|UNITED STATES
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|SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549_____________
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|FORM 10-K
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDEDMARCH 31, 2010COMMISSION FILE NO. 333-43664INVESTORS CAPITAL HOLDINGS, LTD.(Exact name of registrant in its charter)DELAWARE
     
     04-3284631(State or other jurisdiction of
     
     (I.R.S.Employerincorporation or organization)
     
     Identification No.)





230 Broadway East
Lynnfield, Massachusetts 01940
(781) 593-8565

(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of Each Class
     Name of Each Exchange on Which RegisteredCommon Stock, $0.01 par value
     NYSE AMEX / Alternext US





SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:



|None(Title of class)
|--------------------



Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]





Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes [ ] No [X]


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 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 [X] No [ ]

Indicate by check markwhether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T 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 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. [ ]

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Indicate by check mark whether the registrant is an 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 [ ] (Do not check if a smaller reporting company)Smaller reporting company [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).Yes [ ] No [X]
 he aggregate market value of the shares of the registrant's common equity held by non-affiliates, computed by reference to the price at which the common equity was last sold, as of the last business day of the registrant's most recently completed second fiscal quarter, was $6,614,377.
 As of June 18, 2010, there were outstanding 6,591,131 shares of the $0.01 par value per share Common Stock of the registrant.  www.investorscapital.comInvestor Relations Contact: Robert Foney


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010  THE COMPANY Investors Capital Holdings, Ltd. and its wholly-owned subsidiaries are often referred to in this report, both individually and collectively, as the "Company" or with terms such as "we", "us", "our" and the like. When being referred to individually without reference to the other components of the Company, Investors Capital Holdings, Ltd., its wholly-owned subsidiaries Investors Capital Corporation, ICC Insurance Agency, Inc. and Investors Capital Holdings Securities Corporation, and its former wholly-owned subsidiary Eastern Point Advisors, Inc., are often referred to in this report as "ICH", "ICC", ICC Insurance, ICH Securities and EPA, respectively.  FORWARD-LOOKING STATEMENTS The statements, analyses, and other information contained herein relating to trends in our operations and financial results, the markets for our products, the future development of our business, and the contingencies and uncertainties to which we may be subject, as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "will," "should," "may," and other similar expressions, are "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Such statements are made based upon management's current expectations and beliefs concerning future events and their effects on the Company. Our actual results may differ materially from the results anticipated in these forward-looking statements. These forward-looking statements are subject to risks and uncertainties including, but not limited to, those described and discussed in this report and other documents filed by the Company with the United States Securities and Exchange Commission (the SEC). We specifically disclaim any obligation to update or revise any forward-looking information, whether as a result of new information, future developments, or otherwise.  PART I  ITEM 1. BUSINESSOVERVIEW Incorporated in 1995, ICH is a financial services holding company that operates primarily through its wholly-owned broker-dealer and registered investment advisor subsidiary, Investors Capital Corporation (ICC). ICC provides to investors: Broker-dealer servicesprimarily in support of trading and investment in securities such as corporate stocks and bonds, U.S. Government securities, municipal bonds, mutual funds, variable annuities, alternative investments and variable life insurance, including provision of market information, internet trading and portfolio tracking facilities and records management, andInvestment advisory services, including asset management, conducting business as Investors Capital Advisory Services (ICA). Financial information pertaining to the Company for the fiscal years ended March 31, 2010 and 2009 is included in Part II of this document including, without limitation, financial statements and supplementary data in Item 8 thereof. See Part II, Item 8, Footnote 14  Segment Information for information concerning each of the segments of the Companys business with respect to the fiscal years ended March 31, 2010 and 2009, including revenues from external customers, a measure of profit or loss, and total assets. BROKER-DEALER SERVICES


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010Investors Capital Corporation ICC is registered as a securities broker-dealer with the Financial Industry Regulatory Authority ("FINRA"), the Securities and Exchange Commission ("SEC"), the Municipal Securities Rule Making Board ("MSRB") and the Securities Investor Protection Corporation ("SIPC"). Headquartered in Lynnfield, Massachusetts, the wholly-owned subsidiary of ICH also is duly registered and doing business as a broker-dealer in all 50 states, the Commonwealth of Puerto Rico and the District of Columbia. ICC makes available multiple investment products and provides support, technology and back-office services to a network of producing (non-staff) independent registered representatives, of which there were 564 at March 31, 2010. Broker-dealer commissions and investment advisory fees generated by ICC's registered representatives represented 82% and 15%, respectively, of the Company's total revenues for the fiscal year ended March 31, 2010. Broker-Dealer Representatives Our independent representatives are duly registered under federal and state law to offer and provide broker-dealer services to investors through ICC. Depending upon their activities, they also may be required to qualify and register as investment advisor representatives (see INVESTMENT ADVISORY SERVICES, below). Our training programs for representatives emphasize the long-range aspects of financial planning and investment. We believe that the continuing education and support we provide to our registered representatives enable them to better inform and serve their clients. Attracting and retaining experience, productive registered representatives is an integral part of our growth strategy. Once recruited, we focus on enhancing our representatives' professional knowledge, skills and value to their clients. In addition to a variety of valuable products and services, we offer prospective representatives an attractive commission payout and the independence of owning and operating their own offices. Our representatives generally pay the costs associated with their offices and operations, while we concentrate on providing technical, regulatory, supervisory, compliance and other support services to our independent investment professionals. This allows expansion of our operations with relatively minimal capital outlay. Compensation to Representatives Commission payouts to our registered representatives are negotiated and currently average 82.3% of the gross dealer concession generated by them. Representatives grant to us the right to offset against commissions certain losses we may sustain as a result of their actions, errors or omissions. Our agreements with our representatives are terminable by either party with or without cause. Support to Representatives We provide a variety of services and products to our representatives to enhance their professionalism and productivity. Technology Resources.Advanced technology, including a client and enterprise website, enable our representatives and/or their clients to perform many tasks on-line, including: Opening of new accountsMonitoring of existing accountsUpdating of client accountsInitiating and executing trading activitiesViewing and downloading commission dataLocating and exploring financial productsDownloading client datae-Delivery of statements and confirmations


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 Researching reports or inquiries on companies, securities and other financial topics Approved Investment Products.Our representatives offer a wide variety of ICC-approved investment products to their clients that are sponsored by well-respected, financially sound companies. We believe that this is critical to the success of our registered representatives and the Company. We follow a selective process in determining approved products to be offered to clients by our representatives, and we periodically review the product list for continued maintenance or removal of approved status. Marketing.We provide advertising and public relations assistance to our representatives that enhance their profile, public awareness and professional stature in the public's eye, including FINRA-approved marketing materials, corporate and product brochures and client letters. Supervision/Compliance.We maintain comprehensive broker-dealer and investment advisor compliance programs. Our 14-person home office licensing, compliance and risk management staff includes two dedicated attorneys. We also retain experienced field supervisors in FINRA-recognized Offices of Supervisory Jurisdiction across the country that are charged with compliance responsibilities for defined groups of registered representatives including, in particular, newly-affiliated representatives. In this period of rapid regulatory change, we closely supervise and monitor the activities of our representatives to manage risk and enhance compliance with applicable laws, rules and regulations including anti-money laundering and other programs required by the USA Patriot Act. Our compliance efforts are increasingly assisted by computer systems, programs and reports, including routine internal auditing of trading and investment activity. Our representatives seek and value assistance in the area of compliance. Keeping in step with the latest industry regulations, our compliance department provides to our representatives, among other things: Advertising and sales literature reviewField inspections, followed up with written findings and remediation programsIn-house publications, conference calls, workshops, seminars and other communications on compliance topicsAssistance with customer complaints and regulatory inquiriesRegional and national meetingsInterpretation of rules and regulations and general compliance training Clearing.We utilize the services of Pershing LLC, a subsidiary of Bank of New York Mellon, on a fee-for-service basis to provide orderly processing and clearing of most of our brokerage securities transactions. Services provided by Pershing include billing and credit extension as well as control, receipt, custody and delivery of customer securities and funds.


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 Broker-Dealer Revenue Commission revenue generated by ICC during the last two fiscal years was derived from the following activities: Fiscal Year Ended March 31,Source of Commission Revenue
     2010
     2009Variable annuities and variable life insurance
     42%
     42%Individual stocks and bonds
     39%
     30%Mutual funds and unit investment trusts
     10%
     14%Direct participation programs
     9%
     14%Total
     100%
     100%
  Although variable products continued to comprise the largest source of commission revenue, revenue from stocks and bonds experienced the largest increase as a percentage of commission revenue compared to the prior year. This increase primarily reflected the heightened market volatility during the current period which generated an increase in trading volume of these products. Commissions from the sale of variable annuity products continue to comprise the majority of our revenue; however, this relationship may not continue as our revenue mix becomes more diversified. In particular, we believe that the percentage of total commissions derived from customer trading in the stock and bond markets may continue to increase due to our continued efforts to recruit representatives who are duly licensed to execute securities trades for their clients. INVESTMENT ADVISORY SERVICES The Companys investment advisory business has been centered in ICC, conducting business as ICA, since 2004. Having progressively limited its business to providing access to advisory services provided by third-parties, EPA completed the transfer of its assets to ICA by May 1, 2008 and subsequently withdrew its advisory registration. ICA has been encouraging movement away from centralized delivery of advisory services to a more personalized delivery system that emphasizes close, technology-enabled interaction between independent investment advisor representative and customer that can lead to more agile decision making and enhanced customer satisfaction and program participation. In support of this business model, ICA has focused on recruiting additional registered investment advisor representatives and increasing the qualifications, technical competence and motivation of existing representatives. The success of these initiatives is reflected in the growth of revenue from investment advisory services by 6.4% to $11.8 million for the fiscal year ended March 31, 2010. Investment Advisor Representatives Each of our investment advisor representatives must satisfy licensing requirements of the states in which they operate prior to providing investment advisory services. As of March 31, 2010 approximately 411 independent investment advisor representatives registered with the various state securities departments were affiliated with ICA, which is consistent with the year earlier. Asset Allocation Strategy Our investment advisor representatives often provide advisory services through our representative-directed program where the asset allocation is performed directly by the independent representative. Our asset allocation strategy is based on the principle that, by investing in a combination of asset classes, risk may be reduced while seeking enhanced returns. Combining asset classes that typically do not


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 fluctuate in tandem may lower the volatility of the customer's investment portfolio while providing the potential for long-term returns. In implementing a personalized asset allocation strategy for each customer: The customer's risk tolerance, investment goals, age, time horizon, investment experience and financial and personal circumstances are determined using detailed questionnaires that are completed during personal interviews. Based upon these data, an overall investment allocation among stocks, bonds, cash and/or other investment products is fashioned.Specific investment vehicles believed to be appropriate for the particular customer and investment allocation are selected from a universe of Company-approved mutual funds, variable annuities, individual securities and other investment products.Following investment in the selected securities, portfolio performance is monitored and periodically communicated to the client, and changes to the portfolio are made from time to time based upon performance, the customer's financial situation, goals and risk tolerance and other relevant factors. Fee-Based Compensation Structure In conformity with the requirements of the Investment Advisors Act of 1940, compensation for our investment advisory services consists of an annual fee, assessed and earned quarterly, as a percentage of assets under management rather than a transaction-based commission or performance fee. INSURANCE OPERATIONS In certain states a licensed insurance entity is required in order for ICC representatives to sell life insurance and annuity products to their clients. Accordingly, the Company operates ICC Insurance Agency, Inc., a wholly-owned subsidiary of ICH that is duly licensed for such purposes in states in which such licensing is required. All revenue realized by this entity flows through as revenue to ICC. ICH SECURITIES ICH Securities holds cash for Company tax benefit purposes at the Massachusetts state level. INVESTMENT CENTERS The Company closed the last of its four retail investment centers during the quarter ended September 30, 2008 in order to achieve operational efficiencies. Overhead expenses of the centers had been funded by the Company in return for lower commission payouts to representatives using the centers. One location continues to be occupied by representatives who pay a fee to the Company that covers the majority of our office overhead. OUR STRATEGY Key elements of our strategy to achieve our corporate objectives include: Recruit and retain high quality registered representatives.Our business model stresses recruitment and retention of capable, experienced independent representatives possessing the professional qualifications, knowledge and judgment to render superior broker-dealer and investment advisory services to their customers.Increase brand awareness; expand business presence.We strive to increase our brand recognition to attract new clients and representatives by building market awareness, educating the


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 investing public and maintaining customer loyalty through direct marketing, advertising through our marketing department, use of our web site, various public relations programs, web and live seminars, and/or advertising media such as print, radio and television. Provide value-added services to our clients.We provide our clients with access to a pool of well- trained representatives, access to up-to-date market and other financial information, and direct access to our trade desk that is online with various stock exchanges and institutional buyers and sellers. We also provide trading before and after traditional market hours to our clients.Grow recurring revenues.We recognize the trend toward increased investment advisory business and are focused on building our fee based investment advisory business when it serves the interests of our clients. While advisory accounts generate substantially lower first year revenue than most commission products, the recurring nature of advisory fees provides a foundation for accelerating future revenue growth.Create technologically innovative solutions to satisfy client needs.We continue to pursue additional technologies to service the rapidly evolving financial services industry. We continually seek to enhance our web site to augment our clients ability to trade equity securities efficiently via the Internet, to monitor on-line the history and current status of their accounts at any time, and to access financial and other pertinent information. Also, we assist our representatives in developing personalized Internet web sites to provide their clients with a secure and private interface directly to our proprietary client web site. This allows clients to perform market research, buy and sell securities on-line, monitor their accounts and utilize financial calculators.Provide technological solutions to our representatives. We believe that it is imperative that we provide state-of-the-art technology to our employees and independent registered representatives to effectively facilitate, measure and record business activity in a timely, accurate and efficient manner. We seek to achieve economies of scale and optimize the experience of our representatives by providing them with increasingly capable technology platforms.Expand our product and service offering through strategic relationships.We continue to pursue business alliances to increase trading volume, capitalize on cross-selling opportunities, create additional markets for our asset management programs and mutual fund sales, take advantage of emerging market trends, create operational efficiencies and further enhance our name recognition. COMPETITION Our competitors vary in size, resources and breadth of services offered. We encounter direct and indirect competition from numerous established financial services companies, including firms that offer full-commission and discount brokerage, investment advisory, and financial planning services, increasingly based on the independent representative model. Many of our competitors are owned by insurance companies, banks and other large financial institutions. Many competitors, alone or in conjunction with their parent corporations, have greater financial, technical, marketing and other resources, offer a wider range of services and financial products, and have greater name recognition and more extensive client bases. We seek to compete through the quality of our registered representatives, a premier level of service to our representatives, and the breadth and depth of brokerage and advisory products and services we offer. We believe that our ability to compete depends upon many factors both within and outside our control, including: Our ability to attract and retain a network of experienced investment professionalsThe effectiveness, ease of use, performance and features of our technology and servicesThe price and quality of our services and overall client satisfaction


