election of Directors.
The election of a director requires the affirmative vote of the holders of a majority of shares outstanding and entitled to vote thereon. The Fund’s common stock and its preferred stock vote together as one class with respect to the election of Mr. Eliasek. Thus, a majority of the votes cast at the Meeting by holders of common stock and preferred stock must be “FOR” the election of Mr. Eliasek for him to be re-elected as a director. For Mr. Cooper, a majority of the votes cast at the Meeting by holders of preferred stock must be “FOR” the election of Mr. Cooper for him to be re-elected as a director. If you vote to “Withhold Authority” with respect to a nominee, your shares will not be voted with respect to such nominee. Because directors are elected by vote of the holders of a majority of the outstanding shares, votes to “Withhold Authority,” abstentions and broker non-votes will have the effect of a vote against a nominee.
Additional Solicitation.
If a quorum is not present, if there are not enough votes to approve a proposal at the Annual Meeting, or if the chairman of the Annual Meeting determines that additional solicitation of proxies is otherwise in the best interests of the Fund, the chairman of the meeting or, if a stockholder vote is called, the stockholders who are present by webcast, may adjourn the Annual Meeting with respect to any or all of the proposals, including to permit the further solicitation of votes with respect to any proposal.
3
If a quorum is present, a stockholder vote may be called on one or more of the proposals described in this Proxy Statement prior to any such adjournment if there are sufficient votes for approval of such proposal(s).
Information Regarding This Solicitation
The Fund will bear the expense of the solicitation of proxies for the Annual Meeting, including the cost of preparing, printing and mailing this Proxy Statement, the accompanying Notice of Annual Meeting of Stockholders and the proxy cards. If brokers, nominees, fiduciaries and other persons holding shares in their names, or in the name of their nominees, which are beneficially owned by others, forward the proxy materials to and obtain proxies from such beneficial owners, we will reimburse such persons for their reasonable expenses in so doing.
In addition to the solicitation of proxies by the use of the mail, proxies may be solicited in person and by telephone or facsimile transmission by directors or officers of the Fund and officers or employees of Priority Senior Secured Income Management, LLC (“PSSIM” or the “Fund’s investment adviser”), Prospect Capital Management L.P. (“PCM”), the operating member of the Fund’s investment adviser, Preferred Capital Securities, LLC, and/or Prospect Administration LLC (“Prospect Administration”), the Fund’s administrator. No additional compensation will be paid to directors, officers or employees for such services.
The Fund has also retained EQ Fund Solutions, LLC to assist in the solicitation of proxies for the Annual Meeting for a fee of approximately $176,886 plus out-of-pocket expenses.
Stockholders may provide their voting instructions by telephone or through the Internet. These options require stockholders to input the control number which is located on the proxy card. After inputting this number, stockholders will be prompted to provide their voting instructions. Stockholders will have an opportunity to review their voting instructions and make any necessary changes before submitting their voting instructions and terminating their telephone call or Internet link. Stockholders who authorize a proxy via the Internet, in addition to confirming their voting instructions prior to submission, will also receive an e-mail confirming their instructions upon request.
Any proxy given pursuant to this solicitation may be revoked by notice from the person giving the proxy at any time before it is exercised, or by the person submitting a properly executed, later-dated proxy or attending the Annual Meeting and voting virtually. Any such notice of revocation should be provided in writing and signed by the stockholder in the same manner as the proxy being revoked and delivered to our proxy tabulator.
If you are a stockholder as of the Record Date, you may participate in the Annual Meeting via live audio webcast by visiting the following website and following the registration and participation instructions contained therein:
www.virtualshareholdermeeting.com/PRIFA2024
. If you hold your shares directly, please have the 16-digit control number located on your proxy card or notice available. If you hold your shares in “street name” (
i.e.
, through an account at a broker or other nominee), please follow your broker’s or nominee’s instructions you previously received to obtain your 16-digit control number. If you are a stockholder of record (
i.e.
, your shares are registered in your name with DST Systems Inc.) and want to participate in the Annual Meeting, including by voting and submitting questions, you must contact EQ Fund Solutions, LLC via email (
attendameeting@equiniti.com
; in the subject field write “Priority Income Fund, Inc. 2024 Annual Meeting”) to request a control number by December 10, 2024. If you do not have your control number, you may still attend the Annual Meeting via the live audio webcast if you are a confirmed stockholder, but you will not have the option to ask questions or vote your shares during the meeting.
