----

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| x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-------------------------------------------------------------------------------------------|

|   | FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010 |
|--------|---------------------------------------------|

|  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|-----------------------------------------------------------------------------------------------|

|   | FOR THE TRANSITION PERIOD FROM                     TO  |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Maryland                                          | 26-2582882                              |
|---------------------------------------------------|-----------------------------------------|
| (State of Incorporation)                          | (I.R.S. Employer Identification Number) |
|                                              |                                    |
| 5251 DTC Parkway, Suite 1000Greenwood Village, CO | 80111                                   |
| (Address of principal executive offices)          | (Zip Code)                              |

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----

|   | Large accelerated filer    o | Accelerated filer     ̈         |   |
|--------|--------------------------------------------------|---------------------------------------------------------|--------|
|   | Non-accelerated filer    x   | Smaller reporting company     ̈ |   |

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|          |                                                                                                                   |   |
|---------------|------------------------------------------------------------------------------------------------------------------------|--------|
|          |                                                                                                                   | Page   |
| PART I        |                                                                                                                   |   |
| ITEM 1.       | BUSINESS                                                                                                               | 4      |
| ITEM 1A.      | RISK FACTORS                                                                                                           | 39     |
| ITEM 1B.      | UNRESOLVED STAFF COMMENTS                                                                                              | 57     |
| ITEM 2.       | PROPERTIES                                                                                                             | 57     |
| ITEM 3.       | LEGAL PROCEEDINGS                                                                                                      | 57     |
| ITEM 4.       | RESERVED                                                                                                               | 57     |
|          |                                                                                                                   |   |
| PART II       |                                                                                                                   |   |
| ITEM 5.       | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES     | 58     |
| ITEM 6.       | SELECTED FINANCIAL DATA                                                                                                | 61     |
| ITEM 7.       | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                            | 61     |
| ITEM 7A.      | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                             | 76     |
| ITEM 8.       | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                            | 77     |
| ITEM 9.       | CHANGES IN AND DISAGREEMENTS WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON ACCOUNTING AND FINANCIAL DISCLOSURE | 100    |
| ITEM 9A. | CONTROLS AND PROCEDURES                                                                                                | 100    |
| ITEM 9B. | OTHER INFORMATION                                                                                                      | 100    |
|          |                                                                                                                   |   |
| PART III      |                                                                                                                   |   |
| ITEM 10.      | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                                 | 101    |
| ITEM 11.      | EXECUTIVE COMPENSATION                                                                                                 | 101    |
| ITEM 12.      | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS                         | 101    |
| ITEM 13.      | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE                                              | 101    |
| ITEM 14.      | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                                 | 101    |
|          |                                                                                                                   |   |
| PART IV       |                                                                                                                   |   |
| ITEM 15.      | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES                                                                             | 102    |
| SIGNATURES    | 104                                                                                                                    |

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| Item 1. | Business |
|--------------|----------|

----

|   | ● | Qualification. We obtain information from the potential portfolio company’s management, conduct a preliminary evaluation of threshold issues and make a determination as to whether the opportunity is qualified and deserving of additional investigation. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Evaluation. We undertake an in-depth evaluation of the opportunity with primary focus on understanding the business, historical and projected financial information, industry, competition and valuation to ascertain whether we have interest in pursuing the investment. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Report Preparation. We prepare an internal investment report which discusses our evaluation findings and recommendations, together with an internal valuation report outlining our acceptable valuation ranges for an investment. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Approval. Our investment adviser’s Investment Committee reviews the investment and valuation reports and, when appropriate, approves the investment subject to completion of satisfactory due diligence. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Term Sheet.  We prepare, negotiate and execute a term sheet with the portfolio company which, among other things, will establish the due diligence process and set a transaction closing time table (including the achievement of going public milestones).  This step is not applicable to our financing participation deals since the terms and conditions of such an investment have typically already been set by the portfolio company. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Due Diligence.  We conduct an on-site due diligence visit and complete the gathering and review of due diligence materials. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Co-Investment Documents.  As required, we assist the portfolio company in the review, revision and preparation of a confidential business memorandum, company investment PowerPoint presentation and executive summary that will be used by us to approach co-investors on a selected basis or by the portfolio company and its placement agents to undertake a private placement offering.  This step is typically not applicable to our financing participation deals as these documents or comparable information will normally already be available. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Governance.  We establish, and assist the portfolio company in satisfying, certain governance matters which may be required for an exchange listing and which we may designate as a condition to the closing of our investment (including the appointment of an independent board and the audit and compensation committees, the hiring, or the engagement of an executive recruiter to conduct a search for a qualified CFO, the engagement of a qualified independent auditor and completion of the audit). |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | ● | Placement Agent.As required, we assist the portfolio company in identifying potential placement agents to raise additional capital beyond the investment amount we intend to provide.  This step is typically not applicable to our financing participation deals since either a placement agent will have already been engaged or the portfolio company will be handling the offering itself on a self-underwritten basis. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Capital Raising; Going Public Preparation.  We assist the portfolio company in monitoring the capital raising process, by introducing co-investors on a selected basis, and in achieving certain “going public” milestones which we may designate as a condition to the closing of our investment.  This step is typically not applicable to our financing participation deals; however, on a selected basis, we may introduce certain co-investors to the portfolio company. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Investment Closing.  At closing, we make our investment, principally consisting of convertible debt or convertible preferred stock or other equity. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Completion of Going Public Process.  Following the closing of our investment, we will provide managerial assistance to the portfolio company in their completion of the going public process, as needed, within the general time frames set forth below: |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | For a Sponsored Deal:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |    | (i) If we believe that the portfolio company is able to complete a traditional IPO based primarily on its current or anticipated revenue and profitability levels measured against recent comparable IPO transactions, which we refer to herein as “IPO qualified” or an “IPO qualified company,” we expect that the portfolio company will file a registration statement under the Securities Act within approximately nine months after closing and complete the IPO and obtain a senior exchange listing within approximately 15 months after closing.  If the portfolio company fails to complete an IPO within the 15-month time frame, the portfolio company is expected to file a registration statement under the Exchange Act and become a reporting company within 18 months after closing.  The final terms of a sponsored deal will be subject to negotiation, and there is no assurance that we will be able to include terms in our sponsored deals which will require the portfolio company to undertake all or any of these actions within these time periods. |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |    | (ii) If we believe that the portfolio company is not IPO qualified at the time of our investment, we expect that the portfolio company will file a registration statement under the Exchange Act within three to six months after closing and obtain a junior or senior exchange listing within 15 months after closing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | ● | For a Financing Participation Deal:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |    | We expect that the portfolio company, which will typically be IPO qualified, will file a registration statement under the Securities Act within 12 months after closing and complete an IPO and obtain a senior exchange listing within 18 months after closing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

----

| Qualification, Evaluation and Report Preparation                   |   | Obtain Company Information                              |
|--------------------------------------------------------------------|--------|---------------------------------------------------------|
| (2 - 3 weeks)                                                      |   | Preliminary Evaluation of Threshold Issues              |
|                                                               |   | Prepare Summary Analysis                                |
|                                                               |   | Assess Investment Criteria                              |
|                                                               |   | In-depth Company Evaluation                             |
|                                                               |   | Review Industry and Analyst Reports                     |
|                                                               |   | Management and Third Party Interviews                   |
|                                                               |   | Analyze Transaction Structure                           |
|                                                               |   | Prepare Investment and Valuation Report                 |
| Approval, Term Sheet and Due Diligence                             |   | Investment Committee Review and Approval                |
| (1 - 2 weeks)                                                      |   | Set Primary Terms and Conditions of Investment*         |
|                                                               |   | Establish Critical Going Public Milestones              |
|                                                               |   | Discuss Co-Investment Strategy with Company*            |
|                                                               |   | Approve Investment                                      |
|                                                               |   | Prepare Term Sheet*                                     |
|                                                               |   | Establish Transaction Time Table*                       |
|                                                               |   | Distribute Due Diligence Checklist                      |
|                                                               |   | Conduct On-Site Visit and Complete Due Diligence        |
| Co-Investment Documents,  Governance and Placement Agent |   | Complete Business Memorandum and Investor Presentation* |
| (2 - 3 weeks)                                                      |   | Identify Qualified Agents and Co-Investors*             |
|                                                               |   | Assist in Governance Matters                            |
|                                                               |   | Begin Search/Hire Qualified CFO                         |
|                                                               |   | Engage PCAOB Registered Auditor                         |
|                                                               |   | Delivery of Audited Financial Statements                |
|                                                               |   | Engage Placement Agent*                                 |
| Capital Raising, Going Public Preparation                          |   | Monitor Capital Raising Process*                        |
| (6 - 8 weeks)                                                      |   | Introduce Selected Co-Investors                         |
|                                                               |   | Satisfy Going Public Milestones                         |
| Investment Closing                                                 |   | Prepare Investment Documents*                           |
| (1 - 2 weeks)                                                      |   | Fund Investment                                         |
| Completion of Going Public Process                                 |   | Assist in Going Public Matters                          |
| (within 18 months after closing)                                   |   | Prepare/File Registration Statement                     |
|                                                               |   | Regulatory Approval                                     |
|                                                               |   | Complete IPO                                            |
|                                                               |   | Listing on/Upgrade to Senior Exchange                   |
|                                                               |   |                                                    |
| *Indicates typically not part of financing participation deals.    |

----

----

----

|                         |   |     |      |   |          |   |   |     |   |   | Dealer Manager |   |   |     |      |
|------------------------------|--------|----------|-----------|--------|---------------|--------|--------|----------|--------|--------|----------------|--------|--------|----------|-----------|
|                         |   | Shares   |      |   | Average Price |   |   | Gross    |   |   | Fees and       |   |   | Net      |      |
| Month                        |   | Sold (1) |      |   | Per Share (1) |   |   | Proceeds |   |   | Commissions    |   |   | Proceeds |      |
|                         |   |     |      |   |          |   |   |     |   |   |           |   |   |     |      |
| January 2010 (first closing) |   |     | 114,695   |   |          | $      | 10.00  |     |   | $      | 1,146,500      |   |   | $        | 114,243   |   |   | $ | 1,032,257 |   |
| February 2010                |   |     | 54,638    |   |          |   | 9.99   |     |   |   | 546,000        |   |   |     | 54,261    |   |   |   | 491,739 |   |
| March 2010                   |   |     | 175,283   |   |          |   | 9.98   |     |   |   | 1,749,436      |   |   |     | 171,896   |   |   |   | 1,577,540 |   |
| April 2010                   |   |     | 151,554   |   |          |   | 9.84   |     |   |   | 1,491,050      |   |   |     | 127,062   |   |   |   | 1,363,988 |   |
| June 2010                    |   |     | 233,277   |   |          |   | 9.98   |     |   |   | 2,327,331      |   |   |     | 227,840   |   |   |   | 2,099,491 |   |
| July 2010                    |   |     | 113,780   |   |          |   | 9.99   |     |   |   | 1,136,483      |   |   |     | 112,457   |   |   |   | 1,024,026 |   |
| August 2010                  |   |     | 203,128   |   |          |   | 9.99   |     |   |   | 2,028,643      |   |   |     | 200,493   |   |   |   | 1,828,150 |   |
| September 2010               |   |     | 146,716   |   |          |   | 9.95   |     |   |   | 1,459,215      |   |   |     | 138,771   |   |   |   | 1,320,444 |   |
| October 2010                 |   |     | 249,310   |   |          |   | 9.96   |     |   |   | 2,482,410      |   |   |     | 238,622   |   |   |   | 2,243,788 |   |
| November 2010                |   |     | 371,395   |   |          |   | 9.96   |     |   |   | 3,697,520      |   |   |     | 354,967   |   |   |   | 3,342,553 |   |
| December 2010                |   |     | 476,623   |   |          |   | 9.96   |     |   |   | 4,745,065      |   |   |     | 455,454   |   |   |   | 4,289,611 |   |
| January 2011                 |   |     | 315,143   |   |          |   | 9.97   |     |   |   | 3,141,484      |   |   |     | 305,195   |   |   |   | 2,836,289 |   |
| February 2011                |   |     | 536,034   |   |          |   | 9.94   |     |   |   | 5,328,486      |   |   |     | 504,176   |   |   |   | 4,824,310 |   |
|                         |   |     |      |   |          |   |   |     |   |   |           |   |   |     |      |   |   |   |   |   |
|                         |   |     | 3,141,576 |   |          | $      | 9.96   |     |   | $      | 31,279,623     |   |   | $        | 3,005,437 |   |   | $ | 28,274,186 |   |