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 The volatility and performance of financial markets and the world economyOur ability to service our clients effectively and efficientlyOur reputation in the financial services industryOur ability to foster compliance with applicable laws and regulations by employees and independent representatives  HOW WE ARE REGULATEDBroker-Dealer Regulation The securities industry is subject to extensive regulation under both federal and state law. The SEC is the federal agency responsible for administering the federal securities laws that apply to broker-dealers. ICC is a broker-dealer registered with the SEC. In addition to complying with the voluminous and complex rules set out in applicable statutes, including the Securities Act of 1933 and Securities Exchange Act of 1934 (as amended, the Securities Act and Exchange Act), and rules regulations promulgated thereunder, every registered broker-dealer that conducts business with the public is required to be a member of and subject to the jurisdiction and rules of FINRA. FINRA has established numerous rules applicable to broker-dealers, including conduct rules for securities transactions among broker-dealers and private investors, trading rules for the over-the-counter markets and operational rules for its member firms. FINRA conducts examinations of member firms, investigates possible violations of the federal securities laws and its own rules and conducts disciplinary proceedings involving member firms and associated individuals. FINRA administers qualification testing for all securities principals and registered representatives for its own account and on behalf of the state securities authorities. We are also subject to regulation under state law. We are currently registered as a broker-dealer in all 50 states, Puerto Rico and the District of Columbia. The SEC and other regulatory bodies in the United States have rules with respect to net capital requirements that affect our broker-dealer subsidiary. These rules are designed to ensure that broker-dealers maintain adequate capital in relation to their liabilities, depending upon the types of securities business conducted and the size of their customer business. These rules have the effect of requiring that a substantial portion of a broker-dealer's assets be kept in cash or highly liquid investments. Failure to maintain the required net capital may subject a firm to suspension or revocation of its registration with the SEC and suspension and expulsion by the FINRA and other regulatory bodies, and ultimately may require its liquidation. Additional legislation, changes in rules promulgated by the SEC and by self-regulatory bodies and changes in the interpretation or enforcement of existing laws and rules often directly affects the method of operation and profitability of broker-dealers. The SEC and the self-regulatory bodies may conduct administrative proceedings which can result in censure, fine, suspension or expulsion of a broker-dealer, its officers, employees or registered representatives. Registered Investment Advisor Regulation The Investment Advisors Act of 1940 (the "Advisors Act"), and the rules promulgated thereunder, regulate the registration and compensation of investment advisors. Investment advisors are deemed to be fiduciaries for their clients and, as such, are held to a high standard of conduct. Investment advisors are subject to regulation and oversight by the SEC and the various states. Investment advisors are required to register with the SEC and/or appropriate state regulatory agencies, are required to periodically file reports, and are subject to periodic or special examinations. Rules promulgated under the Advisors Act govern many aspects of the investment advisory business, such as advertisements by investment advisors and the custody or possession of funds or securities of a client. Most states require registration by investment advisors unless an exemption is available and impose annual registration fees. Some states also impose minimum capital requirements. There can be no assurance that compliance with existing and future requirements and legislation will not be costly and time consuming or otherwise adversely impact our business in this area.


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 Regulations Applicable to the Use of the Internet Due to the established popularity and use of the Internet and other online services, various regulatory authorities are considering laws and/or regulations with respect to the internet or other online services covering issues such as user privacy, pricing, content copyrights and quality of services. In addition, the growth and development of the market for online commerce may prompt more stringent consumer protection laws that may impose additional burdens on those companies conducting business online. The recent increase in the number of complaints by online traders could lead to more stringent regulations of online trading firms and their practices by the SEC, FINRA and other regulatory bodies. The applicability to the Internet and other online services of existing laws in various jurisdictions governing issues such as property ownership, sales and other taxes and personal privacy is also uncertain and may take years to resolve. Finally, as our services are available over the internet in multiple states, and as we have numerous clients residing in these states, these jurisdictions may claim that we are required to qualify to conduct business as a foreign corporation in each such state. While ICC currently is registered as a broker-dealer in all 50 states, Puerto Rico and the District of Columbia, we are qualified to conduct business as a foreign corporation in only a few states. Failure by our company to qualify as a broker-dealer in other jurisdictions or as an out-of-state or "foreign" corporation in a jurisdiction where it is required to do so could subject us to taxes and penalties for the failure to qualify. Our business could be harmed by any new legislation or regulation, the application of laws and regulations from jurisdictions whose laws do not currently apply to our business or the applications of existing laws and regulations to the Internet and other online services. EMPLOYEES As of March 31, 2010, we had 81 employees, the majority of whom are located at our principal office in Lynnfield, Massachusetts. No employee is covered by a collective bargaining agreement or is represented by a labor union. We consider our employee relations to be excellent. We also enter into independent contractor arrangements on an as-needed basis to assist with various aspects of our business. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act and, in accordance therewith, files reports, proxy statements and other information with the SEC. Such reports, proxy statements and other information filed with the SEC by the Company can be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC located at http://www.sec.gov. Our website address is http://www.investorscapital.com. We make available free of charge on or through our website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The information found on our website is not part of this or any other report we file with or furnish to the SEC. All such documents are also available in print at no charge to any shareholder who requests them in writing to Robert Foney, Manager Corporate Communications, 230 Broadway East, Lynnfield, MA 01940. EXECUTIVE OFFICERS OF THE REGISTRANT


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 The following sets forth, as of June 17, 2010, certain information with respect to each of the executive officers of ICH: Theodore E. Charles, age 67, has served as a director and Chairman of the Board of the Company since its inception in July 1995. A founder of Investors Capital Holdings, Mr. Charles served as the Companys Chief Executive Officer and President from 1995 until August 2009. Mr. Charles also has served as the Chief Executive Officer of ICC and EPA from their founding in 1994 and 1995, respectively, until August 2009. Mr. Charles served on the Board of Directors of Revere Savings Bank of Massachusetts from 1997 to 2001 and served on the Advisory Board of Danvers Savings Bank from 2001 to 2003. Mr. Charles currently holds various securities licenses, including series 6, 63, 7 and 24, has been a member of the Financial Planning Association since 1985 and formerly served as Chairman of the Shareholder Advisory Board of Life USA Insurance Company. Currently, Mr. Charles is Vice Chairman of Easter Seals Massachusetts. Timothy B. Murphy, age 45, has served as a director of the Company since July 1995. A founder of the Company, Mr. Murphy has served as President and Chief Executive Officer since August 2009. He served as Executive Vice President and Chief Financial Officer of the Company from its inception until August and December 2009, respectively, and as President of ICC and EPA since their respective inceptions. He entered the securities industry in 1991 as an operations manager in the Boston regional office of Clayton Securities. By 1994, he was serving as compliance officer of BayBanks Brokerage and a vice president of G.R. Stuart & Company, another brokerage firm. Mr. Murphy holds various securities licenses including series 4, 7, 24, 27, 53, 63 and 65. Kathleen L. Donnelly, age 38, was promoted to Chief Financial Officer of the Company effective January 1, 2009 and serves as its principal financial officer. Prior to this appointment, Ms. Donnelly was employed by ICC as Corporate Accountant where she managed the Companys Sarbanes-Oxley compliance readiness program and provided internal budgeting and financial analysis services. From January through April 2007, Ms. Donnelly was employed as an auditor at Nardella & Taylor, LLC, a public accounting firm. From 1997 through 2006, she was a practicing Certified Public Accountant as an Audit Manager with UHY, LLP (formerly Brown & Brown, LLP), the Companys independent public accountants prior to the appointment of Marcum, LLP. ITEM 1B. UNRESOLVED STAFF COMMENTS. None ITEM 2. PROPERTIES. Our principal executive offices, comprised of several office condominiums, are located in a 9,068 square foot facility at 230 Broadway, Lynnfield, MA. The Company also maintains an office in a 2,132 square foot facility at 218 Boston Street, Topsfield, MA. Both of these properties are leased from entities owned and controlled by the Chairman and principal shareholder of ICH for a combined annual rent of $291,200. The Company believes the annual base rent amounts are generally consistent with current market rates for comparable office space in the same geographic areas. The Lynnfield, MA lease only was renewed and modified in October 2009 and will expire on March 31, 2015. Management believes that, while these premises are adequate for current business purposes, the Companys need for office space could exceed the capacity of these locations in the event of increases in personnel. Previously, the Company leased 3,346 square feet of additional office space in a facility at Six Kimball Lane, Lynnfield, MA for approximately $70,266 per year under a lease that expired June 30, 2009. Additionally, the Company leases 1,357 square feet of office space in Miami, FL for approximately $53,927 per year under a lease expiring in November 2011 that the Company partially sublets. ITEM 3. LEGAL PROCEEDINGS.


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 The Company operates in a highly litigious and regulated business, and the Company often is made a defendant in lawsuits and arbitrations that are incidental to our securities business. The Company typically vigorously contests the allegations of the complaints and believes that there are meritorious defenses in these matters. From time to time the Company also is the subject of regulatory investigations and proceedings. Counsel often is unable to confidently predict the likelihood of an outcome, whether favorable or unfavorable, in such matters because of routine and inherent uncertainties. For the majority of pending claims, the Company's current errors and omissions (E&O) policy limits the Companys maximum exposure in any one case to $100,000. The Company also maintains a fidelity bond to protect itself from potential damages and/or legal costs related to fraudulent activities pursuant to which the Companys exposure is usually limited to $350,000, subject to policy limitations and exclusions. ITEM 4. [REMOVED AND RESERVED]  PART II ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. MARKET INFORMATION ICH's common stock has been trading on NYSE AMEX / Alternext US (Amex) (formerly, The American Stock Exchange) under the symbol "ICH" since February 8, 2001. Prior to such date, there was no established public trading market for the common stock. As of June 18, 2010, there were6,591,131shares outstanding and 273 registered holders thereof. The following table presents the high and low closing prices for the common stock of ICH on the Amex for the periods indicated: High
     LowFiscal Year Ended March 31, 2010:January 1, 2010 through March 31, 2010
     $1.70
     $1.35October 1, 2009 through December 31, 2009
     $2.24
     $1.34July 1, 2009 through September 30, 2009
     $3.19
     $1.95April 1, 2009 through June 30, 2009
     $4.07
     $1.53Fiscal Year Ended March 31, 2009:January 1, 2009 through March 31, 2009
     $2.20
     $1.02October 1, 2008 through December 31, 2008
     $4.15
     $2.00July 1, 2008 through September 30, 2008
     $5.68
     $3.60April 1, 2008 through June 30, 2008
     $4.98
     $4.00
  CASH DIVIDENDS The Company did not pay any dividends on its common stock during the fiscal years ended March 31, 2010 and 2009. Future dividend decisions will be based on, and affected by, a number of factors, including the operating results and financial requirements of the Company and the impact of regulatory restrictions. For further information regarding restrictions on our ability to transfer funds to our stockholders, see Part I, Item 1. Business  How We Are Regulated and Part II, Item 7. Management's Discussion and Analysis--Liquidity and Capital Resources in this Form 10-K. SECURITIES AUTHORIZED FOR ISSUANCE UNDER COMPENSATION PLANS The following table presents information as of March 31, 2010 with respect to compensation plans


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 (including individual compensation arrangements) under which equity securities of the Registrant are authorized for issuance. Equity Compensation Plan InformationNumber of securitiesNumber of securities
     
     remaining available forto be issued
     Weighted-average
     future issuance underupon exercise of
     exercise price of
     equity compensation plansoutstanding options,
     outstanding options,
     (excluding securitiesPlan category
     warrants and rights
     warrants and rights
     reflected in column (a))(a)
     (b)
     (c)Equity compensationplans not approvedby security holders
     150,000
     $1.00
     noneTotal
     150,000
     $1.00
     none
  See Footnote 17  Benefit Plans to the Registrants Financial Statements, contained in Part II, Item 8 of this Form 10-K, for a description of the material features of each compensation plan under which equity securities of the Registrant are authorized for issuance that was adopted without the approval of security holders. RECENT SALES OF UNREGISTERED SECURITIES None. ITEM 6. SELECTED FINANCIAL DATA. Not applicable. ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Management's discussion and analysis reviews our consolidated financial condition as of March 31, 2010 and 2009, the consolidated results of operations for the years ended March 31, 2010 and 2009 and, where appropriate, factors that may affect future financial performance. The discussion should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Form 10-K. Unless context requires otherwise, as used in this Management's Discussion and Analysis (i) the "current period" means the fiscal year ended March 31, 2010, (ii) the "prior period" means the fiscal year ended March 31, 2009, (iii) an increase or decrease compares the current period to the prior period, and (iv) all non-comparative amounts refer to the current period. FORWARD-LOOKING STATEMENTS The reader is urged to read the information contained in the "Forward-Looking Statements" section at the beginning of this report for a discussion of the use of forward-looking statements in this report as well as risks and uncertainties in attempting to predict our future performance based upon such statements. OVERVIEW We are a financial services holding company that, through our subsidiaries, provides brokerage, investment advisory, insurance and related services. We operate in a highly regulated and competitive industry that is influenced by numerous external factors such as economic conditions, marketplace liquidity and volatility, monetary policy, global and national political events, regulatory developments,


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 competition and investor preferences. Our revenues and net earnings may be either enhanced or diminished from period to period by these and other external factors. OUR BUSINESS We operate primarily through our subsidiary, ICC, as a broker-dealer and, doing business as ICA, as a registered investment advisor, with a national network of independent financial representatives. Broker-Dealer Services We provide broker-dealer services in support of trading and investment by our representatives customers in securities, including corporate equity and debt securities, U.S. Government securities, municipal securities, mutual funds, limited partnerships and other alternative investments, variable annuities and variable life insurance. We also provide related services such as market information, Internet brokerage, portfolio tracking facilities and records management. Investment Advisory Services We provide investment advisory services, including asset allocation and portfolio rebalancing, for our representatives customers. In the past, investment advisory services were performed by both ICC and EPA. After consolidating our investment advisory services into ICA, EPA ceased operations and was dissolved in 2008. Recruitment and Support of Representatives A key component of our business strategy is to recruit well-established, productive representatives who provide superior service to their clients. Additionally, we assist our representatives in developing and expanding their business by providing a variety of support services and a diversified range of investment products for their clients. We focus on providing substantial added value to our representatives practices, enabling them to be more productive, particularly in high margin lines such as advisory services and brokerage. Support provided to assist representatives in pursuing consistent, profitable sales growth takes many forms, including automated trading systems, targeted financial assistance and a network of communication links with investment product companies. Regional and national conventions provide forums for interaction to improve product knowledge, sales and client satisfaction. In addition, we provide our representatives with programs and tools to grow their businesses both through new client acquisition and advancement of existing client relationships. These programs enhance our ability to attract and retain productive representatives. OUR PROCESS Online Brokerage.Registered representatives have direct market access to submit security transactions for their clients through the use of an online brokerage platform for trade execution serviced by our clearing firm, Pershing LLC. Check and Application.Check and application revenue is obtained through a process where a check and a product application is delivered to us for processing that includes principal review and submission to the variable annuity, mutual fund, direct participation or other investment product company. Investments in technology are facilitating our migration over time from a paper intensive to a more paperless process. This shortens the transaction cycle, reduces errors and creates greater efficiencies. Bond Brokerage.Our fixed-income brokerage desk uses a network of regional and primary dealers to execute trades across a broad array of fixed income asset classes. The desk also utilizes dealer-only electronic services that allow the desk to offer inventory and to execute trades. Our fixed income traders work with our representatives to develop portfolios for clients.