We encourage you to access the Annual Meeting via the live audio webcast 15 minutes prior to the start time. Online check-in will begin at 1:15 p.m. Eastern Time. If you encounter any difficulties accessing the Annual Meeting during the check-in or meeting time, technical support, including technical support phone numbers, will be available at
www.virtualshareholdermeeting.com/PRIFA2024
. If you have already voted by mail, by telephone or online, you do not need to do anything further to vote your shares. If you have any other questions about the Annual Meeting or about voting, please call our solicitor, EQ Fund Solutions, LLC, at (800) 884-4725.
Investment Adviser, Administrator and Dealer Manager
PSSIM serves as the Fund’s investment adviser and Prospect Administration serves as the Fund’s administrator. PSSIM and Prospect Administration are located at 10 East 40
th
Street, 42
nd
Floor, New York, New York 10016.
Preferred
4
Capital Securities, LLC serves as the Fund's dealer manager (“Dealer Manager”) and its principal offices are located at 3284 Northside Parkway, Suite 150, Atlanta, GA 30327.
Security Ownership of Certain Beneficial Owners and Management
The Fund’s directors are divided into two groups - interested directors and independent directors. Interested directors are “interested persons” of the Fund, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”).
The following table sets forth, as of September 18, 2024, certain ownership information with respect to the Fund’s common stock or preferred stock for (i) those persons who may, insofar as is known to us, directly or indirectly own, control or hold with the power to vote, 5% or more of the Fund’s outstanding common stock or preferred stock, as well as for (ii) each current director, the nominees for director, the Fund’s executive officers, and the executive officers and directors as a group.
Ownership information for those persons, if any, who own, control or hold the power to vote, 5% or more of the Fund’s shares of common stock or preferred stock is based upon Schedule 13D or Schedule 13G filings by such persons with the Securities and Exchange Commission (the “Commission” or “SEC”) and other information obtained from such persons, if available. Such information is as of the date of the applicable filing and may no longer be accurate.
Unless otherwise indicated, we believe that each person set forth in the table below has sole voting and investment power with respect to all shares of the Fund’s common stock or preferred stock he or she beneficially owns, if any, and has the same address as the Fund. The Fund’s address is 10 East 40
th
Street, 42
nd
Floor, New York, New York 10016.
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Name and Address of Beneficial Owner
(1)
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Number of Shares of Common Stock Beneficially Owned
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Percentage of
Shares of Common Stock Outstanding (2) |
Number of Shares of Preferred Stock Beneficially Owned
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Percentage of
Shares of Preferred Stock Outstanding (3) |
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5% or more holders
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| None | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interested Director | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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M. Grier Eliasek
(4)
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Independent Directors
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Andrew C. Cooper
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William J. Gremp
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Eugene S. Stark
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Executive Officers
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Kristin Van Dask
|
— | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Executive officers and directors as a group
|
— | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Name of Director
|
Dollar Range of Equity
Securities in Priority (1)(2) |
Dollar Range of Equity
Securities in PFLOAT (1)(2) |
Dollar Range of Equity
Securities in PSEC (1)(2) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interested Director | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
M. Grier Eliasek
|
None | None | Over $100,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Independent Directors
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Andrew C. Cooper
|
None | None | None | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
William J. Gremp
|
None | None | Over $100,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Eugene S. Stark
|
None | None | Over $100,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Name (Age)
Position(s) with the Fund (Since)
Address
(1)
|
Class
Term Expires
(2)
|
Number of Funds in the Fund Complex overseen by the Director or Nominee
|
Principal
Occupation(s) and
Other Public Company Directorships
Held During the Past 5 Years
(3)
