| UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549                                                                                                                                                                                                                                                                                                                                                                                    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Form 10-K                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (Mark one)                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| R                                                                                                                                                                                                                                                                                                                                                                                                                                                        | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     | For the fiscal year ended September 30, 2010 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
| £                                                                                                                                                                                                                                                                                                                                                                                                                                                   | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     | For the transition period from _________ to __________ |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Commission file number 000-24412 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
| MACC PRIVATE EQUITIES INC.                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (Exact name of registrant as specified in its charter)                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
| Delaware                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 42-1421406 |
| (State or other jurisdiction of incorporation or organization)                                                                                                                                                                                                                                                                                                                                                                                           | (I.R.S. Employer Identification No.) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
| 2533 South Coast Highway 101; Suite 240, Cardiff-By-The-Sea, California                                                                                                                                                                                                                                                                                                                                                                             | 92007 |
| (Address of principal executive offices)                                                                                                                                                                                                                                                                                                                                                                                                                 | (Zip Code) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
| Registrant’s telephone number (760) 479-5080                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
| Securities registered under Section 12(b) of the Exchange Act:                                                                                                                                                                                                                                                                                                                                                                                           |
| None.                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Securities registered under Section 12(g) of the Exchange Act:                                                                                                                                                                                                                                                                                                                                                                                           |
| Common Stock, $0.01 par value                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes £    No R                                                                                                                                                                                                                                                                                           |
| Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.  Yes £    No R                                                                                                                                                                                                                                                                          |
| Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the Exchange Act) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes R     No £                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes £     No £ |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. £                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Large accelerated filer  £ | Accelerated filer  £ |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Non-accelerated filer    R | Smaller reporting Company  £ |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     | (Do not check if a smaller reporting company) |   |   |
| Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes £ No R                                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Aggregate market value of the voting stock held by non-affiliates of the registrant as of December 15, 2010, based upon the value of the price reported by the OTCQB on that date: $1,700,588.                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Number of shares outstanding of the registrant's Common Stock as of December 15, 2010: 2,464,621                                                                                                                                                                                                                                                                                                                                                         |

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|   | ● | ability to continue as a going concern; |
|--------|---------|-----------------------------------------|

|   | ● | ability to pay down debt; |
|--------|---------|---------------------------|

|   | ● | ability to meet cash flow requirements; |
|--------|---------|-----------------------------------------|

|   | ● | future financial and operating results; |
|--------|---------|-----------------------------------------|

|   | ● | business strategies, prospects, and prospects of its portfolio companies; |
|--------|---------|---------------------------------------------------------------------------|

|   | ● | ability to operate as a business development company; |
|--------|---------|-------------------------------------------------------|

|   | ● | regulatory structure; |
|--------|---------|-----------------------|

|   | ● | adequacy of cash resources and working capital; |
|--------|---------|-------------------------------------------------|

|   | ● | projected costs; |
|--------|---------|------------------|

|   | ● | competitive positions; |
|--------|---------|------------------------|

|   | ● | management’s plans and objectives for future operations; and |
|--------|---------|--------------------------------------------------------------------|

|   | ● | industry trends. |
|--------|---------|------------------|

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|    |                                                                                                               |      |
|---------|--------------------------------------------------------------------------------------------------------------------|-----------|
|    | Part I                                                                                                             | Page      |   |
|    |                                                                                                               |      |   |
| Item 1  | Business                                                                                                           |   1  |   |
|    |                                                                                                               |      |   |
| Item 1A | Risk Factors                                                                                                       |   2  |   |
|    |                                                                                                               |      |   |
| Item 1B |  Unresolved Staff Comments                                                                     |   11 |   |
|    |                                                                                                               |      |   |
| Item 2  | Properties                                                                                                         |   12 |   |
|    |                                                                                                               |      |   |
| Item 3  | Legal Proceedings                                                                                                  |   12 |   |
|    |                                                                                                               |      |   |
| Item 4  | (Removed and Reserved).                                                                                            |   12 |   |
|    |                                                                                                               |      |   |
|    | Part II                                                                                                            |      |   |
|    |                                                                                                               |      |   |
| Item 5  | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |   12 |   |
|    |                                                                                                               |      |   |
| Item 6  | Selected Financial Data                                                                                            |   14 |   |
|    |                                                                                                               |      |   |
| Item 7  | Management’s Discussion and Analysis of Financial Conditions and Results of Operation                        |   14 |   |
|    |                                                                                                               |      |   |
| Item 7A | Quantitative and Qualitative Disclosures About Market Risk                                                         |  23  |   |
|    |                                                                                                               |      |   |
| Item 8  | Financial Statements and Supplementary Data                                                                        |   25 |   |
|    |                                                                                                               |      |   |
| Item 9  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                               |   51 |   |
|    |                                                                                                               |      |   |
| Item 9A | Controls and Procedures                                                                                            |   51 |   |
|    |                                                                                                               |      |   |
| Item 9B | Other Information                                                                                                  |   52 |   |
|    |                                                                                                               |      |   |
|    | Part III                                                                                                           |      |   |
|    |                                                                                                               |      |   |
| Item 10 | Directors, Executive Officers and Corporate Governance                                                             |   53 |   |
|    |                                                                                                               |      |   |
| Item 11 | Executive Compensation                                                                                             | 58        |   |
|    |                                                                                                               |      |   |
| Item 12 | Security Ownership of Certain Beneficial Owners and Management                                                     |   60 |   |
|    |                                                                                                               |      |   |
| Item 13 | Certain Relationships and Related Transactions, and Director Independence                                          |   61 |   |
|    |                                                                                                               |      |   |
| Item 14 | Principal Accountant Fees and Services                                                                             |   61 |   |
|    |                                                                                                               |      |   |
|    | Part IV                                                                                                            |      |   |
|    |                                                                                                               |      |   |
| Item 15 | Exhibits and Financial Statement Schedules                                                                         |   63 |   |

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|   | (1) | Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer is an eligible portfolio company.  An eligible portfolio company is defined in the 1940 Act as any issuer that: |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | is organized under the laws of, and has its principal place of business in, the United States; |
|--------|-----|------------------------------------------------------------------------------------------------|

|   | (b) | is not an investment company; and |
|--------|-----|-----------------------------------|

|   | (c) | satisfies one of the following: |
|--------|-----|---------------------------------|

|   | (i) | it does not have any class of securities with respect to which a member of a national securities exchange, broker or dealer may extend or maintain  credit; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | it is controlled by a BDC, either alone or as part of a group acting together,  and such BDC exercises control over the company and as a result of such control has an affiliated person who is a director of such BDC; |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | it has total assets of not more than $4,000,000, and capital and surplus (shareholders’ equity less retained earnings) of not less than $2,000,000; |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | it has a class of securities listed on a national securities exchange, with an aggregate market value of outstanding voting and non-voting equity of less than $250 million; or |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | such other criteria prescribed by the SEC established as consistent with public interest, the protection of investors, and the purposes fairly intended by the policy and provisions of the 1940 Act. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Cash, cash items, government securities, or high quality debt securities maturing in one year or less from the time of investment. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Securities received in exchange for or distributed on or with respect to securities described in (1) above, or pursuant to the exercise of options, warrants or rights relating to such securities. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | ● | First, many closed-end funds generally are structured to produce annual dividends to shareholders.  MACC, however, has not paid dividends but, rather, retained all income after taxes and expenses to reduce debt or fund additional investments and thus create capital appreciation.  The return to holders of MACC’s common stock is thus anticipated to be long-term and capital in nature. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Second, due to several factors, including the small size of MACC relative to fixed expenses, and the fact that much of the income of MACC arises through capital gains rather than ordinary income, MACC has lost money (that is, had net investment expense, rather than net investment income) in each of the last seven years.  Many similar funds are structured to earn sufficient current income to achieve operating income (investment income in excess of operating expenses) each year. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Third, at MACC’s annual shareholder meeting held on November 30, 2010, shareholders voted against giving MACC the ability to raise additional capital through the issuance of shares of common stock at a price below MACC’s then-current net asset value per share.   In addition, shareholders voted against allowing MACC the ability to issue warrants, options or rights to subscribe for or convert into common stock.  Without these authorizations to sell shares at below net asset value or issue options or warrants, MACC’s ability to raise funding through the capital markets is highly unlikely. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | ● price and volume fluctuations in the overall stock market from time to time; |
|--------|--------------------------------------------------------------------------------------|

|   | ● significant volatility in the market price and trading volume of securities of BDCs or other financial services companies; |
|--------|------------------------------------------------------------------------------------------------------------------------------------|

|   | ● changes in laws or regulatory policies or tax guidelines with respect to BDCs or regulated investment companies; |
|--------|--------------------------------------------------------------------------------------------------------------------------|

|   | ● actual or anticipated changes in our earnings or fluctuations in our operating results or changes in the expectations of securities analysts; |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● risks associated with possible disruption in our operations due to terrorism; |
|--------|---------------------------------------------------------------------------------------|

|   | ● general economic conditions and trends; |
|--------|-------------------------------------------------|

|   | ● loss of a major funding source; |
|--------|-----------------------------------------|

|   | ● departures of key personnel; or |
|--------|-----------------------------------------|

|   | ● other risks and uncertainties as may be detailed from time to time in our public announcements and SEC filings. |
|--------|-------------------------------------------------------------------------------------------------------------------------|

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|   |                | High   | Low    |
|--------|---------------------|--------|--------|
|   |                |   |   |
|   | September 30, 2008  | $      | 2.16   | 1.20 |
|   |                |   |   |   |
|   | December 31, 2008   |   | 1.46   | 0.50 |
|   |                |   |   |   |
|   | March 31, 2009      | 0.84   | 0.52   |
|   |                |   |   |
|   | June 30, 2009       | 1.74   | 0.40   |
|   |                |   |   |
|   | September 30, 2009  | 1.15   | 0.65   |
|   |                |   |   |
|   | December 31, 2009   | 0.96   | 0.40   |
|   |                |   |   |
|   | March 31, 2010      | 0.90   | 0.52   |
|   |                |   |   |
|   | June 30, 2010       | 0.77   | 0.54   |
|   |                |   |   |
|   | September 30, 2010* | 1.02   | 0.49   |

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|                                                              |   | 2010                                                                |   | 2009                                                          |   | 2008                                                                                                                            |   | 2007                                          |   | 2006                                                                |
|-------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|---------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|--------|---------------------------------------------------------------------|
|                                                              |   |                                                                |   |                                                          |   |                                                                                                                            |   |                                          |   |                                                                |
| Investment expense, net                                           | $      |     (774,214)                                   |   | (576,810)                                                     |   |  (447,791)                                                                                                                 |   | (786,487)                                     |   | (1,171,152)                                                         |
|                                                              |   |                                                                |   |                                                          |   |                                                                                                                            |   |                                          |   |                                                                |
| Net realized (loss)gain on investments                            |   | (3,185,785)                                                         |   | (2,444,130)                                                   |   | 687,269                                                                                                                         |   | 1,351,456                                     |   | 3,645                                                               |
|                                                              |   |                                                                |   |                                                          |   |                                                                                                                            |   |                                          |   |                                                                |
| Net change in unrealized depreciation/ appreciationon investments |   |    2,098,690                                         |   |     395,347                               |   |     (1,294,629)                                                                                             |   |       (662,393) |   |      (879,234)                             |
|                                                              |   |                                                                |   |                                                          |   |                                                                                                                            |   |                                          |   |                                                                |
| Realized loss on other assets                                     |   | ---                                                                 |   | ---                                                           |   | (30,678)                                                                                                                        |   | ---                                           |   | ---                                                                 |
|                                                              |   |                                                                |   |                                                          |   |                                                                                                                            |   |                                          |   |                                                                |
| Net change in net assets from operations                          | $      |      (1,861,309))                          |   |       (2,625,593)               |   |  (1,085,829)                                                                                                               |   |    (97,424)                    |   |   (2,046,741)                                             |
|                                                              |   |                                                                |   |                                                          |   |                                                                                                                            |   |                                          |   |                                                                |
| Net change in net assets from operations per common share         |   |           (0.761) |   |          (1.061) |   |                     (0.441) |   | (0.041)                                       |   |           (0.831) |
|                                                              |   |                                                                |   |                                                          |   |                                                                                                                            |   |                                          |   |                                                                |
| Total assets                                                      | $      |    9,574,785                                         |   |   12,516,519                                        |   |   15,313,877                                                                                                          |   |  18,008,787                              |   |   22,830,055                                              |
|                                                              |   |                                                                |   |                                                          |   |                                                                                                                            |   |                                          |   |                                                                |
| Total long term debt                                              | $      |      3,367,928                             |   |    4,618,659                                   |   |   4,750,405                                                                                                           |   |  6,108,373                               |   |   10,790,000                                              |