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 Asset Allocation.Asset allocation services are made available through ICA. Our services include the design, selection and rebalancing of investment portfolios on behalf of our representatives' clients. We also provide tools, services and guidance that enable our representatives to provide these investment services directly to their clients. These services, for the most part, are conducted through our online brokerage platform. Other allocation services are performed directly by fund companies.  CRITICAL ACCOUNTING POLICIESIn General Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The Company believes that of its significant accounting policies (detailed in Footnote 2 to the Companys Consolidated Financial Statements contained herein), those dealing with valuation of securities and other assets, revenue recognition and allowance for doubtful accounts receivable involve a particularly high degree of judgment and complexity. Our accounting policies require estimates and assumptions that affect the amounts of assets, liabilities, revenues and expenses reported in the consolidated financial statements. Due to their nature, estimates involve judgment based upon available information. Actual results or amounts could differ from estimates and the difference could have a material effect on the consolidated financial statements. Therefore, understanding these policies is important to understanding the reported results of operations and the financial position of the Company. OffBalance Sheet Risk We execute securities transactions on behalf of our customers. If either the customer or counter-party fails to perform, we, by agreement with our clearing broker, may be required to discharge the obligations of the non-performing party. In such circumstances, we may sustain a loss if the market value of the security is different from the contract value of the transaction. We seek to control off-balance sheet risk by monitoring the market value of securities held or given as collateral in compliance with regulatory and internal guidelines. Pursuant to such guidelines, our clearing firm requires that we reduce positions when necessary. We also complete credit evaluations where there is thought to be credit risk. Reserves We record reserves related to legal proceedings in "accrued expenses" in the consolidated balance sheet. The determination of these reserve amounts requires significant judgment on the part of management. Many factors are considered including, but not limited to: the amount of the claim; the amount of the loss in the client's account; the basis and validity of the claim; the possibility of wrongdoing on the part of one of our employees or representatives; previous results in similar cases; and legal precedents. Each legal proceeding is reviewed with counsel in each accounting period and the reserve is adjusted as deemed appropriate by management. Any change in the reserve amount is recorded in the consolidated financial statements and is recognized as a charge or credit to earnings in that period. The assumptions of management in determining the estimates of reserves may be incorrect and the actual costs upon disposition of a legal proceeding could be greater or less than the reserved amount. RISK MANAGEMENT Risk is an inherent part of our business and activities. Risk management is critical to our financial strength and profitability and requires robust auditing, constant communications, sound judgment and knowledge of financial regulations, trends and the economy as a whole. We take a holistic approach to governance, risk management and compliance. Management and staff, at all levels, take an active role in the risk management process. The principal risks involved in our business activities include market, operational, regulatory and legal risks.


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 Market Risk Market risk is the risk attributable to common macroeconomic factors such as gross domestic product, employment, inflation, interest rates, budget deficits and consumer sentiment. Consumer and producer sentiment is critical to our business. The level of consumer confidence determines their willingness to spend, especially in the financial markets. It is the willingness to spend in the financial markets that is key to our business. A shift in spending in this area, often caused by market volatility, could negatively impact us. In addition, declines in market values negatively impact investment advisory revenues that are based upon the value of assets under management. We constantly monitor these economic trends in order to enhance and broaden our product line to mitigate potential negative impact of such trends. Operational Risk Operational risk refers to the risk of loss resulting from our operations, including, but not limited to, improper or unauthorized execution of transactions, deficiencies in our technology or financial or financial operating systems and inadequacies or breaches in our control processes. Managing these risks is critical, especially in a rapidly changing environment with increasing transaction volume. Failure to manage these risks could result in material financial loss to the Company. To mitigate these risks, the Company has developed policies and procedures designed to identify and manage operational risk. These policies and procedures are reviewed and updated on a continuing basis by a broad-based Risk Committee that meets weekly to ensure that risk is minimized. Regulatory and Legal Risk Regulatory and legal risk includes non-compliance with applicable legal and regulatory requirements and the risk of a large number of customer claims that could result in adverse judgments against us. We are subject to extensive regulation in the various jurisdictions in which it operates, and we maintain a panoply of procedures to address issues such as regulatory capital requirements, sales and trading practices, use of and safekeeping of customer funds, the granting of credit, collection activities, money-laundering and record keeping. However, compliance procedures, no matter how stringent and comprehensive, can only limit, but not completely prevent, the institution of regulatory and legal proceedings, the outcomes and consequences of which typically cannot be reasonably foreseen or quantified. In the normal course of business, we continue to be the subject of numerous civil actions and arbitrations arising out of customer complaints relating to our alleged activities as a broker-dealer or investment advisor, as an employer or as a result of other business activities. In line with general industry experience, the volume of such complaints has generally trended upward over time, and particularly as a consequence of market losses incurred by customers during the most recent financial downturn. However, we have recently experienced a marked redution in our legal charges. Effects of Inflation Our assets primarily are liquid in nature and not significantly affected by inflation. Management believes that the replacement cost of property and equipment will not materially affect operating results. However, the rate of inflation can affect our expenses, including, without limitation, employee compensation and benefits, communications and occupancy, which may not be readily recoverable through charges for services provided. KEY INDICATORS OF FINANCIAL PERFORMANCE


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 We periodically review and analyze our financial performance across a number of measurable factors considered to be particularly useful in understanding and managing our business. Key metrics in this process include Adjusted EBITDA (as defined below), productivity and practice diversification of representatives, top line commission and advisory services revenues, gross margins, operating expenses, legal costs, taxes and earnings per share. COMPARISON OF FISCAL YEARS ENDED MARCH 31, 2010 AND 2009 The following discussion provides an assessment of our results of operations, capital resources and liquidity and should be read in conjunction with our audited consolidated financial statements and related notes included elsewhere in this report. RESULTS OF OPERATIONSPercent of RevenueYear Ended March 31,
     Year Ended March 31,
     Percent Change2010
     2009
     2010
     2009
     2010 vs. 2009Revenues:Commission
     $ 64,997,188
     $ 68,219,314
     82.0%
     83.6%
     -4.7%Advisory fees
     11,798,894
     11,090,508
     14.9%
     13.6%
     6.4%Other fee income
     1,013,718
     804,877
     1.3%
     1.0%
     25.9%Marketing revenue
     995,767
     981,100
     1.3%
     1.2%
     1.5%Other income
     382,370
     511,589
     0.5%
     0.6%
     -25.3%Total revenue
     79,187,937
     81,607,388
     100.0%
     100.0%
     -3.0%Commissions and advisory fees expense
     64,045,046
     65,609,588
     80.9%
     80.4%
     -2.4%Gross profit
     15,142,891
     15,997,800
     19.1%
     19.6%
     -5.3%Operating expenses:Advertisement and marketing
     744,933
     1,279,756
     0.9%
     1.6%
     -41.8%Communications
     653,393
     1,060,641
     0.8%
     1.3%
     -38.4%Total selling expenses
     1,398,326
     2,340,397
     1.7%
     2.9%
     -40.3%Compensation and benefits
     8,007,675
     9,135,686
     10.2%
     11.2%
     -12.3%Regulatory, legal and professional
     2,312,812
     3,805,231
     2.9%
     4.7%
     -39.2%Occupancy
     853,548
     1,032,914
     1.1%
     1.3%
     -17.4%Other administrative expenses
     1,687,644
     1,815,393
     2.1%
     2.2%
     -7.0%Interest expense
     26,213
     36,845
     0.0%
     0.0%
     -28.9%Total administrative expenses
     12,887,892
     15,826,069
     16.3%
     19.4%
     -18.6%Total operating expenses
     14,286,218
     18,166,466
     18.0%
     22.3%
     -21.4%Operating income (loss)
     856,673
     (2,168,666)
     1.1%
     -2.7%
     -139.5%Provision (benefit) for income taxes
     535,135
     (338,667)
     0.7%
     -0.4%
     -258.0%Net income (loss)
     $ 321,538
     $ (1,829,999)
     0.4%
     -2.3%
     -117.6%Adjusted EBITDA:
     $ 1,475,538
     $ (261,102)
     1.9%
     -0.3%
     -665.1%Income tax benefit
     (535,135)
     351,658
     -0.7%
     -0.4%
     -252.2%Interest expense
     (26,213)
     (36,845)
     0.0%
     0.0%
     -28.9%Income tax expense
     0
     (12,991)
     0.0%
     0.0%
     -100.0%Depreciation
     (349,001)
     (386,625)
     -0.4%
     0.5%
     -9.7%Non-cash compensation
     (243,651)
     (844,702)
     -0.3%
     1.0%
     -71.2%Non-recurring professional fees to evaluatestrategic business opportunities
     -
     (639,392)
     0.0%
     0.8%
     -Net income (loss)
     $ 321,538
     $ (1,829,999)
     0.4%
     -2.3%
     -117.6%
  Adjusted EBITDA Earnings before interest, taxes, depreciation and amortization (EBITDA), as adjusted by eliminating other non-cash expense, gains or losses on sales of assets, and various non-recurring items (adjusted EBITDA), is a key metric we use in evaluating our financial performance. Adjusted EBITDA eliminates items that we believe are not part of our core operations, are non-recurring items of revenue or expense, or do not involve a cash outlay, such as stock-related compensation. We consider adjusted EBITDA important in monitoring and evaluating our financial performance on a consistent basis across various periods. We also use adjusted EBITDA as a primary measure, among others, to analyze and evaluate financial and strategic planning decisions. Adjusted EBITDA is considered a non-GAAP financial measure as defined by Regulation G


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 promulgated by the SEC under the Securities Act. Adjusted EBITDA should be considered in conjunction with, rather than as a substitute for, important GAAP financial measures including pre-tax income, net income and cash flows from operating activities. Items excluded from adjusted EBITDA are significant and necessary components to the operations of our business; therefore, adjusted EBITDA should only be used as a supplemental measure of our operating performance. PRODUCTIVITY AND PRACTICE DIVERSIFICATION OF REPRESENTATIVES Management believes that improving the overall quality of our independent representatives is a key to achieving growth in revenues and net income. We believe that upgrading the business practices of our representatives not only generates more revenue, but assists in limiting the cost of overhead functions and representative noncompliance. We strive to continually improve the overall quality of our force of representatives by: assisting representatives to improve their skills and practices,recruiting established, high quality representatives, andterminating low quality representatives. Productivity A key metric that we use to assess the average quality of our producing (non-staff) representatives is per capita rep-generated revenue based on a rolling 12-month period. Data for the 12-month periods ended March 31, 2010 and 2009 are presented below: Year Ended
     
     % Increase/March 31, 2010
     March 31, 2009
     Incease/decrease
     decreaseRep-generated revenue:Commission
     $ 64,997,188
     $ 68,219,314
     $ (3,222,126)
     -4.7%Advisory
     11,798,894
     
     11,090,508
     708,386
     6.4%Other fee income
     1,013,718
     
     804,877
     208,841
     25.9%$ 77,809,800
     $ 80,114,699
     $ (2,304,899)
     -2.9%Number of representatives
     564
     
     651
     (87)
     -13.4%Average revenue per representative
     $ 137,961
     $ 123,064
     $ 14,897
     12.1%
  We believe that the 12.1% increase in per capita rep-generated revenue, while indicative of overall market improvement, also reflects recruitment of quality representatives who offer superior investment products and services to their clients, especially in times of volatile markets. Among the steps that were taken during the most recent fiscal year to attract and retain higher quality representatives was increasing total payouts percentages for high-end producers. Practice Diversification Our revenues and earnings are substantially affected by general conditions in financial markets. Further, past performance is not necessarily indicative of results to be expected in future periods. In our securities brokerage business, the amount of our revenues depends on levels of market activity requiring the services we provide. We encourage diversification in the investments products and services recommended or selected by our independent representatives for their clients through recruitment, education and training. This enables our representatives to more fully serve the investment and security needs of their clients, particularly in volatile markets. We believe that representatives who offer sophisticated investment products and services to their clients will generate relatively high margin transaction and fee-based business and recurring revenues that will help us weather volatile and down markets.


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010REVENUES Revenues decreased by $2.42 million, or 3.0%, to $79.19 million, led by a $3.22 million or 4.7% decline in commissions offset by a $0.71 million or 6.4% increase in advisory services revenue. Revenues from advisory services increased primarily as a result of asset values in managed portfolios returning to previous balances before the significant market disruption beginning in September 2008. Commissions The decline in commissionable revenues was mostly attributable to a drop off in direct business investments including variable annuities, mutual funds and direct participation programs. The decline was most notable in direct participation programs, including a decrease in sales of Real Estate Investment Trust Programs (REITS) that correlated with the real estate market crisis. On the other hand, brokerage revenue increased considerably as investors returned to a market that was rebounding from low levels established in prior periods. Fiscal Year Ended
     Increase/
     Percentage
     PercentageMarch 31,
     decrease
     of Total
     change2010
     2009
     2010 vs. 2009
     change
     2010 vs. 2009Commission Revenue:Variable Annuities
     $ 27,411,820
     $ 28,433,022
     $ (1,021,202)
     31.7%
     -3.6%Brokerage(1)
     25,352,547
     22,936,314
     2,416,233
     -75.0%
     10.5%Direct Mutual Funds Sales
     6,068,445
     7,004,834
     (936,389)
     29.1%
     -13.4%Direct Participation Programs
     6,067,833
     9,601,454
     (3,533,621)
     109.7%
     -36.8%Other
     96,543
     243,690
     (147,147)
     4.5%
     -60.4%Total Commission Revenue
     $ 64,997,188
     $ 68,219,314
     $ (3,222,126)
     100.0%
     -4.7%
  1. Revenue designated as Brokerage includes revenue from mutual funds sold through our trading platform. Advisory Responding to industry trends and increasing client demand, we have endeavored to assist our representatives in transitioning more of their business to advisory services. We do not dictate the general nature or extent of advisory services our representatives provide for their clients. However, we continue to make concerted efforts to attract our representatives to our expanded line of proprietary advisory services programs through education, seminars, tradeshows and direct telemarketing. Assisted by Pershings on-line platform, A-MAP remains popular because of the opportunities it provides representatives to deliver superior asset management services and overall investment performance at a lower cost. Resulting transactional cost savings have been shared with our representatives' clients in the form of lower fees. Revenues from this program increased by $0.09 million or 1.4% due to an increase in assets under management driven principally by market-wide increases in asset values. Revenue from the ICA-directed F-Map program grew by 18.8% or $0.21 million, reflecting improvement in portfolio performance and asset contributions. Utilizing an experienced investment policy committee, this ICA-directed program provides a mutual fund and Exchange Traded Funds (ETFs) managed portfolio to our representatives.