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Interested Director
(4)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
M. Grier Eliasek (51)
Chairman of the Board, Director, Chief Executive Officer and President (July 2012) |
Class III Nominee
2027 | 3 |
President and Chief Operating Officer of PSSIM, President and Chief Operating Officer of Prospect Capital Corporation, Managing Director of Prospect Capital Management and Prospect Administration, and Chief Executive Officer
and President of Prospect Floating Rate and Alternative Income Fund, Inc.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Independent Directors
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
William J. Gremp
(5)
(81)
Director
(October 2012)
|
Class II Continuing
2026 | 3 | Member of Board of Directors of Prospect Capital Corporation and of Prospect Floating Rate and Alternative Income Fund, Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Andrew C. Cooper
(5)
(62)
Director
(October 2012)
|
Class III Nominee
2027 | 3 |
Mr. Cooper is an entrepreneur, who over the last 15 years has founded, built, run and sold three companies. He is Co-Chief Executive Officer of Unison Energy, LLC, a company that develops, owns and operates, distributed combined heat and power co-generation solutions. Member of Board of Directors of Prospect Capital Corporation and of Prospect Floating Rate and Alternative Income Fund, Inc.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Eugene S. Stark (66)
Director (October 2012) |
Class I Continuing
2025 | 3 | Principal Financial Officer, Chief Compliance Officer and Vice President—Administration of General American Investors Company, Inc. from May 2005 to present. Member of Board of Directors of Prospect Capital Corporation and of Prospect Floating Rate and Alternative Income Fund, Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Name, Address and Age
|
Position(s) Held
with the Fund
|
Term at Office and
Length of Time Served
|
Principal Occupation(s)
During Past 5 Years
|
|||||||||||||||||
|
Kristin Van Dask, 45
(1)
|
Chief Financial Officer, Chief Compliance Officer, Treasurer and Secretary |
Chief Financial Officer, Chief Compliance Officer, Treasurer and Secretary since April 2018
| Ms. Van Dask has been the Chief Financial Officer, Chief Compliance Officer, Treasurer and Secretary of the Fund since April 2018. Ms. Van Dask previously served as controller at Prospect Administration LLC. Ms. Van Dask is also the Chief Financial Officer, Chief Compliance Officer, Treasurer and Secretary of PSSIM, Prospect Floating Rate and Alternative Income Fund, Inc. and Prospect Capital Corporation. | |||||||||||||||||
_______________________________
(1)
The business address of Ms. Van Dask is c/o Priority Income Fund, Inc., 10 East 40
th
Street, 42
nd
Floor, New York, New York 10016.
Compensation of Executive Officers and Directors
The following table sets forth information regarding the compensation received by the directors and executive officers for the Fund for the fiscal year ended June 30, 2024. No compensation is paid to the interested directors by the Fund.
Compensation Table
|
Name and Position
|
Aggregate
Compensation
from the Fund
|
Pension or
Retirement Benefits Accrued as Part of the Fund’s Expenses (1)
|
|
Total
Compensation from the Fund
and Fund Complex
Interested Director
|
|
|
|
|
|
|
|
M. Grier Eliasek
(2)
|
None
|
|
None
|
|
None
|
|
Independent Directors
|
|
|
|
|
|
|
Andrew C. Cooper
|
$75,000
|
|
|
None
|
|
$262,500
|
|
|
William J. Gremp
|
$75,000
|
|
|
None
|
|
$262,500
|
|
|
Eugene S. Stark
|
$75,000
|
|
|
None
|
|
$262,500
|
|
|
Executive Officers
|
|
|
|
|
|
|
Kristin Van Dask
(2)
|
None
|
|
None
|
|
None
|
14
(1) The Fund does not have a bonus, profit sharing or retirement plan, and directors do not receive any pension or retirement benefits.
(2) The Fund has not paid, and does not intend to pay, any annual cash compensation to its executive officers for their services as executive officers. Mr. Eliasek is compensated by PCM from the income PCM receives as an owner of the Adviser. Ms. Van Dask is compensated from the income Prospect Administration receives under the administration agreements.
The independent directors are entitled to receive annual cash retainer fees, determined based on the Fund’s net asset value as of the end of each fiscal quarter. Amounts payable by the Fund under the arrangement will be determined and paid quarterly in arrears as follows:
Independent Registered Public Accounting Firm
The 1940 Act requires that the Fund’s independent registered public accounting firm be selected by a majority of the independent directors of the Fund. One of the purposes of the Audit Committee is to recommend to the Fund’s Board the selection, retention or termination of the independent registered public accounting firm for the Fund. The Fund’s independent registered public accounting firm for the fiscal year ended June 30, 2023 was BDO USA, P.C. (“BDO”). The Fund’s independent registered public accounting firm for the fiscal year ended June 30, 2024 was Deloitte & Touche LLP (“Deloitte”).