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|                                                     |    | For the years ended September 30,         |   |
|----------------------------------------------------------|---------|------------------------------------------------|--------|
|                                                     |    |                                           |   |   |   |   |   |
|                                                     |    |  2010                                     |   |  2009 |   |   2008 |   |
|  Total investment income                            |  $ |  395,339                                  |   | 586,989 |   | 955,563 |   |
| Total operating expenses                                 |    | (1,169,553                                     | )      |  (1,163,799 | ) | (1,403,354 | )  |
| Investment expense, net                                  |    | (774,214                                       | )      | (576,810 | ) | (447,791 | )  |
| Net realized (loss) gain on investments                  |    |  (3,185,785                               | )      | (2,444,130 | ) | 687,269 |   |
| Net unrealized appreciation (depreciation) oninvestments |    | 2,098,690                                      |   | 395,347 |   | (1,294,629 | )  |
| Realized loss on other assets                            |    | ---                                       |   | ---  |   | (30,678 | )  |
| Net (loss) gain on investments and other assets          |    |  (1,087,095                               | )      | (2,048,783 | ) | (638,038 | )  |
| Net change in net assets from operations                 |  $ |       (1,861,309 | )      |  (2,625,593 | ) | (1,085,829 | )  |
| Net asset value:                                         |    |                                           |   |   |   |   |   |
|     Beginning of year                |    |     3.17                   |   |    4.23 |   |         4.67 |   |
|     End of year                      |    |   2.41                               |   |    3.17 |   |  4.23 |   |

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|   | ● | Authorization for a reverse stock split of the Company’s common stock; |
|--------|---------|------------------------------------------------------------------------------|

|   | ● | To change the Company’s name to “MACC Equities, Inc.”; |
|--------|---------|--------------------------------------------------------------------------|

|   | ● | Authorization to sell or otherwise issue shares of the Company’s common stock at a price below its then-current net asset value per share; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Authorization to issue warrants, options or rights to subscribe for or convert into the Company’s common stock; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------|

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|   | ● | Approval of the Amended and Restated Investment Advisory Agreement between the Company and its current investment adviser, EAM; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Approval of the Amended and Restated Subadvisory Agreement by and among MACC, EAM and IAIA. |
|--------|---------|---------------------------------------------------------------------------------------------|

|   |  Payments due by period |   |
|--------|------------------------------|--------|
| Contractual Obligations |   |      |   |            |   |      |   |      |   |              |   |
|-------------------------|--------|-----------|--------|-----------------|--------|-----------|--------|-----------|--------|-------------------|--------|
|                    |   | Total     |   | Less than1 Year |   | 1-3 Years |   | 3-5 Years |   | More than 5 Years |   |
| Note Payable            | $      | 3,367,928 |   | 3,367,928       |   | ---       |   | ---       |   | ---               |   |
| Incentive Fees Payable  | $      | 16,361    |   | 16,361          |   | ---       |   | ---       |   | ---               |   |

| F A I R   V A L U E |
|------------------------------------|
| PORTFOLIO COMPANY                  | SEPTEMBER 30, 2010 | SEPTEMBER 30, 2009(1) |
| Aviation Manufacturing Group, LLC  |   |   | 1,649,215 | 1,618,039 |   |
| Detroit Tool Metal Products Co.    |   |   | 1,404,850 | 1,945,429 |   |
| Feed Management Systems, Inc.      |   |   | 75,504 | 151,007 |   |
| Linton Truss Corporation           |   |   | 9,336 | 75,036 |   |
| Magnum Systems, Inc.               |   |   | 1,751,417 | 1,113,737 |   |
| Monitronics International, Inc.    |   |   | 682,354 | 439,284 |   |
| Morgan Ohare, Inc.                 |   |   | 1,079,991 | 1,083,855 |   |
| Portrait Displays, Inc.            |   |   | 509,833 | 637,292 |   |
| SMWC Acquisition Co., Inc.         |   |   | 310,000 | 510,794 |   |
| Spectrum Products, LLC             |   |   | 1,077,542 | 1,510,355 |   |
| Superior Holding, Inc.             |   |   | 676,608 | 1,176,608 |   |

|   | (1) | September 30, 2009 valuations have been adjusted for additional amounts invested or partial disposition of the portfolio investment in 2010 for purposes of comparison. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Assets                                                                                                                              |   | 2010   |      |   | 2009   |   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                                                                                                |   |   |      |   |   |   |
| Loans and investments in portfolio securities, at fair value (note 2):                                                              |   |   |      |   |   |   |
| Unaffiliated companies (cost of $732,032 for 2010; $779,807 for 2009)                                                               |   | $      | 1,201,524 |   |   |   | 1,199,388 |   |
| Affiliated companies (cost of $6,072,436 for 2010; $10,664,161 for 2009)                                                            |   |   | 5,867,593 |   |   |   | 7,973,862 |   |
| Controlled companies (cost of $2,867,127 for 2010; $2,874,939 for 2009)                                                             |   |   | 2,157,533 |   |   |   | 2,602,022 |   |
| Cash and money market accounts                                                                                                      |   |   | 135,094   |   |   |   | 173,521 |   |
| Interest receivable                                                                                                                 |   |   | 24,255    |   |   |   | 303,656 |   |
| Other assets (note 1)                                                                                                               |   |   | 188,786   |   |   |   | 264,070 |   |
|                                                                                                                                |   |   |      |   |   |   |   |   |
| Total assets                                                                                                                        |   | $      | 9,574,785 |   |   |   | 12,516,519 |   |
|                                                                                                                                |   |   |      |   |   |   |   |   |
| Liabilities and net assets                                                                                                          |   |   |      |   |   |   |   |   |
|                                                                                                                                |   |   |      |   |   |   |   |   |
| Liabilities:                                                                                                                        |   |   |      |   |   |   |   |   |
| Note payable (note 3)                                                                                                               |   | $      | 3,367,928 |   |   |   | 4,618,659 |   |
| Incentive fees payable (note 5)                                                                                                     |   |   | 16,361    |   |   |   | 16,361 |   |
| Accounts payable and other liabilities                                                                                              |   |   | 242,417   |   |   |   | 72,111 |   |
|                                                                                                                                |   |   |      |   |   |   |   |   |
| Total liabilities                                                                                                                   |   |   | 3,626,706 |   |   |   | 4,707,131 |   |
|                                                                                                                                |   |   |      |   |   |   |   |   |
| Net assets:                                                                                                                         |   |   |      |   |   |   |   |   |
| Common stock, $.01 par value per share; authorized 10,000,000 shares;issued and outstanding 2,464,621 shares for each 2009 and 2008 |   |   | 24,646    |   |   |   | 24,646 |   |
| Additional paid-in-capital, net of accumulated investment expense and realized loss                                                 |   |   | 6,368,378 |   |   |   | 10,328,377 |   |
| Unrealized depreciation on investments (note 2)                                                                                     |   |   | (444,945  | )      |   |   | (2,543,635 | ) |
|                                                                                                                                |   |   |      |   |   |   |   |   |
| Total net assets                                                                                                                    |   |   | 5,948,079 |   |   |   | 7,809,388 |   |
|                                                                                                                                |   |   |      |   |   |   |   |   |
| Commitments and contingencies (note 6)                                                                                              |   |   |      |   |   |   |   |   |
|                                                                                                                                |   |   |      |   |   |   |   |   |
| Total liabilities and net assets                                                                                                    |   | $      | 9,574,785 |   |   |   | 12,516,519 |   |
|                                                                                                                                |   |   |      |   |   |   |   |   |
| Net assets per share                                                                                                                |   | $      | 2.41      |   |   |   | 3.17 |   |
|                                                                                                                                |   |   |      |   |   |   |   |   |

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|                                                       |    |   2010                 |   |   2009     |   |   2008     |   |
|------------------------------------------------------------|---------|-----------------------------|--------|-----------------|--------|-----------------|--------|
| Investment income:                                         |    |                        |   |            |   |            |   |
| Interest                                                   |  $ |   67,328          |   |  129,334   |   |  33,315    |   |
| Unaffiliated companies                                     |    |  203,492               |   | 236,787         |   | 516,387         |   |
| Affiliated companies                                       |    |  181,265               |   | 24,957          |   | 47,933          |   |
| Controlled companies                                       |    |  (241,843)             |   | ---             |   | ---             |   |
| Loss on interest receivable                                |    |  338                   |   | 318             |   | 2,917           |   |
| Other                                                      |    |                        |   |            |   |            |   |
| Dividends                                                  |    |                        |   |            |   |            |   |
| Affiliated companies                                       |    | 184,759                     |   | 161,174         |   |  355,005   |   |
| Controlled companies                                       |    |  --                    |   | 26,766          |   | ---             |   |
| Other                                                      |    |  --                    |   | 7,653           |   | 6               |   |
|                                                       |    |                        |   |            |   |            |   |
| Total investment income                                    |    | 395,339                     |   | 586,989         |   | 955,563         |   |
|                                                       |    |                        |   |            |   |            |   |
| Operating expenses:                                        |    |                        |   |            |   |            |   |
| Interest expenses (note 3)                                 |    | 258,753                     |   | 303,794         |   | 408,175         |   |
| Management fees (note 5)                                   |    | 229,228                     |   | 284,557         |   | 282,457         |   |
| Professional fees                                          |    | 465,815                     |   | 325,839         |   | 395,240         |   |
| Director fees                                              |    | 66,750                      |   | 80,500          |   |  64,000    |   |
| Other                                                      |    | 263,621                     |   | 229,862         |   |  253,482   |   |
|                                                       |    |                        |   |            |   |            |   |
| Total operating expenses before waivers                    |    | 1,284,167                   |   | 1,224,552       |   | 1,403,354       |   |
|                                                       |    |                        |   |            |   |            |   |
|  Expenses reduced by Advisor                          |    |  (114,614)             |   | (60,753)        |   | ---             |   |
|                                                       |    |                        |   |            |   |            |   |
| Total operating expenses                                   |    | 1,169,553                   |   |  1,163,799 |   | 1,403,354       |   |
|                                                       |    |                        |   |            |   |            |   |
| Investment expense, net before tax expense                 |    | (774,214)              |   | (576,810)       |   | (447,791)       |   |
|                                                       |    |                        |   |            |   |            |   |
| Income tax benefit (note 4)                                |    | --                     |   | ---             |   | ---             |   |
|                                                       |    |                        |   |            |   |            |   |
| Investment expense, net                                    |    | (774,214)              |   | (576,810)       |   | (447,791)       |   |
|                                                       |    |                        |   |            |   |            |   |
| Realized and unrealized loss on investments (note 2):      |    |                        |   |            |   |            |   |
| Net realized (loss) gain on investments:                   |    |                        |   |            |   |            |   |
| Unaffiliated companies                                     |    | ---                    |   |  (908,201) |   | (106,664)  |   |
| Affiliated companies                                       |    |  (3,185,785)           |   | (1,535,929)     |   | 580,605         |   |
| Net unrealized appreciation (depreciation) on investments  |    | 2,098,690                   |   | 395,347         |   | (1,294,629)     |   |
| Realized loss on other assets                              |    |    ---  |   |            |   | (30, 678)       |   |
| Net loss on investments                                    |    | (1,087,095                  | )      | (2,048,783      | )      | (638,038        | )      |
|                                                       |    |                        |   |            |   |            |   |
|    Net change in net assets from operations |    | (1,861,309                  | )      | (2,625,593      | )      | (1,085,829      | )      |
|                                                       |    |                        |   |            |   |            |   |
|                                                       |    |                        |   |            |   |            |   |