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010Other Fee Income The growth in other fee income reflects increases in annual representative renewal fees instituted to fund rising licensing and other regulatory costs. Marketing Revenue Net marketing revenues increased by 1.5% principally due to a reduction in net costs in sponsoring our conventions that was offset by a decline in product sales from companies participating in our partnership programs. Other Income Other income, consisting primarily of interest and dividends and gains/losses on investments, decreased by 25.3%. The decrease is attributable to a reduction in interest income earned on declining trade and related cash balances impacted by reductions in federal funds rates. GROSS MARGINGross Margin
     % of Total
     Gross MarginGross Margin
     
     Retention
     Gross Margin
     % ChangeYear Ended March 31,
     Year Ended March 31,
     Year Ended March 31,2010
     
     2009
     2010
     2009
     2010
     2009
     2010 vs. 2009Commissions:Brokerage
     $ 5,671,301
     $ 6,089,989
     22.4%
     26.6%
     37.4%
     38.1%
     -6.9%Check & Application
     5,141,253
     
     5,855,108
     13.0%
     13.0%
     34.0%
     36.6%
     -12.2%Insurance Products
     91,544
     
     117,090
     100.0%
     100.0%
     0.6%
     0.7%
     -21.8%Underwriting
     500
     
     22,762
     10.0%
     18.0%
     0.0%
     0.1%
     -97.8%Total
     $ 10,904,598
     $ 12,084,949
     
     
     72.0%
     75.5%
     -9.8%Advisory Services:A-MAP
     1,420,551
     
     1,468,935
     22.3%
     23.3%
     9.4%
     9.2%
     -3.3%F-MAP
     513,530
     
     492,780
     39.1%
     44.2%
     3.4%
     3.1%
     4.2%Other
     591,834
     
     328,259
     n/a
     n/a
     3.9%
     2.1%
     80.3%Total
     $ 2,525,915
     $ 2,289,974
     20.9%
     20.2%
     16.7%
     14.4%
     10.3%Other fees
     620,893
     
     452,808
     100.0%
     100.0%
     4.1%
     2.8%
     37.1%Marketing
     991,656
     
     981,099
     n/a
     n/a
     6.5%
     6.1%
     1.1%Other income
     99,829
     
     188,970
     n/a
     n/a
     0.7%
     1.2%
     -47.2%Total Gross Margin
     $ 15,142,891
     $ 15,997,800
     19.1%
     19.6%
     100.0%
     100.0%
     -5.3%1. Due to account composition, margin retention for these products is not deemed a useful indicator of performance.
  Overall our gross margin decreased by $0.85 million, or 5.3%, to $15.1 million led by a $0.71 million, or 12.2%, decline in gross margin derived from our direct check and application programs as we welcomed more representatives onto our brokerage platform. Also contributing to this decrease was a $0.42 million or 6.9% decrease in profit margin from brokerage primarily as a result of the decrease in income derived from money market balances. Commissions Profit margin from commissions decreased by $1.18 million, or 10.0% mainly as a result of a $3.53 million decrease in sales of direct participation programs, primarily REITS, which generated the bulk of the $0.71 million decrease. Profit margin from brokerage declined principally as a result of a reduction in recurring revenues due to a reduction in the target rate on federal funds offset by a decrease in clearing firm charges in transferring accounts.


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010Advisory Services Profit margins from advisory services increased by 10.3% or $0.24 million primarily as a result of decreased transaction costs in managing the revised A-Map NT program, now referred to as the A-Map AT program. In addition, the Company experienced an increase in margin from the F-Map program as a result of increased asset values due to improvement in performance and new asset contributions. Finally, the increase in advisory services margins also reflected contributions from other services including financial planning and the newly created Fund Select program. Commission and Advisory Fees Expenses Profit margins are inversely aligned with payout of commission and advisory fees to our representatives as a percentage of revenue generated by them. We strive to recruit quality independent representatives who generate recurring revenues that do not flow through the commission and advisory expense payout grid, primarily as brokerage commissions and advisory fees. Management monitors the amount of revenue an independent representative brings in compared to his or her payout on that revenue. Commission and advisory fee expenses during the current period were $64.1 million as compared to $65.6 million for the prior period. As a percentage of revenue generated by representatives (defined as commissions, advisory fees and other fees), commission and advisory expenses increased from 81.9% in the prior period to 82.3% in the current period due primarily to structural increases in the percentage of commissionable revenue paid to high producing representatives. These expenses include commissions to representatives, clearing and execution costs and other direct costs that are necessary to produce revenue. Management continuously monitors these costs as they have a substantial effect on our profit margin. OPERATING EXPENSES Operating expenses, which decreased by 21.4% or by $3.88 million, are discussed in detail below. Compensation and Benefits The largest component of operating expense, compensation and benefits, decreased by $1.13 million or 12.3%. The drop is attributed principally to reduced health care plan costs, a suspended 401(k) plan match, and reduced stock compensation coupled with minimal hiring. Finally, during the prior period there was a resignation by one of our officers whom we did not replace. In January 2010, 10% pay cuts in effect since February 2009 for the salaried staff employees were restored. In April 2010, pay cuts in place as of January 2009 were restored to members of the senior management team. Regulatory, Legal and Professional Regulatory, legal and professional expenses declined by $1.49 million, or 39.2%, reflecting significant reductions in both litigation and settlement costs. In the prior period, the Company had incurred legal defense and settlement costs stemming from two major lawsuits. Also in the prior period, the Company incurred legal fees for strategic corporate matters whereas in the current period there were no legal fees of that nature. We will continue to incur legal fees and settlement costs as we operate in a litigious, regulated industry. In addition, from time to time regulatory agencies and self-regulatory organizations institute investigations into industry or Company practices, which can also result in the imposition of sanctions. We invest significant resources to contain litigation and regulatory exposure by promoting sound operational procedures.


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010Advertising Advertising, including related marketing and branding efforts, along with meals and entertainment decreased by $0.53 million, or 41.8%. due primarily to restricting print advertisements to fewer publications, a sharp reduction in travel and entertainment expenses, and a decrease in direct marketing expenses for recruitment purposes. Communications Communications expenses, which include such items as telephone and connectivity costs and investor relations, were consistent with levels during the prior year; however, we are looking to further expand, update and improve our website as an effective media for communicating to our independent representatives, customers and others. Communications expense decreased by 38.4%, or $0.41 million due primarily to a reduction in company-sponsored trips. We sponsored a reward trip during August 2008, whereas we combined that event with sponsored events in the current period. Additionally, the Company reduced its telephone expenses, and the increased use of electronic rather than print for direct marketing efforts. In addition there were decreases in website connectivity costs following the closing of our investment centers. Occupancy Occupancy expenses, which include depreciation, decreased by 17.4% or $0.18 million due to the closing of investment centers as well as downsizing of home office space upon the expiration of a lease. Also depreciation decreased as a result of lower capital expenditures combined with existing assets fully depreciating. Other Administrative Other administrative expenses, which include various insurance, loan reserves, postage, office and computer-related expenses, decreased by $0.13 million or 7.0% primarily due to a reduction in regulatory fines and penalties offset by an increase in insurances for our fidelity bond and our directors and officers liability. We also had increased directors fees as a result of board members sitting in on a special committee evaluating strategic corporate matters. Interest Expense Interest expense decreased by 28.9% reflecting lower margin balances in our firm accounts and reduced rate charges on E&O insurance financing. OPERATING AND NET INCOME The Company reported a significant turnaround in operating income; $0.85 million as compared to a $2.17 million operating loss for the prior period. Our net income totaled $0.32 million, or $0.05 per basic and diluted net income per share, compared to net loss of $1.83 million, or $0.29 basic and diluted net loss per share, for the prior period. We have realized growth in every category of revenue, except commissions, during each of the last fiscal four quarters compared to the immediately preceding year, as declines in the overall economy have tapered. Management attributes the stabilization in operating income primarily to reduced operating costs, recent growth in the recruitment of productive representatives, enhanced operating efficiency, and growth of our advisory segments asset values. The Company expects to continue to operate in a more efficient environment; however, the Companys main focus will be to grow revenues strategically by recruiting brokerage based representatives and high-end asset advisors as the Company moves forward. The Company, to remain competitive, will continue to seek to improve the quality of customer service to its representatives including technology enhancement to ensure a superior experience.


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 In the current year, the Company has begun to rebound with positive operating income as we see improvements in the financial and economic circumstances, and we are cautiously optimistic that these conditions present an opportunity to optimize our human capital and maximize operational efficiency. However, we cannot forecast the severity or permanence of the impact on our financial position that may result from a continuation and worsening of disruption in financial markets. Much of such future impact is inherently beyond our ability to forecast or control. LIQUIDITY AND CAPITAL RESOURCES Our primary source of liquidity remains cash flows from operations, primarily from our broker-dealer and investment advisory business. We take a proactive approach to minimizing the occurrence and impact of events that may lead to unpredictable cash outflows, including major legal proceedings, trade errors, and fines and other sanctions imposed by regulatory bodies such as FINRA, the SEC and state securities regulators. A key to this approach is ensuring that industry-standard controls over our operations and those of our representatives are consistently maintained. As of March 31, 2010, cash and cash equivalents totaled $5.81 million as compared to $6.15 million as of March 31, 2009. Working capital as of March 31, 2010 was $6.67 million as compared to $6.08 million as of March 31, 2009. The ratio of current assets to current liabilities was 1.84 to 1 as of March 31, 2010 as compared to 1.73 to 1 as of March 31, 2009. Operations provided $1.61 million in cash for the year ended March 31, 2010 as compared to $1.82 million of cash provided for the year ended March 31, 2009. In comparing cash flow from operating activities for fiscal year ended March 31, 2010 to fiscal year ended March 31, 2009, cash flows decreased by $0.21 million largely because we had paid major legal settlements that were included in accounts payable at March 31, 2009offset by the insurance recovery from our fidelity bond. Cash flows from investing activities during the current period primarily consisted of $0.17 million in cash for acquisition of equipment along with $0.14 million of salaries devoted to capitalized internal software in the development of our new proprietary transparency system. Also during the current period cash used in financing activities consisted mostly of $1.49 million in principal payments on a short-term note to finance insurance premiums. Cash flows from investing activities for the prior year primarily consisted of $1.25 million in cash provided from Treasury notes and Certificates of Deposit maturing offset by $0.13 million of cash used to purchase additional equipment. Cash used in the prior year for financing activities consisted mostly of $1.19 million in principal payments on a short-term note obligation to finance insurance premiums along with proceeds of $0.12 million from the exercise of stock options. REGULATORY NET CAPITAL Cash disbursements can have a material impact on our brokerage firms regulatory net capital. The SEC Uniform Net Capital Rule (Rule 15c3-1) requires that ICC, our broker-dealer subsidiary, maintain net capital of $100,000 and a ratio of aggregate indebtedness to net capital (a net capital ratio) not to exceed 15 to 1. Under the rule, indebtedness generally includes all money owed by ICC, and net capital includes ICC cash and assets that are easily converted into cash. SEC rules also prohibit "equity capital" (which, under the net capital rule, includes subordinated loans) from being withdrawn, cash dividends from being paid and other specified actions of similar effect from being taken, if, among other specified contingencies, ICCs net capital ratio would exceed 10 to 1 or if ICC would have less than 120% of its minimum required net capital. As of March 31, 2010, ICC had net capital of $3.39 million (i.e., an excess of $2.91 million) and a 2.13 to 1 net capital ratio as compared to net capital of approximately $1.94 million (i.e., an excess of $1.41


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 million) and a 4.10 to 1 net capital ratio as of March 31, 2009. The increase in net capital was the primary result of the increase in stockholders equity generated by income from operations of the broker dealer. Positive cash flow and maintenance of satisfactory net capital depends primarily upon generation of operating income. The Company experienced a considerable loss in the prior period principally as a result of legal settlement and defense costs and turmoil in financial markets. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. REPORT OF MARCUM LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Stockholders of Investors Capital Holdings, Ltd. and SubsidiariesLynnfield, MA We have audited the accompanying consolidated balance sheet of Investors Capital Holdings, Ltd. and subsidiaries (the Company) as of March 31, 2010, and the related consolidated statements of operations, changes in stockholders equity and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.  We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.  In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Investors Capital Holdings, Ltd. and subsidiaries at March 31, 2010, and the consolidated results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.  /s/ Marcum LLP  Marcum LLP Boston, Massachusetts June 28, 2010


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Stockholders of Investors Capital Holdings, Ltd. and Subsidiaries Lynnfield, MA We have audited the accompanying consolidated balance sheet of Investors Capital Holdings, Ltd. and subsidiaries (the Company) as of March 31, 2009, and the related consolidated statements of operations, changes in stockholders equity, and cash flows for the year then ended. These consolidatedfinancial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstance, but not for the purpose of expressing an opinion on the effectiveness of the Company internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Investors Capital Holdings, Ltd. and subsidiaries at March 31, 2009, and the consolidated results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.  /s/ UHY LLPBoston, MassachusettsJune 26, 2009


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|Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010
|-------------------------------------------------------------------------------------------

INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSMarch 31,
     
     March 31,2010
     
     2009AssetsCurrent AssetsCash and cash equivalents
     $                     5,812,865
     
     $                     6,151,613Deposit with clearing organization, restricted
     175,000
     
     175,000Accounts receivable
     6,042,188
     
     5,198,575Accounts receivable - Fidelity Bond
     -
     
     956,223Note receivable
     140,598
     
     8,674Loans receivable from registered representatives (current), net of allowance
     769,263
     
     737,571Prepaid income taxes
     559,007
     
     295,608Securities owned, at fair value
     57,933
     
     85,436Investments
     50,000Prepaid expenses
     957,674
     
     858,67914,564,528
     
     14,467,379Property and equipment, net
     774,182
     
     950,620Long Term InvestmentsLoans receivable from registered representatives
     292,884
     
     129,358Note receivable
     595,000
     
     747,617Investments
     184,319
     
     127,143Non-qualified deferred compensation investment
     929,897
     
     533,665Cash surrender value life insurance policies
     551,398
     
     406,0892,553,498
     
     1,943,872Other AssetsOther assets
     25,069
     
     44,511Deferred tax asset, net
     838,773
     
     1,097,952Capitalized software, net
     138,497
     
     -1,102,339
     
     1,142,463TOTAL ASSETS
     $                18,894,547
     
     $                18,504,334Liabilities and Stockholders' EquityCurrent LiabilitiesAccounts payable
     $                        817,761
     
     $                     2,029,286Accrued expenses
     2,358,656
     
     2,347,761Commissions payable
     3,488,415
     
     2,860,093Notes payable
     1,130,922
     
     1,044,805Unearned revenues
     101,931
     
     94,259Securities sold, not yet purchased, at fair value
     5,693
     
     7,0567,903,378
     
     8,383,260Long-Term LiabilitiesNon-qualified deferred compensation plan
     793,735
     
     541,993793,735
     
     541,993Total liabilities
     8,697,113
     
     8,925,253Commitments and contingencies (Note 15Stockholders' Equity:Common stock, $.01 par value, 10,000,000 shares authorized;6,595,804 issued and 6,591,919 outstanding at March 31, 2010;6,570,177 issued and 6,566,292 outstanding at March 31, 2009
     65,958
     
     65,702Additional paid-in capital
     12,095,862
     
     11,852,467Accumulated deficit
     (1,964,084)
     
     (2,285,622)Less: Treasury stock, 3,885 shares at cost
     (30,135)
     
     (30,135)Accumulated other comprehensive income
     29,833
     
     (23,331)Total stockholders' equity
     10,197,434
     
     9,579,081TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
     $                18,894,547
     
     $                18,504,334The accompanying notes are an integral part of these consolidated financial statements.