At a meeting held on August 27, 2024, the Fund’s Audit Committee recommended and the Board, including a majority of the independent directors, approved the selection of Deloitte as the Fund’s independent registered public accounting firm for the fiscal year ending June 30, 2025. The 1940 Act rules do not require that the Board’s selection of Deloitte be submitted for ratification by stockholders of the Fund. We expect that a representative of Deloitte will be present at the Annual Meeting and will have an opportunity to make a statement if he or she so chooses and will be available to respond to appropriate questions. After reviewing the Fund’s audited financial statements for the fiscal year ended June 30, 2024, the Fund’s Audit Committee recommended to the Board that such statements be included in the Fund’s annual report to stockholders. A copy of the Audit Committee’s report appears below.
The Audit Committee and the Board have considered the independence of Deloitte and have concluded that Deloitte is independent as required by the applicable rules of the Public Company Accounting Oversight Board. In connection with their determination, Deloitte has advised the Fund that neither the firm nor any present member or associate of it has any material financial interest, direct or indirect, in the Fund or its affiliates.
Audit Fees.
The aggregate fees billed for professional services rendered by Deloitte and BDO for services that are normally provided by the Fund’s independent registered public accounting firm in connection with statutory and regulatory filings or engagements for the fiscal years ended June 30, 2024 and June 30, 2023 were approximately $535,000 and $535,922, respectively.
Audit-Related Fees.
The aggregate fees billed for assurance and related services rendered by Deloitte and BDO that are reasonably related to the performance of the audit of the Fund’s financial statements and not reported under audit fees in the fiscal years ended June 30, 2024 and June 30, 2023 were approximately $0 and $0, respectively. These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards.
Tax Fees.
The aggregate fees billed for professional services by Deloitte and BDO for tax compliance, tax advice and tax planning in the fiscal years ended June 30, 2024 and June 30, 2023 were approximately $0 and $22,030, respectively.
15
All Other Fees.
The aggregate fees billed for professional services by Deloitte and BDO related to the credit facility in the fiscal year ended June 30, 2024 and June 30, 2023 was approximately $0.
Non-Audit Fees.
For the fiscal years ended June 30, 2024 and June 30, 2023, the aggregate fees billed by Deloitte and BDO for non-audit services rendered to the Fund and for non-audit services rendered to the Fund’s investment advisor (not including any sub-advisor whose role is primarily portfolio management and is subcontracted with or overseen by another investment advisor) and/or to any entity controlling, controlled by or under common control with the Fund’s investment advisor that provides ongoing services to the Fund and the Fund’s investment advisor were approximately $0.
Audit Committee Pre-Approval Policies and Procedures
. The Audit Committee pre-approves Deloitte’s engagements for audit and non-audit services to the Fund or the Fund’s investment adviser. Pre-approval considerations include whether the proposed services are compatible with maintaining Deloitte’s independence. All of the services described above were pre-approved by the Audit Committee. No services described above were approved by the Audit Committee pursuant to the “de minimis exception” set forth in Rule 2-01(c)(7)(i)(C) of Regulation S-X. The Audit Committee has considered and concluded that the provision of non-audit services rendered by Deloitte and BDO to the Fund’s investment adviser and any entity controlling, controlled by, or under common control with the Fund’s investment adviser that were not required to be pre-approved by the Audit Committee is compatible with maintaining the independence of Deloitte and BDO.
Change in Independent Registered Public Accounting Firm
As previously disclosed in the Fund’s annual report on Form N-CSR filed with the SEC on August 29, 2024, on September 28, 2023, the Audit Committee of the Board approved the appointment of Deloitte as the Fund’s independent registered public accounting firm for the fiscal year ending June 30, 2024, effective immediately concurrent with the dismissal of BDO.
During the Fund’s two most recent fiscal years (fiscal years ended June 30, 2023 and 2022), respectively, and the subsequent interim period through September 28, 2023, neither the Fund nor anyone on its behalf consulted Deloitte regarding any of the matters set forth in Item 304(a)(2)(i) or (ii) of Regulation S-K.
BDO’s reports on the Fund’s consolidated financial statements for the fiscal years ended June 30, 2023 and 2022, respectively, did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.