----

|                                                                                  |    |   2010          |   |   2009      |   |   2008      |   |
|---------------------------------------------------------------------------------------|---------|----------------------|--------|------------------|--------|------------------|--------|
| Operations:                                                                           |    |                 |   |             |   |             |   |
| Investment expense, net                                                               |  $ |   (774,214 | )      | (576,810         | )      | (447,791         | )      |
| Net realized (loss) gain on investments                                               |    | (3,185,785           | )      | (2,444,130       | )      | 687,269          |   |
| Net unrealized appreciation (depreciation)  on investments and other assets |    | 2,098,690            |   | 395,347          |   | (1,294,629       | )      |
| Realized loss on other assets                                                         |    | ---                  |   | ---              |   | (30,678          | )      |
|                                                                                  |    |                 |   |             |   |             |   |
| Net change in net assets from operations                                              |    |  (1,861,309     | )      |  (2,625,593 | )      |  (1,085,829 | )      |
|                                                                                  |    |                 |   |             |   |             |   |
| Net assets:                                                                           |    |                 |   |             |   |             |   |
| Beginning of year                                                                     |    | 7,809,388            |   | 10,434,981       |   | 11,520,810       |   |
|                                                                                  |    |                 |   |             |   |             |   |
|  End of year                                                                     |  $ | 5,948,079            |   | 7,809,388        |   | 10,434,981       |   |

----

|                                                                                       |   | 2010   |       |   | 2009   |   |       | 2008   |   |
|--------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Cash flows from operating activities:                                                      |   |   |       |   |   |   |       |   |   |
| Decrease in net assets from operations                                                     |   | $      | (1,861,309 | )      |   |   | (2,625,593 | )      |   |   | (1,085,829 | ) |
|                                                                                       |   |   |       |   |   |   |       |   |   |   |   |   |
| Adjustments to reconcile decrease in net assets from operations to                         |   |   |       |   |   |   |       |   |   |   |   |   |
| net cash provided by operating activities:                                                 |   |   |       |   |   |   |       |   |   |   |   |   |
| Net realized and unrealized loss (gain) on investments                                     |   |   | 1,057,551  |   |   |   | 2,048,783  |   |   |   | 607,360 |   |
| Net realized and unrealized gain on other assets                                           |   |   | ---        |   |   |   | ---        |   |   |   | 30,678 |   |
| Proceeds from disposition of and payments on                                               |   |   |       |   |   |   |       |   |   |   |   |   |
| loans and investments in portfolio securities                                              |   |   | 1,563,413  |   |   |   | 817,382    |   |   |   | 1,647,743 |   |
| Purchases of loans and investments in portfolio securities                                 |   |   | (72,342    | )      |   |   | (139,586   | )      |   |   | (52,000 | ) |
| Change in interest receivable                                                              |   |   | 279,401    |   |   |   | 9,905      |   |   |   | (44,963 | ) |
| Change in other assets                                                                     |   |   | 75,284     |   |   |   | 88,605     |   |   |   | (170,413 | ) |
| Change in accrued interest, deferred incentive fees payable,                               |   |   |       |   |   |   |       |   |   |   |   |   |
| accounts payable and other liabilities                                                     |   |   | 170,306    |   |   |   | (40,019    | )      |   |   | (251,113 | ) |
|                                                                                       |   |   |       |   |   |   |       |   |   |   |   |   |
| Total adjustments                                                                          |   |   | 3,073,613  |   |   |   | 2,785,070  |   |   |   | 1,767,292 |   |
|                                                                                       |   |   |       |   |   |   |       |   |   |   |   |   |
| Net cash provided by operating activities                                                  |   |   | 1,212,304  |   |   |   | 159,477    |   |   |   | 681,463 |   |
|                                                                                       |   |   |       |   |   |   |       |   |   |   |   |   |
| Cash flows from financing activities:                                                      |   |   |       |   |   |   |       |   |   |   |   |   |
| Line of credit draws                                                                       |   |   | ---        |   |   |   | 522,160    |   |   |   | --- |   |
| Note repayment                                                                             |   |   | (1,250,731 | )      |   |   | (653,906   | )      |   |   | (1,357,968 | ) |
|                                                                                       |   |   |       |   |   |   |       |   |   |   |   |   |
| Net cash used in financing activities                                                      |   |   | (1,250,731 | )      |   |   | (131,746   | )      |   |   | (1,357,968 | ) |
|                                                                                       |   |   |       |   |   |   |       |   |   |   |   |   |
| Net (decrease) increase in cash and cash equivalents                                       |   |   | (38,427    | )      |   |   | 27,731     |   |   |   | (676,505 | ) |
|                                                                                       |   |   |       |   |   |   |       |   |   |   |   |   |
| Cash and cash equivalents at beginning of period                                           |   |   | 173,521    |   |   |   | 145,790    |   |   |   | 822,295 |   |
|                                                                                       |   |   |       |   |   |   |       |   |   |   |   |   |
| Cash and cash equivalents at end of period                                                 |   | $      | 135,094    |   |   |   | 173,521    |   |   |   | 145,790 |   |
|                                                                                       |   |   |       |   |   |   |       |   |   |   |   |   |
| Supplemental disclosure of cash flow information -Cash paid during the period for interest |   | $      | 256,503    |   |   |   | 288,632    |   |   |   | 391,907 |   |
|                                                                                       |   |   |       |   |   |   |       |   |   |   |   |   |
| Non-cash Transactions:                                                                     |   |   |       |   |   |   |       |   |   |   |   |   |
|                                                                                       |   |   |       |   |   |   |       |   |   |   |   |   |
| Capitalization of interest in debt security                                                |   |   | 29,544     |   |   |   | ---        |   |   |   | --- |   |
|                                                                                       |   |   |       |   |   |   |       |   |   |   |   |   |
| Realized gain recognized in debt security restructuring                                    |   |   | 540,580    |   |   |   | ---        |   |   |   | --- |   |
|                                                                                       |   |   |       |   |   |

----

| (1) | SUMMARY OF SIGNIFICANT ACCOUNTING POLICES AND RELATED MATTERS |
|-----|---------------------------------------------------------------|

|   | (a) | Basis of Presentation |
|--------|-----|-----------------------|

|   | (b) | Going Concern Uncertainty and Liquidity |
|--------|-----|-----------------------------------------|

----

|   | (c) | Use of Estimates |
|--------|-----|------------------|

|   | (d) | Cash Equivalents |
|--------|-----|------------------|

|   | (e) | Loans and Investments in Portfolio Securities |
|--------|-----|-----------------------------------------------|

|   | (f) | Other Assets, Net |
|--------|-----|-------------------|

|   | (g) | Revenue Recognition |
|--------|-----|---------------------|

----

|   | (h) | Income Taxes |
|--------|-----|--------------|

|   |  (i) | Disclosures About Fair Value of Financial Instruments |
|--------|-----------|-------------------------------------------------------|

|   | (j) | Recent Accounting Pronouncements |
|--------|-----|----------------------------------|

----

| (2) | Investments |
|-----|-------------|

----

| Fair Value Based on        | Corporate Private Debt        |   | Corporate Private Equity |   | Total  |
|----------------------------|------------------------------------|--------|-------------------------------|--------|--------|
|                       |                               |   |                          |   |   |
| Investment Level III  | $ 6,092,445    |   | $3,134,205(1)                 |   | 100%   |

| Fair Value Based on        | Corporate Private Debt |   | Corporate Private Equity |   | Total  |
|----------------------------|------------------------|--------|-------------------------------|--------|--------|
|                       |                   |   |                          |   |   |
| Investment Level III  | $ 7,111,912       |   | $4,663,630(1)                 |   | 100%   |

----

| For the year ended September 30, 2010                                                                                                                                                                      |   |                                                   |   | Total  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|--------|--------|
|                                                                                                                                                                                                       |   |                                                   |   |   |   |
| Balance, October 1, 2009                                                                                                                                                                              |   |                                                   |   |   | $11,775,272 |
| Purchases (Debt Repayment)                                                                                                                                                                                 |   |                                                   |   |   |   |
|        Detroit Tool Metal Products Co.                                                                                                                                  |   | $33,342                                                |   |   |   |
|        Feed Management Systems, Inc.                                                                                                                                    |   | (1,288,285)                                            |   |   |   |
|        M.A. Gedney Company                                                                                                                                              |   | (76,000)                                               |   |   |   |
|        Magnum Systems, Inc.                                                                                                                                             |   | (143,541)                                              |   |   |   |
|        Morgan Ohare, Inc.                                                                                                                                               |   | (7,812)                                                |   |   |   |
|        Portrait Displays, Inc.                                                                                                                                          |   |       (47,775)           |   |   |   |
|        SMWC Acquisition Co., Inc                                                                                                                                        |   |         29,544 |   |   |   |
|        Superior Holding, Inc.                                                                                                                                           |   |         39,000 |   |   |   |
| TotaTotal Purchases (Debt Repayment)                                                                                                                                                                       |   |                                                   |   |   | (1,461,527) |
| RealRealized Gain (Loss)                                                                                                                                                                                   |   |                                                   |   |   |   |
|        Detroit Tool Metal Products Co.                                                                                                                                  |   | 540,579                                                |   |   |   |
|        Feed Management Systems, Inc.                                                                                                                                    |   | (562,203)                                              |   |   |   |
|        Handy Industries, LLC                                                                                                                                            |   | (269,093)                                              |   |   |   |
|        M.A. Gedney Company                                                                                                                                              |   | (1,450,601)                                            |   |   |   |
|        Pratt-Read Corporation                                                                                                                                           |   | (1,444,467)                                            |   |   |   |
| TotaTotal Realized Gain (Loss)                                                                                                                                                                             |   |                                                   |   |   | (3,185,785) |
| Un rUnrealized Gain (Loss)                                                                                                                                                                                 |   |                                                   |   |   |   |
|        Aviation Manufacturing Group, LLC                                                                                                                                |   | 31,176                                                 |   |   |   |
|        Detroit Metal Product Co.                                                                                                                                        |   | (540,579)                                              |   |   |   |
|        Feed Management Systems, Inc.                                                                                                                                    |   | (115,144)                                              |   |   |   |
|        Handy Industries, LLC                                                                                                                                            |   |     202,051                        |   |   |   |
|        Linton Truss Corporation                                                                                                                                         |   | (65,700)                                               |   |   |   |
|        M.A. Gedney Company                                                                                                                                              |   | 1,526,600                                              |   |   |   |
|        Magnum Systems, Inc.                                                                                                                                             |   | 637,680                                                |   |   |   |
|        Monitronics International, Inc.                                                                                                                                  |   | 243,070                                                |   |   |   |
|        Morgan Ohare, Inc.                                                                                                                                               |   | (3,864)                                                |   |   |   |
|        Portrait Displays, Inc.                                                                                                                                          |   | (127,459)                                              |   |   |   |
|        Pratt-Read Corporation                                                                                                                                           |   | 1,444,466                                              |   |   |   |
|        SMWC Acquisition Co., Inc.                                                                                                                                       |   | (200,794)                                              |   |   |   |
|        Spectrum Products, LLC                                                                                                                                           |   | (432,813)                                              |   |   |   |
|        Superior Holding, Inc.                                                                                                                                           |   | (500,000)                                              |   |   |   |
| TotaTotal Unrealized Gain (Loss)                                                                                                                                                                           |   |                                                   |   |   | 2,098,690 |
| BalaBalance, September 30, 2010                                                                                                                                                                            |   |                                                   |   |   | $9,226,650 |
| The The amount of total gains (losses) for the period included on the statement of operations attributable to changes in unrealized gains/losses relating to investments still held at the reporting date. |   |                                                   |   |   | $2,098,690 |