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010

INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONSYEARS ENDEDMarch 31,2010
     
     2009Revenues:Commission
     $                             64,997,188
     
     $                             68,219,314Advisory fees
     11,798,894
     
     
     11,090,508Other fee income
     1,013,718
     
     
     804,877Marketing revenue
     995,767
     
     
     981,100Other income
     382,370
     
     
     511,589Total revenue
     79,187,937
     
     
     81,607,388Commission and advisory fees
     64,045,046
     
     
     65,609,588Gross profit
     15,142,891
     
     
     15,997,800Operating expenses:Advertisement and marketing
     744,933
     
     
     1,279,756Communications
     653,393
     
     
     1,060,641Selling expenses
     1,398,326
     
     
     2,340,397Compensation and benefits
     8,007,675
     
     
     9,135,686Regulatory, legal and professional
     2,312,812
     
     
     3,805,231Occupancy
     853,548
     
     
     1,032,914Other administrative expenses
     1,687,644
     
     
     1,815,393Interest expense
     26,213
     
     
     36,845Administrative expenses
     12,887,892
     
     
     15,826,069Total operating expenses
     14,286,218
     
     
     18,166,466Operating income (loss) before income taxes
     856,673
     
     
     (2,168,666)Provision (benefit) for income taxes
     535,135
     
     
     (338,667)Net income (loss)
     $                                   321,538
     
     $                             (1,829,999)Basic and diluted net income (loss) per share
     $                                         0.05
     
     $                                      (0.29)Basic and diluted dividends per common share
     $                                               -
     
     $                                              -Shares used in basic and diluted per share calculations
     6,503,476
     
     6,415,385The accompanying notes are an integral part of these consolidated financial statements.


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010



INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITYYears Ended March 31, 2010 and 2009Common Stock$.01 Par Value
     Additional
     
     Retained
     
     Accumulated
     TotalNumber of
     Carrying
     Paid-In
     Comprehensive
     Earnings
     Treasury
     Other
     Stockholders'Shares
     Amount
     Capital
     Income
     (Deficit)
     Stock
     Comprehensive
     EquityBalance at March 31, 2008
     6,535,871
     $                              65,359
     $                      10,886,381
     $                                         -
     $                         (455,623)
     $                            (30,135)
     $                              28,674
     $                           10,494,656Stock-based compensation:Exercise of stock options
     34,760
     347
     121,380
     
     
     
     
     121,727Amortization of deferred compensation
     
     
     848,263
     
     
     
     
     848,263Cancelled restricted shares
     (27,368)
     (273)
     (7,918)
     
     
     
     
     (8,191)Issuance of common stock under plans
     26,914
     269
     4,361
     
     
     
     
     4,630Comprehensive income:Net loss
     
     
     
     (1,829,999)
     (1,829,999)Other comprehensive loss:unrealized holding loss arising during theperiod, net of tax effect
     
     
     
     (52,005)No reclassification adjustment required
     
     
     
     -Other comprehensive loss
     
     
     
     (52,005)
     
     
     (52,005)Comprehensive loss
     
     
     
     (1,882,004)
     
     
     
     (1,882,004)Balance at March 31, 2009
     6,570,177
     $                              65,702
     $                      11,852,467
     -
     $                      (2,285,622)
     $                            (30,135)
     $                           (23,331)
     $9,579,081Stock-based compensation:Amortization of deferred compensation
     
     
     243,651
     
     
     
     
     243,651Issuance of common stock under plans
     28,701
     287
     (287)Cancelled restricted shares
     (3,074)
     (31)
     31
     
     
     
     
     -Comprehensive income:Net income
     
     
     
     321,538
     321,538
     
     
     -Other Comprehensive Income:Unrealized gain on securities:Unrealized holding gains arising during
     
     
     
     53,164the period, no tax effectNo reclassification adjustment required
     
     
     
     -Other comprehensive income
     
     
     
     53,164
     
     
     53,164Comprehensive income
     
     
     
     374,702
     
     
     
     374,702Balance at March 31, 2010
     6,595,804
     $                              65,958
     $                       12,095,862
     $                                         -
     $                      (1,964,084)
     $                            (30,135)
     $                              29,833
     $                              10,197,434
  Reclassification disclosure:There was no reclassification adjustment required for an unrealized loss of $52,005 on available- for- sale securities for the year ended March 31, 2010.There was no reclassification adjustment required for an unrealized gain of $4,650 on available-for-sale securities for the year ended March 31, 2009.The accompanying notes are an integral part of these consolidated financial statements.


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010

INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSYears Ended March 31, 2010 and 20092010
     2009Cash flows from operating activities:Net income (loss)
     $              321,538
     $      (1,829,999)Adjustments to reconcile net income (loss) to net cashprovided by operating activities:Depreciation and amortization
     349,001
     386,625Amortization of discount on U.S. Treasury note
     -
     (2,139)Allowance for forgivable loans to representatives
     (60,907)
     174,150Deferred taxes
     259,179
     (401,192)Stock-based compensation
     243,651
     844,702Unrealized loss (gain) in marketable securities
     (5,985)
     3,481Non-qualified deferred compensation investment
     27,065
     11,006Loss on disposal of equipment
     1,198
     62,048Market adjustment cash surrender value life insurance policy
     (36,424)
     26,266Charge to commission expense (forgivable loans)
     130,134
     32,250Allowance for bad debt expense
     90,390
     -Additional paid in capital carry back claims
     -
     30,000Loss on permanent impairment of private placement investment
     -
     40,000Change in operating assets and liabilities:
     
     -Accounts receivable
     (843,613)
     (1,492,652)Prepaid expenses and other
     (251,107)
     (192,812)Loans receivable from registered representatives
     (354,835)
     (258,294)Prepaid income taxes
     (263,399)
     969,268Accounts receivable - Fidelity Bond
     956,223
     -Accounts payable
     368,977
     2,572,150Securities, net
     32,125
     (41,885)Accrued expenses
     10,895
     1,035,575Commissions payable
     628,322
     (137,406)Unearned revenues
     7,672
     (8,303)Net cash provided by operating activities
     1,610,100
     1,822,839Cash flows from investing activities:Acquisition of property and equipment
     (173,762)
     (134,657)Proceeds from sale of property and equipment
     -
     13,000Capitalized internal software costs
     (138,497)
     -Cash surrender value life insurance policies
     (108,885)
     (72,886)Proceeds from maturity of U.S. Treasury note
     -
     1,000,000Proceeds from maturity of certificate of deposit
     -
     250,000Payment on note receivable
     20,693Purchase of investments
     (54,012)
     (3,324)Net cash (used in) provided by investing activities
     (454,463)
     1,052,133Cash flows from financing activities:Payments on note payable
     (1,494,385)
     (1,185,168)Exercise of stock options
     -
     121,727Net cash used in financing activities
     (1,494,385)
     (1,063,441)Net increase (decrease) in cash and cash equivalents
     (338,748)
     1,811,531Cash and cash equivalents, beginning of year
     6,151,613
     4,340,082Cash and cash equivalents, end of year
     $           5,812,865
     $         6,151,613Supplemental disclosures of cash flow information:Interest paid
     $                26,213
     $              36,845Income taxes paid
     $              606,470
     $            172,604Non cash financing activityInsurance premiums
     $           1,580,503
     $         1,376,561


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended March 31, 2010 and 2009 NOTE 1 - NATURE OF OPERATIONS Incorporated in July 1995 under Massachusetts law and redomiciled under Delaware law in November 2007, Investors Capital Holdings, Ltd. ("ICH") is a holding company whose wholly-owned subsidiaries assist a nationwide network of independent registered representatives ("representatives") in providing a diversified line of financial services to the public including securities brokerage, investment advice, asset management, financial planning and insurance. Our subsidiaries include the following: Investors Capital Corporation ("ICC") is duly registered under the Securities Exchange Act of 1934, the Investment Advisers Act of 1940 and applicable state law to provide broker-dealer and investment advisory services nationwide. ICCs national network of independent financial representatives is licensed to provide these services through ICC under the regulatory purview of the Securities and Exchange Commission (the SEC), the Financial Industry Regulatory Authority (FINRA) and state securities regulators. ICC executes and clears its public customer accounts on a fully disclosed basis through Pershing, LLC. (Pershing). ICC, doing business as Investors Capital Advisors (ICA), also provides investment advisory services.ICC Insurance Agency, Inc. facilitates the sale of insurance and annuities by our representatives.Investors Capital Holdings Securities Corporation ("ICH Securities") holds cash, cash equivalents, interest income and dividend income for ICH.In the past, Eastern Point Advisors, Inc. ("EPA") had been the Companys primary provider of investment advisory services. EPA withdrew its investment advisor registration with the SEC on May 5, 2008. EPA ceased operations and voluntarily dissolved during the fiscal quarter ended June 30, 2008. EPAs net assets and equity were transferred to ICC and ICH, respectively. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies of the Company are summarized below to assist the reader to better understand the consolidated financial statements and other data contained herein. BASIS OF PRESENTATION The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, ICC, ICC Insurance Agency, Inc., and ICH Securities. All significant inter-company items and transactions have been eliminated in the consolidation. USE OF ESTIMATES AND ASSUMPTIONS The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, if any, at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. RECLASSIFICATIONS: Certain amounts in 2009 were reclassified to provide comparison with 2010 classifications. These reclassifications had no effect on previously reported results of operations. REVENUE RECOGNITION


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 The Companys revenue recognition policies are summarized below. Mutual Funds/Variable Annuities.Revenue from the sale of mutual funds and variable annuities is recognized as of the date the check and application is accepted by the investment company. Brokerage.The Company earns commissions through stock purchase and sale transactions, mutual fund purchases, government and corporate bonds transactions, fee-based managed accounts and ticket charges. The Company also earns revenue in the form of 12b-1 fees and interest on account balances. The earnings process is substantially complete at trade date in accordance with the rules of FINRA and the SEC. The Company also receives credit for clearing charge adjustments that are netted against any clearing charges the Company may incur for the period. These adjustments are recognized as income in the period received unless otherwise noted by the clearing Company. Unrealized gains and losses are recorded at the time that the Company reconciles its trading positions with the market value. The unrealized gains or losses are adjusted to market until the position is settled or the trade is cancelled. Advisory Fees.Our managed accounts advisory fees are based on the amount of assets managed per agreement negotiated between our independent representatives and their clients. These revenues are recorded quarterly as and when billed based on the fair market value of assets managed throughout the quarter. Any portion remaining uncollected due to account adjustments after account rebalancing is charged against earnings at quarter end. Administration Fees.Administration fees for services rendered to the Companys representatives respecting annual FINRA license renewals and Error and Omissions (E&O) insurance are recognized as revenue upon registration of the representative with FINRA and listing of the registered representative with the E&O insurance carrier. The funds received from the registered representative are initially recorded as unearned revenue. The amounts collected in excess of the E & O insurance premium and/or fees due FINRA, if any, are recognized as revenue. Fees collected to maintain books and records are deferred and recognized ratably throughout the year. Marketing Revenue.Revenue from marketing associated with product sales is recognized quarterly based on production levels. Marketing event revenues are recognized at the commencement of each event offset by its costs. CASH AND CASH EQUIVALENTS For purposes of reporting cash flow, cash and cash equivalents includes cash in checking and savings accounts, cash at its clearing firm and short-term investments with original maturities of 90 days or less. CUSTOMER ACCOUNTS The Company's customer accounts are reported by the various custodians on a fully disclosed basis. FINANCIAL INSTRUMENTS The Companys financial assets and liabilities are reported in the statements of financial condition at readily ascertainable fair value or at carrying amounts that approximate fair value as the maturities on these financial instruments generally have short maturity periods. The fair value of securities owned and trading securities sold, not yet purchased are equal to the carrying value. Changes in the fair value of these securities are reflected in the results of operations.


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010MARKETABLE SECURITIES The Company classifies their short-term investments as trading, available for sale, or held to maturity. The Company's marketable securities consist of fixed income instruments and mutual funds and have been classified by management as trading. Accordingly, realized and unrealized gains and losses at year-end are included in the earnings of the Company. The fair market values of these securities are determined based on quoted market prices. The Company conducts its principal trading through two designated trading accounts. One of these accounts is used to facilitate fixed income trading on a same day buy-sell basis. The second account is used to facilitate fixed income trading for representatives and may carry positions overnight. These securities are normally held in the account for no longer than 30 days and are recorded at fair market value. ADVERTISING The Company expenses all promotional costs as incurred. PROPERTY AND EQUIPMENT Property and equipment consists of leasehold improvements, furniture, fixtures, automobile and computer equipment and software. All property and equipment is stated at cost and is depreciated over the appropriate useful life of the asset, five-years for software and equipment and seven-years for furniture and fixtures, using the straight-line method. Leasehold improvements are amortized over the useful life of the improvement or the remaining term of the lease, whichever is shorter. The cost and related accumulated depreciation applicable to assets sold or retired are removed from the accounts and any gain or loss on disposition is recognized as a component of net realized gains (losses). Maintenance and repairs are charged to current operations as incurred. INCOME TAXES The Company uses the asset and liability method to account for income taxes, which requires recognition of deferred tax assets, subject to valuation allowances, and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income or loss in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has recorded a valuation allowance against certain deferred tax assets in the current period. Management believes it is more likely than not that the remaining deferred tax assets will be realized. The Company reserves for potential payments of tax to various tax authorities related to uncertain tax positions and other issues. Reserves related to uncertain tax positions are based on a determination of whether and how much of a tax benefit taken in our tax filings or positions is more likely than not to be realized, assuming that the matter in question will be raised by the tax authorities. Potential interest and penalties associated with such uncertain tax positions are recorded as a component of income tax expense. We believe appropriate provisions for outstanding issues have been made. EARNINGS PER SHARE The Company reports net income (loss) per share. Diluted earnings per share do not include the effect of stock options as it has an anti-dilutive effect on earnings per share (See Note 19). Basic and diluted net income per common share are determined by dividing net income by the weighted average number of common shares outstanding during the period.


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 SEGMENT REPORTING The Company makes disclosures about products and services, geographic areas, and major customers. RECEIVABLES Trade Receivables.Substantially all trade recievables reflect amounts due from the clearing broker. As prescribed by the SEC, trade receivables usually settle within three days. If a trade error results, the Company pursues remedies to collect on the trade error. The Company does not record a receivable resulting from a trade error that is in litigation or whose outcome is otherwise not reasonably determinable. In such a case, the Company applies any proceeds from settlements or insurance against any trade losses incurred. Loans to representatives.Management performs periodic evaluations and provides an allowance based on the assessment of specifically identified unsecured receivables and other factors, including the representative's payment history and production levels. Once it is determined that it is both probable that a loan has been impaired, typically due to the termination of the relationship, and the amount of loss can reasonably be estimated, the portion of the loan balance estimated to be uncollectible is so classified. Loans charged to commission expense, upon the representative meeting their respective forgiveness target totaled $130,134 and $32,250 for the fiscal years ended March 31, 2010 and 2009. See Note 3, Loans to Registered Representatives. VALUATION OF SECURITIES AND OTHER ASSETS: Substantially all financial instruments are reflected in the consolidated financial statements at fair value or amounts that approximate fair value. These include cash; cash equivalents; securities purchased under agreements to resell; deposits with clearing organizations; securities owned; and securities sold but not yet purchased. Certain financial instruments are classified as trading, available for sale, and held to maturity. The realized gains and losses are recorded in the income statement in the period in which the transactions occurred. The related unrealized gains and losses are reflected in other comprehensive income depending on the underlying purpose of the instrument. The Company records its private equity holdings at cost as the Company does not exercise significant influence over these equity investments. Where available, the Company uses prices from independent sources such as listed market prices, or broker or dealer price quotations. Fair values for certain derivative contracts are derived from pricing models that consider current market and contractual prices for the underlying financial instruments or commodities, as well as time value and yield curve or volatility factors underlying the positions. In addition, even where the value of a security is derived from an independent market price or broker or dealer quote, certain assumptions may be required to determine the fair value. For instance, the Company generally assumes that the size of positions in securities that the Company holds would not be large enough to affect the quoted price of the securities if the Company were to sell them, and that any such sale would happen in an orderly manner. However, the actual value realized upon disposition could be different from the current carrying value. INTERNAL USE SOFTWARE Cost incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Training costs are expensed as incurred.