During the Fund’s fiscal years ended June 30, 2023 and 2022, respectively, and the subsequent interim period through September 28, 2023, there were no (i) disagreements (within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions thereto) with BDO on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure that, if not resolved to the satisfaction of BDO, would have caused BDO to make reference thereto in its reports covering the Fund’s consolidated financial statements for such periods and (ii) reportable events (as defined in Item 304(a)(1)(v) of Regulation S-K), except for the disclosure of the material weakness in the Fund’s internal control over financial reporting as disclosed in Item 11 of the Fund’s annual report on Form N-CSR for the year ended June 30, 2022 which was remediated as previously disclosed in the Fund’s annual report on Form N-CSR for the year ended June 30, 2023. The Audit Committee has discussed the subject matter of the above referenced reportable event with BDO and the Fund has authorized BDO to respond fully to the inquiries of Deloitte concerning the subject matter of such reportable event.
The Fund provided BDO with a copy of the annual report for the year ended June 30, 2024 prior to filing the annual report for the year ended June 30, 2024 in accordance with the requirements of Instruction 2 to Item 304 of Regulation S-K. A copy of BDO’s letter, dated August 29, 2024 was filed as Exhibit 99.13(C) to the annual report for the year ended June 30, 2024.
16
Audit Committee Report
(1)
The following is the report of the Audit Committee with respect to the Fund’s audited financial statements for the fiscal year ended June 30, 2024.
The Audit Committee has reviewed and discussed the Fund’s audited financial statements with management and Deloitte, with and without management present. The Audit Committee included in its review results of Deloitte’s examinations, the Fund’s disclosure controls and procedures, and the quality of the Fund’s financial reporting. The Audit Committee also reviewed the Fund’s procedures and disclosure controls designed to ensure full, fair and adequate financial reporting and disclosures, including procedures for certifications by the Fund’s chief executive officer and chief financial officer that are required in periodic reports filed by the Fund with the Commission.
The Audit Committee also has discussed with Deloitte matters relating to Deloitte’s judgments about the quality, as well as the acceptability, of the Fund’s accounting principles as applied in its financial reporting as required by Public Company Accounting Oversight Board (“PCAOB”) Auditing Standards No. 1301 (“AS 1301”). In addition, the Audit Committee has discussed with Deloitte their independence from management and the Fund, as well as the matters in the written disclosures received from Deloitte as required by AS 1301. Further, as required by PCAOB Rule 3526, “Communication with Audit Committees Concerning Independence,” the Audit Committee received written, as well as oral communications from Deloitte confirming their independence and discussed the matter with Deloitte. The Audit Committee discussed and reviewed with Deloitte the Fund’s critical accounting policies and practices, disclosure controls, other material written communications to management, and the scope of Deloitte’s audits and all fees paid to Deloitte during the fiscal year. Pursuant to the Audit Committee charter, the Audit Committee may review and pre-approve audit and permissible non-audit services performed by Deloitte for the Fund. The Audit Committee may delegate pre-approval authority to one or more of its members. The member or members to whom such authority is delegated shall report any pre-approval decisions to the Audit Committee at its next scheduled meeting. The Audit Committee does not delegate its responsibilities to pre-approve services performed by the independent registered public accounting firm to management. The Audit Committee has reviewed and considered the compatibility of Deloitte’s performance of non-audit services with the maintenance of Deloitte’s independence as the Fund’s independent registered public accounting firm.
Based on the Audit Committee’s review and discussions referred to above, the Audit Committee recommended to the Board that the Fund’s audited financial statements for the fiscal year ended June 30, 2024 be included in the Fund’s annual report on Form N-CSR for the same fiscal year for filing with the Commission. In addition, the Audit Committee has recommended the appointment of Deloitte to serve as the Fund’s independent registered public accounting firm for the fiscal year ending June 30, 2025.
Respectfully Submitted,
The Audit Committee Eugene S. Stark, Chairman Andrew C. Cooper William J. Gremp
August 27, 2024
_____________________________
(1) The material in this report is not “soliciting material,” is not deemed “filed” with the Commission, and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
17
Financial Statements and Other Information
The Fund will furnish, without charge, a copy its annual report and the most recent semi-annual report succeeding the annual report, if any, to any stockholder upon request. Requests should be directed to the Fund at Priority Income Fund, Inc., 10 East 40
th
Street, 42
nd
Floor, New York, New York 10016 (telephone number (212) 448-0702). Copies of these documents may also be accessed electronically by means of the Commission’s home page on the internet at
http://www.sec.gov
.