----

| For the year ended September 30, 2009                                                                                                                                                                      |   |                                                     |   | Total  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------|--------|--------|
|                                                                                                                                                                                                       |   |                                                     |   |   |   |
| Balance, October 1, 2008                                                                                                                                                                              |   |                                                     |   |   | $14,501,851 |
| Purchases (Debt Repayment)                                                                                                                                                                                 |   |                                                     |   |   |   |
|        Central Fiber Corporation                                                                                                                                        |   | ($258,222)                                               |   |   |   |
|        Handy Industries, LLC                                                                                                                                            |   | 100,565                                                  |   |   |   |
|        Linton Truss Corporation                                                                                                                                         |   | 21                                                       |   |   |   |
|        MainStream Data, Inc.                                                                                                                                            |   |       (100,057)            |   |   |   |
|        Morgan Ohare, Inc.                                                                                                                                               |   | (57,292)                                                 |   |   |   |
|        Portrait Displays, Inc.                                                                                                                                          |   |       (81,575)             |   |   |   |
|        SMWC Acquisition Co., Inc                                                                                                                                        |   |         (73,425) |   |   |   |
|        Superior Holding, Inc.                                                                                                                                           |   |         39,000   |   |   |   |
|        Warren Family Funeral Homes, Inc.                                                                                                                                |   |        (12)           |   |   |   |
| TotaTotal Purchases (Debt Repayment)                                                                                                                                                                       |   |                                                     |   |   | (430,997) |
| RealRealized Gain (Loss)                                                                                                                                                                                   |   |                                                     |   |   |   |
|        Handy Industries, LLC                                                                                                                                            |   | (667,327)                                                |   |   |   |
|        Kwik-Way Products, Inc.                                                                                                                                          |   | (768,610)                                                |   |   |   |
|        MainStream Data, Inc.                                                                                                                                            |   | (99,992)                                                 |   |   |   |
|        Phonex Broadband Corporation                                                                                                                                     |   | (1,155,000)                                              |   |   |   |
| TotaTotal Realized Gain (Loss)                                                                                                                                                                             |   |                                                     |   |   | (2,690,929) |
| Un rUnrealized Gain (Loss)                                                                                                                                                                                 |   |                                                     |   |   |   |
|        Aviation Manufacturing Group, LLC                                                                                                                                |   | (24,520)                                                 |   |   |   |
|        Detroit Tool Metal Products Co.                                                                                                                                  |   | (321,973)                                                |   |   |   |
|        Feed Management Systems, Inc.                                                                                                                                    |   | 39,641                                                   |   |   |   |
|        Handy Industries, LLC                                                                                                                                            |   |     215,877                          |   |   |   |
|        Kwik-Way Products, Inc.                                                                                                                                          |   | 768,610                                                  |   |   |   |
|        Linton Truss Corporation                                                                                                                                         |   | (115,000)                                                |   |   |   |
|        M.A. Gedney Company                                                                                                                                              |   | (145,999)                                                |   |   |   |
|        Magnum Systems, Inc.                                                                                                                                             |   | (250,000)                                                |   |   |   |
|        MainStream Data, Inc.                                                                                                                                            |   | (24,951)                                                 |   |   |   |
|        Morgan Ohare, Inc.                                                                                                                                               |   | (216,667)                                                |   |   |   |
|        Phonex Broadband Corporation                                                                                                                                     |   | 1,154,999                                                |   |   |   |
|        Portrait Displays, Inc.                                                                                                                                          |   | 324,050                                                  |   |   |   |
|        Pratt-Read Corporation                                                                                                                                           |   | (905,576)                                                |   |   |   |
|        Spectrum Products, LLC                                                                                                                                           |   | 432,706                                                  |   |   |   |
|        Superior Holding, Inc.                                                                                                                                           |   | (335,850)                                                |   |   |   |
|        Warren Family Funeral Homes, Inc.                                                                                                                                |   | (200,000)                                                |   |   |   |
| TotaTotal Unrealized Gain (Loss)                                                                                                                                                                           |   |                                                     |   |   | 395,347 |
| BalaBalance, September 30, 2009                                                                                                                                                                            |   |                                                     |   |   | $11,775,272 |
| The The amount of total gains (losses) for the period included on the statement of operations attributable to changes in unrealized gains/losses relating to investments still held at the reporting date. |   |                                                     |   |   | $395,347 |

----

|   |                        | September 30, 2010 |       | September 30, 2009 |       |
|--------|-----------------------------|--------------------|------------|--------------------|------------|
|   |                        | Cost               | Fair Value | Cost               | Fair Value |
|   | Senior Subordinated Debt    | 7,748,643          | 6,092,445  | 7,949,900          | 7,111,912  |
|   | Preferred Equity Securities | 1,416,892          | 557,848    | 4,686,768          | 3,074,045  |
|   | Common Equity Securities    | 354,663            | 1,698,638  | 1,681,849          | 817,925    |
|   | Membership Interests        | 390                | 802,215    | 390                | 771,390    |
|   | Escrows                     | 151,007            | 75,504     | ---                | ---        |

|  (3) | NOTES PAYABLE |
|-----------|---------------|

|  (4) | INCOME TAXES |
|-----------|--------------|

|                                                 |                                                                              | 2010       |      | 2009      |     | 2008      |
|------------------------------------------------------|-----------------------------------------------------------------------------------|------------|-----------|-----------|----------|-----------|
| Computed “expected” tax expense          | $                                                                                 | ( 619,000) |      | (914,000) |     | (369,000) |
| Increase (reduction) in income taxes resulting from: |                                                                              |       |      |      |     |      |
|                                                 | Nontaxable dividend income                                                        |       | ( 31,000) |      | (26,000) |      | (59,000) |
|                                                 | Reduction of Federal Net Operating Losses                                         |       | 1,136,000 |      | ---      |      | 1,824,000 |
|                                                 | Change in the beginning of the period valuation allowance for deferred tax assets |       | (504,000) |      | 940,000  |      | (1,396,000) |
|                                                 | Other                                                                             |       | 18,000    |      | ---      |      | --- |
|                                                 |                                                                              |       |      |      |     |      |   |
|                                                 | Income tax expense / (benefit)                                                    | $          | ---       |      | ---      |      | --- |

----

|                     |                                         | 2010        |      | 2009        |
|--------------------------|----------------------------------------------|-------------|-----------|-------------|
| Deferred tax assets:     |                                         |        |      |        |
|                     | Net operating and capital loss carryforwards | $           | 8,174,000 |        | 7,953,000 |
|                     | Unrealized depreciation on investments       |        | 590,000   |        | 1,460,000 |
|                     | Interest Reserve and other                   |        | 513,000   |        | 586,000 |
|                     |                                         |        |      |        |   |
|                     | Total gross deferred tax assets              |        | 9,277,000 |        | 9,999,000 |
|                     |                                         |        |      |        |
| Less valuation allowance |                                         | (8,947,000) |      | (9,451,000) |
| Net deferred tax assets  |                                         | 330,000     |      | 548,000     |

| Deferred tax liabilities: |                                  |   |       |
|---------------------------|---------------------------------------|--------|------------|
|                      | Equity pass-through investments       |   | (275,000)  | (427,000) |
|                      | Other assets received in lieu of cash |   | ( 55,000 ) | (121,000) |
|                      | Net deferred tax assets               | $      | ---        | --- |

| (5) | MANAGEMENT AGREEMENTS |
|-----|-----------------------|

|   | (a) | Eudaimonia |
|--------|-----|------------|

----

|   | (b) | InvestAmerica |
|--------|-----|---------------|

| (6) | Commitments and Contingencies |
|-----|-------------------------------|

|  (7) | Subsequent events |
|-----------|-------------------|

|   | ● | Authorization for a reverse stock split of the Company’s common stock; |
|--------|---------|------------------------------------------------------------------------------|

|   | ● | To change the Company’s name to “MACC Equities, Inc.”; |
|--------|---------|--------------------------------------------------------------------------|

|   | ● | Authorization to sell or otherwise issue shares of the Company’s common stock at a price below its then-current net asset value per share; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Authorization to issue warrants, options or rights to subscribe for or convert into the Company’s common stock; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------|

|   | ● | Approval of the Amended and Restated Investment Advisory Agreement between the Company and its current investment adviser, EAM; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Approval of the Amended and Restated Subadvisory Agreement by and among MACC, EAM and IAIA. |
|--------|---------|---------------------------------------------------------------------------------------------|

----

|                                                                                                                                                                                                        |                                                                                         | 2010                   |                               | 2009                   |                                  | 2008                   |         | 2007                   |         | 2006                   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------|------------------------|------------------------------------|------------------------|---------------------------------------|------------------------|--------------|------------------------|--------------|------------------------|
|                                                                                                                                                                                                        |                                                                                         |                   |                               |                   |                                  |                   |         |                   |         |                   |
| Per Share Operating Performance  (For a share of capital stock outstanding     throughout the period):     Net asset value, beginning of period |    $                                                                          |    3.17 |                               |    4.23 |                                  |    4.67 |         |    4.71 |         |    5.54 |
|                                                                                                                                                                                                        |                                                                                         |                   |                               |                   |                                  |                   |         |                   |         |                   |
|   Income from investment operations:                                                                                                                                                              |                                                                                         |                   |                               |                   |                                  |                   |         |                   |         |                   |
|                                                                                                                                                                                                        | Investment expense, net                                                                      |                   | (0.32)                             |                   | (0.23)                                |                   | (0.18)       |                   | (0.32)       |                   | (0.48) |
|                                                                                                                                                                                                        | Net realized and unrealized (loss)                                                           |                   |                               |                   |                                  |                   |         |                   |         |                   |   |
|                                                                                                                                                                                                        |     gain on investment transactions                                      |                   | (0.44)                             |                   | (0.83)                                |                   | (0.26)       |                   | 0.28         |                   | (0.35) |
|                                                                                                                                                                                                        |           Total from investment operations |                   | (0.76)                             |                   | (1.06)                                |                   | (0.44)       |                   | (0.04)       |                   | (0.83) |
|                                                                                                                                                                                                        |                                                                                         |                   |                               |                   |                                  |                   |         |                   |         |                   |   |
|      Net asset value, end of period                                                                                                                                                | $                                                                                            | 2.41                   |                               | 3.17                   |                                  | 4.23                   |         | 4.67                   |         | 4.71                   |
|      Closing market price                                                                                                                                                          | $                                                                                            | 0.85                   |                               | 0.80                   |                                  | 1.36                   |         | 2.45                   |         | 1.78                   |
|                                                                                                                                                                                                        |                                                                                         |                   |                               |                   |                                  |                   |         |                   |         |                   |
|                                                                                                                                                                                                        |                                                                                         | 2010                   |                               | 2009                   |                                  | 2008                   |         | 2007                   |         | 2006                   |
|                                                                                                                                                                                                        |                                                                                         |                   |                               |                   |                                  |                   |         |                   |         |                   |
|                                                                                                                                                                                                        | Total return                                                                                 |                   |                               |                   |                                  |                   |         |                   |         |                   |   |
|                                                                                                                                                                                                        |   Net asset value basis (1)                                                        |                   | (23.83)                            | %                      |      (25.16) |                   | (9.42)       |                   | (0.84)       |                   | (14.98) |
|                                                                                                                                                                                                        |   Market price basis                                                               |                   |      6.25 | %                      | (41.18)                               |                   | (44.49)      |                   | 37.64        |                   | (30.74) |
|                                                                                                                                                                                                        |                                                                                         |                   |                               |                   |                                  |                   |         |                   |         |                   |   |
|                                                                                                                                                                                                        | Net asset value, end of period   (in thousands)                               |  $                |  5,948                        |                   |  7,809                           |                   |  10,435 |                   |  11,521 |                   |  11,618 |
|                                                                                                                                                                                                        |                                                                                         |                   |                               |                   |                                  |                   |         |                   |         |                   |   |
|     Ratio to average net assets:                                                                                                                                                        |                                                                                         |                   |                               |                   |                                  |                   |         |                   |         |                   |
|                                                                                                                                                                                                        | Investment (expense) income, net (1)                                                         |                   | (10.37)                            | %                      | (6.09)                                |                   | (4.12)       |                   | (6.71)       |                   | (8.53) |
|                                                                                                                                                                                                        | Operating and income tax expense (1)                                                         |                   | 15.67                              | %                      | 12.29                                 |                   | 12.92        |                   | 15.22        |                   | 18.46 |