----

|   | ● | Operates in an attractive growth industry. We focus on micro-cap and small-cap companies across a broad range of attractive growth industries that we believe are being transformed or created anew by technological, economic and social forces and are capable of attracting interest from both retail and institutional investors. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Immediate need for external capital. We target micro-cap and small-cap companies whose organic growth is currently constrained by limited capital, and which have reached a point in their development where we believe external capital is required.  As part of our investment, we offer a more stable form of equity capital for our portfolio companies, while requiring that their ownership structure align the economic interests of their management team with the success of the enterprise. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Demonstrated revenue stream. We invest in micro-cap and small-cap companies that have a demonstrated revenue stream that we believe will make them attractive as publicly traded companies.  However, in certain opportunistic situations, we may invest in development stage, pre-revenue stage and early revenue stage companies if there is a clear and verifiable path to generating meaningful revenue within the next 12 months. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Demonstrated profitability. We focus on micro-cap and small-cap companies that are at or near profitability on an earnings before interest, taxes, depreciation and amortization (“EBITDA”) or cash flow from operations basis, or where there is a clear path to generating positive EBITDA or cash flow from operations within the next 12 months.  With the capital we provide, together with the projected EBITDA or cash flow from operations of our portfolio companies, we expect each of our portfolio companies to be able to finance their development over the next 12 to 18 months without requiring additional outside capital subsequent to completion of our investment.  Once our portfolio companies become eligible to be listed on a senior exchange, which we generally expect to occur within 12 to 18 months after completion of our investment, we would expect our portfolio companies to be positioned to conduct, if appropriate, a registered offering either simultaneous with obtaining a senior exchange listing or within a reasonable time thereafter. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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----

----

----

|   | In addition to higher valuations, we believe that public companies also enjoy other benefits, including: |
|--------|----------------------------------------------------------------------------------------------------------|
|   |                                                                                                     |   |
|   | ●                                                                                                  | Lower cost of capital, superior access to the capital markets, and less stock dilution to founders when raising additional capital; |

|   | ● | Creation of a stock currency to fund acquisitions; |
|--------|---------|----------------------------------------------------|

|   | ● | Equity-based compensation to retain and attract management and employees; |
|--------|---------|---------------------------------------------------------------------------|

|   | ● | More liquidity for founders, minority shareholders, and investors; and |
|--------|---------|------------------------------------------------------------------------|

|   | ● | Added corporate prestige and visibility with customers, suppliers, employees and the financial community. |
|--------|---------|-----------------------------------------------------------------------------------------------------------|

----

----

|   | ● | Visibility – greater access to investment analyst coverage to disseminate our portfolio companies’ stories, and added corporate prestige and visibility with exchange listing; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Valuation and liquidity – potential for more stock liquidity as retail brokers become more interested in making a market in the stock and soliciting their clients to purchase the stock and as institutional investors who typically do not invest in junior exchange-listed stocks consider investments; and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Access to capital – greater interest from top- and mid-tier investment banking firms to conduct a subsequent registered offering for our portfolio companies. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | ● | Qualification. We obtain information from the potential portfolio company’s management, conduct a preliminary evaluation of threshold issues and make a determination as to whether the opportunity is qualified and deserving of additional investigation. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Evaluation. We undertake an in-depth evaluation of the opportunity with primary focus on understanding the business, historical and projected financial information, industry, competition and valuation to ascertain whether we have interest in pursuing the investment. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Report Preparation. We prepare an internal investment report which discusses our evaluation findings and recommendations, together with an internal valuation report outlining our acceptable valuation ranges for an investment. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Approval. Our investment adviser’s Investment Committee reviews the investment and valuation reports and, when appropriate, approves the investment subject to completion of satisfactory due diligence. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Term Sheet.  We prepare, negotiate and execute a term sheet with the portfolio company which, among other things, will establish the due diligence process and set a transaction closing time table (including the achievement of going public milestones).  This step is not applicable to our financing participation deals since the terms and conditions of such an investment have typically already been set by the portfolio company. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Due Diligence.  We conduct an on-site due diligence visit and complete the gathering and review of due diligence materials. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Co-Investment Documents.  As required, we assist the portfolio company in the review, revision and preparation of a confidential business memorandum, company investment PowerPoint presentation and executive summary that will be used by us to approach co-investors on a selected basis or by the portfolio company and its placement agents to undertake a private placement offering.  This step is typically not applicable to our financing participation deals as these documents or comparable information will normally already be available. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Governance.  We establish, and assist the portfolio company in satisfying, certain governance matters which may be required for an exchange listing and which we may designate as a condition to the closing of our investment (including the appointment of an independent board and the audit and compensation committees, the hiring, or the engagement of an executive recruiter to conduct a search for a qualified CFO, the engagement of a qualified independent auditor and completion of the audit). |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Placement Agent.As required, we assist the portfolio company in identifying potential placement agents to raise additional capital beyond the investment amount we intend to provide.  This step is typically not applicable to our financing participation deals since either a placement agent will have already been engaged or the portfolio company will be handling the offering itself on a self-underwritten basis. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Capital Raising; Going Public Preparation.  We assist the portfolio company in monitoring the capital raising process, by introducing co-investors on a selected basis, and in achieving certain “going public” milestones which we may designate as a condition to the closing of our investment.  This step is typically not applicable to our financing participation deals; however, on a selected basis, we may introduce certain co-investors to the portfolio company. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | ● | Investment Closing.  At closing, we make our investment, principally consisting of convertible debt or convertible preferred stock or other equity. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Completion of Going Public Process.  Following the closing of our investment, we will provide managerial assistance to the portfolio company in their completion of the going public process, as needed, within the general time frames set forth below: |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | For a Sponsored Deal:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |    | (i) If we believe that the portfolio company is able to complete a traditional IPO based primarily on its current or anticipated revenue and profitability levels measured against recent comparable IPO transactions, which we refer to herein as “IPO qualified” or an “IPO qualified company,” we expect that the portfolio company will file a registration statement under the Securities Act within approximately nine months after closing and complete the IPO and obtain a senior exchange listing within approximately 15 months after closing.  If the portfolio company fails to complete an IPO within the 15-month time frame, the portfolio company is expected to file a registration statement under the Exchange Act and become a reporting company within 18 months after closing.  The final terms of a sponsored deal will be subject to negotiation, and there is no assurance that we will be able to include terms in our sponsored deals which will require the portfolio company to undertake all or any of these actions within these time periods. |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |    | (ii) If we believe that the portfolio company is not IPO qualified at the time of our investment, we expect that the portfolio company will file a registration statement under the Exchange Act within three to six months after closing and obtain a junior or senior exchange listing within 15 months after closing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | ● | For a Financing Participation Deal:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |    | We expect that the portfolio company, which will typically be IPO qualified, will file a registration statement under the Securities Act within 12 months after closing and complete an IPO and obtain a senior exchange listing within 18 months after closing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

|   | ● | Revenue growth. We seek to invest primarily in micro-cap and small-cap companies that are already generating revenue and which we believe have significant growth potential. We seek to invest principally in companies with annual revenues in excess of $10 million.  However, in certain opportunistic situations, we may invest in development stage, pre-revenue stage and early revenue stage companies if there is a clear and verifiable path to generating meaningful revenue within the next 12 months.  We examine the market segment in which each prospective portfolio company is operating, including its size, geographic focus and competition, to determine whether that company is likely to continue its current growth rate prior to investing. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | ● | Large addressable markets. We seek to invest in businesses where we believe there is a proven demand for the company’s products or services that address large market opportunities.  We believe that large markets not only provide for more attractive growth prospects, but also have the ability to support a healthy competitive environment with more than one successful competitor. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Strong industry position. We seek to invest in companies that have developed defendable market positions within their respective markets and are well positioned to capitalize on growth opportunities. We seek to invest in companies that demonstrate competitive advantages versus their competitors, which should help to protect their market position and profitability and permit them to adapt to changes in their respective business environments. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Strong, experienced management team. We generally require that our portfolio companies have an experienced management team. We also require our portfolio companies to have in place proper incentives to induce management to succeed and to act in concert with our interests as investors, including having significant equity interests. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Positive EBITDA or operating cash flow. We focus on micro-cap and small-cap companies that are at or near profitability on an EBITDA or cash flow from operations basis, or where there is a clear path to generating positive EBITDA or cash flow from operations within the next 12 months. We seek to invest in companies that we believe will provide a predictable and growing EBITDA or cash flow from operations. We expect that projected EBITDA and cash flow from operations, together with the proceeds from our investments, will be a key means by which our portfolio companies will financially support their future growth plans until they are listed on a senior exchange and ready for a subsequent registered offering. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Attractive public markets company.We seek to invest in public ready micro-cap and small-cap companies whose management is committed to, and capable of, becoming a public company, whose business we believe will benefit from exposure as a public company and will have appeal to retail and institutional investors, and that we believe is capable of obtaining a senior exchange listing typically within eighteen months after we complete our investment. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Regulatory compliance. We generally require that our portfolio companies have in place, or be committed to hiring, a qualified chief financial officer with a strong background in SEC reporting, Sarbanes-Oxley Act compliance, Generally Accepted Accounting Principles (“GAAP”), accounting and internal controls management, and investor relations.  Before we complete our investment, our portfolio companies will be required to have GAAP compliant financial statements, in final or draft, but substantially completed form, for at least the past two years which have been audited by a Public Company Accounting Oversight Board (“PCAOB”) registered auditor acceptable to us.  For portfolio companies seeking a foreign listing, we will generally accept financial statements audited under standards imposed by, and auditors qualified under, the rules for the foreign jurisdiction and the foreign exchange. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Assessment of management. Our investment adviser will typically perform an assessment including a review of experience, passion, proven leadership ability, vision, ability to attract key employees, dispute resolution skills, and reputation in the market.  Our investment adviser will generally corroborate and verify management’s track record, industry accomplishments and leadership capabilities through extensive background checks, interviews with management, employees, references and other industry leaders, and on-site visits.  Our investment adviser will also assess the qualifications and experience of the chief financial officer to manage micro-cap or small-cap public companies. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Market and competitive analysis. Our investment adviser will utilize its investment analysts and engage, on an as-needed basis, outside experts to perform market and competitive analysis and due diligence. This analysis and due diligence typically will provide our investment adviser with a detailed understanding of the prospective portfolio company’s business, market opportunities and operations. This analysis may include: |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | ● | Industry and competitive analysis, including verification of market potential, the relative position of the prospective portfolio company within its market, the existence of significant barriers to entry for potential competitors, and pricing elasticity; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                           |
|   | ● | Customer and vendor interviews to assess reputation within its market;                                                                                                                                                                                         |
|   |    |                                                                                                                                                                                                                                                           |
|   | ● | Assessment of technology and intellectual capital; and                                                                                                                                                                                                         |
|   |    |                                                                                                                                                                                                                                                           |
|   | ● | Examination of potential regulatory and legal issues.                                                                                                                                                                                                          |

|   | ● | Business model and financial assessment.Prior to making an investment decision, our investment adviser will typically review a prospective portfolio company’s business model and financial reporting. This will include a thorough review of historical and prospective financial information, accounting practices and financial models, and investment and loan documents.  Our investment adviser intends to challenge management’s financial assumptions, make an independent assessment of revenue and earnings quality, and conduct interviews with attorneys and auditors. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Strategic and public company analysis. Our investment adviser will also generally perform a strategic analysis of each prospective portfolio company, during which it will evaluate operating and market risks, public company attractiveness, comparable public company valuations, potential to become a public company in a cost-effective and timely manner, management commitment to being a public company, and potential appeal to retail and institutional investors in the aftermarket. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | ● | Verify business and financial disclosures. Review accuracy of public disclosures regarding the portfolio company’s business, operations, management, products and services, markets, finances, major contracts, tangible and intangible properties, business strategies, related party transactions, compensation arrangements and stock ownership.  Organize all supporting documentation, diligence materials and corporate information. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | ● | Review and preparation of business plans and financial models. Thorough review of historical and prospective financial information, accounting practices and financial models, review investment and loan documents, challenge management’s financial assumptions, and review revenue and earnings quality.  Assist in preparation of business history and plans, and management discussion and analysis. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Coordinate audit and legal processes. Work directly with the portfolio company’s internal staff and their audit and legal teams to prepare, present, review and complete audited financial statements, footnote disclosures and supporting analysis and documentation.  Assist in internal control compliance matters. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Assess and make recommendations on financial management team. Continue assessment of chief financial officer’s capabilities to lead and manage financial reporting and accounting functions for a public company.  Make recommendations for additional hires, if necessary.  Before, or within a reasonable time after, our investment is made, a portfolio company must typically have in place, or ready for hire, a qualified chief financial officer with a strong background in SEC reporting, Sarbanes-Oxley Act compliance, GAAP accounting and internal controls management, and investor relations. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Composition of Board of Directors. Work directly with the portfolio company’s management to identify the appropriate composition of the Board of Directors and to assess the skills and experience they should be seeking from new Board members including the financial expert.  The majority of the Board must consist of independent directors and the proper Board committee charters must be adopted and the committees selected, all in compliance with the initial listing requirements of most senior exchanges. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Preparation and filing of registration statements. Work directly with the portfolio company’s internal staff and their audit and legal teams to prepare and complete appropriate documentation for filing with the SEC under the Exchange Act, as applicable.  We expect the portfolio company to file a registration statement with the SEC within approximately three to twelve months after our investment. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Obtain trading symbol. Assist selected market maker in the preparation of documents to be filed with the Financial Industry Regulatory Authority (“FINRA”) to allow for submission of initial price quotation on a junior exchange, or assist the portfolio company, if it so qualifies, with its initial application for listing on a senior exchange. Obtain and organize required supporting documentation. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | ● | Requiring a total return on our investments (including both interest and potential equity appreciation) that compensates us for credit risk; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Incorporating a “put” right into the investment structure; and |
|--------|---------|----------------------------------------------------------------------------|

|   | ● | Negotiating covenants and other contractual provisions in connection with our investments. Such provisions may include affirmative and negative covenants, default penalties, lien protection, change of control provisions and possibly board rights. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|   | ● | assessment of business development success, including product development, profitability and the portfolio company’s overall adherence to its business plan; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | periodic and regular contact with portfolio company management to discuss financial position, requirements and accomplishments; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------|

|   | ● | periodic formal update interviews with portfolio company management; and |
|--------|---------|--------------------------------------------------------------------------|

|   | ● | review of monthly and quarterly financial statements and financial projections for portfolio companies. |
|--------|---------|---------------------------------------------------------------------------------------------------------|

|   | ● | Determines the composition of our portfolio, the nature and timing of the changes to our portfolio and the manner of implementing such changes; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Determines which securities we will purchase, retain or sell; |
|--------|---------|---------------------------------------------------------------|

|   | ● | Identifies, evaluates and negotiates the structure of the investments we make; and |
|--------|---------|-----------------------------------------------------------------------------------------|

|   | ● | Closes, monitors and services the investments we make. |
|--------|---------|--------------------------------------------------------|