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 Internal use software is amortized on a straight-line basis over its estimated useful life, generally three years. NOTE 3  LOANS TO REGISTERED REPRESENTATIVES ICC has granted loans to certain registered representatives with the stipulation that the loans will be forgiven if the representatives remain licensed with the Company for an agreed upon period of time, generally one to five years, and/or meet specified performance goals. Upon forgiveness, the loans are charged to commission expense for financial reporting purposes. Loans charged to commission expense totaled $130,134 and $32,250 for the fiscal years ended March 31, 2010 and 2009, respectively. Some loans to registered representatives are not subject to a forgiveness contingency. These loans, as well as loans that have failed the forgiveness contingency, are repaid to the Company by deducting a portion of the representatives commission payouts throughout the commission cycle until the loans are repaid. Interest charged on these loans to representatives range from 3% to 11.25% annually. Loans to registered representatives included in receivables from employees and registered representatives are as follows at March 31: 2010
     2009Forgivable loans
     $                      854,005
     $                     396,632Other loans
     244,514
     567,576Less: allowance
     (36,372)
     (97,279)Total loans
     $                   1,062,147
     $                     866,929
  NOTE 4 - NOTE RECEIVABLE On October 24, 2005, the Company entered into an agreement (the Transition Agreement) with Dividend Growth Advisors, LLC (DGA). Pursuant to the Transition Agreement, the Company agreed to terminate its Investment Advisory Agreement with Eastern Point Advisors Funds Trust (the Trust) effective October 18, 2005 and to permit the appointment by the Trust of DGA to succeed the Company as the Trusts investment advisor. Under the terms of the Transition Agreement and an associated promissory note (the Note), the receivable owed by the Funds to the Company was assigned to DGA and DGA agreed to pay the Company an amount equal to the total of all fees that the Company had waived or remitted to a fund in the Trust through October 18, 2005. The Note provides for a principal amount of $747,617, quarterly payments of interest accruing thereon at 5.5% and a full payment on or before October 31, 2010. The terms of this note were modified, effective March 3, 2010. Specifically, the maturity was extended for four years to October 31, 2013. Total outstanding as of March 31, 2010 and 2009 was $735,598 and $756,291, respectively. Prepayments are permitted without penalty. The interest accrued on this note was $2,981 and $8,674, respectively, at March 31, 2010 and 2009. NOTE 5 - NET CAPITAL REQUIREMENTS The Company's wholly owned subsidiary, ICC, is subject to SEC regulations and operating guidelines that require ICC to maintain a specified amount of net capital, as defined, and a ratio of aggregate indebtedness to net capital, as defined, not exceeding 15 to 1. ICC's net capital as computed under SEC Uniform Net Capital Rule (Rule15c3-1) was $3,389,460 at March 31, 2010, which resulted in excess net capital of $2,908,434 over the required net capital of $481,026. The ratio of aggregate indebtedness to capital at March 31, 2010 was 2.13 to 1.


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|Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010
|-------------------------------------------------------------------------------------------

ICC's net capital as computed under SEC Uniform Net Capital Rule (Rule15c3-1) was $1,938,578 at March 31, 2009, which resulted in excess net capital of $1,409,273 over the required net capital of $529,305. The ratio of aggregate indebtedness to capital at March 31, 2009 was 4.10 to 1.

NOTE 6 - SECURITIES OWNED AND SECURITIES SOLD, NOT YET PURCHASED AT FAIR VALUE

Trading and investment securities owned consist of both marketable securities and not readily marketable securities and are recorded at fair value. Securities sold, but not yet purchased represent obligations of the Company to deliver the specified security at the contracted price and thereby create a liability to purchase the security in the market at prevailing prices. Changes in the value of these securities are reflected currently in the results of operations.

As of March 31, 2010 and 2009, the Companys proprietary trading and investment accounts consisted of the following securities:

March 31, 2010Sold, Not YetOwned
     PurchasedCorporate equity
     $                               54,850
     $                              5,693Mortgage-backed security
     3,083
     -$                               57,933
     $                              5,693March 31, 2009Sold, Not YetOwned
     PurchasedCorporate equity
     $                               14,666
     $                                      -Corporate bonds
     62,609
     -Municipal bonds
     3,980
     -Mortgage-backed security
     4,123Mutual funds
     58
     -Certificate of Deposit
     -
     7,056$                               85,436
     $                              7,056


NOTE 7 - INVESTMENTS


As of March 31, 2010, the Company owned investments classified as held to maturity through March 12, 2011. These investments are presented at face value as follows:

Purchase Date
     Purchase Price
     Description
     Face Value
     Interest DateInsight Real Estate Series 2007-A12/1/2009
     $                               50,000
     Secured Debentures
     $ 50,000
     Quarterly




There were no investments held to maturity as of March 31, 2009.


NOTE 8 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK


The Company is engaged in various trading and brokerage activities whose counterparties primarily include the general public. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk. Securities sold, but not yet purchased, represent obligations of the Company to purchase the security in the market at the prevailing prices to the extent that the Company does not already have the securities in possession. Accordingly, these transactions result in off-balance sheet risk when the Company's satisfaction of the obligations exceeds the amount recognized in the balance sheet. The risk of default depends on the creditworthiness of the counterparty of the issuer of the instrument. It

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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 is the Company's policy to review, as necessary, the credit standings of each counterparty with which it conducts business. Commission receivables from one source were 44.89% and 39.04% of total receivables for the years ended March 31, 2010 and 2009, respectively. At March 31, 2010, the bank statement balance of the Company's cash and cash equivalents was $6,078,319. Of the bank statement balance, $250,000 was covered by federal depository insurance and $1,689,132 was covered by the Depositors Insurance Fund of Massachusetts. The Company's cash and cash equivalents as of March 31, 2010 also include $1,328,661 at its clearing broker-dealer of which $500,000 was fully insured by the Securities Investor Protection Corporation (SIPC). At March 31, 2009, the bank statement balance of the Company's cash and cash equivalents was $6,317,214. Of the bank statement balance, $250,000 was covered by federal depository insurance and $2,887,557 was covered by the Depositors Insurance Fund of Massachusetts. The Company's cash and cash equivalents as of March 31, 2009 also include $2,495,596 at its clearing broker-dealer of which $500,000 was fully insured by the Securities Investor Protection Corporation (SIPC). NOTE 9  FAIR VALUE MEASUREMENTS The Companys assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income or cost approach are used to measure fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: Level 1- Inputs are unadjusted quoted prices in active markets for identical assets or liabilities the Company has the ability to access.Level 2- Inputs are inputs (other than quoted prices included within Level 1) that are observable for the asset or liability, either directly or indirectly.Level 3- Inputs include unobservable inputs for the asset or liability and rely on management's own assumptions about the assumptions that market participants would use in pricing the asset or liability. (The unobservable inputs should be developed based on the best information available in the circumstances and may include the Companys own data.) The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following table presents the Company's fair value hierarchy for those financial assets and liabilities measured at fair value as of March 31, 2010:


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|Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010
|-------------------------------------------------------------------------------------------

Fair Value Measurements of Reporting Date UsingQuotes Prices in
     SignificantActive Markets for
     Other
     SignificantTotal Fair Value of
     Identical Assets
     Observable
     UnobservableAsset or Liability
     (Level 1)
     Input (Level 2)
     Inputs (Level 3)Cash surrender value of life insurance policies
     $                          551,398
     $                                       -
     $                           551,398
     $                                    -Mutual funds1
     929,897
     929,897Investments
     184,319
     184,319
     -
     -Securities owned, at fair value
     57,933
     57,933
     -
     -Total assets
     $                      1,723,547
     $                      1,172,149
     $                         551,398
     $ -Securities sold, not yet purchased, at fair value
     $                               5,693
     $                               5,693Total liabilities
     $                              5,693
     $                              5,693
  1Amount labeled as Mutual funds are included in Non-qualified Deferred compensation investment on the Consolidated Balance Sheet. The following table presents the Companys fair value hierarchy for those financial assets and liabilities measured at fair value as of March 31, 2009: Fair Value Measurements of Reporting DateUsingQuotes Prices
     Significantin Active
     Other
     SignificantMarkets for
     Observable
     UnobservableTotal Fair Value of
     Identical Assets
     Input (Level
     Inputs (LevelAsset or Liability
     (Level 1)
     2)
     3)Cash surrender value of life insurance policies
     $                                         406,089
     $                                           -
     $                                406,089
     $                                                    -Mutual funds1
     533,665
     533,665Investments
     127,143
     127,143
     -Securities owned, at fair value
     85,436
     85,436
     -Total assets
     $                                   1,152,333
     $                              746,244
     $                             406,089
     $                                                    -Securities sold, not yet purchased, at fair value
     7,056
     7,056Total liabilities
     $                                           7,056
     $                                  7,056
  1Amount labeled as Mutual funds are included in Non-qualified Deferred compensation investment on the Consolidated Balance Sheet. Valuation of Marketable Trading and Investment Securities Owned The fair value of marketable trading and investment securities owned is determined based on quoted market prices. Securities traded on a national exchange are stated at the last reported sales price on the day of valuation; other securities traded in over-the-counter market and listed securities for which no sale was reported on that date are stated as the last quoted bid price. Valuation of Trading Securities Sold, Not Yet Purchased As a broker-dealer, the Company is engaged in various securities trading and brokerage activities as principal. In the normal course of business, the Company sometimes sells securities they do not currently own and will therefore be obligated to purchase such securities at a future date. This obligation is recorded on the balance sheet at fair value based on quoted market prices of the related securities and will result in a trading loss if the fair value increases and a trading gain if the fair value decreases between the balance sheet dateand date of purchase.


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 Valuation of Life Insurance Policies The Company values its life insurance policies based on the cash surrender value of the policies which approximates fair value. Valuation of Mutual Funds The fair value of mutual funds is determined based on quoted market prices. Securities traded on a national exchange are stated at the last reported sales price on the day of valuation; other securities traded in over-the-counter market and listed securities for which no sale was reported on that date are stated as the last quoted bid price. NOTE 10  RELATED-PARTY TRANSACTIONS From time to time the Company may enter into transactions with related parties which occur in the normal course of business and are deemed to be transacted at arms length by management or that the Company deems immaterial. The Company leases office space from a related party, the owner of who is the principal stockholder of ICH. Rent expense, including condo fees, for these leases amounted to $368,733 and $377,193 for the years ending March 31, 2010 and 2009, respectively, and is included in occupancy costs on the consolidated statements of operations. The Company engages in transactions with a related party in connection with the promotion and servicing of fixed insurance products produced by the Companys independent representatives. Payments made by the Company to IMS Insurance, when combined with payments received by the Company from IMS Insurance were immaterial for the years ended March 31, 2010 and 2009. The Company bills a broker dealer, whose owner is the spouse of the Parents principal shareholder, ticket charges for executing its trades and being the introducing broker. Amounts billed for the years ended March 31, 2010 and 2009 were immaterial. NOTE 11 - PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following at March 31:2010
     2009Equipment
     $        1,737,526
     $      1,659,294Leasehold improvements
     668,742
     644,833Furniture and fixtures
     397,444
     397,4442,803,712
     2,701,571Accumulated depreciation and amortization
     (2,029,530)
     (1,750,951)Property and equipment, net
     $           774,182
     $         950,620
 NOTE 12 - NOTES PAYABLE  At March 31, 2010 and 2009, notes payable consisted of debt to finance insurance premiums. These notes are referenced in the table below:


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|Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010
|-------------------------------------------------------------------------------------------

March 31,
     Lender
     Premium
     Principal
     Interest Rate
     Maturity DateDirectors and Officers, Liability,2010
     The Daniel & Henry Company
     Fidelity Bond
     $                   276,741
     2.27%
     February 17, 2011Flat Iron Funding
     Errors & Omissions
     854,181
     2.95%
     November 30, 2010$                1,130,922Directors and Officers, Liability,2009
     First Insurance Funding
     Fidelity Bond
     $                   258,961
     5.25%
     December 17, 2009First Insurance Funding
     Errors & Omissions
     785,844
     3.75%
     October 31, 2009$                1,044,805
  For the years ended March 31, 2010 and 2009 there was no long term debt outstanding. NOTE 13 - INCOME TAXES The provision (benefit) for income taxes is as follows for the fiscal years ended March 31: 2010
     2009Current:Federal
     $                   197,072
     $              (44,086)State
     78,886
     57,077$                   275,958
     $                 12,991Deferred:Federal
     $                   108,504
     $            (214,547)State
     150,673
     (137,111)259,177
     (351,658)Provision (benefit) for income taxes
     $                   535,135
     $            (338,667)
  Deferred income taxes are the result of timing differences between book and taxable income and consist primarily of deferred compensation, legal accruals, unrealized gains, mutual fund start up costs and differences between depreciation expenses for financial statement purposes versus tax return purposes. Net deferred tax assets (liabilities) within each tax jurisdiction consisted of the following at: March 31, 2010Asset
     Liability
     NetFederal
     
     $                        645,580
     $                       (14,981)
     $                 630,599State
     
     243,297
     (35,123)
     208,174Total
     $                        888,877
     $                       (50,104)
     $                 838,773March 31, 2009Asset
     Liability
     NetFederal
     
     $                        788,182
     $                         (8,257)
     $                779,925State
     
     368,618
     (50,591)
     318,027Total
     $                     1,156,800
     $                       (58,848)
     $             1,097,952
  The following is a summary of the significant components of the Company's deferred tax assets and liabilities:


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|Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010
|-------------------------------------------------------------------------------------------

Years Ended March 31,2010
     2009Deferred tax assets (liabilities):Accrued legal and settlements
     $                                    316,048
     $                                   463,200Deferred compensation
     423,415
     368,454Net operating losses
     14,015
     144,952Depreciation and other
     104,103
     110,369Mutual fund start-up costs
     -
     21,783Unrealized gain
     (18,808)
     (10,806)Total deferred tax assets
     $                                    838,773
     $                                 1,097,952





The total income tax provision (benefit) differs from the income tax at the statutory federal income tax rate due to the following:

Years Ended March 31,2010
     2009Tax at U.S. statutory rate
     $                        301,274
     $                     (727,146)State taxes, net of federal benefit
     98,156
     (139,094)Unallowable expenses
     59,662
     468,678Change in valuation allowance
     24,008
     -Other adjustments(1)
     52,035
     58,895Provision (benefit) for income taxes
     $                        535,135
     $                     (338,667)





1. Other Adjustments are additional state taxes and return to provision adjustments related to permanent items.


As of March 31, 2010, the Company had federal and state net operating loss carryforwards of approximately $0 and $ 373,491, respectively, which may be available to offset future income tax liabilities and begin to expire in 2010 through 2028. Due to uncertainty as to whether certain net operating losses will be realized, the Company has established a valuation allowance of approximately $24,000.