----

|                                               | 2010        |
|----------------------------------------------------|-------------|
|                                               | 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter |
| Total Investment Income                            | $167,043    | $56,330 | $78,775 | $93,191 |
| Interest Expense                                   | 51,965      | 67,914 | 67,811 | 71,063 |
| Management and Professional Fees                   | 210,815     | 133,841 | 113,742 | 122,031 |
| Other Expenses                                     | 117,324     | 78,033 | 65,056 | 69,958 |
| Investment Expense, Net                            | (213,061)   | (223,458) | (167,834) | (169,861) |
| Net gain (loss) on investments                     | (1,144,861) | 826,589 | (445,152) | (323,671) |
| Net Change in Net Assets from Operations      | (1,357,922) | 603,131 | (612,986) | (493,532) |
| Net Change in Net Assets from Operations per Share | $(0.55)     | $0.24 | $(0.25) | $(0.20) |
| Net Asset Value per Share                          | $2.41       | $2.96 | $2.72 | $2.97 |
|                                               |        |
|                                               | 2009        |
|                                               | 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter |
| Total Investment Income                            | $141,403    | $152,445 | $81,763 | $211,379 |
| Interest Expense                                   | 74,647      | 85,745 | 70,895 | 72,507 |
| Management and Professional Fees                   | 127,877     | 95,909 | 184,686 | 132,171 |
| Other Expenses                                     | 95,008      | 70,903 | 64,731 | 88,721 |
| Investment Expense, Net                            | (156,129)   | (100,112) | (238,549) | (82,020) |
| Net gain (loss) on investments                     | (91,979)    | (1,075,523) | (1,150,381) | 269,100 |
| Net Change in Net Assets from Operations           | (248,108)   | (1,175,635) | (1,175,635) | 187,080 |
| Net Change in Net Assets from Operations per Share | $(0.10)     | $(0.48) | $(0.56) | $0.08 |
| Net Asset Value per Share                          | $3.17       | $3.27 | $3.75 | $4.31 |
|                                               |        |
|                                               | 2008        |
|                                               | 4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter |
| Total Investment Income                            | $219,400    | $281,861 | $194,298 | $260,004 |
| Interest Expense                                   | 77,871      | 93,377 | 108,812 | 128,115 |
| Management and Professional Fees                   | 118,538     | 174,370 | 262,105 | 122,684 |
| Other Expenses                                     | 71,579      | 94,274 | 94,865 | 56,764 |
| Investment Expense, Net                            | (48,588)    | (80,160) | (271,484) | (47,559) |
| Net gain (loss) on investments                     | (339,926)   | 611,097 | (187,855) | (721,354) |
| Net Change in Net Assets from Operations           | (388,514)   | 530,937 | (459,339) | (768,913) |
| Net Change in Net Assets fromOperations per Share  | $(0.16)     | $0.21 | $(0.18) | $(0.31) |
| Net Asset Value per Share                          | $4.23       | $4.39 | $4.18 | $4.36 |

----

| CASH ADDITIONS TO PREVIOUS INVESTMENTS | DISPOSITIONS                                                                                                                                |   |                          |
|----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|
|                                   | AmountInvested                                                                                                                              |   |  Cost                    |   | Amount Received |   |
| Detroit Tool Metal Products*           | $                      33,342 |   | Feed Management Systems, Inc. | $ | 2,001,495 | $ | 1,288,285 |   |
| Superior Holding, Inc.*                | 39,000                                                                                                                                      |   | Handy Industries, LLC         |   | 269,093 |   | 0 |   |
|                                   |                                                                                                                                        |   | M.A. Gedney Company           |   | 1,526,601 |   | 76,000 |   |
|                                   |                                                                                                                                        |   | Pratt-Read Corporation        |   | 1,444,467 |   | 0 |   |
|                                   | $              72,342                                                 |   |                          |  $ |        5,241,656 | $ |      1,364,285 |
|                                   |                                                                                                                                        |   |                          |   |   |   |   |   |
|                                   |                                                                                                                                        |   | REPAYMENTS RECEIVED           |   | $ | 199,128 |   |

----

| Manufacturing:                                           |                                                                     |
|----------------------------------------------------------|--------------------------------------------------------------------------|
| Company                                                  | Security                                                                 | Percentof Net assets |   | Value |   | Cost (d) |
|                                                     |                                                                     |   |   |   |   |   |
| Aviation Manufacturing Group, LLC (a)                    | 14% debt security, due December 31, 2011                                 |   | $ | 616,000 |   | 616,000 |
| Yankton, South Dakota                                    | 154,000 units preferred                                                  |   |   | 154,000 |   | 154,000 |
| Manufacturer of flight critical parts for aircraft       | Membership interest14% note, due December 31, 2011                       |   |   | 802,215   77,000 |   | 39   77,000 |
|                                                     |                                                                     |   |   | 1,649,215 |   |   847,039 |
|                                                     |                                                                     |   |   |   |   |   |
| Detroit Tool Metal Products Co. (a)                      | 12% debt security, due December 31, 2011                                 |   |   | 1,371,508 |   | 1,912,087 |
| Lebanon, Missouri                                        | 19,853.94 shares Series A preferred (c)                                  |   |   | ---- |   | 195,231 |
|     Metal stamping                   | 7,887.17 shares common (c)                                               |   |   | ---- |   | 126,742 |
|                                                     | 8% debt security, due December 31, 2011                                  |   |   |     33,342 |   |     33,342 |
|                                                     |                                                                     |   |   |  1,404,850 |   |  2,267,402 |
|                                                     |                                                                     |   |   |   |   |   |
| Linton Truss Corporation                                 | 542.8 common shares (c)                                                  |   |   | ---- |   | ---- |
| Delray Beach, Florida                                    | 400 shares Series 1 preferred (c)                                        |   |   | 9,336 |   | 40,000 |
| Manufacturer of residential roof and floor truss systems | Warrants to purchase common shares (c)                                   |   |   |     ---  |   |              36  |
|                                                     |                                                                     |   |   |     9,336 |   |       40,036 |
|                                                     |                                                                     |   |   |   |   |   |
| Magnum Systems, Inc. (a)                                 | 12% debt security, due November 1, 2011                                  |   |   | 430,622 |   | 430,622 |
| Parsons, Kansas                                          | 48,038 common shares (c)                                                 |   |   | 48,038 |   | 48,038 |
| Manufacturer of industrial bagging equipment             | 292,800 shares preferred (c)Warrant to purchase 56,529 common shares (c) |   |   | 304,512    968,245 |   | 304,512           565 |
|                                                     |                                                                     |   |   | 1,751,417 |   |     783,737 |
|                                                     |                                                                     |   |   |   |   |   |
|   Spectrum Products, LLC (b)                        |   13% debt security, due January 1, 2011 (c)                        |   |   |   1,077,542 |   |   1,077,649 |
| Missoula, Montana                                        | 385,000 units Series A preferred (c)                                     |   |   |  --- |   | 385,000 |
| Manufacturer of equipment for the swimming pool     | Membership interest (c)                                                  |   |   |    --- |   | 351 |
| industry                                                 | 35,073.50 units Class B preferred (c)                                    |   |   |  --- |   |      47,355 |
|                                                     |                                                                     |   |   | 1,077,542 |   | 1,510,355 |
|                                                     |                                                                     |   |   |   |   |   |
|                                                                           |                                         |   |   |                                                                                    |   |      |
|--------------------------------------------------------------------------------|----------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------|--------|-----------|
|  Superior Holding, Inc. (a)                                               | 6% debt security, due April 1, 2013 (c)      |   |   | 370,608                                                                                 |   | 780,000   |
|     Wichita, Kansas                                        | Warrant to purchase 11,143 common shares (c) |   |   |               --- |   | 1         |
|         Manufacturer of industrial and | 6% debt security, due April 1, 2013 (c)      |   |   | 110,000                                                                                 |   | 221,000   |
|         commercial boilers and shower  | 121,457 common shares (c)                    |   |   | ----                                                                                    |   | 121,457   |
|         doors, frames and enclosures   | 6% debt security, due April 1, 2013 (c)      |   |   | 150,000                                                                                 |   | 308,880   |
|                                                                           | 312,000 common shares (c)                    |   |   | ----                                                                                    |   | 3,120     |
|                                                                           | 12% debt security, April 1, 2013             |   |   | 23,000                                                                                  |   | 39,000    |
|                                                                           | 12% debt security, April 1, 2013             |   |   | 23,000                                                                                  |   | 39,000    |
|                                                                           |                                         |   |   | 676,608                                                                                 |   | 1,512,458 |
|                                                                           |                                         |   |   |                                                                                    |   |      |
| Total manufacturing                                                            |                                         | 71%    |   | 6,568,968                                                                               |   | 6,961,027 |
|                                                                           |                                         |   |   |                                                                                    |   |      |

----

| Service:                                                                                                                                      |                                      |
|-----------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------|
| Company                                                                                                                                       | Security                                  | Percent of Net assets |   | Value |   | Cost (d) |
|                                                                                                                                          |                                      |   |   |   |   |   |
| Monitronics International, Inc.                                                                                                               | 73,214 common shares (c)                  |   |   |    682,354 |   |       54,703 |
| Dallas, Texas                                                                                                                                 |                                      |   |   |   |   |   |
| Provides home security systems monitoring services                                                                                            |                                      |   |   |   |   |   |
|                                                                                                                                          |                                      |   |   |   |   |   |
| Morgan Ohare, Inc. (b)                                                                                                                        | 0% debt security, due January 1, 2011 (c) |   |   | 848,219 |   | 1,125,000 |
| Addison, Illinois                                                                                                                             | 10% debt security, due January 1, 2011    |   |   | 231,771 |   | 231,771 |
| Fastener plating and heat treating                                                                                                            | 57 common shares (c)                      |   |   | 1 |   | 1 |
|                                                                                                                                          |                                      |   |   | 1,079,991 |   | 1,356,772 |
|                                                                                                                                          |                                      |   |   |   |   |   |
| SMWC Acquisition Co., Inc. (a)Kansas City, Missouri    Steel warehouse distribution and    Processing | 12% debt security due September 30, 2011  |   |   | 220,000 |   | 220,000 |
| 145,397 shares Series A preferred (c)                                                                                                         |                                      |   | 90,000 |   | 290,794 |
|                                                                                                                                          |                                      |   | 310,000 |   | 510,794 |
|                                                                                                                                          |                                      |   |   |   |   |
|                                                                                                                                          |                                      |   |   |   |   |   |
| Total Service                                                                                                                                 |                                      |  23 % |   | 2,072,345 |   | 1,922,269 |
|                                                                                                                                          |                                      |   |   |   |   |   |
| Technology and Communications:      |                                         |      |   |                      |   |          |
|-------------------------------------|----------------------------------------------|-----------|--------|---------------------------|--------|---------------|
|                                |                                         |      |   |                      |   |          |
| Feed Management Systems, Inc. (a)   | Escrow (c)                                   |      |   |   75,504        |   |  151,007 |
| Brooklyn Center, Minnesota          |                                         |      |   |                      |   |          |
| and B2B internet services           |                                         |      |   |                      |   |          |
|                                |                                         |      |   |                      |   |          |
| Portrait Displays, Inc.             | 10% debt security, due April 1, 2012         |      |   | 509,833                   |   |  637,292 |
| Pleasanton, California              | Warrant to purchase 39,400 common shares (c) |      |   | ----                      |   |  ----    |
| Designs and markets pivot enabling  |                                         |      |   |    509,833 |   |  637,292 |
| software for LCD computer monitors  |                                         |      |   |                      |   |          |
|                                |                                         |      |   |                      |   |          |
| Total technology and communications |                                         |  6 % |   | 585,337                   |   |  788,299 |
|                                |                                         |      |   |                      |   |          |
|                                |                                         |      |   |                      |   |          |
|                                |                                         |      | $      | 9,226,650                 |   | 9,671,595     |
|                                |                                         |      |   |                      |   |          |