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| Examples of Annual Incentive Fee for Capital Gains* (all dollar amounts in millions) |
|--------------------------------------------------------------------------------------|
|                                                                                 |
| Example 1                                                                            |
|                                                                                 |   |   |   |   |   |   |
| Year                                                                                 |   | Investment Description |   | Incentive Fee |   | Explanatory comments |
|                                                                                 |   |   |   |   |   |   |
| 1                                                                                    |   | Invested $5 in Company A stock and $10 in Company B stock. |   | $ | 0 |   | No incentive fee as there are no realized gains. |
|                                                                                 |   |   |   |   |   |   |   |   |
| 2                                                                                    |   | Sold Company A stock for $15 ($10 realized gain).  Fair value of Company B stock at $20 ($10 unrealized gain) |   | $ | 2.0 |   | Incentive fee equals 20% of $10 realized gains.  Unrealized gains do not affect calculation. |
|                                                                                 |   |   |   |   |   |   |   |   |
| 3                                                                                    |   | Fair value of Company B stock at $8 ($2 unrealized loss). |   | $ | 0 |   | No incentive fee as there is only unrealized loss in the year. |
|                                                                                 |   |   |   |   |   |   |   |   |
| 4                                                                                    |   | Sold Company B stock for $12 ($2 realized gain). |   | $ | 0.4 |   | Incentive fee equals 20% of cumulative realized gains of $12, or $2.4, less previously paid incentive fee of $2. |

| Example 2 |
|-----------|
|      |
| Year      |   | Investment Description |   | Incentive Fee |   | Explanatory comments |
|      |   |   |   |   |   |   |
| 1         |   | Invested $20 in Company A stock, $30 in Company B stock and $25 in Company C stock |   | $ | 0 |   | No incentive fee as there are no realized gains. |
|      |   |   |   |   |   |   |   |   |
| 2         |   | Sold Company A stock for $50 (realized gain $30).  Fair value of Company B stock at $25 ($5 unrealized loss).  Fair value of Company C stock at $25 (no unrealized gain or loss). |   | $ | 5.0 |   | Incentive fee equals 20% of $25 (which is the $30 realized gains less the $5 unrealized loss). |
|      |   |   |   |   |   |   |   |   |
| 3         |   | Sold Company C stock for $30 ($5 realized gain).  Fair value of Company B stock at $27 ($3 unrealized loss) |   | $ | 1.4 |   | Incentive fee equals 20% of $32 (which is the $35 of realized gains less the $3 of unrealized losses), reduced by the $5 previously paid incentive fee. |
|      |   |   |   |   |   |   |   |   |
| 4         |   | Fair value of Company B stock at $35 ($5 unrealized gain). |   | $ | 0 |   | No incentive fee as there are no realized gains in year. |
|      |   |   |   |   |   |   |   |   |
| 5         |   | Sold Company B stock for $20 ($10 realized loss). |   | $ | 0 |   | No incentive fee as the 20% incentive fee on $25 (which is the $35 cumulative realized gains less the $10 realized losses) is less than the $6.4 previously paid incentive fee. |

|   | *  |   | The hypothetical amount of income, gains and returns shown in the above tables assumes no leverage. There is no guarantee that the income, gains, or the income returns based on our net asset values, will be realized and actual income, gains and returns may vary from those shown in these examples. |
|--------|---------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | ● | Costs of calculating our net asset value, including the cost of any third-party valuation services;                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | ● | Costs of effecting sales and repurchases of shares of our common stock and other securities;                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | ● | Fees payable to third parties relating to, or associated with, making investments, including fees and expenses associated with performing due diligence reviews of prospective investments;                                                                                                                                                                                                                                                                                                                                                                        |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | ● | Transfer agent and custodial fees;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | ● | Costs related to organization and offerings;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | ● | Fees and expenses associated with marketing efforts;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | ● | Federal and state registration fees;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | ● | Any stock exchange listing fees;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | ● | Applicable federal, state and local taxes;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | ● | Independent directors’ fees and expenses;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | ● | Excess brokerage commissions;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | ● | Costs of proxy statements, stockholders’ reports and notices;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | ● | Fidelity bond, directors and officers/errors and omissions liability insurance and other insurance premiums;                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | ● | Direct costs such as printing and mailing, and staff;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | ● | Fees and expenses associated with independent audits and outside legal costs;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | ● | Costs associated with our reporting and compliance obligations under the 1940 Act, the Exchange Act and applicable federal and state securities laws; and                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | ● | All other expenses incurred by either Keating Investments or us in connection with administering our business, including payments under the Investment Advisory and Administrative Services Agreement that will be based upon our allocable portion of overhead and other expenses incurred by Keating Investments in performing its obligations under the Investment Advisory and Administrative Services Agreement, including our allocable portion of the compensation of our Chief Financial Officer and Chief Compliance Officer, and their respective staff. |

----

|   | ● | We may not purchase or lease assets in which Keating Investments has an interest; |
|--------|---------|-----------------------------------------------------------------------------------|

|      | ● | Keating Investments may not acquire assets from us unless approved by our stockholders in accordance with our charter; |
|--------------------------|---------|------------------------------------------------------------------------------------------------------------------------|

|     | ● | We may not lease assets to Keating Investments; |
|--------------------|---------|-------------------------------------------------|

|      | ● | We may not make any loans to Keating Investments except for the advancement of funds as permitted by our charter; |
|--------------------------|---------|-------------------------------------------------------------------------------------------------------------------|

|      | ● | We may not acquire assets in exchange for our stock; |
|--------------------------|---------|------------------------------------------------------|

|          | ● | We may not pay a commission or fee, either directly or indirectly to Keating Investments, except as otherwise permitted by our charter, in connection with the reinvestment of cash flows from operations and available reserves or from the proceeds of the resale, exchange or refinancing of our assets; |
|--------------------------------------------------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|      | ● | Keating Investments may not charge duplicate fees to us; and |
|--------------------------|---------|--------------------------------------------------------------|

|     | ● | Keating Investments may not provide financing to us with a term in excess of 12 months. |
|--------------------|---------|----------------------------------------------------------------------------------------------|

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----

|      | ● | Qualify as a RIC; and |
|--------------------------|---------|-----------------------|

|     | ● | Satisfy the Annual Distribution Requirement; |
|--------------------|---------|----------------------------------------------|

----

|   | ● | Have in effect at all times during each taxable year an election to be regulated as a business development company under the 1940 Act; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Derive in each taxable year at least 90% of our gross income from (a) dividends, interest, payments with respect to certain securities loans, gains from the sale of stock or other securities, or other income derived with respect to our business of investing in such stock or securities and (b) net income derived from an interest in a “qualified publicly traded limited partnership” (the “90% Income Test”); and |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Diversify our holdings so that at the end of each quarter of the taxable year: |
|--------|---------|--------------------------------------------------------------------------------|

|   | ● | at least 50% of the value of our assets consists of cash, cash equivalents, U.S. government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of such issuer; and |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | no more than 25% of the value of our assets is invested in (i) securities (other than U.S. government securities or securities of other RICs) of one issuer, (ii) securities of two or more issuers that are controlled, as determined under applicable tax rules, by us and that are engaged in the same or similar or related trades or businesses, or (iii) securities of one or more “qualified publicly traded partnerships” (the “Diversification Tests”). |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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----

----

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|   | ● | Pursuant to Rule 13a-14 of the Exchange Act, our Chief Executive Officer and Chief Financial Officer must certify the accuracy of the financial statements contained in our periodic reports;                                                                                                                                                                                                                                                                                              |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | ● | Pursuant to Item 307 of Regulation S-K, our periodic reports must disclose our conclusions about the effectiveness of our disclosure controls and procedures;                                                                                                                                                                                                                                                                                                                         |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | ● | Pursuant to Rule 13a-15 of the Exchange Act, our management must prepare an annual report regarding its assessment of our internal controls over financial reporting and, once our public float exceeds $75 million, must obtain an audit of the effectiveness of internal controls over financial reporting performed by our independent registered public accounting firm;                                                                                                                    |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | ● | Pursuant to Item 308 of Regulation S-K and Rule 13a-15 of the Exchange Act, our periodic reports must disclose whether there were significant changes in our internal controls over financial reporting or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses; and                                                     |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | ● | Pursuant to Section 404 of the Sarbanes-Oxley Act and Rule 13a-15 of the Exchange Act, we are required to include in our annual report on Form 10-K a report from our management on internal controls over financial reporting, including a statement that our management is responsible for establishing and maintaining adequate internal control over financial reporting as well as our management's assessment of the effectiveness of our internal control over financial reporting. |

----

----

| Item 1A. | Risk Factors |
|---------------|--------------|

----

----

----

----

|   | ● | The annual distribution requirement for a RIC will be satisfied if we distribute to our stockholders on an annual basis at least 90% of our investment company taxable income (which is generally our net ordinary income plus the excess, if any, of realized net short-term capital gains over realized net long-term capital losses)(the “Annual Distribution Requirement”). Since we will not use debt financing, we will not be able to borrow money to make distributions necessary to satisfy the Annual Distribution Requirement and, as a result, we could fail to qualify for RIC tax treatment and thus become subject to corporate-level income tax.                                                                                                                       |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | ● | The income source requirement will be satisfied if we obtain at least 90% of our income for each year from dividends, interest, gains from the sale of stock or securities or similar sources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | ● | The asset diversification requirement will be satisfied if we meet certain asset diversification requirements at the end of each quarter of our taxable year. Failure to meet those requirements may result in our having to dispose of certain investments quickly in order to prevent the loss of RIC status. Because most of our investments will be in private companies or in public companies whose securities may not trade actively in the secondary markets, and therefore will be relatively illiquid, any such dispositions could be made at disadvantageous prices and could result in substantial losses. Although we currently do not intend to borrow money, we are allowed to use debt financing to raise cash to meet the diversification requirements at the end of any quarter. |

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----

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|   | ●       | They may have limited financial resources and may be unable to meet their obligations, which may lead to bankruptcy or liquidation and the loss of our investment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | ●       | They typically have limited operating histories, narrower, less established product lines or offerings and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors’ actions, market conditions, operational risks and consumer sentiment in respect of their products or services, as well as general economic downturns.                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | ●       | At the time of our investment, since they are primarily privately owned, there is generally little publicly available information about these businesses; therefore, although Keating Investments’ investment professionals and agents will perform “due diligence” investigations on these portfolio companies, their operations and their prospects, we may not learn all of the material information we need to know regarding these businesses.                                                                                                                                                                                                                                                                                                             |
|   |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | ●  | They are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on our portfolio company and, in turn, on us.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | ●       | Since part of our investment process requires that these companies become publicly traded companies, they will need resources, processes, procedures and systems to satisfy the additional regulatory burdens, they will incur legal, accounting and other expenses, including costs associated with the periodic reporting requirements applicable to a company whose securities are registered under the Exchange Act, recently adopted corporate governance requirements, including requirements under the Sarbanes-Oxley Act, and other rules implemented by the SEC, and they may not be able to attract retail and institutional investor interest in the secondary market, all of which may have a material adverse impact on our portfolio companies and, in turn, on us. |