The Company recognizes and measures its unrecognized tax benefit or expense . The Company assesses the likelihood, based on their technical merit, that tax positions will be sustained upon examination based on the facts, circumstances and information available at the end of each period. The measurement of unrecognized tax expense or benefit is adjusted when new information is available or when an event occurs that requires a change. The Company recognizes the accrual of any interest and penalties related to unrecognized tax expense in income tax expense. No interest or penalties were recognized in 2010 and 2009. The Company does not have any tax positions as of March 31, 2010 for which it is reasonably possible that the total amounts of unrecognized tax benefit or expense will significantly increase or decrease within 12 months of the reporting date.


NOTE 14 - SEGMENT INFORMATION

Operating segments are defined as components of a business about which separate financial information of the segmentis available that is regularly evaluated by management in deciding how to allocate resources and in assessing performance. The Company evaluates performance based on profit and loss from operations before income taxes not including nonrecurring gains and losses.

The Company's reportable operating segments are (i) broker/dealer and related services offered through ICC and (ii) asset management (investment advisory) services offered through ICC, doing business as ICA, and, until recently, EPA. The segments are strategic business units that are managed separately. They operate under different regulatory systems, provide different services and require distinct marketing strategies and varied technological and operational support. They also have differing revenue models; ICC earns transactional commissions and various fees in connection with the brokerage of securities for its customers, whereas ICA generates recurring revenue from fees that are based on the value of assets

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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010under management. The Company accounts for inter-segment services and transfers as if the services or transfers were to third parties, that is, at current market prices. In presenting segment data, all corporate overhead items are allocated to the segments, and inter-segment revenue, expense, receivables and payables are eliminated. Currently it is impractical to report segment information using geographical concentration. Assets are allocated among ICH and its subsidiaries based upon legal ownership and the services provided. Total period-end assets are presented on a stand-alone basis, i.e., without inter-company eliminations. The Company does not allocate income taxes or unusual items to segments. Corporate items and eliminations are presented in the following table for the purpose of reconciling the stand-alone asset amounts to total consolidated assets. Effective October 1, 2008, management instituted a new expense sharing agreement which revised the previous method of allocating expenses. Prior to the new expense sharing agreement, ICHs expenses were absorbed by its principal operating subsidiary, ICC, as overhead, and these expenses were then further allocated between the operating segments pro rata to their respective revenue. Under the new expense sharing agreement there are no such ICH-generated overhead expenses. Instead, management allocates all expenses separately to the parent and ICC, including allocation of costs associated with shared personnel, based upon time studies and a determination of which entities are the beneficiaries of the services rendered by the personnel. Within ICC, expenses are further allocated between the two segments, ICC and ICA as follows: overhead expenses pro rata to revenue, direct full-time and time-shared employee costs based on the segments being served, and other personnel-related expenses pro rata to head count. Effective July 1, 2009, ICC agreed to reimburse ICH in the form of a management fee, The Management Fee Agreement, for ICH-incurred overhead expenses that are necessary for ICC to effectively conduct its operations. This overhead primarily is in the nature of salaries and professional and legal fees incurred to obtain such services as audit engagements, legal advice, and industry expertise. TheCompany in reviewing its net capital requirement will assess the ongoing risk these agreements may have on the firms net capital.


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|Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010
|-------------------------------------------------------------------------------------------

March 31, 2010ICC
     ICA/EPA
     ICH
     ICH Securities
     TotalsNon-interest revenue
     $         66,763,037
     $         12,087,723
     $           ( 27,064 )
     
     $         78,823,696Revenue from transaction withother operating segments:
     1,124,830
     
     
     
     $           1,124,830Interest and dividend income, net
     356,018
     
     8,172
     51
     $              364,241Depreciation and amortization
     344,334
     4,667
     
     
     $              349,001Income (loss) from operations
     849,750
     1,089,554
     (1,082,682)
     51
     $              856,673Period end total assets
     14,873,831
     1,906,778
     2,613,401
     10,238
     $         19,404,248Corporate items and eliminations
     
     
     (509,701)
     
     $         ( 509,701 )March 31, 2009ICC
     ICA/EPA
     ICH
     ICH Securities
     TotalsNon-interest revenue
     $         69,734,741
     $         11,351,093
     $           ( 41,007 )
     $                          -
     $         81,044,827Revenue from transaction withother operating segments:
     181,803
     -
     -
     -
     $              181,803Interest and dividend income, net
     504,045
     47,143
     11,322
     51
     $              562,561Depreciation and amortization
     381,959
     4,666
     -
     -
     $              386,625Income (loss) from operations
     (406,057)
     1,189,073
     (2,951,733)
     51
     $      ( 2,168,666 )Period end total assets
     14,768,000
     1,306,584
     2,555,321
     10,187
     $         18,640,092Corporate items and eliminations
     -
     -
     (135,758)
     -
     $          ( 135,758 )


Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 NOTE 15 - COMMITMENTS AND CONTINGENCIES   Operating Leases   The Company leases its primary office space in Lynnfield, Massachusetts from a related party (see Note 8). In October 2009, this lease term was extended to March 31, 2015. The Company continues to lease office space for offices located in Topsfield, MA and Coral Gables, FL. These leases expire in March 2012 and November 2011, respectively. The Company has entered into various operating leases for office equipment and furniture.   The total minimum rental due in future periods under these existing agreements as of March 31, 2010 are as follows:  2011
     $ 394,2672012
     381,3502013
     283,9222014
     276,3542015
     282,214Thereafter
     24,000$ 1,642,107
  Rent expense under the operating leases was $336,385 and $459,931 for the years ended March 31, 2010 and 2009, respectively, and is included in occupancy costs in the statement of income. While management has no plans to cancel, the Company is contractually obligated in the short-term for approximately $514,900 of costs associated with hosting national events at various hotels that are expected to be paid in the year ended March 31, 2011. The Company offers loans and transition assistance to its representatives mainly for recruiting or retention purposes. These commitments are contingent upon certain events occurring, including but not limited to the representatives joining the Company and meeting certain production requirements. As of March 31, 2010, the Company estimates that it had made commitments of $0.03 million in loans and transition assistance which have not yet been funded. NOTE 16 - LITIGATION AND REGULATORY MATTERS In the ordinary course of business, the Company and its subsidiaries are routinely defendants in or parties to pending and threatened legal actions and proceedings brought on behalf of various claimants, some of which seek material and/or indeterminable amounts. Certain of these actions and proceedings are based on alleged violations of consumer protection, securities and other laws and may involve claims for substantial monetary damages asserted against the Company and its subsidiaries. Also, the Company and its subsidiaries are subject to regulatory examinations, information gathering requests, inquiries, investigations and formal administrative proceedings that may result in fines or other negative impact on the Company. ICC, as a duly registered broker/dealer and investment advisor, is subject to regulation by the SEC, FINRA, NYSE Euronext (formerly the American Stock Exchange) and other state securities regulators. The Company maintains Errors and Omissions ("E&O") insurance to protect itself from potential damages and/or legal costs associated with certain litigation and arbitration proceedings and, as a result, in the majority of cases the Companys exposure is limited to $100,000 in any one case, subject to policy limitations and exclusions. The Company also maintains a fidelity bond to protect itself from potential damages and/or legal costs related to fraudulent activities pursuant to which the Companys exposure is usually limited to $350,000 deductible per case, subject to policy limitations and exclusions. The Company had accrued expenses of approximately $765,000 and $2,267,000 for the years ended March 31, 2010 and 2009, respectively, related to legal fees and estimated probable settlement costs relating to the Companys defense in various lawsuits. It is possible that some of the matters could require the Company to pay damages or make other expenditures or establish accruals in amounts that could not be estimated as of March 31, 2010. NOTE 17 - BENEFIT PLANS The 1994 Stock Option Plan As of September 1, 1994, the Company adopted a stock option plan (the "1994 Plan") that provided for the granting of options to Timothy Murphy, the Companys CEO, to purchase shares of the common stock of the Company for $1.00 per share. Following a three for two stock split in 1997, a maximum of 150,000 shares of common stock were issuable under the 1994 Plan. The number of options and grant


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 date were determined at the discretion of the Company's Board of Directors (the "Board"). Options outstanding under the 1994 Plan are fully exercisable and have no stated expiration. The 1996 Incentive Stock Plan As of October 1, 1997, the Board adopted the 1996 Incentive Stock Plan (the "1996 Plan"). Key employees, directors and the Company's registered representatives are eligible to receive stock options and stock grants, and the aggregate number of shares to be delivered under the 1996 Plan cannot exceed 300,000. In February 2009, the Companys Board approved the extension of 7,677 vested options from the 1996 Plan from their initial maturity of January 2009 to March 31, 2009. As of March 31, 2010 and 2009, there were no options outstanding. As of March 31, 2010 and 2009, the Company had not granted any options under the 1996 Plan. The 2001 Equity Incentive Plan As of March 12, 2001, the Board adopted the 2001 Equity Incentive Plan (the "2001 Plan"). Key employees, directors and the Company's registered representatives are eligible to receive stock grants and/or stock options to purchase shares of the common stock of the Company. The aggregate number of shares issuable under the 2001 Plan cannot exceed 250,000. The numbers of shares subject to each stock grant or stock option and any vesting requirements are determined by the Board. A total of 218,750 shares have been granted under the 2001 Plan. At March 31, 2010 there are no options outstanding under the Plan. The 2005 Equity Incentive Plan The Investors Capital Holdings, Ltd. 2005 Equity Incentive Plan (the 2005 Plan) was adopted by the Board on May 17, 2005, and was approved by vote of the Companys stockholders at a September 21, 2005 meeting. The purpose of the 2005 Plan is (i) to attract and retain employees, directors, officers, representatives and other individuals upon whom the responsibilities of the successful administration, management, planning and/or organization of the Company may rest, and whose present and potential contributions to the welfare of the Company, a parent corporation or a subsidiary are of importance (Key Contributors), and (ii) to motivate Key Contributors with a view toward enhancing profitable growth of the Company over the long term. Under the 2005 Plan, the Company is authorized to award options to purchase common stock, and shares of common stock, to employees, independent representatives and others who have contributed to or are expected to contribute to the Company, its businesses and prospects. Stock options and restricted stock customarily are granted by the Company in connection with initial employment or under various retention plans. Options may, but need not, be designated as incentive stock options (ISOs) within the meaning of Section 422 of the Internal Revenue Code of 1986. As of March 31, 2010 and 2009, the Company had not granted any options under the plan and had no current plans to do so. Restricted shares of stock granted under the 2005 Plan as of March 31, 2010 have been either fully vested at date of grant or subject to vesting over times periods varying from one to five years after the date of grant, unvested shares being subject to forfeiture in the event of termination of the grantees relationship with the Company, other than for death or disability. The compensation cost associated with restricted stock grants is recognized over the vesting period of the shares and is calculated as the market value of the shares on the date of grant. Restricted shares have been recorded as deferred compensation, which is a component of paid-in capital within stockholders equity on the Companys Consolidated Balance Sheets. The following table presents the total number of restricted stock grants awarded under the 2005 Plan during the last two years.


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|Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010
|-------------------------------------------------------------------------------------------

Number of Restricted SharesGranted2010
     2009Registered representatives
     28,701
     24,914Employees
     -
     2,00028,701
     26,914
  Stock compensation for the years ended March 31, 2010 and 2009 for restricted shares issued under all Plans was $250,006 and $844,702, respectively. The following activity under the 2005 plan occurred during the fiscal year ended March 31, 2010: Weighted Ave
     Weighted AverageShares
     Stock Price
     Vested Life
     Fair Value $Non-vested at 4/1/2009
     96,913
     $                  4.11
     1.66 years
     $           398,312Granted
     28,701
     $                  2.65
     
     $             76,058Less: vested
     (59,677)
     $                  4.05
     
     $        (241,692)Less: canceled
     (3,074)
     $                  3.97
     
     $          (12,204)Non-vested at 3/31/2010
     62,863
     $                  3.50
     1.91 years
     $           220,021
  The following activity under the 2005 Plan occurred during the fiscal year ended March 31, 2009: Weighted Ave
     Weighted AverageShares
     Stock Price
     Vested Life
     Fair Value $Non-vested at 4/1/2008
     264,142
     $                   4.62
     1.76 years
     $           1,220,336Granted
     26,914
     $                   4.83
     
     $           129,995Less: vested
     (166,775)
     $                   4.96
     
     $        (827,204)Less: canceled
     (27,368)
     $                   3.29
     
     $          (90,041)Non-vested at 3/31/2009
     96,913
     $                   4.11
     1.66 years
     $           398,312
  The Company's net income (loss) for the fiscal year ended March 31, 2010 and 2009, respectively includes $124,269 and $743,454 of compensation costs related to vesting of restricted stock grants to employees and $119,382 and $101,248 of restricted stock grants to directors, consultants and independent representatives, under the 2005 Plan. As of March 31, 2010 there was $220,021 of unrecognized compensation cost related to grants under the 2005 Plan. Stock Option Grants A summary of the status of the Company's employee, representative and Directors' fixed stock options as of March 31, 2010 and 2009, and changes during the fiscal years ended on those dates, is presented below:


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010

Employee
     2010
     2009Fixed Options
     
     Weighted-Average
     
     Weighted-AverageShares
     Exercise Price
     Shares
     Exercise PriceOutstanding at beginning of year
     150,000
     $1.00
     150,000
     $1.00Granted
     -
     
     -Forfeited
     -
     
     -Exercised
     -
     
     -Outstanding at year end
     150,000
     $1.00
     150,000
     $1.00Options exercisable at year-end
     150,000
     
     150,000Weighted-average fair value ofoptions granted during the year
     -
     
     -
  A summary of the status of the Company's independent registered representatives' fixed stock options as of March 31, 2010 and 2009, and changes during the years ending on those dates, is presented below: Independent Representatives
     2010
     2009Fixed Options
     
     Weighted-Average
     
     Weighted-AverageShares
     Exercise Price
     Shares
     Exercise PriceOutstanding at beginning of year
     31,272
     $4.55
     81,425
     $3.92Granted
     
     
     -Forfeited
     (31,272)
     $4.55
     (15,393)
     $3.62Exercised
     -
     
     (34,760)
     $3.51Outstanding at year end
     -
     
     31,272Options exercisable at year-end
     -
     
     31,272
     $4.55
  Retirement Plan:The Company has a 401(k) retirement plan that allows participation by all employees with at least three months of service. Individuals employed on the plan's effective date did not have to satisfy the service requirement. The Company's contribution was based on matching 100% of the first 3% of the amount of elected salary deferral elected by each eligible employee. Effective May 29, 2001, the Company's contribution was increased to matching 100% of the first 6% of the amount of elected salary deferral, with matching dollars to be in the form of the Company's common stock. The Company's contribution expense for the years ended March 31, 2010 and 2009 were $0 and $201,374, respectively. Effective, January 1, 2010, the Company discontinued its discretionary match. Non-Qualified Deferred Compensation Plan:Effective December 2007, the Company established the Investors Capital Holdings, Ltd. Deferred Compensation Plan (the NQ Plan) as well as a Rabbi Trust Agreement for this Plan, for which ICC is the NQ Plans sponsor. The unfunded NQ Plan enables eligible ICCs Representatives to elect to defer a portion of earned commissions, as defined by the NQ Plan. The total amount of deferred compensation was $309,036 and $444,338 for the years ended March 31, 2010 and 2009, respectively. NOTE 18 - EARNINGS PER COMMON SHARE Basic earnings per share represent income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflects the dilutive effect, if any, of all common stock equivalentsoutstanding during the period that could potentially result in the issuance of common stock, as well as any adjustment to income that would result from the assumed issuance. As of March 31, 2010 and 2009, the Company had no incremental common stock equivalents that resulted in a dilutive effect on its earnings per common share.