----

|  Description                 |   | Beginning Cost | Purchases | Sales     | EndingCost | DividendIncome | Interest Income | Net Realized Gains/Losses |
|-----------------------------------|--------|----------------|-----------|-----------|------------|----------------|----------------------|---------------------------|
|                              |   |           |      |      |       |           |                 |                      |
| Aviation Manufacturing Group, LLC | $      | 847,039        | ---       | ---       | 847,039    | 53,631         | 97,020               | ---                       |
| Detroit Tool Metal Products Co.   |   | 1,693,480      | 573,922   | ---       | 2,267,402  | ---            | (241,843)            | 540,579                   |
| Feed Management Systems, Inc.     |   | 2,001,495      | ---       | 1,850,488 | 151,007    | 88,496         | ---                  | (562,203)                 |
| Handy Industries, LLC             |   | 269,093        | ---       | 269,093   | ---        | ---            | ---                  | (269,093)                 |
| M.A. Gedney Company               |   | 1,526,601      | ---       | 1,526,601 | ---        | ---            | ---                  | (1,450,601)               |
| Magnum Systems, Inc.              |   | 927,278        | ---       | 143,541   | 783,737    | 42,632         | 55,072               | ---                       |
| Pratt-Read Corporation            |   | 1,444,467      | ---       | 1,444,467 | ---        | ---            | ---                  | (1,444,467)               |
| SMWC Acquisition Co., Inc         |   | 481,250        | 29,544    | ---       | 510,794    | ---            | 42,891               | ---                       |
| Superior Holding, Inc.            |   | 1,473,458      | 39,000    | ---       | 1,512,458  | ---            | 8,510                | ---                       |
|                              |   |           |      |      |       |           |                 |                      |
| Total                             | $      | 10,664,161     | 642,466   | 5,234,190 | 6,072,437  | 184,759        | (38,350)             | (3,185,785)               |

|  Description      | BeginningCost | PurchaseCost | SalesCost | EndingCost | DividendIncome | Interest Income | Net Realized Gains/Losses |
|------------------------|---------------|--------------|-----------|------------|----------------|-----------------|---------------------------|
| Morgan Ohare, Inc.     | $             | 1,364,584    | ---       | 7,812      | 1,356,772      | ---             | (30,602)                  | --- |
| Spectrum Products, LLC |          | 1,510,355    | ---       | ---        | 1,510,355      | ---             | 211,867                   | --- |
| Total                  | $             | 2,874,939    | ---       | 7,812      | 2,867,127      | ---             | 181,265                   | --- |

----

| Unrealized appreciation | $                           | 1,475,878 |   |
|-------------------------|-----------------------------|-----------|--------|
| Unrealized depreciation |    (825,620) |      |
|                    | Net unrealized depreciation | $ 650,258 |   |

----

| Company                                                                     | Security                                    | Percent of Net Assets |   | Value      |   | Cost (d)   |
|-----------------------------------------------------------------------------|---------------------------------------------|-----------------------|--------|------------|--------|------------|
|                                                                        |                                        |                  |   |       |   |       |
| Aviation Manufacturing Group, LLC (a)                                       | 14% debt security, due October 1, 2010 (c)  |                  | $      | 616,000    |   | 616,000    |
| Yankton, South Dakota                                                       | 154,000 units preferred                     |                  |   | 154,000    |   | 154,000    |
| Manufacturer of flight critical                                             | Membership interest                         |                  |   | 771,039    |   | 39         |
| parts for aircraft                                                          | 14% note, due October 1, 2010               |                  |   | 77,000     |   | 77,000     |
|                                                                        |                                        |                  |   | 1,618,039  |   | 847,039    |
|                                                                        |                                        |                  |   |       |   |       |
| Detroit Tool Metal Products Co. (a)                                         | 12% debt security, due November 18, 2009    |                  |   | 1,371,507  |   | 1,371,507  |
| Lebanon, Missouri                                                           | 19,853.94 shares Series A preferred (c)     |                  |   | ---        |   | 195,231    |
| Metal stamping                                                              | 7,887.17 shares common (c)                  |                  |   | ---        |   | 126,742    |
|                                                                        |                                        |                  |   | 1,371,507  |   | 1,693,480  |
|                                                                        |                                        |                  |   |       |   |       |
| Handy Industries, LLC (a)                                                   | 1,015.79 units Class A1 preferred (c)       |                  |   | 67,042     |   | 269,093    |
| Marshalltown, Iowa                                                          |                                        |                  |   |       |   |       |
| Manufacturer of lifts for motorcycles, trucks and industrial metal products |                                        |                  |   |       |   |       |
|                                                                        |                                        |                  |   |       |   |       |
|                                                                        |                                        |                  |   |       |   |       |
| Linton Truss Corporation                                                    | 542.8 common shares (c)                     |                  |   | ---        |   | ---        |
| Delray Beach, Florida                                                       | 400 shares Series 1 preferred (c)           |                  |   | 75,000     |   | 40,000     |
| Manufacturer of residential roof and                                        | Warrants to purchase common shares (c)      |                  |   | 36         |   | 36         |
| floor truss systems                                                         |                                        |                  |   |       |   |       |
|                                                                        |                                        |                  |   | 75,036     |   | 40,036     |
|                                                                        |                                        |                  |   |       |   |       |
| M.A. Gedney Company (a)                                                     | 648,783 shares preferred (c)                |                  |   | ---        |   | 1,450,601  |
| Chaska, Minnesota                                                           | 12% debt security, due June 30,2012         |                  |   | 1          |   | 76,000     |
| Pickle Processor                                                            | Warrant to purchase 83,573 preferred shares |                  |   |       |   |       |
|                                                                        | (c)                                         |                  |   | ---        |   | ---        |
|                                                                        |                                        |                  |   | 1          |   | 1,526,601  |
|                                                                        |                                        |                  |   |       |   |       |
| Magnum Systems, Inc. (a)                                                    | 12% debt security, due November 1, 2011     |                  |   | 574,163    |   | 574,163    |
| Parsons, Kansas                                                             | 48,038 common shares (c)                    |                  |   | 48,038     |   | 48,038     |
| Manufacturer of industrial bagging                                          | 292,800 shares preferred (c)                |                  |   | 304,512    |   | 304,512    |
| equipment                                                                   | Warrant to purchase 56,529 common shares    |                  |   |       |   |       |
|                                                                        | (c)                                         |                  |   | 330,565    |   | 565        |
|                                                                        |                                        |                  |   | 1,257,278  |   | 927,278    |
|                                                                        |                                        |                  |   |       |   |       |
| Pratt-Read Corporation (a)                                                  | 13,889 shares Series A Preferred (c)        |                  |   | ---        |   | 750,000    |
| Bridgeport, Connecticut                                                     | 7,718 shares Service A preferred (c)        |                  |   | ---        |   | 416,667    |
| Manufacturer of screwdriver shafts                                          | 13% debt security, due January 7, 2009 (c)  |                  |   | 1          |   | 277,800    |
| and handles and other hand tools                                            | Warrants to purchase common shares (c)      |                  |   | --         |   | ---        |
|                                                                        |                                        |                  |   | 1          |   | 1,444,467  |
|                                                                        |                                        |                  |   |       |   |       |
| Spectrum Products, LLC (b)                                                  | 13% debt security, due January 1, 2011 (c)  |                  |   | 1,077,649  |   | 1,077,649  |
| Missoula, Montana                                                           | 385,000 units Series A preferred (c)        |                  |   | 385,000    |   | 385,000    |
| Manufacturer of equipment for the                                           | Membership interest (c)                     |                  |   |   351 |   |   351 |
| swimming pool industry                                                      | 35,073.50 units Class B preferred (c)       |                  |   | 47,355     |   | 47,355     |
|                                                                        |                                        |                  |   | 1,510,355  |   | 1,510,355  |
|                                                                        |                                        |                  |   |       |   |       |

----

| Company                             | Security                                     | Percent of Net Assets |   | Value      |   | Cost (d)   |
|-------------------------------------|----------------------------------------------|----------------------------|--------|------------|--------|------------|
|                                |                                         |                       |   |       |   |       |
| Superior Holding, Inc. (a)          | 6% debt security, due April 1, 2010 (c)      |                       |   | 568,727    |   | 780,000    |
| Wichita, Kansas                     | Warrant to purchase 11,143 common Shares (c) |                       |   | 1          |   | 1          |
| Manufacturer of industrial and      | 6% debt security, due April 1, 2010 (c)      |                       |   | 221,000    |   | 221,000    |
| commercial boilers and shower       | 121,457 common shares (c)                    |                       |   | ---        |   | 121,457    |
| doors, frames and enclosures        | 6% debt security, due April 1, 2010 (c)      |                       |   | 308,880    |   | 308,880    |
|                                | 312,000 common shares (c)                    |                       |   | ---        |   | 3,120      |
|                                | 19% debt security, January 1, 2010 (c)       |                       |   | 39,000     |   | 39,000     |
|                                |                                         |                       |   | 1,137,608  |   | 1,473,458  |
|                                |                                         |                       |   |       |   |       |
| Total manufacturing                 |                                         | 60%                        |   | 7,036,867  |   | 9,731,807  |
|                                |                                         |                       |   |       |   |       |
| Service:                            |                                         |                       |   |       |   |       |
|                                |                                         |                       |   |       |   |       |
| Monitronics International, Inc.     | 73,214 common shares (c)                     |                       |   | 439,284    |   | 54,703     |
| Dallas, Texas                       |                                         |                       |   |       |   |       |
| Provides home security systems      |                                         |                       |   |       |   |       |
| monitoring services                 |                                         |                       |   |       |   |       |
|                                |                                         |                       |   |       |   |       |
| Morgan Ohare, Inc. (b)              | 0% debt security, due January 1, 2010 (c)    |                       |   | 900,000    |   | 1,125,000  |
| Addison, Illinois                   | 10% debt security, due January 1, 2010       |                       |   | 191,666    |   | 239,583    |
| Fastener plating and heat treating  | 57 common shares (c)                         |                       |   | 1          |   | 1          |
|                                |                                         |                       |   | 1,091,667  |   | 1,364,584  |
|                                |                                         |                       |   |       |   |       |
| SMWC Acquisition Co., Inc. (a)      | 13% debt security due September 30, 2011     |                       |   | 68,750     |   | 68,750     |
| Kansas City, Missouri               | 12% debt security due September 30, 2011     |                       |   | 412,500    |   | 412,500    |
| Steel warehouse distribution and    |                                         |                       |   | 481,250    |   | 481,250    |
| processing                          |                                         |                       |   |       |   |       |
|                                |                                         |                       |   |       |   |       |
| Total Service                       |                                         | 17%                        |   | 2,012,201  |   | 1,900,537  |
|                                |                                         |                       |   |       |   |       |
| Technology and Communications:      |                                         |                       |   |       |   |       |
|                                |                                         |                       |   |       |   |       |
| Feed Management Systems, Inc. (a)   | 540,551 common shares (c)                    |                       |   | ---        |   | 1,327,186  |
| Brooklyn Center, Minnesota          | 674,309 shares Series A preferred (c)        |                       |   | 2,041,136  |   | 674,309    |
| and B2B internet services           |                                         |                       |   | 2041,136   |   | 2,001,495  |
|                                |                                         |                       |   |       |   |       |
| Portrait Displays, Inc.             | 10% debt security, due April 1, 2012         |                       |   | 685,068    |   | 685,068    |
| Pleasanton, California              | Warrant to purchase 39,400 common Shares (c) |                       |   |  ---  |   |  ---  |
| Designs and markets pivot enabling  |                                         |                       |   | 685,068    |   | 685,068    |
| software for LCD computer           |                                         |                       |   |       |   |       |
| monitors                            |                                         |                       |   |       |   |       |
|                                |                                         |                       |   |       |   |       |
| Total technology and communications |                                         |                       |   |       |   |       |
|                                |                                         | 23%                        |   | 2,726,204  |   | 2,686,563  |
|                                |                                         |                       |   |       |   |       |
|                                |                                         |                       | $      | 11,775,272 |   | 14,318,907 |