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|   | ● | Difficulties in enforcing agreements and collecting receivables through certain foreign legal systems;                                                                        |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                          |
|   | ● | Foreign customers may have longer payment cycles than customers in the U.S.;                                                                                                  |
|   |    |                                                                                                                                                                          |
|   | ● | Tax rates in certain foreign countries may exceed those in the U.S. and foreign earnings may be subject to withholding requirements, exchange controls or other restrictions; |
|   |    |                                                                                                                                                                          |
|   | ● | General economic and political conditions in countries where we operate may have an adverse effect on our operations;                                                         |
|   |    |                                                                                                                                                                          |
|   | ● | Exposure to risks associated with changes in foreign exchange rates;                                                                                                          |
|   |    |                                                                                                                                                                          |
|   | ● | Difficulties associated with managing a large organization spread throughout various countries;                                                                               |
|   |    |                                                                                                                                                                          |
|   | ● | Difficulties in enforcing intellectual property rights; and                                                                                                              |
|   |    |                                                                                                                                                                          |
|   | ● | Required compliance with a variety of foreign laws and regulations.                                                                                                           |

----

|   | ● | Price and volume fluctuations in the overall stock market from time to time;                                                                                                                                                       |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                               |
|   | ● | Investor demand for our shares;                                                                                                                                                                                                    |
|   |    |                                                                                                                                                                                                                               |
|   | ● | Significant volatility in the market price and trading volume of securities of business development companies or other companies in our sector, which are not necessarily related to the operating performance of these companies; |
|   |    |                                                                                                                                                                                                                               |
|   | ● | Changes in regulatory policies or tax guidelines with respect to regulated investment companies or business development companies;                                                                                                 |
|   |    |                                                                                                                                                                                                                               |
|   | ● | Failure to qualify as a RIC, or the loss of RIC status;                                                                                                                                                                            |
|   |    |                                                                                                                                                                                                                               |
|   | ● | Any shortfall in revenue or net income or any increase in losses from levels expected by investors or securities analysts;                                                                                                         |
|   |    |                                                                                                                                                                                                                               |
|   | ● | Increases or decreases, or expectations about increases or decreases, in our quarterly dividends;                                                                                                                                  |
|   |    |                                                                                                                                                                                                                               |
|   | ● | Changes, or perceived changes, in the value of our portfolio investments;                                                                                                                                                          |
|   |    |                                                                                                                                                                                                                               |
|   | ● | Departures of Keating Investments’ key personnel;                                                                                                                                                                            |
|   |    |                                                                                                                                                                                                                               |
|   | ● | Operating performance of companies comparable to us; or                                                                                                                                                                       |
|   |    |                                                                                                                                                                                                                               |
|   | ● | General economic conditions and trends and other external factors.                                                                                                                                                                 |

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| Item 1B. | Unresolved Staff Comments |
|---------------|---------------------------|

| Item 2. | Properties |
|--------------|------------|

| Item 3. | Legal Proceedings |
|--------------|-------------------|

| Item 4. | Reserved |
|--------------|----------|

----

| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
|--------------|--------------------------------------------------------------------------------------------------------------------|

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----

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| Item 6. | Selected Financial Data |
|--------------|-------------------------|

|                                                          |   |           |       |   |           |   |      | At December 31, 2008 |   |
|---------------------------------------------------------------|--------|----------------|------------|--------|----------------|--------|-----------|----------------------|--------|
|                                                          |   |           |       |   |           |   |      | and for the Period   |   |
|                                                          |   | At and for the |       |   | At and for the |   |      | from May 9, 2008     |   |
|                                                          |   | Year Ended     |       |   | Year Ended     |   |      | (Inception) to       |   |
|                                                          |   | December 31,   |       |   | December 31,   |   |      | December 31,         |   |
|                                                          |   | 2010           |       |   | 2009           |   |      | 2008                 |   |
|                                                          |   |           |       |   |           |   |      |                 |   |
| Statement of Operations Data:                                 |   |           |       |   |           |   |      |                 |   |
| Total investment income                                       |   | $              | 54,009     |   |           | $      | 10,637    |                 |   | $ | 14,005 |   |
| Base management fees                                          |   |           | 218,876    |   |           |   | 90,904    |                 |   |   | 11,990 |   |
| Incentive fees                                                |   |           | 115,423    |   |           |   | -         |                 |   |   | - |   |
| Administrative expenses allocated from Investment Adviser     |   |           | 404,633    |   |           |   | 269,384   |                 |   |   | 28,041 |   |
| Total operating expenses                                      |   |           | 2,031,002  |   |           |   | 1,006,615 |                 |   |   | 542,965 |   |
| Net investment (loss)                                         |   |           | (1,976,993 | )      |           |   | (995,978  | )                    |   |   | (528,960 | ) |
| Net change in unrealized appreciation on investments          |   |           | 577,116    |   |           |   | -         |                 |   |   | - |   |
| Net (decrease) in net assets resulting from operations        |   |           | (1,399,877 | )      |           |   | (995,978  | )                    |   |   | (528,960 | ) |
|                                                          |   |           |       |   |           |   |      |                 |   |   |   |   |
| Per Share Data:                                               |   |           |       |   |           |   |      |                 |   |   |   |   |
| Net asset value per common share                              |   | $              | 7.85       |   |           | $      | 6.53      |                 |   | $ | 8.27 |   |
| Net investment (loss) (1)                                     |   |           | (1.43      | )      |           |   | (1.75     | )                    |   |   | (1.79 | ) |
| Net (decrease) in net assets resulting from operations (1)(2) |   |           | (1.01      | )      |           |   | (1.75     | )                    |   |   | (1.79 | ) |
| Distributions declared                                        |   |           | -          |   |           |   | -         |                 |   |   | - |   |
|                                                          |   |           |       |   |           |   |      |                 |   |   |   |   |
| Balance Sheet Data at Period End:                             |   |           |       |   |           |   |      |                 |   |   |   |   |
| Investments in portfolio company securities at fair value     |   | $              | 4,177,607  |   |           | $      | -         |                 |   | $ | - |   |
| Short-term investments at fair value                          |   |           | 13,500,000 |   |           |   | 3,000,000 |                 |   |   | 4,411,127 |   |
| Cash and cash equivalents                                     |   |           | 4,753,299  |   |           |   | 367,918   |                 |   |   | 367,588 |   |
| Total assets                                                  |   |           | 22,856,713 |   |           |   | 3,903,387 |                 |   |   | 4,810,163 |   |
| Total liabilities                                             |   |           | 400,313    |   |           |   | 183,891   |                 |   |   | 94,689 |   |
| Net assets                                                    |   |           | 22,456,400 |   |           |   | 3,719,496 |                 |   |   | 4,715,474 |   |
| Common shares outstanding                                     |   |           | 2,860,299  |   |           |   | 569,900   |                 |   |   | 569,900 |   |

| (1)  | Per share amounts are calculated using weighted average shares outstanding during the period.                                                                                                                                                  |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)       | Net decrease in net assets resulting from operations during the year ended December 31, 2010 includes a net increase in unrealized appreciation on investments of $577,116, or $0.42 per weighted average share outstanding during the period. |

| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|--------------|---------------------------------------------------------------------------------------------|

|          | ● | Our future operating results; |
|--------------------------------------------------|---------|-------------------------------|

|          | ● | Our business prospects and the prospects of our portfolio companies; |
|--------------------------------------------------|---------|----------------------------------------------------------------------|

|          | ● | The impact of the investments that we expect to make; |
|--------------------------------------------------|---------|-------------------------------------------------------|

|          | ● | The ability of our portfolio companies to achieve their objectives; |
|--------------------------------------------------|---------|---------------------------------------------------------------------|

----

|          | ● | Our expected financings and investments; |
|--------------------------------------------------|---------|------------------------------------------|

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

|          | ● | The timing of cash flows, if any, from the operations of our portfolio companies. |
|--------------------------------------------------|---------|-----------------------------------------------------------------------------------|

|          | ● | Changes in the economy; |
|--------------------------------------------------|---------|-------------------------|

|          | ● | Future changes in laws or regulations and conditions in our operating areas; and |
|--------------------------------------------------|---------|----------------------------------------------------------------------------------|

|          | ● | An inability to access the equity markets which could impair our investment activities. |
|--------------------------------------------------|---------|-----------------------------------------------------------------------------------------|

----

|                                |   |   |      |   |       |   |      | Percentage of     |   |   |          |   |
|-------------------------------------|--------|--------|-----------|--------|------------|--------|-----------|-------------------|--------|--------|---------------|--------|
|                                |   |   |      |   |       |   |      | Portfolio Company |   |   | Percentage of |   |
|                                |   |   |      |   |       |   |      | Investments       |   |   | Net Assets    |   |
|                                |   | Cost   |      |   | Fair Value |   |      | At Fair Value     |   |   | At Fair Value |   |
|                                |   |   |      |   |       |   |      |              |   |   |          |   |
| As of December 31, 2010             |   |   |      |   |       |   |      |              |   |   |          |   |
| Private Portfolio Companies:        |   |   |      |   |       |   |      |              |   |   |          |   |
| NeoPhotonics Corporation            |   | $      | 1,000,000 |   |       | $      | 1,550,000 |              |   |   | 37.10         | %      |   |   | 6.90 | % |
| Livescribe, Inc.                    |   |   | 500,500   |   |       |   | 527,616   |              |   |   | 12.63         | %      |   |   | 2.35 | % |
| Solazyme, Inc.                      |   |   | 999,991   |   |       |   | 999,991   |              |   |   | 23.94         | %      |   |   | 4.45 | % |
| MBA Polymers, Inc.                  |   |   | 1,100,000 |   |       |   | 1,100,000 |              |   |   | 26.33         | %      |   |   | 4.90 | % |
|                                |   |   |      |   |       |   |      |              |   |   |          |   |   |   |   |   |
| Total - Private Portfolio Companies |   | $      | 3,600,491 |   |       | $      | 4,177,607 |              |   |   | 100.00        | %      |   |   | 18.60 | % |

----

|                                |   |   |      |   |       |   |      | Percentage of     |   |   |          |   |
|-------------------------------------|--------|--------|-----------|--------|------------|--------|-----------|-------------------|--------|--------|---------------|--------|
|                                |   |   |      |   |       |   |      | Portfolio Company |   |   | Percentage of |   |
|                                |   |   |      |   |       |   |      | Investments       |   |   | Net Assets    |   |
|                                |   | Cost   |      |   | Fair Value |   |      | At Fair Value     |   |   | At Fair Value |   |
|                                |   |   |      |   |       |   |      |              |   |   |          |   |
| As of December 31, 2010             |   |   |      |   |       |   |      |              |   |   |          |   |
| Private Portfolio Companies:        |   |   |      |   |       |   |      |              |   |   |          |   |
| Technology Equipment                |   | $      | 1,000,000 |   |       | $      | 1,550,000 |              |   |   | 37.10         | %      |   |   | 6.90 | % |
| Consumer Products                   |   |   | 500,500   |   |       |   | 527,616   |              |   |   | 12.63         | %      |   |   | 2.35 | % |
| Clean Technology                    |   |   | 2,099,991 |   |       |   | 2,099,991 |              |   |   | 50.27         | %      |   |   | 9.35 | % |
|                                |   |   |      |   |       |   |      |              |   |   |          |   |   |   |   |   |
| Total - Private Portfolio Companies |   | $      | 3,600,491 |   |       | $      | 4,177,607 |              |   |   | 100.00        | %      |   |   | 18.60 | % |

|                    |   |   |   |      |   |       |   |      | Percentage of     |   |   |          |   |
|-------------------------|--------|--------|--------|-----------|--------|------------|--------|-----------|-------------------|--------|--------|---------------|--------|
|                    |   |   |   |      |   |       |   |      | Portfolio Company |   |   | Percentage of |   |
|                    |   |   |   |      |   |       |   |      | Investments       |   |   | Net Assets    |   |
| Geographic Location     |   |   | Cost   |      |   | Fair Value |   |      | At Fair Value     |   |   | At Fair Value |   |
|                    |   |   |   |      |   |       |   |      |              |   |   |          |   |
| As of December 31, 2010 |   |   |   |      |   |       |   |      |              |   |   |          |   |
| West                    |   |   | $      | 3,600,491 |   |       | $      | 4,177,607 |              |   |   | 100.00        | %      |   |   | 18.60 | % |
|                    |   |   |   |      |   |       |   |      |              |   |   |          |   |   |   |   |   |
| Total                   |   |   | $      | 3,600,491 |   |       | $      | 4,177,607 |              |   |   | 100.00        | %      |   |   | 18.60 | % |

----

| ● | Costs of calculating our net asset value, including the cost of any third-party valuation services; |
|---------|-----------------------------------------------------------------------------------------------------|
|    |                                                                                                |
| ● | Costs of effecting sales and repurchases of shares of our common stock and other securities;        |

----

| ● | Fees payable to third parties relating to, or associated with, making investments, including fees and expenses associated with performing due diligence reviews of prospective investments;                                                                                                                                                                                                                                                                                                                                                                        |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | Costs related to organization and offerings;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | Transfer agent and custodial fees;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | Fees and expenses associated with marketing efforts;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | Federal and state registration fees;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | Any stock exchange listing fees;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | Applicable federal, state and local taxes;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | Independent directors’ fees and expenses;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | Brokerage commissions;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | Costs of proxy statements, stockholders’ reports and notices;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | Fidelity bond, directors and officers/errors and omissions liability insurance and other insurance premiums;                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | Direct costs such as printing, mailing, and long distance telephone;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | Fees and expenses associated with independent audits and outside legal costs;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | Costs associated with our reporting and compliance obligations under the 1940 Act, Sarbanes-Oxley Act, and applicable federal and state securities laws; and                                                                                                                                                                                                                                                                                                                                                                                                  |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | All other expenses incurred by either Keating Investments or us in connection with administering our business, including payments under the Investment Advisory and Administrative Services Agreement that will be based upon our allocable portion of overhead and other expenses incurred by Keating Investments in performing its obligations under the Investment Advisory and Administrative Services Agreement, including our allocable portion of the compensation of our Chief Financial Officer and Chief Compliance Officer, and their respective staff. |