Householding of Proxy Materials
The Commission has adopted rules that permit companies and intermediaries (
e.g.
, brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement and annual report addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies.
Please note that only one Proxy Statement and/or annual report may be delivered to two or more stockholders who share an address, unless the Fund has received instructions to the contrary. To request a separate copy of this Proxy Statement and/or annual report or for instructions as to how to request a separate copy of this document and/or annual report or as to how to request a single copy if multiple copies of this document and/or annual report are received, stockholders should contact the Fund at the address and phone number set forth below.
Requests should be directed to Priority Income Fund, Inc., 10 East 40
th
Street, 42
nd
Floor, New York, New York 10016 (telephone number 212-448-0702). Copies of these documents may also be accessed electronically by means of the Commission’s home page on the Internet at
www.sec.gov
.
Other Business
The Board knows of no other matters that may be presented for stockholder action at the Annual Meeting. If any other matters properly come before the Annual Meeting, the persons named as proxies will vote upon them in their discretion.
Submission of Stockholder Proposals
Stockholders may present proper nominations of candidates for director or other proposals for inclusion in the Fund’s proxy statement and proxy card for consideration at the 2025 Annual Meeting of Stockholders by submitting such nominations or proposals in writing to the Secretary of the Fund, c/o Priority Income Fund, Inc., 10 East 40th Street, 42nd Floor, New York, New York 10016, in a timely manner, calculated in the manner provided in Rule 14a-8(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Fund expects that the 2025 Annual Meeting of Stockholders will be held in December 2025, but the exact date, time and location of such meeting have yet to be determined. While the Board will consider stockholder proposals, the Fund reserves the right to omit from its proxy statement and proxy card any stockholder proposal that it is not required to include under the Exchange Act, including Rule 14a-8 under the Exchange Act.
To be considered timely pursuant to Rule 14a-8(e) under the Exchange Act for inclusion in the Fund’s proxy statement and proxy card for a regularly scheduled annual meeting, a stockholder’s proposal must be received at the Fund’s principal executive offices not less than 120 calendar days before the anniversary of the date the Fund’s proxy statement was released to stockholders for the previous year's annual meeting. Accordingly, a stockholder’s proposal must be received not later than May 22, 2025 in order to be included in the Fund’s proxy statement and proxy card for the 2025 Annual Meeting of Stockholders.
In addition, the Fund’s bylaws contain an advance notice provision with respect to director nominations and other proposals, other than for stockholder proposals submitted pursuant to Rule 14a-8 discussed above. The Fund’s bylaws currently provide that, in order for a stockholder to nominate a candidate for election as a director at an annual meeting of stockholders or propose other business for consideration at an annual meeting, written notice in the manner provided for in the bylaws containing the information required by the bylaws generally must be delivered to the Fund’s Secretary at its principal executive office not earlier than the 150
th
day prior to the first anniversary of the date the Fund first released its proxy statement for the preceding year’s annual meeting (the “Anniversary Date”) nor later than 5:00 p.m., Eastern Time, on the 120
th
day prior to the Anniversary Date. Accordingly, under the Fund’s current bylaws, a stockholder nomination for director or proposal of other
18
business intended to be considered at the 2025 Annual Meeting of Stockholders must be received by the Fund’s Secretary not earlier than April 22, 2024, and not later than 5:00 p.m., Eastern Time, on May 22, 2025. Proposals should be addressed to the Fund’s Secretary, c/o Priority Income Fund, Inc., 10 East 40
th
Street, 42
nd
Floor, New York, New York 10016. In the event that the date of the next annual meeting of stockholders is advanced or delayed by more than 30 days from the first anniversary of the date of the prior annual meeting of stockholders, a notice by the stockholder to be timely must be so delivered not earlier than the 150
th
day prior to the date of such next annual meeting and not later than 5:00 p.m. Eastern Time on the 120
th
day prior to the date of such next annual meeting or the tenth day following the day on which public announcement of the date of such next annual meeting is first made. We reserve the right to reject, rule out of order or take other appropriate action with respect to any proposal that does not comply with these and other applicable requirements.
By Order of the Board of Directors,
Kristin Van Dask
Chief Financial Officer, Chief Compliance Officer,
Treasurer and Secretary
New York, New York
September 19, 2024
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