Form N-CSR
Pursuant to Rule 30b2-1 {17 CFR 270.30b2-1}
1. Investment Company Act File Number: 811-09189
2. Exact name of investment company as specified in
registration statement: Zazove Convertible Securities Fund, Inc.
3. Address of principal executive office:
1001 Tahoe Blvd.
Incline Village, NV 89451
4. Name and Address of Agent for Service:
Greg Shorin
1001 Tahoe Blvd.
Incline Village, NV 89451
5. Registrant's telephone number: 775.298-7500
6. Date of fiscal year end: December 31
7. Date of reporting period: January 1, 2020 through
December 31, 2020
Item 1. Report to Stockholders
Registrant's Annual Report is included as an Exhibit hereto.
Item 2: Code of Ethics
(a) Registrant has adopted a code of ethics (the "Code of Ethics")
that applies to its principal executive officer and principal
financial officer(s).
(b) No action required.
(c) Registrant did not adopt any amendment to the Code of Ethics
during the period covered.
(d) Registrant has not granted a waiver or an implicit waiver from its
Code of Ethics during the period covered by the shareholder report
presented in Item 1 hereto.
(e) Not applicable.
(f) (1) The registrant's Code of Ethics is attached as an Exhibit
hereto.
(2) Not applicable.
(3) Upon request, registrant will provide a copy without charge
of its Code of Ethics. Requests may be made by contacting
registrant by telephone at 847.239.7100.
Item 3: Audit Committee Financial Expert
Although Registrant's disinterested directors are sophisticated
and financially literate and have the necessary education and
experience to be effective directors, no director possesses
all of the specified attributes required to qualify as an audit
committee financial expert under the rules.
Item 4: Principal Accountant Fees and Services
(a) Audit Fees:
Audit Fees for the year ended December 31, 2019 $37.600
Audit Fees for the year ended December 31, 2020 $38.700
(b) Audit Related Fees:
Audit-Related Fees for the year ended December 31, 2019 $0.00
Audit-Related Fees for the year ended December 31, 2020 $0.00
(c) Tax Fees:
Tax Fees for the year ended December 31, 2019 $14,900
Tax Fees for the year ended December 31, 2020 $15,006
The foregoing fees were incurred for professional services
rendered by Registrant's principal accountant for tax
Compliance and tax return preparation.
(d) All Other Fees:
All Other Fees for the year ended December 31, 2019 $0.00
All Other Fees for the year ended December 31, 2020 $0.00
(e) Audit Committee's Procedures (Rule 2-01 of Regulation S-X).
This Rule is not applicable since Registrant is not a reporting
company under the Securities Exchange Act of 1934.
(f) Not applicable.
(g) The aggregate non-audit fees billed by Registrant's accountant
for services rendered to Registrant for the years ended
December 31, 2019 and December 31, 2020 were $14,900 and
$15,006, respectively.
The aggregate non-audit fees billed by Registrant's accountant
for services rendered to Registrant's investment advisor for
the years ended December 31, 2019 and December 31, 2020
were $20,115 and $20,011, respectively.
(h) Registrant's board of directors was made aware of the fact that
Registrant's principal accountant provides tax preparation and
audit services for Registrant's investment advisor and for
investment partnerships managed by investment advisor.
Item 5: Audit Committee of Listed Registrants
This item only applies to a registrant that is a listed issuer
as defined in Rule 10A-3 under the Exchange Act
(17 CFR 240.10A-3) and is therefore not applicable.
Item 6: Schedule of Investments. This information is included in
the Report to Shareholders in Item 1.
Item 7: Disclosure of Proxy Voting Policies and
Procedures for Closed-End Management Investment Companies.
A copy of Registrant's Proxy Voting Policies and
Procedures are included as an Exhibit hereto.
Item 8: Portfolio Managers of Closed-End Management Investment
Companies
(a)
(1) Zazove Associates, LLC is engaged as the Fund's Investment Advisor
pursuant to the terms of an Investment Advisory Agreement. The
Investment Advisor is registered with the Securities and Exchange
Commission under the Investment Advisers Act of 1940, as amended.
Gene T. Pretti serves as President of the Fund and has served as
the Investment Advisor's Chief Executive Officer, Sr. Portfolio
Manager and Chief Investment Officer since October 1989.
Mr. Pretti is responsible for the day-to-day management of the Fund
and is also primarily responsible for managing certain other
investment portfolios managed by the Investment Advisor.
(2) The following chart provides certain information with regard
to the other accounts over which Mr. Pretti is primarily responsible
for the day-to-day management:
Category No. of Accounts Assets
Registered investment companies -0- -0-
Other Pooled investment vehicles 2 $83.2 million
Other Accounts 70 $1.6 billion
No. of Accounts
With Performance
Based Fees Assets
Registered investment companies -0- -0-
Other Pooled investment vehicles 1 $33.5 million
Other Accounts 33 $1.2 billion
The Investment Advisor engages in the practice of placing aggregate
orders for the purchase or sale of securities on behalf of its
clients, which could include the Fund. It is often the case that
larger principal transactions can be executed at more favorable
prices than multiple smaller orders. In addition, larger broker
transactions may often be executed at lower commission costs on a
per-dollar basis than multiple small orders. In all cases in which
an aggregate order to purchase or sell securities is placed by the
Investment Advisor, each account that participates in the aggregated
order will participate at the average price and all transactions
costs will be shared pro rata. The Investment Advisor will act in
good faith in the allocation of an aggregated order among accounts
(including the Fund) such that no account is favored over any
other account. The Investment Advisor may have financial or other
incentives to favor certain other accounts over the Fund (e.g.,
another account pays higher fees), but the Investment Advisor
intends to treat all accounts (including the Fund) in a fair,
reasonable and equitable manner.