----

|                                                      |   | Years Ended  |      |   |         |   |
|-----------------------------------------------------------|--------|--------------|-----------|--------|--------------|--------|
|                                                      |   | December 31, |      |   | December 31, |   |   |   |   |
|                                                      |   | 2010         |      |   | 2009         |   |   | Increase |   |
| Operating Expenses                                        |   |         |      |   |         |   |   |   |   |
| Base management fees                                      |   | $            | 218,876   |   |         | $      | 90,904 |   |   | $ | 127,972 |   |
| Incentive fees                                            |   |         | 115,423   |   |         |   | - |   |   |   | 115,423 |   |
| Administrative expenses allocated from Investment Adviser |   |         | 404,633   |   |         |   | 269,384 |   |   |   | 135,249 |   |
| Legal and professional fees                               |   |         | 335,839   |   |         |   | 254,572 |   |   |   | 81,267 |   |
| Directors' fees                                           |   |         | 108,000   |   |         |   | 99,000 |   |   |   | 9,000 |   |
| Stock transfer agent fees                                 |   |         | 192,306   |   |         |   | 133,554 |   |   |   | 58,752 |   |
| Printing and fulfillment expenses                         |   |         | 108,192   |   |         |   | 25,501 |   |   |   | 82,691 |   |
| Postage and delivery expenses                             |   |         | 98,907    |   |         |   | 16,908 |   |   |   | 81,999 |   |
| Stock issuance expenses                                   |   |         | 156,941   |   |         |   | - |   |   |   | 156,941 |   |
| General and administrative expenses                       |   |         | 291,885   |   |         |   | 116,792 |   |   |   | 175,093 |   |
|                                                      |   |         |      |   |         |   |   |   |   |   |   |   |
| Total Operating Expenses                                  |   | $            | 2,031,002 |   |         | $      | 1,006,615 |   |   | $ | 1,024,387 |   |

| ● | The increase of $127,972 in base management fees for the year ended December 31, 2010 compared to the year ended December 31, 2009 was the result of an increase in total assets on which the base management fee is calculated.  The increase in our total assets was primarily the result of net proceeds received from the sale of common stock in our continuous public offering.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| ● | The increase of $115,423 in incentive fees for the year ended December 31, 2010 compared to the year ended December 31, 2009 was the result of recording an incentive fee payable to our investment adviser on the unrealized appreciation of our NeoPhotonics and Livescribe portfolio company investments as of December 31, 2010, while we held no portfolio company investments with unrealized appreciation as of December 31, 2009.  The incentive fee is payable in arrears as of the end of each calendar year and equals 20% of our realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fees. While we generated no realized capital gains on our portfolio company investments during 2009 or 2010 and were not required to pay an incentive fee for 2010, we accrued an incentive fee of $115,423 as of December 31, 2010 with respect to $577,116 of net unrealized appreciation as of such date.  Since the incentive fee is only payable based on realized capital gains (after reduction for realized capital losses and unrealized depreciation), this accrued incentive fee of $115,423 may differ from the actual incentive fee that may be paid to Keating Investments depending on whether the Company is ultimately able to dispose of its portfolio company investments and generate a net realized capital gain at least commensurate with the unrealized appreciation recorded as of December 31, 2010. |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| ● | The increase of $135,249 in administrative expenses allocated from our investment adviser for the year ended December 31, 2010 compared to the year ended December 31, 2009 was primarily the result of: (i) the allocation to us of additional expenses associated with the management, coordination and administration of outreach activities designed to widen distribution of our shares in our continuous public offering, which expenses are expected to decline in conjunction with the conclusion of our continuous public offering on June 30, 2011, and (ii) the allocation to us of additional expenses associated with the management and implementation of our stockholder communications, investor relations and brand marketing initiatives.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| ● | The increase of $81,267 in legal and professional fees for the for the year ended December 31, 2010 compared to the year ended December 31, 2009 was primarily the result of: (i) an increase in audit and audit related expenses associated with the audit of our December 31, 2009 financial statements and reviews of our March 31, 2010, June 30, 2010 and September 30, 2010 financial statements, (ii) one-time professional fees for the enhancement and redesign of our Web site as we continue to implement our brand marketing strategy in anticipation of an expected listing of our shares by the end of 2011, (iii), fees paid to a third-party consulting firm engaged to assist us in documenting and testing our internal controls over financial reporting, and (iv) fees paid to a third-party valuation firm engaged to review preliminary portfolio company investment valuations prepared by the senior investment professionals of our investment adviser.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

----

| ● | The increase of $58,752 in stock transfer agent fees for the year ended December 31, 2010 compared to the year ended December 31, 2009 was primarily related to stock transfer agent fees for our continuous public offering being incurred for an entire 12 month period during 2010 while stock transfer agent fees were not incurred during 2009 until June 2009 when our continuous public offering commenced.                                                                                                                                                                                                                                                                                                                                                                                        |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ● | The increase of $82,691 in printing and fulfillment expenses for the year ended December 31, 2010 compared to the year ended December 31, 2009 was the result of: (i) an increase in the printing and production volume of periodic reports to our increasing stockholder base as required by state securities laws, (ii) an increase in the printing and production volume of other marketing and informational materials used in our investment origination activities, and (iii) an increase in fulfillment expenses related to inventory management and assembly of investor and broker-dealer kits and other marketing materials associated with our continuous public offering, which expenses are expected to decline following the conclusion of our continuous public offering on June 30, 2011. |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ● | The increase of $81,999 in postage and delivery expenses for the year ended December 31, 2010 compared to the year ended December 31, 2009 was primarily the result of an increase in the volume of kits and other marketing materials mailed to investors and broker-dealers in conjunction with our continuous public offering, which expenses are expected to decline following conclusion of our continuous public offering on June 30, 2011.                                                                                                                                                                                                                                                                                                                                                         |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ● | The increase of $156,941 in stock issuance expenses for year ended December 31, 2010 compared to the year ended December 31, 2009 was the result of expensing stock issuance costs associated with maintaining the registration of our continuous public offering (i.e., legal, accounting, printing and blue sky expenses), which expenses had, prior to the first closing under our continuous public offering, been capitalized as deferred offering costs and which are amortized as a reduction to paid-in capital ratably over the remaining term of the offering.                                                                                                                                                                                                                                  |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ● | The increase of $175,093 in general and administrative expenses for the year ended December 31, 2010 compared to the year ended December 31, 2009 was primarily the result of: (i) an increase in travel and travel-related expenses directly related to our outreach activities designed to widen distribution of our shares in our continuous public offering, which expenses are expected to decline following conclusion of our continuous public offering on June 30, 2011, (ii) an increase in database and information service subscription expenses, and (iii) an increase in expenses associated with attending seminars and conferences resulting from our brand marketing initiatives.                                                                                                         |

|                                                      |   |         |      |   | Period from    |   |    |       |   |
|-----------------------------------------------------------|--------|--------------|-----------|--------|----------------|--------|---------|------------|--------|
|                                                      |   |         |      |   | May 9, 2008    |   |    |       |   |
|                                                      |   | Year Ended   |      |   | (Inception) to |   |    |       |   |
|                                                      |   | December 31, |      |   | December 31,   |   |    | Increase   |   |
|                                                      |   | 2009         |      |   | 2008           |   |    | (Decrease) |   |
| Operating Expenses                                        |   |         |      |   |           |   |    |       |   |
| Base management fees                                      |   | $            | 90,904    |   |           | $      | 11,990  |       |   | $ | 78,914 |   |
| Administrative expenses allocated from Investment Adviser |   |         | 269,384   |   |           |   | 28,041  |       |   |   | 241,343 |   |
| Legal and professional fees                               |   |         | 254,572   |   |           |   | 359,328 |       |   |   | (104,756 | ) |
| Directors' fees                                           |   |         | 99,000    |   |           |   | 53,189  |       |   |   | 45,811 |   |
| Stock transfer agent fees                                 |   |         | 133,554   |   |           |   | 1,092   |       |   |   | 132,462 |   |
| Printing and fulfillment expenses                         |   |         | 25,501    |   |           |   | 19,187  |       |   |   | 6,314 |   |
| Postage and delivery expenses                             |   |         | 16,908    |   |           |   | 10,501  |       |   |   | 6,407 |   |
| General and administrative expenses                       |   |         | 116,792   |   |           |   | 59,637  |       |   |   | 57,155 |   |
|                                                      |   |         |      |   |           |   |    |       |   |   |   |   |
| Total Operating Expenses                                  |   | $            | 1,006,615 |   |           | $      | 542,965 |       |   | $ | 463,650 |   |

| ● | The increase of $78,914 in base management fees for the year ended December 31, 2009 compared to the period from May 9, 2008 (Inception) to December 31, 2008 was the result of the base management fee incurred for an entire 12 month period during 2009 based on total assets during this period, while the base management fee was only incurred for the period from November 13, 2008 to December 31, 2008 during the period from May 9, 2008 (Inception) to December 31, 2008. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ● | The increase of $241,343 in administrative expenses allocated from our investment adviser for the year ended December 31, 2009 compared to the period from May 9, 2008 (Inception) to December 31, 2008 was the result of such expenses being allocated to us from Keating Investments for an entire 12 month period during 2009, while such expenses were only allocated to us from Keating Investments for the period from November 13, 2008 to December 31, 2008 during the period from May 9, 2008 (Inception) to December 31, 2008.                                                                                                                                                                                |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ● | The decrease of $104,756 in legal and professional fees for the year ended December 31, 2009 compared to the period from May 9, 2008 (Inception) to December 31, 2008 was primarily the result of a significant portion legal fees incurred during the year ended December 31, 2009 being classified as deferred offering costs related to the preparation and filing of the registration statement for our continuous public offering while the majority of legal and other professional fees we incurred in the period from May 9, 2008 (Inception) to December 31, 2008 related to our initial organization and formation as a business development company were expensed as incurred.                               |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ● | The increase of $45,811 in directors’ fees for the year ended December 31, 2009 compared to the period from May 9, 2008 (Inception) to December 31, 2008 was the result of directors’ fees being incurred for an entire 12 month period during 2009, while directors’ fees were only incurred from June 1, 2008 to December 31, 2008 during the period from May 9, 2008 (Inception) to December 31, 2008.                                                                                                                                                                                                                                                                                             |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ● | The increase of $132,462 in stock transfer agent fees for the year ended December 31, 2009 compared to the period from May 9, 2008 (Inception) to December 31, 2008 was the result of initial set-up and recurring stock transfer agent fees being incurred during 2009 commencing with our continuous public offering in June 2009, while only minor, administrative-related stock transfer agent fees were incurred during the period from May 9, 2008 (Inception) to December 31, 2008.                                                                                                                                                                                                                              |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ● | The increase of $57,155 in general and administrative expenses for the year ended December 31, 2009 compared to the period from May 9, 2008 (Inception) to December 31, 2008 was primarily the result of: (i) directors and officers insurance expenses being incurred for an entire 12 month period during 2009, while such expenses were only incurred from September 1, 2008 to December 31, 2008 during the period from May 9, 2008 (Inception) to December 31, 2008, and (ii) travel related expenses being incurred for an entire 12 month period during 2009, while such expenses were only incurred from June 1, 2008 to December 31, 2008 during the period from May 9, 2008 (Inception) to December 31, 2008. |