----

|  Description                 |   | Beginning Cost | Purchases | Sales     | EndingCost | DividendIncome | Interest Income | Net Realized Gains/Losses |
|-----------------------------------|--------|----------------|-----------|-----------|------------|----------------|----------------------|---------------------------|
|                              |   |           |      |      |       |           |                 |                      |
| Aviation Manufacturing Group, LLC | $      | 847,039        | ---       | ---       | 847,039    | 51,550         | 97,020               | ---                       |
| Detroit Tool Metal Products Co.   |   | 1,693,480      | ---       | ---       | 1,693,480  | ---            | 26,529               | ---                       |
| Feed Management Systems, Inc.     |   | 2,001,495      | ---       | ---       | 2,001,495  | ---            | ---                  | ---                       |
| Handy Industries, LLC             |   | 835,855        | 100,565   | 667,327   | 269,093    | ---            | ---                  | (667,327)                 |
| Kwik-Way Products, Inc.           |   | 768,610        | ---       | 768,610   | ---        | ---            | ---                  | (768,610)                 |
| M.A. Gedney Company               |   | 1,526,601      | ---       | ---       | 1,526,601  | ---            | (21,609)             | ---                       |
| Magnum Systems, Inc.              |   | 927,278        | ---       | ---       | 927,278    | 109,624        | 68,899               | ---                       |
| MainStream Data, Inc.             |   | 200,049        | ---       | 200,049   | ---        | ---            | ---                  | (99,992)                  |
| Pratt-Read Corporation            |   | 1,444,467      | ---       | ---       | 1,444,467  | ---            | ---                  | ---                       |
| SMWC Acquisition Co., Inc         |   | 554,675        | ---       | 73,425    | 481,250    | ---            | 61,537               | ---                       |
| Superior Holding, Inc.            |   | 1,434,458      | 39,000    | ---       | 1,473,458  | ---            | 4,411                | ---                       |
|                              |   |           |      |      |       |           |                 |                      |
| Total                             | $      | 12,234,007     | 139,565   | 1,709,411 | 10,664,161 | 161,174        | 236,787              | (1,535,929)               |

|  Description      | BeginningCost | PurchaseCost | SalesCost | EndingCost | DividendIncome | Interest Income | Net Realized Gains/Losses |
|------------------------|---------------|--------------|-----------|------------|----------------|-----------------|---------------------------|
| Morgan Ohare, Inc.     | $             | 1,421,876    | ---       | 57,292     | 1,364,584      | ---             | 24,957                    | --- |
| Spectrum Products, LLC |          | 1,510,355    | ---       | ---        | 1,510,355      | 26,766          | ---                       | --- |
| Total                  | $             | 2,932,231    | ---       | 57,292     | 2,874,939      | 26,766          | 24,957                    | --- |

|   | Unrealized appreciation     | $                                                                                                                                          | 1,634,049 |   |
|--------|-----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------|-----------|--------|
|   | Unrealized depreciation     |    (3,831,092)                                                                                                              |      |
|   | Net unrealized depreciation | $                     (2,197,043) |      |

----

----

| Item 9.   | Changes in and Disagreements with Accountants on Accounting and Financial  Disclosure. |
|---------------------|--------------------------------------------------------------------------------------------------|

| Item 9A.   | Controls and Procedures. |
|----------------------|--------------------------|

|   | (a) | Evaluation of Disclosure Controls and Procedures |
|--------|-----|--------------------------------------------------|

|   | (b) | Management’s Report on Internal Control Over Financial Reporting |
|--------|-----|------------------------------------------------------------------------|

|   | 1) | MACC’s policies and procedures over the preparation and accumulation of information used in the investments valuation process and management’s review thereof are not appropriately designed to identify matters that may affect the appropriateness and reliability of information provided to the valuation committee. Specifically, our policies and procedures and management review controls were not designed to ensure the appropriateness and consistency in (a) the preparation of the portfolio company financial information provided to the valuation committee, (b) the procedures used to ensure the relevancy and reliability of the underlying financial information provided by the portfolio companies, and (c) the methods used to value MACC’s individual investments |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 2) | MACC’s entity-level policies and procedures for monitoring internal control over financial reporting were not sufficient. Specifically, we did not have sufficient personnel with an appropriate level of technical accounting knowledge, experience, and training who could execute appropriate monitoring controls and perform adequate supervisory reviews over the investments valuation process. This material weakness contributed to the additional material weakness discussed above. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Changes in Internal Control over Financial Reporting |
|--------|-----|------------------------------------------------------|

|   | (d) | Remediation Plan |
|--------|-----|------------------|

----

| Director     | Experiences, Qualifications and Skills                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Mr. Roth     | Mr. Roth has served as a director since 2000.  As a certified public accountant, as Chairman of his own firm and prior to that as a partner at Deloitte & Touche, Mr. Roth was originally asked to join the Board to serve as the Audit Committee’s financial expert.   In his current position with RCP and throughout his service to us, Mr. Roth has helped the Board evaluate strategic options.    In addition, Mr. Roth has helped create our current strategy to change our investment focus.  Given his background as a CPA, his long Board service, his primary investment banking activities, and experience, Mr. Roth provides important skills to the Board as the Company continues to explore its future direction.  |
| Mr. Gadawski | Mr. Gadawski was recently recruited to serve on the Board to serve as a member of the Audit Committee and as that Committee’s financial expert.  In addition, Mr. Gadawski's career in smaller high growth companies is important to the Board and as the Company continues to explore its future direction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Mr. Eiler    | Mr. Eiler was asked to join the Board in 2007 due to his long career in financial services, including as CEO overseeing an extensive loan portfolio and as an investment banker.  Mr. Eiler’s extensive finance experience is important to management of our Existing Portfolio as the Company continues to explore its future direction.                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Mr. Dunn     | Mr. Dunn has served as a Director since its inception and brings that experience to his continued service.  As the principal owner and CEO of a bank holding company and affiliates, Mr. Dunn brings the perspective of a highly-regulated financial industry to the Board and serves as the Chair of the Audit Committee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

----

|    Nameand Age |  Position(s) Held with the Company | Term of Office and Length of Time Served |   Principal Occupation(s)During Past 5 Years                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|-------------------------------|----------------------------------------------|-----------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                          |                                         |                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| Gordon J. Roth, 56†     | Director                                     | Since 2000                                    | CFO and Chief Operating Officer, Roth Capital Partners, LLC (independent investment banking firm specializing in small-cap companies), 2000-present; Chairman, Roth & Company, P.C. (public accounting firm located in Des Moines, Iowa), 1990-2000. Prior to that, Mr. Roth was a partner at Deloitte & Touche, a public accounting firm, in Des Moines.                                                                                                                                                                                                                 |
| Kevin J. Gadawski, 43         | Director                                     | Since January, 2010                      | President, NL Strategies, Inc. (a financial and strategic consulting firm), 2007-present; Owner and President of First Check Diagnostics, LLC (manufacturer of medical devices), 2004-2007;  COO and CFO, Worldwide Medical, 2002-2004; CFO, California Software, 2001-2002;  Prior to 2001, Mr. Gadawski was CFO at e-net Financial, a company providing mortgage services to both commercial and consumer markets.  Mr. Gadawski is a Certified Pubic Accountant and has a Bachelors of Science in Accounting from Northern Kentucky University.  |
| James W. Eiler, 59       | Director                                     | Since January, 2008                      | Principal, Eiler Capital Advisors (Investment Banking), since 2007; Managing Director, First National Investment Bank (Investment Banking), 2007; Managing Partner, Cybus Capital Markets (Investment banking), 2004-2007; Senior Vice President, John Deere Credit (Agricultural Financial Services), 1999-2004.  Mr. Eiler holds an M.S. in Ag Economics and a B.S. in Ag Business from Iowa State University.                                                                                                                                                        |
| Michael W. Dunn, 61           | Director                                     | Since 1994;Chairman since December 8, 2009    | Director, MorAmerica (1994 – 2008); CEO (since 1980), President and CEO and Director (since 1983), Farmers & Merchants Savings Bank of Manchester, Iowa.                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                          |                                         |                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |

----

| Nameand Age                | Position(s) Held with MACC             | Length of Time Served  | Principal Occupation(s)During Past 5 Years                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|----------------------------|----------------------------------------|------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Travis T. Prentice, 35     | President & CEO                    | Since April, 2008 | President and Chief Investment Officer of EAM, a firm he co-founded in 2007.  In addition, he serves as portfolio manager for the firm’s Micro Cap Growth and Ultra Micro Cap Growth investment strategies. Prior to founding Eudaimonia, Mr. Prentice was a Partner, Managing Director and Portfolio Manager with Nicholas-Applegate Capital Management where he had lead portfolio management responsibilities for their Micro and Ultra Micro Cap investment strategies and a senior role in the firm’s US Micro/Emerging Growth team.  He brings over twelve years of institutional investment experience from Eudaimonia and Nicholas Applegate where he originally joined in 1997. He holds a Masters in Business Administration from San Diego State University and a Bachelor of Arts in Economics and a Bachelor of Arts in Psychology from the University of Arizona.                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| Derek J. Gaertner, 39      | Chief Financial Officer & CCO | Since April, 2008      | Vice President and Chief Operating/ Compliance Officer of Eudaimonia.  Prior to joining Eudaimonia in 2007, Mr. Gaertner was the Chief Financial Officer of Torrey Pines Capital Management, a global long/short equity hedge fund located in San Diego, California.  He was also responsible for overseeing the firm’s regulatory compliance and operations functions.  Prior to joining Torrey Pines Capital Management in 2004, Mr. Gaertner was a Tax Manager with PricewaterhouseCoopers LLP.  He has over 8 years of public accounting experience in both the audit and tax departments.  Mr. Gaertner is a Certified Public Accountant and has a Bachelors of Science in Accounting from the University of Southern California and Masters of Science in Taxation from Golden Gate University, San Francisco.                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Montie L. Weisenberger, 42 | Treasurer & Secretary              | Since April, 2008 | Senior Vice President and Portfolio Manager of Eudaimonia, a firm he co-founded in 2007.  Mr. Weisenberger has primary portfolio management responsibilities for the firm’s Small Cap Growth investment strategy.  Prior to founding Eudaimonia, Mr. Weisenberger was a Senior Vice President and Portfolio Manager at Nicholas Applegate Capital Management where he had lead portfolio management responsibilities for the firm’s Traditional Small-to-Mid Cap Growth strategy and was a senior member of the firm’s US Micro / Emerging Growth team since 2001.  Prior to joining Nicholas Applegate Capital Management, Montie was a research analyst at Adams, Harkness & Hill, now Cannacord Adams, an emerging growth investment bank located in Boston, MA. Mr. Weisenberger also spent more than five years as a finance and strategic management consultant, most recently as a manager with KPMG, LLP.  Mr. Weisenberger brings more than fourteen years of combined investment management and financial analysis experience to Eudaimonia Asset Management.  He holds a Masters in Business Administration and a Masters in Health Administration from Georgia State University and a Bachelor of Arts in Business Administration from Flagler College.  |

----

| Name and Address of  Beneficial Owner                                         |   | Amount and Nature of Beneficial Ownership |   | Percent of Class of Voting common stock |
|-----------------------------------------------------------------------------------------|--------|-------------------------------------------|--------|-----------------------------------------|
| Bridgewater International Group, LLC (1)10500 South 1300 West, South Jordan, Utah 84095 |   | 804,689                                   |   | 32.65%                                  |
| Benjamin Jiaravanon (1)Ancol Barat, J1 Ancol VIII, No.1, Jakarta 14430 Indonesia        |   | 804,689                                   |   | 32.65%                                  |
| Geoffrey T. Woolley                                                                |   | 151,314                                   |   | 6.14%                                   |
| Gordon J. Roth(2)                                                                       |   | 57,783                                    |   | 2.27%                                   |
| Michael W. Dunn                                                                         |   | 46,734                                    |   | 1.90%                                   |
| James W. Eiler                                                                          |   | 10,000                                    |   | 0.04%                                   |
| Kevin J. Gadawski                                                                       |   | 0                                         |   | 0.00%                                   |
| All Officers and Directors as a Group                                                   |   | 114,517                                   |   | 4.65%                                   |

|   | (1)    | The foregoing information with respect to BIG and Mr. Jiaravanon is based upon Amendment No. 1 to Schedule 13D, dated August 8, 2003, as subsequently amended October 10, 2003, March 9, 2005, May 3, 2005, May 19, 2005 and August 19, 2010, filed by BIG and others with the SEC (collectively, the “BIG Group 13D”).  The BIG Group 13D disclosed control over 804,689 shares of common stock owned by BIG (the “BIG Shares”).  BIG retains control of voting of the BIG Shares, including all other incidents of ownership of the stock, including beneficial ownership and dispositive power. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   | As the sole Manager of BIG, Mr. Jiaravanon maintains control over the voting power respecting the BIG Shares.  BIG is a wholly owned subsidiary of Aleksin, a corporation organized under the laws of the British Virgin Islands.  Aleksin is a wholly-owned subsidiary of Maze Industrial Ltd. (“Maze”), a corporation organized under the laws of the British Virgin Islands.  Maze is 100% owned by Sumet Jiaravanon, an individual.                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | (2)    | Mr. Roth individually owns 5,151 shares of common stock.  RCP, in which Mr. Roth has shared control of voting power, owns 52,632 shares of common stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

| Name ofIndependent Director | Dollar Range of EquitySecurities in the Corporation | Aggregate Dollar Range of Equity Securitiesin all Funds in Fund Complex† |
|-----------------------------|-----------------------------------------------------|--------------------------------------------------------------------------------|
| Michael W. Dunn             | $10,001 - $50,000                                   | $10,001 - $50,000                                                              |
| Kevin J. Gadawski           | $0                                                  | $0                                                                             |
| James W. Eiler              | $1- $10,000                                         | $1- $10,000                                                                    |
|                        |                                                |                                                                           |
| Name ofInterested Director  | Dollar Range of EquitySecurities in the Corporation | Aggregate Dollar Range of Equity Securitiesin all Funds in Fund Complex† |
| Gordon J. Roth              | $10,001- $50,000                                    | $10,001- $50,000                                                               |