(3) Portfolio Manager Compensation
Mr. Pretti receives a fixed salary that is not dependent on the
performance of the Fund or any other accounts that he is primarily
responsible for managing. As the Investment Advisor's majority
equity holder, Mr. Pretti receives a distributive share of the
Investment Advisors net income.
(4) Portfolio Manager Beneficial Ownership in the Fund
The dollar range of Mr. Pretti's beneficial interest of equity
securities in the Fund is $500,000 - $1,000,000.
(b) Not applicable.
Item 9: Purchases of Equity Securities by Closed-End
Management Investment Company and Affiliated Purchasers.
Month Ending Total No. Avg. Price Total No. Maximum No.
Shares Paid Per Of Shares (or approximate
Purchased Shares Purchased value) of shares
As Part of that May Yet Be
Publicly Purchased Under
Announced the Plans or
Plans or Programs
Programs
January -0-
February -0-
March 74,745.96 $14.82 * *
April -0-
May -0-
June 10,006.58 $18.39 * *
July -0-
August -0-
September 43,133.20 $19.42 * *
October -0-
November -0-
December 57,150.60 $21.27 * *
* On a quarterly basis, it is a basic policy of the Fund
to offer to repurchase no less than 5% and no more than
25% of the Fund's outstanding shares at the then net asset
value per share. Notice of the terms and conditions of each
quarterly repurchase offer are sent to the shareholders in
advance of the offer. The Fund may impose a 2% fee on the
redemption of fund shares held for less than one year.
This fee is intended to compensate the Fund for expenses
related to such redemption. Shares are redeemed by treating
the shares first acquired by a shareholder as being redeemed
prior to shares acquired by such shareholders thereafter.
There were no redemption fees imposed during 2020. It is a
basic policy of the Fund to offer on a quarterly basis to
repurchase no less than 5% and no more than 25% of the Fund's
outstanding shares at the then net asset value per share.
A Shareholder who desires to have Shares redeemed at the
close of a calendar quarter must submit a written request
by the 17th day of March, June, September or December,
as applicable (or the next business day if such day is
not a business day). Each such day is referred to as a
"Repurchase Request Deadline." The Fund will send a notice
to each Shareholder no less than twenty-one and no more than
forty-two days before each Repurchase Request Deadline with
the details regarding the repurchase offer. If the number
of Shares requested by the Shareholders for repurchase
exceeds the number of Shares in the repurchase offer, then
the Fund may repurchase an additional two percent of the
outstanding Shares. If there is still an excess, the Fund
will repurchase Shares on a pro rata basis. The Fund has
adopted written procedures reasonably designed to ensure
that the Fund's portfolio is sufficiently liquid to enable
the Fund to fulfill the repurchase requests. The Fund has
the right, under certain circumstances, to force the
redemption of all or a portion of the Shares held by a
Shareholder. The Fund may impose a 2% fee on the repurchase
of Shares held for less than one year, which fee is intended
to compensate the Fund for expenses related to such redemption.
Shares are deemed repurchased by treating the Shares first
acquired by a Shareholder as being repurchased prior to Shares
acquired by such Shareholder thereafter.
Item 10: Submission of Matters to a Vote of Security Holders.
No material change.
Item 11: Controls and Procedures
a) Registrant's principal executive officer and principal
financial officer have evaluated Registrant's disclosure
controls and Procedures within 90 days of this filing and
have concluded that Registrant's disclosure controls and
procedures (as defined in Rule 30a-2(c)) were effective
as of that date, in ensuring that the information required
to be disclosed by Registrant in this Form N-CSR was recorded,
processed, summarized and reported on a timely basis.
Registrant's principal executive officer and principal
financial officer concluded that such procedures did not have
any significant deficiencies or material weaknesses that
require corrective action.
b) There were no changes in Registrant's internal control
over financial reporting (as defined in Rule 30a-3(d) under
the Investment Company Act of 1940) that occurred during
Registrant's last fiscal half-year (Registrant's second
fiscal half-year in the case of an annual report) that has
materially affected, or is reasonably likely to materially
affect, Registrant's internal control over financial
reporting.
Item 12: Exhibits
(a)(1) Registrants Code of Ethics is attached as an exhibit.
(a)(2) The certification required by Rule 30a-2(a)
under the Act (17 CFR 270.30a-2(a)) of each principal
executive officer of Registrant is attached.
(a)(3) Registrant's Annual Report for the Year Ended December 31, 2021.
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.
Zazove Convertible Securities Fund, Inc.
By: /s/ Gene T. Pretti
---------------------------------
Name: Gene T. Pretti
Title: Principal Executive Officer
Date: February 26, 2021
By: /s/ Steven M. Kleiman
---------------------------------
Name: Steven M. Kleiman
Title: Principal Financial Officer
Date: February 26, 2021