----

|                         |   |     |      |   |          |   |   |     |   |   | Dealer Manager |   |   |     |      |
|------------------------------|--------|----------|-----------|--------|---------------|--------|--------|----------|--------|--------|----------------|--------|--------|----------|-----------|
|                         |   | Shares   |      |   | Average Price |   |   | Gross    |   |   | Fees and       |   |   | Net      |      |
| Month                        |   | Sold (1) |      |   | Per Share (1) |   |   | Proceeds |   |   | Commissions    |   |   | Proceeds |      |
|                         |   |     |      |   |          |   |   |     |   |   |           |   |   |     |      |
| January 2010 (first closing) |   |     | 114,695   |   |          | $      | 10.00  |     |   | $      | 1,146,500      |   |   | $        | 114,243   |   |   | $ | 1,032,257 |   |
| February 2010                |   |     | 54,638    |   |          |   | 9.99   |     |   |   | 546,000        |   |   |     | 54,261    |   |   |   | 491,739 |   |
| March 2010                   |   |     | 175,283   |   |          |   | 9.98   |     |   |   | 1,749,436      |   |   |     | 171,896   |   |   |   | 1,577,540 |   |
| April 2010                   |   |     | 151,554   |   |          |   | 9.84   |     |   |   | 1,491,050      |   |   |     | 127,062   |   |   |   | 1,363,988 |   |
| June 2010                    |   |     | 233,277   |   |          |   | 9.98   |     |   |   | 2,327,331      |   |   |     | 227,840   |   |   |   | 2,099,491 |   |
| July 2010                    |   |     | 113,780   |   |          |   | 9.99   |     |   |   | 1,136,483      |   |   |     | 112,457   |   |   |   | 1,024,026 |   |
| August 2010                  |   |     | 203,128   |   |          |   | 9.99   |     |   |   | 2,028,643      |   |   |     | 200,493   |   |   |   | 1,828,150 |   |
| September 2010               |   |     | 146,716   |   |          |   | 9.95   |     |   |   | 1,459,215      |   |   |     | 138,771   |   |   |   | 1,320,444 |   |
| October 2010                 |   |     | 249,310   |   |          |   | 9.96   |     |   |   | 2,482,410      |   |   |     | 238,622   |   |   |   | 2,243,788 |   |
| November 2010                |   |     | 371,395   |   |          |   | 9.96   |     |   |   | 3,697,520      |   |   |     | 354,967   |   |   |   | 3,342,553 |   |
| December 2010                |   |     | 476,623   |   |          |   | 9.96   |     |   |   | 4,745,065      |   |   |     | 455,454   |   |   |   | 4,289,611 |   |
| January 2011                 |   |     | 315,143   |   |          |   | 9.97   |     |   |   | 3,141,484      |   |   |     | 305,195   |   |   |   | 2,836,289 |   |
| February 2011                |   |     | 536,034   |   |          |   | 9.94   |     |   |   | 5,328,486      |   |   |     | 504,176   |   |   |   | 4,824,310 |   |
|                         |   |     |      |   |          |   |   |     |   |   |           |   |   |     |      |   |   |   |   |   |
|                         |   |     | 3,141,576 |   |          | $      | 9.96   |     |   | $      | 31,279,623     |   |   | $        | 3,005,437 |   |   | $ | 28,274,186 |   |

| (1)    | All shares were sold at a price of either $9.30 or $10.00, depending on whether or not sales commissions were waived by |
|--------|-------------------------------------------------------------------------------------------------------------------------|
|   | the dealer manager.                                                                                                     |

----

| ●                                                                                                               | On January 25, 2010, we completed a $1 million investment in the convertible preferred stock of NeoPhotonics.                                                   |
|-----------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                  |                                                                                                                                                            |
| ●                                                                                                               | On July 1, 2010, we completed a $500,500 investment in the convertible preferred stock and warrants of Livescribe.                                              |
|                                                                                                                  |                                                                                                                                                            |
| ●                                                                                                               | On July 16, 2010, we completed a $999,991 investment in the convertible preferred stock of Solazyme.                                                            |
|                                                                                                                  |                                                                                                                                                            |
| ·                                                                                                                | On October 15, 2010, we completed a $1,100,000 investment in the convertible preferred stock of MBA Polymers.                                                   |
|                                                                                                                  |                                                                                                                                                            |
| During 2011 through the date of this annual report on Form 10-K, we made the following portfolio company investments; |
|                                                                                                                  |                                                                                                                                                            |
| ●                                                                                                               | On February 22, 2011, we made an additional investment of $900,000 in MBA Polymers in the same series of convertible preferred stock as our initial investment. |

----

|          |   |     |    |   |          |   |   |     |   |   | Dealer Manager |   |   |     |    |
|---------------|--------|----------|---------|--------|---------------|--------|--------|----------|--------|--------|----------------|--------|--------|----------|---------|
|          |   | Shares   |    |   | Average Price |   |   | Gross    |   |   | Fees and       |   |   | Net      |    |
| Month         |   | Sold (1) |    |   | Per Share (1) |   |   | Proceeds |   |   | Commissions    |   |   | Proceeds |    |
|          |   |     |    |   |          |   |   |     |   |   |           |   |   |     |    |
| January 2011  |   |     | 315,143 |   |          |   | 9.97   |     |   |   | 3,141,484      |   |   |     | 305,195 |   |   |   | 2,836,289 |   |
| February 2011 |   |     | 536,034 |   |          |   | 9.94   |     |   |   | 5,328,486      |   |   |     | 504,176 |   |   |   | 4,824,310 |   |
|          |   |     |    |   |          |   |   |     |   |   |           |   |   |     |    |   |   |   |   |   |
|          |   |     | 851,177 |   |          | $      | 9.95   |     |   | $      | 8,469,970      |   |   | $        | 809,371 |   |   | $ | 7,660,599 |   |

| (1)    | All shares were sold at a price of either $9.30 or $10.00, depending on whether or not sales commissions were waived by |
|--------|-------------------------------------------------------------------------------------------------------------------------|
|   | the dealer manager.                                                                                                     |

----

----

| ● | Level 1:  Observable inputs such as unadjusted quoted prices in active markets;                                                                                                  |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                       |
| ● | Level 2: Includes inputs such as quoted prices for similar securities in active markets and quoted prices for identical securities where there is little or no activity in the market; and |

| ● | Level 3: Unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------|

----

| ● | Our quarterly valuation process begins with each portfolio company or investment being initially valued by Keating Investments’ senior investment professionals responsible for the portfolio investment;                                                                                                                                                                           |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                      |
| ● | A nationally recognized third-party valuation firm engaged by our Board of Directors reviews these preliminary valuations at such times as determined by the Company’s Board of Directors, but in all cases a review will be conducted by the third-party valuation firm for each new portfolio company investment made during a calendar quarter and at least annually thereafter; |
|    |                                                                                                                                                                                                                                                                                                                                                                                      |
| ● | Our Valuation Committee reviews the preliminary valuations, and our investment adviser and the nationally recognized third-party valuation firm respond and supplement the preliminary valuation to reflect any comments provided by the Valuation Committee; and                                                                                                                    |
|    |                                                                                                                                                                                                                                                                                                                                                                                      |
| ● | Our Board of Directors discusses the valuations and determines, in good faith, the fair value of each investment in our portfolio for which market quotations are not readily available based on the input of our investment adviser, the nationally recognized third-party valuation firm, and our Valuation Committee.                                                                  |

----

Item 7A.

----

Item 8.

----

| Financial Statements                                                                                                                                         |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                         |   |
| Report of Independent Registered Public Accounting Firm                                                                                                      | 78     |
|                                                                                                                                                         |   |
| Statements of Assets and Liabilities as of December 31, 2010 and December 31, 2009                                                                           | 79     |
|                                                                                                                                                         |   |
| Statements of Operations for the years ended December 31, 2010 and 2009 and for the period from May 9, 2008 (Inception) to December 31, 2008       | 80     |
|                                                                                                                                                         |   |
| Statements of Changes in Net Assets for the years ended December 31, 2010 and 2009 and for the period from May 9, 2008 (Inception) to December 31, 2008 | 81     |
|                                                                                                                                                         |   |
| Statements of Cash Flows for the years ended December 31, 2010 and 2009 and for the period from May 9, 2008 (Inception) to December 31, 2008       | 82     |
|                                                                                                                                                         |   |
| Schedule of Investments as of December 31, 2010                                                                                                              | 83     |
|                                                                                                                                                         |   |
| Schedule of Investments as of December 31, 2009                                                                                                              | 84     |
|                                                                                                                                                         |   |
| Financial Highlights for the years ended December 31, 2010 and 2009 and for the period from May 9, 2008 (Inception) to December 31, 2008           | 85     |
|                                                                                                                                                         |   |
| Notes to Financial Statements                                                                                                                                | 86     |

----

----

----

|                                                                           |   | December 31, |       |   | December 31, |   |
|--------------------------------------------------------------------------------|--------|--------------|------------|--------|--------------|--------|
|                                                                           |   | 2010         |       |   | 2009         |   |
|                                                                           |   |         |       |   |         |   |
| Assets                                                                         |   |         |       |   |         |   |
| Investments in portfolio company securities at fair value:                     |   |         |       |   |         |   |
| Non-control/non-affiliate investments                                          |   |         |       |   |         |   |
| (cost: $3,600,491 at December 31, 2010)                                        |   | $            | 4,177,607  |   |         | $      | - |   |
| Short-term investments at fair value                                           |   |         |       |   |         |   |   |   |
| (cost: $13,500,000 and $3,000,000 at December 31, 2010 and 2009, respectively) |   |         | 13,500,000 |   |         |   | 3,000,000 |   |
| Cash and cash equivalents                                                      |   |         | 4,753,299  |   |         |   | 367,918 |   |
| Prepaid expenses and other assets                                              |   |         | 92,125     |   |         |   | 33,572 |   |
| Deferred offering costs                                                        |   |         | 333,682    |   |         |   | 501,897 |   |
|                                                                           |   |         |       |   |         |   |   |   |
| Total Assets                                                                   |   |         | 22,856,713 |   |         |   | 3,903,387 |   |
|                                                                           |   |         |       |   |         |   |   |   |
| Liabilities                                                                    |   |         |       |   |         |   |   |   |
| Base management fees payable to Investment Adviser                             |   |         | 90,631     |   |         |   | 29,468 |   |
| Incentive fees payable to Investment Adviser                                   |   |         | 115,423    |   |         |   | - |   |
| Administrative expenses payable to Investment Adviser                          |   |         | 41,348     |   |         |   | 67,136 |   |
| Reimbursable expenses payable to Investment Adviser                            |   |         | 3,068      |   |         |   | 18,063 |   |
| Accounts payable                                                               |   |         | 80,275     |   |         |   | 32,113 |   |
| Accrued expenses and other liabilities                                         |   |         | 69,568     |   |         |   | 37,111 |   |
|                                                                           |   |         |       |   |         |   |   |   |
| Total Liabilities                                                              |   |         | 400,313    |   |         |   | 183,891 |   |
|                                                                           |   |         |       |   |         |   |   |   |
| Net Assets                                                                     |   | $            | 22,456,400 |   |         | $      | 3,719,496 |   |
|                                                                           |   |         |       |   |         |   |   |   |
| Components of Net Assets:                                                      |   |         |       |   |         |   |   |   |
| Common stock, $0.001 par value; 200,000,000 shares authorized;                 |   |         |       |   |         |   |   |   |
| 2,860,299 and 569,900 shares issued and outstanding as of                      |   |         |       |   |         |   |   |   |
| December 31, 2010 and 2009, respectively                                       |   | $            | 2,860      |   |         | $      | 570 |   |
| Additional paid-in capital                                                     |   |         | 25,378,355 |   |         |   | 5,243,864 |   |
| Accumulated undistributed net investment loss                                  |   |         | (3,501,931 | )      |         |   | (1,524,938 | ) |
| Net unrealized appreciation on investments                                     |   |         | 577,116    |   |         |   | - |   |
|                                                                           |   |         |       |   |         |   |   |   |
| Net Assets                                                                     |   | $            | 22,456,400 |   |         | $      | 3,719,496 |   |
|                                                                           |   |         |       |   |         |   |   |   |
| Common Shares Outstanding                                                      |   |         | 2,860,299  |   |         |   | 569,900 |   |
|                                                                           |   |         |       |   |         |   |   |   |
| Net Asset Value Per Outstanding Common Share                                   |   | $            | 7.85       |   |         | $      | 6.53 |   |