----

----

|   |  Name and Position |   | Aggregate CompensationFrom MACC(1) |   |
|--------|-------------------------|--------|------------------------------------|--------|
|   |                    |   |                               |   |
|   | Michael W. Dunn         |   | $23,000                            |   |
|   |                    |   |                               |   |
|   | Kevin J. Gadawski       |   | $9,250                             |   |

----

|   | Gordon J. Roth               |   | $14,000 |   |
|--------|------------------------------|--------|---------|--------|
|   |                         |   |    |   |
|   | James W. Eiler               |   | $14,500 |   |
|   |                         |   |    |   |
|   | Geoffrey T. Woolley (2) |   | $6,000  |   |

|   |   |
|--------|--------|
| (1)   |  Consists only of directors’ fees and does not include reimbursed expenses, |
|-----------------|----------------------------------------------------------------------------------------|

| (2) | Mr. Woolley resigned from the Board of Directors effective December 8, 2009. |
|-----|------------------------------------------------------------------------------|

----

| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
|----------|-------------------------------------------------------------------------------------------------|

| Name and Address of  Beneficial Owner                                         |   | Amount and Nature of Beneficial Ownership |   | Percent of Class of Voting common stock |
|-----------------------------------------------------------------------------------------|--------|-------------------------------------------|--------|-----------------------------------------|
| Bridgewater International Group, LLC (1)10500 South 1300 West, South Jordan, Utah 84095 |   | 804,689                                   |   | 32.65%                                  |
| Benjamin Jiaravanon (1)Ancol Barat, J1 Ancol VIII, No.1, Jakarta 14430 Indonesia        |   | 804,689                                   |   | 32.65%                                  |
| Geoffrey T. Woolley                                                                |   | 151,314                                   |   | 6.14%                                   |
| Gordon J. Roth(2)                                                                       |   | 57,783                                    |   | 2.27%                                   |
| Michael W. Dunn                                                                         |   | 46,734                                    |   | 1.90%                                   |
| James W. Eiler                                                                          |   | 10,000                                    |   | 0.04%                                   |
| Kevin J. Gadawski                                                                       |   | 0                                         |   | 0.00%                                   |
| All Officers and Directors as a Group                                                   |   | 114,517                                   |   | 4.65%                                   |
|                                                                                    |   |                                      |   |                                    |

|   | (1)    | The foregoing information with respect to BIG and Mr. Jiaravanon is based upon Amendment No. 1 to Schedule 13D, dated August 8, 2003, as subsequently amended October 10, 2003, March 9, 2005, May 3, 2005, May 19, 2005 and August 19, 2010, filed by BIG and others with the SEC (collectively, the “BIG Group 13D”).  The BIG Group 13D disclosed control over 804,689 shares of common stock owned by BIG (the “BIG Shares”).  BIG retains control of voting of the BIG Shares, including all other incidents of ownership of the stock, including beneficial ownership and dispositive power. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   | As the sole Manager of BIG, Mr. Jiaravanon maintains control over the voting power respecting the BIG Shares.  BIG is a wholly owned subsidiary of Aleksin, a corporation organized under the laws of the British Virgin Islands.  Aleksin is a wholly-owned subsidiary of Maze Industrial Ltd. (“Maze”), a corporation organized under the laws of the British Virgin Islands.  Maze is 100% owned by Sumet Jiaravanon, an individual.                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | (2)    | Mr. Roth individually owns 5,151 shares of common stock.  RCP, in which Mr. Roth has shared control of voting power, owns 52,632 shares of common stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

----

| Item  13. | Certain Relationships and Related Transactions, and Director Independence. |
|----------------|----------------------------------------------------------------------------|

| Item  14. | Principal Accounting Fees and Services. |
|----------------|-----------------------------------------|

| Fee Category           |   | Fiscal Year 2010 Fees     |   | Fiscal Year 2009 Fees |
|------------------------|--------|---------------------------|--------|-----------------------|
|                   |   |                      |   |                  |
| Audit Fees             |   | $170,000                  |   | $79,940               |
|                   |   |                      |   |                  |
| Audit-Related Fees     |   |    $25,860 |   | $7,000                |
|                   |   |                      |   |                  |
| Tax Fees               |   |   $11,850  |   | $15,000               |
|  Total Fees  |   |  $207,710            |   | $101,940              |

----

----

| Item  15. | Exhibits and Financial Statement Schedules.  |
|----------------|---------------------------------------------------|

| (a) | Documents filed as part of this Report: |
|-----|-----------------------------------------|

|   | (1)    | Balance Sheet at September 30, 2010 and 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |  Statement of Operations for the years ended September 30, 2010, 2009 and 2008Statements of Changes in Net Assets for the years ended September 30, 2010, 2009 and 2008Statement of Cash Flows for the years ended September 30, 2010, 2009 and 200Notes to Financial StatementsSchedule of Investments as of September 30, 2010 and 2009Notes to the Schedule of InvestmentsThe Report of the Independent Registered Public Accounting Firm with respect to the financial statements listed above. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

|   | (2) | No financial statement schedules of the Company are filed herewith because (i) such schedules are not required or (ii) the information required has been presented in the aforementioned financial statements and schedule of investments. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | The following exhibits are filed herewith or incorporated by reference as set forth below: |
|--------|-----|--------------------------------------------------------------------------------------------|

|   | 3(i).1 | Certificate of Incorporation of the Company (incorporated by reference to the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1997, as filed with the SEC on May 14, 1997). |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3(i).2 | Articles of Amendment to the Certificate of Incorporation of the Company (incorporated by reference to the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2005, as filed with the SEC on August 15, 2005). |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3(ii) | Fourth Amended and Restated By-Laws of the Company (incorporated by reference to the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010, as filed with the SEC on August 16, 2010). |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.1 | Investment Advisory Agreement between MACC Private Equities Inc. and Eudaimonia Asset Management, LLC dated April 29, 2008 (incorporated by reference to the Current Report on Form 8-K, as filed with the SEC on May 1, 2008).  |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.2 | Investment Subadvisory Agreement among the Company, Eudaimonia Asset Management, LLC and InvestAmerica Investment Advisors, Inc. dated April 29, 2008 (incorporated by reference to the Current Report on Form 8-K, as filed with the SEC on May 1, 2008). |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.3 | Business Loan Agreement dated August 30, 2007 with Cedar Rapids Bank and Trust Company, as amended by Omnibus Amendment Consent and Waiver dated as of April 29, 2008 (incorporated by reference to exhibit 10(i).1 of Current Report on Form 8-K filed September 6, 2007). |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.4 | Second Amendment to Business Loan Agreement and Security Agreements by and among MACC Private Equities Inc. successor in interest to MorAmerica Capital Corporation and Cedar Rapids Bank and Trust Company dated August 14, 2009 (incorporated by reference to exhibit 10.4 of Annual Report on Form 10-K filed December 28, 2009). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.5 | Commercial Pledge and Security Agreement dated August 30, 2007 with Cedar Rapids Bank and Trust Company, as amended by Omnibus Amendment Consent and Waiver dated as of April 29, 2008  (incorporated by reference to exhibit 10(i).3 of Current Report on Form 8-K filed September 6, 2007). |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.6 | Commercial Security Agreement dated August 30, 2007 with Cedar Rapids Bank and Trust Company, as amended by Omnibus Amendment Consent and Waiver dated as of April 29, 2008 (incorporated by reference to exhibit 10(i).4 of Current Report on Form 8-K filed September 6, 2007). |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.7 | Promissory Note dated August 30, 2007 in favor of Cedar Rapids Bank and Trust Company, as amended by Omnibus Amendment Consent and Waiver dated as of April 29, 2008 (incorporated by reference to exhibit 10(i).5 of Current Report on Form 8-K filed September 6, 2007). |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 10.8 | Promissory Note dated August 30, 2007 in favor of Cedar Rapids Bank and Trust Company, as amended by Omnibus Amendment Consent and Waiver dated as of April 29, 2008 (incorporated by reference to exhibit 10(i).6 of Current Report on Form 8-K filed September 6, 2007). |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.9 | Omnibus Amendment Consent and Waiver dated as of April 29, 2008 among MACC Private Equities Inc., MorAmerica Capital Corporation and Cedar Rapids Bank and Trust (incorporated  by  reference to Exhibit 10.3 of Current Report on Form 8-K filed May 1, 2008). |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.10 | Change In Terms Agreement dated as of April 12, 2010 by and among MACC Private Equities Inc. and Cedar Rapids Bank and Trust (incorporated by reference to Exhibit 10.1 of Current Report on Form 8-K filed April 13, 2010). |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.11 | Disbursement Request and Authorization dated as of April 12, 2010, by and among MACC Private Equities Inc. and Cedar Rapids Bank and Trust Company (incorporated by reference to Exhibit 10.2 of Current Report on Form 8-K filed April 13, 2010). |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.12 | Notice of Final Agreement dated as of April 12, 2010, by and among MACC Private Equities Inc. and Cedar Rapids Bank and Trust Company (incorporated by reference to Exhibit 10.3 of Current Report on Form 8-K filed April 13, 2010). |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.13 | Third Amendment to Business Loan Agreement dated as of April 12, 2010, by and between Cedar Rapids Bank & Trust Company (incorporated by reference to Exhibit 10.4 of Current Report on Form 8-K filed April 13, 2010). |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.14 | Safekeeping Agreement with Cedar Rapids Bank and Trust Company dated September 1, 2007 (incorporated by reference to exhibit 10(i).9 of Registrant’s Current Report on Form 8-K filed September 6, 2007). |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 14 | Code of Business Conduct and Ethics (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed on October 14, 2008). |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------|

|   | 31.1 | Section 302 Certification of Travis T. Prentice (President and CEO). |
|--------|------|----------------------------------------------------------------------|

|   | 31.2 | Section 302 Certification of Derek J. Gaertner (CFO). |
|--------|------|-------------------------------------------------------|

|   | 32.1 | Section 906 Certification of Travis T. Prentice (President and CEO). |
|--------|------|----------------------------------------------------------------------|

|   | 32.2 | Section 906 Certification of Derek J. Gaertner (CFO). |
|--------|------|-------------------------------------------------------|

| (b) | Exhibits |
|-----|----------|

| (c) | Financial Statement Schedules |
|-----|-------------------------------|

----

|   |   | /s/ Travis T. Prentice                               |   |
|--------|--------|------------------------------------------------------|--------|
|   |   | Travis T. Prentice                                   |   |
|   |   | President and CEO                                    |   |
|   |   |                                                 |   |
|   |   |                                                 |   |
|   |   | /s/ Derek J. Gaertner                                |   |
|   |   | Derek J. Gaertner                                    |   |
|   |   | Chief Financial Officer and Chief Compliance Officer |   |
|   |   |                                                 |   |

----

| Signature                     |   | Date                    |   |
|-------------------------------|--------|-------------------------|--------|
|                          |   |                    |   |
|  /s/ Michael W. Dunn     |   |  December 29, 2010 |   |
| Michael W. Dunn, Director     |   |                    |   |
|                          |   |                    |   |
|  /s/ James W. Eiler |   |  December 29, 2010 |   |
| James W. Eiler, Director      |   |                    |   |
|                          |   |                    |   |
|  /s/ Gordon J. Roth      |   |  December 29, 2010 |   |
| Gordon J. Roth, Director      |   |                    |   |
|                          |   |                    |   |
|  /s/ Kevin J. Gadawski   |   |  December 29, 2010 |   |
| Kevin J. Gadawski, Director   |   |                    |   |
|                          |   |                    |   |

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