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 outstanding that were not included in the diluted earnings per share calculation because they were anti-dilutive. NOTE 19 - UNAUDITED QUARTERLY RESULTS OF OPERATIONS The unaudited quarterly amounts may differ from amounts previously reported due to reclassifications.June 30, 2009
     September 30, 2009
     December 31, 2009
     March 31, 2010Revenues
     $                        18,614,835
     $                       18,935,799
     $                         21,051,029
     $                20,586,274Expenses
     15,113,975
     15,136,218
     16,884,955
     16,909,898Gross profit
     3,500,860
     3,799,581
     4,166,074
     3,676,376Net income
     51,534
     206,698
     428,058
     (364,752)Basic earnings (loss) per share
     $                                   0.01
     $                                 0.03
     $                                   0.07
     $                        (0.06)Diluted earnings (loss) per share
     N/A
     N/A
     N/A
     N/AJune 30, 2008
     September 30, 2008
     December 31, 2008
     March 31, 2009Revenues
     $                         22,887,562
     $                       23,053,345
     $                        18,351,520
     $                   17,314,961Expenses
     18,585,175
     18,639,678
     14,370,628
     14,014,107Gross profit
     4,302,387
     4,413,667
     3,980,892
     3,300,854Net loss
     (274,546)
     (491,926)
     (614,715)
     (448,812)Basic earnings (loss) per share
     $                                  (0.04)
     $                               (0.08)
     $                                (0.10)
     $                            (0.07)Diluted earnings (loss) per share
     N/A
     N/A
     N/A
     N/A
  ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT ON ACCOUNTING AND FINANCIAL DISCLOSURE. None.  ITEM 9A(T).  CONTROLS AND PROCEDURES Disclosure Controls Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report as defined in Rule 13a-15(f) or Rule 15d-15(f) under the Securities Exchange Act of 1934 (the Exchange Act). Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Report of Management on Internal Control Over Financial Reporting The Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and expenditures of company assets


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Management conducted an evaluation of the effectiveness of the Companys internal control over financial reporting based on the framework inInternal Control  Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management concluded that the Companys internal control over financial reporting was effective as of March 31, 2010. Remediation of Material Weaknesses in Internal Control Not applicable. No Attestation Report by Public Accounting Firm This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by the Companys registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only managements report in this annual report. Changes in Internal Controls There has been no change in our internal control over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.  PART IIIINCORPORATION BY REFERENCE Item 10  Directors, Executive Officers and Corporate Governance, Item 11 -- "Executive Compensation", Item 12 -- "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters", Item 13 -- "Certain Relationships and Related Transactions, and Director Independence" and Item 14  Principal Accountant Fees and Services are incorporated herein by this reference to the Company's definitive proxy statement for its 2010 annual meeting of stockholders, which definitive proxy statement is expected to be filed with the Commission not later than 120 days after the end of the fiscal year to which this report relates. PART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.Documents Filed as a Part of this Report:1.
     Financial Statements:
     PageReport of Marcum LLP, Independent Registered Public Accounting Firm
     26Report of Independent Registered Public Accounting Firm
     27Consolidated Balance Sheets as of March 31, 2010 and 2009
     28Consolidated Statements of Income for the years ended March 31, 2010 and 2009
     29Consolidated Statements of Changes in Stockholders' Equity for the years ended March 31,2010 and 2009
     30Consolidated Statements of Cash Flows for the years ended March 31, 2010 and 2009
     31Notes to Consolidated Financial Statements
     32-45


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010




2. Financial Statement Schedules :


No financial schedules are listed since they are not applicable or are not required, or because the required information is included in the consolidated financial statements or notes thereto.

3.Exhibits:ExhibitNumber
     Description
     Location3.1
     Certificate of Incorporation
     (2)(Exh. 3.1)3.2
     By-Laws
     
     (2)(Exh. 3.2)4.1
     Form of Stock Certificate
     (2)(Exh. 4.1)10.1
     Employment Agreement with Theodore E. Charles (3)
     (9)(Exh. 10.2)10.2
     Employment Agreement with Timothy B. Murphy (3)
     (9)(Exh. 10.1)10.3
     The 1994 Stock Option Plan (3)
     (4)(Exh. 10.3)10.4
     The 1996 Stock Incentive Plan (3)
     (2)(Exh. 10.3)10.5
     The 2001 Equity Incentive Plan (3)
     (5)(Exh. 4.4)10.6
     The 2005 Equity Incentive Plan (3)
     (6)(Exh. 4.5)10.7
     Form of June 2006 Stock Grant Agreement (3)
     (7)(Exh. 10.8)10.8
     Form of February 2009 Stock Grant Agreement (3)
     (7)(Exh. 10.9)10.9
     Consulting Agreement with Theodore E. Charles (3)
     (9)(Exh. 10.3)14.1
     Code of Business Conduct and Ethics
     (8)(Exh. 5.05)21.1
     Subsidiaries of Investors Capital Holdings, Ltd. as of March 31, 2010.
     (1)23.1
     Consent of MARCUM LLP
     (1)23.2
     Consent of UHY LLP
     (1)31.1
     Certification of Timothy B. Murphy pursuant to Rule 13a-14(a)
     (1)31.2
     Certification of Kathleen L. Donnelly pursuant to Rule 13a-14(a)
     (1)32.1
     Certification of Timothy B. Murphy pursuant to 18 U.S.C. Section 1350
     (1)32.2
     Certification of Kathleen L. Donnelly pursuant to 18 U.S.C. Section 1350
     (1)





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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 ______________________________(1)
     Filed herewith.(2)
     Incorporated by reference to the indicated exhibit to the Registrant's Quarterly Report on Form 10- Q filed November 14, 2007.(3)
     A management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(b) of this report.(4)
     Incorporated by reference to the indicated exhibit to the Registrants Annual Report on Form 10-K filed June 30, 2005.(5)
     Incorporated by reference to the indicated exhibit to the Registrants Registration Statement on Form S-8 (File No. 333-117807) filed July 30, 2004.(6)
     Incorporated by reference to the indicated exhibit to the Registrants Registration Statement on Form S-8 (File No. 333-134885) filed June 9, 2006.(7)
     Incorporated by reference to the indicated exhibit to the Registrants Annual Report on Form 10-K filed June 30, 2009.(8)
     Incorporated by reference to the indicated exhibit to the Registrants Report on Form 8-K filed September 26, 2009.(9)
     Incorporated by reference to the indicated exhibit to the Registrants Report on Form 8-K filed April 21, 2010. Any exhibit not included with this Form 10-K when furnished to any shareholder of record will be furnished to such shareholder upon written request and payment of up to $.25 per page plus postage. Such requests should be directed to Investors Capital Holdings, Ltd., 230 Broadway East, Lynnfield, MA 01940-2320.


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010  SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.  INVESTORS CAPITAL HOLDINGS, LTD.By: /s/ Timothy B. MurphyChief Executive OfficerDate: June 28, 2010 Pursuant to the requirements of the Securities Act of 1933, this Annual Report on Form 10-K has been signed by the following persons in the capacities and as of the dates indicated. Signature
     Capacity(ies)
     Date/s/ Timothy B. Murphy
     Principal Executive Officer
     June 28, 2010Timothy B. Murphy/s/ Kathleen L. Donnelly
     Principal Financial and Accounting Officer
     June 28, 2010Kathleen L. Donnelly/s/Theodore E. Charles
     Chairman of the Board and Director
     June 28, 2010Theodore E. Charles/s/ Geoffrey Chalmers
     Director
     June 28, 2010Geoffrey Chalmers/s/ William Atherton
     Director
     June 28, 2010William Atherton/s/ Robert Martin
     Director
     June 28, 2010Robert Martin/s/ Arthur J. Stickney
     Director
     June 28, 2010Arthur J. Stickney


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010  EXHIBIT INDEX (Exhibits being initially filed with this Form 10-K) 21.1
     Subsidiaries of Investors Capital Holdings, Ltd. as of March 31, 201023.1
     Consent of MARCUM LLP23.2
     Consent of UHY LLP31.1
     Certification of Timothy B. Murphy pursuant to Rule 13a-14(a)31.2
     Certification of Kathleen L. Donnelly pursuant to Rule 13a-14(a)32.1
     Certification of Timothy B. Murphy pursuant to 18 U.S.C. Section 135032.2
     Certification of Kathleen L. Donnelly pursuant to 18 U.S.C. Section 1350


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 Exhibit 21.1 Subsidiaries of Investors Capital Holdings, Ltd. Subsidiary
     Jurisdiction of IncorporationInvestors Capital Corporation
     
     MAICC Insurance Agency, Inc.
     
     MAInvestors Capital Holdings Securities Corporation
     MA
  All subsidiaries are wholly-owned by Investors Capital Holdings, Ltd.


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010  Exhibit 23.1 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS CONSENT We consent to the incorporation by reference in the Registration Statements of Investors Capital Holdings, Ltd. on Form S-8 (No. 333-117807 and No. 333-134885) of our report dated June 28, 2010, with respect to our audit of the consolidated financial statements of Investors Capital Holdings, Ltd. and subsidiaries as of March 31, 2010 and for the year then ended, which report is included in this Annual Report on Form 10-K of Investors Capital Holdings, Ltd. for the year ended March 31, 2010.  /s/Marcum LLP  Marcum LLP Boston, Massachusetts June 28, 2010  Exhibit 23.2 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in the Registration Statements of Investors Capital Holdings, Ltd. on Form S-8 (No. 333-117807 and No. 333-134885) of our report dated June 26, 2009 pertaining to the consolidated financial statements of Investors Capital Holdings, Ltd. and Subsidiaries as of March 31, 2009 and for the year endedwhich appears in the Annual Report on Form 10-K of Investors Capital Holdings, Ltd. for the year ended March 31, 2010.  /s/ UHY LLPHouston, TexasJune 28, 2010


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010  Exhibit 31.1CERTIFICATION  I, Timothy B. Murphy, certify that: 1.
     I have reviewed this annual report on Form 10-K of Investors Capital Holdings, Ltd.;2.
     Based on my knowledge, this report does not contain any untrue statement of a material fact or omitto state a material fact necessary to make the statements made, in light of the circumstances underwhich such statements were made, not misleading with respect to the period covered by this report;3.
     Based on my knowledge, the financial statements, and other financial information included in thisreport, fairly present in all material respects the financial condition, results of operations and cashflows of the registrant as of, and for, the periods presented in said report;4.
     The registrant's other certifying officer(s) and I are responsible for establishing and maintainingdisclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) andinternal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:a)
     Designed such disclosure controls and procedures, or caused such disclosure controls andprocedures to be designed under our supervision, to ensure that material information relatingto the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared;b)
     Designed such internal control over financial reporting, or caused such internal control overfinancial reporting to be designed under our supervision, to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c)
     Evaluated the effectiveness of the registrant's disclosure controls and procedures and presentedin this report our conclusions about the effectiveness of the disclosure controls and procedures,as of the end of the period covered by this report based on such evaluation; andd)
     Disclosed in this report any change in the registrant's internal control over financial reportingthat occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter inthe case of an annual report) that has materially affected, or is reasonably likely to materiallyaffect, the registrant's internal control over financial reporting; and5.
     The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluationof internal control over financial reporting, to the registrant's auditors and the audit committee of theregistrant's board of directors (or persons performing the equivalent functions):a)
     All significant deficiencies and material weaknesses in the design or operation of internalcontrol over financial reporting which are reasonably likely to adversely affect the registrant'sability to record, process, summarize and report financial information; andb)
     Any fraud, whether or not material, that involves management or other employees who have a


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010 significant role in the registrant's internal control over financial reporting. Date: June 28, 2010 By: /s/ Timothy B. Murphy  Timothy B. MurphyChief Executive Officer and Director(principal executive officer)


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010  Exhibit 31.2CERTIFICATION  I, Kathleen L. Donnelly, certify that: 1.
     I have reviewed this annual report on Form 10-K of Investors Capital Holdings, Ltd.;2.
     Based on my knowledge, this report does not contain any untrue statement of a material fact or omitto state a material fact necessary to make the statements made, in light of the circumstances underwhich such statements were made, not misleading with respect to the period covered by this report;3.
     Based on my knowledge, the financial statements, and other financial information included in thisreport, fairly present in all material respects the financial condition, results of operations and cashflows of the registrant as of, and for, the periods presented in said report;4.
     The registrant's other certifying officer(s) and I are responsible for establishing and maintainingdisclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) andinternal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:a)
     Designed such disclosure controls and procedures, or caused such disclosure controls andprocedures to be designed under our supervision, to ensure that material information relatingto the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared;b)
     Designed such internal control over financial reporting, or caused such internal control overfinancial reporting to be designed under our supervision, to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c)
     Evaluated the effectiveness of the registrant's disclosure controls and procedures and presentedin this report our conclusions about the effectiveness of the disclosure controls and procedures,as of the end of the period covered by this report based on such evaluation; andd)
     Disclosed in this report any change in the registrant's internal control over financial reportingthat occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter inthe case of an annual report) that has materially affected, or is reasonably likely to materiallyaffect, the registrant's internal control over financial reporting; and5.
     The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluationof internal control over financial reporting, to the registrant's auditors and the audit committee of theregistrant's board of directors (or persons performing the equivalent functions):a)
     All significant deficiencies and material weaknesses in the design or operation of internalcontrol over financial reporting which are reasonably likely to adversely affect the registrant'sability to record, process, summarize and report financial information; andb)
     Any fraud, whether or not material, that involves management or other employees who have a


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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2010 significant role in the registrant's internal control over financial reporting. Date: June 28, 2010 By: /s/ Kathleen L. Donnelly  Kathleen L. DonnellyChief Financial Officer(principal financial officer)


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010  Exhibit 32.1CERTIFICATION I, Timothy B. Murphy, certify that this report on Form 10-K fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in this report fairly presents, in all material respects, the financial condition and results of operations of Investors Capital Holdings, Ltd. Date: June 28, 2010 By: /s/ Timothy B. Murphy  Timothy B. MurphyChief Executive Officer and Director(principal executive officer)


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Investors Capital Holdings, Ltd. Annual Report on Form 10-KFiscal Year Ended March 31, 2010  Exhibit 32.2CERTIFICATION I, Kathleen L. Donnelly, certify that this report on Form 10-K fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in this report fairly presents, in all material respects, the financial condition and results of operations of Investors Capital Holdings, Ltd. Date: June 28, 2010 By: /s/ Kathleen L. Donnelly  Kathleen L. DonnellyChief Financial Officer(principal financial officer)


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