----

----

|                                                      |   |         |       |   |           |   |      | Period from  |   |
|-----------------------------------------------------------|--------|--------------|------------|--------|----------------|--------|-----------|--------------|--------|
|                                                      |   |         |       |   |           |   |      | May 9, 2008  |   |
|                                                      |   | Years Ended  |       |   | (Inception) to |   |
|                                                      |   | December 31, |       |   | December 31,   |   |      | December 31, |   |
|                                                      |   | 2010         |       |   | 2009           |   |      | 2008         |   |
|                                                      |   |         |       |   |           |   |      |         |   |
| Investment Income                                         |   |         |       |   |           |   |      |         |   |
| Interest and dividend income:                             |   |         |       |   |           |   |      |         |   |
| Certificate of deposit and money market investments       |   | $            | 44,009     |   |           | $      | 10,637    |         |   | $ | 14,005 |   |
| Other income                                              |   |         | 10,000     |   |           |   | -         |         |   |   | - |   |
|                                                      |   |         |       |   |           |   |      |         |   |   |   |   |
| Total Investment Income                                   |   |         | 54,009     |   |           |   | 10,637    |         |   |   | 14,005 |   |
|                                                      |   |         |       |   |           |   |      |         |   |   |   |   |
| Operating Expenses                                        |   |         |       |   |           |   |      |         |   |   |   |   |
| Base management fees                                      |   |         | 218,876    |   |           |   | 90,904    |         |   |   | 11,990 |   |
| Incentive fees                                            |   |         | 115,423    |   |           |   | -         |         |   |   | - |   |
| Administrative expenses allocated from Investment Adviser |   |         | 404,633    |   |           |   | 269,384   |         |   |   | 28,041 |   |
| Legal and professional fees                               |   |         | 335,839    |   |           |   | 254,572   |         |   |   | 359,328 |   |
| Directors' fees                                           |   |         | 108,000    |   |           |   | 99,000    |         |   |   | 53,189 |   |
| Stock transfer agent fees                                 |   |         | 192,306    |   |           |   | 133,554   |         |   |   | 1,092 |   |
| Printing and fulfillment expenses                         |   |         | 108,192    |   |           |   | 25,501    |         |   |   | 19,187 |   |
| Postage and delivery expenses                             |   |         | 98,907     |   |           |   | 16,908    |         |   |   | 10,501 |   |
| Stock issuance expenses                                   |   |         | 156,941    |   |           |   | -         |         |   |   | - |   |
| General and administrative expenses                       |   |         | 291,885    |   |           |   | 116,792   |         |   |   | 59,637 |   |
|                                                      |   |         |       |   |           |   |      |         |   |   |   |   |
| Total Operating Expenses                                  |   |         | 2,031,002  |   |           |   | 1,006,615 |         |   |   | 542,965 |   |
|                                                      |   |         |       |   |           |   |      |         |   |   |   |   |
| Net Investment Loss                                       |   |         | (1,976,993 | )      |           |   | (995,978  | )            |   |   | (528,960 | ) |
|                                                      |   |         |       |   |           |   |      |         |   |   |   |   |
| Net Change in Unrealized Appreciation on Investments      |   |         |       |   |           |   |      |         |   |   |   |   |
| Non-control/non-affiliate investments                     |   |         | 577,116    |   |           |   | -         |         |   |   | - |   |
|                                                      |   |         |       |   |           |   |      |         |   |   |   |   |
| Net Change in Unrealized Appreciation On Investments      |   |         | 577,116    |   |           |   | -         |         |   |   | - |   |
|                                                      |   |         |       |   |           |   |      |         |   |   |   |   |
| Net Decrease in Net Assets Resulting From Operations      |   | $            | (1,399,877 | )      |           | $      | (995,978  | )            |   | $ | (528,960 | ) |
|                                                      |   |         |       |   |           |   |      |         |   |   |   |   |
| Net Decrease in Net Assets Resulting from Operations      |   |         |       |   |           |   |      |         |   |   |   |   |
| Per Common Share                                          |   | $            | (1.01      | )      |           | $      | (1.75     | )            |   | $ | (1.79 | ) |
|                                                      |   |         |       |   |           |   |      |         |   |   |   |   |
| Weighted Average Number of Common Shares Outstanding:     |   |         |       |   |           |   |      |         |   |   |   |   |
| Basic and Diluted                                         |   |         | 1,383,537  |   |           |   | 569,900   |         |   |   | 294,824 |   |

----

----

|                                                        |   |         |       |   |           |   |      | Period from  |   |
|-------------------------------------------------------------|--------|--------------|------------|--------|----------------|--------|-----------|--------------|--------|
|                                                        |   |         |       |   |           |   |      | May 9, 2008  |   |
|                                                        |   | Years Ended  |       |   | (Inception) to |   |
|                                                        |   | December 31, |       |   | December 31,   |   |      | December 31, |   |
|                                                        |   | 2010         |       |   | 2009           |   |      | 2008         |   |
|                                                        |   |         |       |   |           |   |      |         |   |
| Changes in Net Assets from Operations                       |   |         |       |   |           |   |      |         |   |
| Net investment loss                                         |   | $            | (1,976,993 | )      |           | $      | (995,978  | )            |   | $ | (528,960 | ) |
| Net change in unrealized appreciation on investments        |   |         | 577,116    |   |           |   | -         |         |   |   | - |   |
|                                                        |   |         |       |   |           |   |      |         |   |   |   |   |
| Net Decrease in Net Assets Resulting from Operations        |   |         | (1,399,877 | )      |           |   | (995,978  | )            |   |   | (528,960 | ) |
|                                                        |   |         |       |   |           |   |      |         |   |   |   |   |
| Changes in Net Assets from Capital Stock Transactions       |   |         |       |   |           |   |      |         |   |   |   |   |
| Issuance of common stock in private offering:               |   |         |       |   |           |   |      |         |   |   |   |   |
| 569,900 shares at $10.00 per share:                         |   |         | -          |   |           |   | -         |         |   |   | 5,699,000 |   |
| Issuance of common stock in continuous public offering:     |   |         |       |   |           |   |      |         |   |   |   |   |
| 2,290,399 shares at an average price of $9.96 per share (1) |   |         | 22,809,653 |   |           |   | -         |         |   |   | - |   |
| Offering costs from issuance of common stock                |   |         | (2,196,066 | )      |           |   | -         |         |   |   | (454,566 | ) |
| Amortization of deferred offering costs                     |   |         | (476,806   | )      |           |   | -         |         |   |   | - |   |
|                                                        |   |         |       |   |           |   |      |         |   |   |   |   |
| Net Increase in Net Assets Resulting From                   |   |         |       |   |           |   |      |         |   |   |   |   |
| Capital Stock Transactions                                  |   |         | 20,136,781 |   |           |   | -         |         |   |   | 5,244,434 |   |
|                                                        |   |         |       |   |           |   |      |         |   |   |   |   |
| Net Increase (Decrease) in Net Assets                       |   |         | 18,736,904 |   |           |   | (995,978  | )            |   |   | 4,715,474 |   |
|                                                        |   |         |       |   |           |   |      |         |   |   |   |   |
| Net assets at beginning of period                           |   |         | 3,719,496  |   |           |   | 4,715,474 |         |   |   | - |   |
|                                                        |   |         |       |   |           |   |      |         |   |   |   |   |
| Net Assets at End of Period (2)                             |   | $            | 22,456,400 |   |           | $      | 3,719,496 |         |   | $ | 4,715,474 |   |

| (1)    | All shares were sold at a price of either $9.30 or $10.00, depending on whether or not sales commissions were waived |
|--------|----------------------------------------------------------------------------------------------------------------------|
|   | by the dealer manager.                                                                                               |
| (2)    | Net Assets at December 31, 2010, 2009 and 2008 include no accumulated undistributed net investment income and no     |
|   | accumulated undistributed net realized gains.                                                                        |

----

----

|                                                          |   |         |        |   |           |   |        | Period from  |   |
|---------------------------------------------------------------|--------|--------------|-------------|--------|----------------|--------|-------------|--------------|--------|
|                                                          |   |         |        |   |           |   |        | May 9, 2008  |   |
|                                                          |   | Years Ended  |        |   | (Inception) to |   |
|                                                          |   | December 31, |        |   | December 31,   |   |        | December 31, |   |
|                                                          |   | 2010         |        |   | 2009           |   |        | 2008         |   |
|                                                          |   |         |        |   |           |   |        |         |   |
| Cash Flows From Operating Activities                          |   |         |        |   |           |   |        |         |   |
| Net decrease in net assets resulting from operations          |   | $            | (1,399,877  | )      |           | $      | (995,978    | )            |   | $ | (528,960 | ) |
| Adjustments to reconcile net decrease in net assets resulting |   |         |        |   |           |   |        |         |   |   |   |   |
| from operations to net cash used in operating activities:     |   |         |        |   |           |   |        |         |   |   |   |   |
| Net change in unrealized appreciation on investments          |   |         | (577,116    | )      |           |   | -           |         |   |   | - |   |
| Changes in operating assets and liabilities:                  |   |         |        |   |           |   |        |         |   |   |   |   |
| (Increase) in prepaid expenses and other assets               |   |         | (58,553     | )      |           |   | (2,124      | )            |   |   | (31,448 | ) |
| Increase in base management fees payable to                   |   |         |        |   |           |   |        |         |   |   |   |   |
|  Investment Adviser                                      |   |         | 61,163      |   |           |   | 17,478      |         |   |   | 11,990 |   |
| Increase in incentive fees payable to Investment Adviser      |   |         | 115,423     |   |           |   | -           |         |   |   | - |   |
| (Decrease) increase in administrative expenses payable to     |   |         |        |   |           |   |        |         |   |   |   |   |
| Investment Adviser                                            |   |         | (25,788     | )      |           |   | 39,095      |         |   |   | 28,041 |   |
| (Decrease) increase in reimbursable expenses payable to       |   |         |        |   |           |   |        |         |   |   |   |   |
|  Investment Adviser                                      |   |         | (14,995     | )      |           |   | 4,188       |         |   |   | 13,875 |   |
| Increase (decrease) in accounts payable                       |   |         | 48,162      |   |           |   | (3,670      | )            |   |   | 35,783 |   |
| Increase in accrued expenses and other liabilities            |   |         | 32,457      |   |           |   | 32,111      |         |   |   | 5,000 |   |
|                                                          |   |         |        |   |           |   |        |         |   |   |   |   |
| Net cash used in operating activities                         |   |         | (1,819,124  | )      |           |   | (908,900    | )            |   |   | (465,719 | ) |
|                                                          |   |         |        |   |           |   |        |         |   |   |   |   |
| Cash Flows From Investing Activities                          |   |         |        |   |           |   |        |         |   |   |   |   |
| Investments in portfolio companies                            |   |         | (3,600,491  | )      |           |   | -           |         |   |   | - |   |
| Purchases of short-term investments                           |   |         | (84,000,000 | )      |           |   | (16,703,814 | )            |   |   | (4,411,127 | ) |
| Proceeds from sales and maturities of short-term investments  |   |         | 73,500,000  |   |           |   | 18,114,941  |         |   |   | - |   |
|                                                          |   |         |        |   |           |   |        |         |   |   |   |   |
| Net cash (used in) provided by investing activities           |   |         | (14,100,491 | )      |           |   | 1,411,127   |         |   |   | (4,411,127 | ) |
|                                                          |   |         |        |   |           |   |        |         |   |   |   |   |
| Cash Flows From Financing Activities                          |   |         |        |   |           |   |        |         |   |   |   |   |
| Gross proceeds from issuance of common stock                  |   |         | 22,809,653  |   |           |   | -           |         |   |   | 5,699,000 |   |
| Offering costs from issuance of common stock                  |   |         | (2,196,066  | )      |           |   | -           |         |   |   | (454,566 | ) |
| Additions to deferred stock offering costs                    |   |         | (308,591    | )      |           |   | (501,897    | )            |   |   | - |   |
|                                                          |   |         |        |   |           |   |        |         |   |   |   |   |
| Net cash provided by (used in) financing activities           |   |         | 20,304,996  |   |           |   | (501,897    | )            |   |   | 5,244,434 |   |
|                                                          |   |         |        |   |           |   |        |         |   |   |   |   |
| Net increase in cash and cash equivalents                     |   |         | 4,385,381   |   |           |   | 330         |         |   |   | 367,588 |   |
|                                                          |   |         |        |   |           |   |        |         |   |   |   |   |
| Cash and cash equivalents, beginning of period                |   |         | 367,918     |   |           |   | 367,588     |         |   |   | - |   |
|                                                          |   |         |        |   |           |   |        |         |   |   |   |   |
| Cash and cash equivalents, end of period                      |   | $            | 4,753,299   |   |           | $      | 367,918     |         |   | $ | 367,588 |   |
|                                                          |   |         |        |   |           |   |        |         |   |   |   |   |
| Supplemental Disclosure of Non-Cash Financing Activities      |   |         |        |   |           |   |        |         |   |   |   |   |
| Amortization of deferred offering costs                       |   | $            | 476,806     |   |           | $      | -           |         |   | $ | - |   |

----

----

|                                            |   |                 |      |   |    |   |      |   |       |       |      |   | % of       |   |
|-------------------------------------------------|--------|----------------------|-----------|--------|---------|--------|-----------|--------|------------|------------|-----------|--------|------------|--------|
| Portfolio Company / Type of Investment (1)      |   | Industry             |      | Shares |    |   | Cost      |   |       | Fair Value |      |   | Net Assets |   |
|                                            |   |                 |      |   |    |   |      |   |       |       |      |   |       |   |
| Non-Control/Non-Affiliate Investments (1)       |   |                 |      |   |    |   |      |   |       |       |      |   |       |   |
|                                            |   |                 |      |   |    |   |      |   |       |       |      |   |       |   |
| Private Portfolio Companies:                    |   |                 |      |   |    |   |      |   |       |       |      |   |       |   |
| NeoPhotonics Corporation                        |   |                 |      |   |    |   |      |   |       |       |      |   |       |   |
| Series X Convertible Preferred Stock (3)(4)(7)  |   | Technology Equipment |      |   | 10,000  |   |      | $      | 1,000,000  |       |      | $      | 1,550,000  |   |   |   | 6.90 | % |
|                                            |   |                 |      |   |    |   |      |   |       |       |      |   |       |   |   |   |   |   |
| Livescribe, Inc.                                |   | Consumer Products    |      |   |    |   |      |   |       |       |      |   |       |   |   |   |   |   |
| Series C Convertible Preferred Stock (3)(4)     |   |                 | 1,000,000 |   |    |   | 471,295   |   |       |       | 500,000   |   |       |   | 2.23 | % |
| Series C Convertible Preferred Stock            |   |                 |      |   |    |   |      |   |       |       |      |   |       |   |   |   |   |   |
| Warrants (5)                                    |   |                 |      |   | 125,000 |   |      |   | 29,205     |       |      |   | 27,616     |   |   |   | 0.12 | % |
|                                            |   |                 |      |   |    |   |      |   |       |       |      |   |       |   |   |   |   |   |
| Solazyme, Inc.                                  |   | Clean Technology     |      |   |    |   |      |   |       |       |      |   |       |   |   |   |   |   |
| Series D Convertible Preferred Stock (3)(4)     |   |                 | 112,927   |   |    |   | 999,991   |   |       |       | 999,991   |   |       |   | 4.45 | % |
|                                            |   |                 |      |   |    |   |      |   |       |       |      |   |       |   |   |   |   |   |
| MBA Polymers, Inc.                              |   | Clean Technology     |      |   |    |   |      |   |       |       |      |   |       |   |   |   |   |   |
| Series G Convertible Preferred Stock (3)(4)     |   |                 | 1,100,000 |   |    |   | 1,100,000 |   |       |       | 1,100,000 |   |       |   | 4.90 | % |
|                                            |   |                 |      |   |    |   |      |   |       |       |      |   |       |   |   |   |   |   |
| Total Non-Control/Non-Affiliate Investments (2) |   |                 |      |   |    |   |      |   |       |       |      |   |       |   |   |   |
| Private Portfolio Companies                     |   |                 |      |   |    |   |      | $      | 3,600,491  |       |      | $      | 4,177,607  |   |   |   | 18.60 | % |
|                                            |   |                 |      |   |    |   |      |   |       |       |      |   |       |   |   |   |   |   |
| Short-Term Investments                          |   |                 |      |   |    |   |      |   |       |       |      |   |       |   |   |   |   |   |
| Certificates of Deposit (6)                     |   |                 |      |   |    |   |      |   |       |       |      |   |       |   |   |   |   |   |
| Maturing on January 6, 2011                     |   |                 |      |   |    |   |      |   |       |       |      |   |       |   |   |   |   |   |
| Annual Percentage Yield of 0.45%                |   |                 |      |   |    |   |      | $      | 13,500,000 |       |      | $      | 13,500,000 |   |   |   | 60.12 | % |
|                                            |   |                 |      |   |    |   |      |   |       |       |      |   |       |   |   |   |   |   |
| Total Short-Term Investments                    |   |                 |      |   |    |   |      | $      | 13,500,000 |       |      | $      | 13,500,000 |   |   |   | 60.12 | % |

----

| (1) | Control investments are defined by the Investment Company Act of 1940, as amended (the "1940 Act"), as investments in which  more than 25% of the voting securities are owned or where the ability to nominate greater than 50% of the board representation is maintained.  Affiliate investments are defined by the 1940 Act as investments in which between 5% and 25% of the voting securities are owned.  Non-Control/Non-Affiliate investments are defined by the 1940 Act as investments that are neither Control Investments nor Affiliate Investments. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | The aggregate cost basis for federal income tax purposes of Non-Control/Non-Affiliate investments is $3,600,491.  The gross unrealized appreciation based on the tax cost basis of these securities is $578,705.  The gross unrealized depreciation based on the tax cost basis of these securities is $1,589.                                                                                                                                                                                                                                                           |
| (3) | The shares of preferred stock represented by these investments are subject to legal restrictions on transfer pursuant to the Securities Act of 1933, as amended (the "Securities Act") and may only be sold pursuant to a registration statement under the Securities Act or an available exemption from registration thereunder.  These shares are also subject to a contractual lock-up for a period of six months following completion of an initial public offering.                                                                                                           |
| (4) | The shares of preferred stock represented by these investments carry a non-cumulative, preferred dividend payable when and if declared by the portfolio company's board of directors.  As no dividends have been declared or paid with respect to these investments, these investments are considered to be non-income producing.                                                                                                                                                                                                                                        |
| (5) | The Warrants grant the holder the right to purchase shares of Series C convertible preferred stock at an exercise price of $0.50 per share. The Warrants have a contractual life of five years, expiring on June 30, 2015.                                                                                                                                                                                                                                                                                                                                                                   |
| (6) | Fair value reflects amortized cost as of December 31, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (7) | On February 2, 2011, NeoPhotonics completed an initial public offering of its common stock at a price of $11.00 per share. Prior to the initial public offering, the Company’s Series X convertible preferred stock converted into 160,000 shares of NeoPhotonics common stock, which common shares are subject to a 180-day lockup provision (see Note 8).                                                                                                                                                                                                                            |

----

----

|                                   |   |   |      |   |       |   |      | % of       |   |
|----------------------------------------|--------|--------|-----------|--------|------------|--------|-----------|------------|--------|
| Portfolio Company / Type of Investment |   | Cost   |      |   | Fair Value |   |      | Net Assets |   |
|                                   |   |   |      |   |       |   |      |       |   |
| Short-Term Investments                 |   |   |      |   |       |   |      |       |   |
| Certificates of Deposit (1)            |   |   |      |   |       |   |      |       |   |
| Maturing on January 7, 2010            |   |   |      |   |       |   |      |       |   |
| Annual Percentage Yield of 0.55%       |   | $      | 3,000,000 |   |       | $      | 3,000,000 |       |   |   | 80.66 | % |
|                                   |   |   |      |   |       |   |      |       |   |   |   |   |
| Total Short-Term Investments           |   | $      | 3,000,000 |   |       | $      | 3,000,000 |       |   |   | 80.66 | % |

----

| (1) | Fair value reflects amortized cost as of December 31, 2009. |
|-----|-------------------------------------------------------------|

----

----

|                                                       |   |         |       |   |           |   |      | Period from  |   |
|------------------------------------------------------------|--------|--------------|------------|--------|----------------|--------|-----------|--------------|--------|
|                                                       |   |         |       |   |           |   |      | May 9, 2008  |   |
|                                                       |   | Years Ended  |       |   | (Inception) to |   |
|                                                       |   | December 31, |       |   | December 31,   |   |      | December 31, |   |
|                                                       |   | 2010         |       |   | 2009           |   |      | 2008         |   |
|                                                       |   |         |       |   |           |   |      |         |   |
| Per Common Share Data                                      |   |         |       |   |           |   |      |         |   |
| Net asset value, beginning of period (1)                   |   | $            | 6.53       |   |           | $      | 8.27      |         |   | $ | - |   |
|                                                       |   |         |       |   |           |   |      |         |   |   |   |   |
| Net investment loss (2)                                    |   |         | (1.43      | )      |           |   | (1.75     | )            |   |   | (0.93 | ) |
| Net change in unrealized appreciation from investments (2) |   |         | 0.42       |   |           |   | -         |         |   |   | - |   |
|                                                       |   |         |       |   |           |   |      |         |   |   |   |   |
| Net decrease in net assets resulting from operations (3)   |   |         | (1.01      | )      |           |   | (1.75     | )            |   |   | (0.93 | ) |
|                                                       |   |         |       |   |           |   |      |         |   |   |   |   |
| Capital stock transactions:                                |   |         |       |   |           |   |      |         |   |   |   |   |
| Issuance of common stock in private offering (2)           |   |         | -          |   |           |   | -         |         |   |   | 10.00 |   |
| Issuance of common stock in continuous public offering (4) |   |         | 4.26       |   |           |   | -         |         |   |   | - |   |
| Offering costs from issuance of common stock (2)           |   |         | (1.59      | )      |           |   | -         |         |   |   | (0.80 | ) |
| Amortization of deferred offering costs (2)                |   |         | (0.34      | )      |           |   | -         |         |   |   | - |   |
|                                                       |   |         |       |   |           |   |      |         |   |   |   |   |
| Net increase in net assets from capital stock transactions |   |         | 2.33       |   |           |   | -         |         |   |   | 9.20 |   |
|                                                       |   |         |       |   |           |   |      |         |   |   |   |   |
| Net asset value, end of period (1)                         |   | $            | 7.85       |   |           | $      | 6.53      |         |   | $ | 8.27 |   |
|                                                       |   |         |       |   |           |   |      |         |   |   |   |   |
| Common shares outstanding, beginning of period             |   |         | 569,900    |   |           |   | 569,900   |         |   |   | - |   |
| Common shares outstanding, end of period                   |   |         | 2,860,299  |   |           |   | 569,900   |         |   |   | 569,900 |   |
| Weighted average common shares outstanding during period   |   |         | 1,383,537  |   |           |   | 569,900   |         |   |   | 294,824 |   |
| Total return based on change in net asset value (5)(6)(7)  |   |         | 20.21      | %      |           |   | -21.04    | %            |   |   | -11.08 | % |
|                                                       |   |         |       |   |           |   |      |         |   |   |   |   |
| Supplemental Data and Ratios                               |   |         |       |   |           |   |      |         |   |   |   |   |
| Net assets, beginning of period                            |   | $            | 3,719,496  |   |           | $      | 4,715,474 |         |   | $ | - |   |
| Net assets, end of period                                  |   | $            | 22,456,400 |   |           | $      | 3,719,496 |         |   | $ | 4,715,474 |   |
| Average net assets during period                           |   | $            | 13,087,948 |   |           | $      | 4,217,485 |         |   | $ | 2,357,737 |   |
| Ratio of operating expenses to average net assets (8)      |   |         | 15.52      | %      |           |   | 23.87     | %            |   |   | 35.62 | % |
| Ratio of net investment loss to average net assets (8)     |   |         | -15.11     | %      |           |   | -23.62    | %            |   |   | -34.70 | % |
| Portfolio turnover (9)                                     |   |         | -          |   |           |   | -         |         |   |   | - |   |

| (1) | Based on total shares outstanding at the beginning and end of the corresponding period.                                                                                                                                                                                                                                                                                                                                                                             |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Based on weighted average shares outstanding during the period for the years ended December 31, 2010 and 2009 and total shares outstanding at the end of the period for the period from May 9, 2008 (Inception) to December 31, 2008. If net investment loss for the period from May 9, 2008 (Inception) to December 31, 2008 is calculated using weighted average shares outstanding during the period, the resulting net investment loss per share is $1.79. |
| (3) | Net decrease in net assets resulting from operations per share for the years ended December 31, 2010 and 2009 and for the period from May 9, 2008 (Inception) to December 31, 2008 include rounding adjustments to reconcile the change in net asset value per share for each period.                                                                                                                                                                               |
| (4) | Represents the average increase in net asset value attributable to each share issued during the year ended December 31, 2010.                                                                                                                                                                                                                                                                                                                                       |
| (5) | The total return calculations for the years ended December 31, 2010 and 2009 were based solely on the changes in the Company's net asset values.  For the years ended December 31, 2010 and 2009, no distributions were paid with respect to the Company's shares.                                                                                                                                                                                        |
| (6) | Total return for the years ended December 31, 2010 and 2009 was calculated as the change in net asset value for each period, divided by the net asset value per share at the beginning of each period.                                                                                                                                                                                                                                                              |
| (7) | Total return for the period from May 9, 2008 (Inception) through December 31, 2008 was calculated as the change in net asset value based on an initial investment at $9.30 per share (which represents the offering price per share in the Company's initial private placement, net of placement agent commissions) to the net asset value per share on December 31, 2008, divided by the initial private placement price of $9.30 per share.                       |
| (8) | Ratios for the Period from May 9, 2008 (Inception) to December 31, 2008 have been annualized.                                                                                                                                                                                                                                                                                                                                                                       |
| (9) | For the year ended December 31, 2010, the only investment activity subject to the calculation of portfolio turnover was an aggregate of $3,600,491 in portfolio company investments.  As there were no sales of portfolio company investments during the year, there was no portfolio turnover.  For the year ended December 31, 2010, there was no investment activity subject to the calculation of portfolio turnover.                       |

----

----

| 1.     | Organization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Keating Capital, Inc. (“Keating Capital” or the “Company”) was incorporated on May 9, 2008 under the laws of the State of Maryland and is an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended (the “1940 Act”), as of November 20, 2008. During 2010, the Company satisfied the requirements to qualify as a regulated investment company (“RIC”).  The Company will elect to be treated as a RIC under Subchapter M of the Internal Revenue Code (the “Code”) for its 2010 taxable when it files its 2010 tax return (see Federal and State Income Taxes under Note 2).  Prior to its 2010 taxable year, the Company was taxable as a regular corporation under Subchapter C of the Code. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The Company seeks to invest principally in equity securities, including convertible preferred securities, and other debt securities convertible into equity securities, of primarily non-public U.S.-based companies.  Under the Company’s investment process, it typically makes a single investment, principally consisting of convertible preferred stock, convertible debt or other equity, after it is satisfied that a potential portfolio company is committed to and capable of becoming public and obtaining an exchange listing within the Company’s desired timeframes and has substantially completed certain audit and governance requirements to the Company’s satisfaction prior to the closing of the Company’s investment.                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Keating Investments, LLC (“Keating Investments” or the “Investment Adviser”) serves as the Company’s external investment adviser and also provides the Company with administrative services necessary for it to operate.  In this capacity, Keating Investments is primarily responsible for the selection, evaluation, structure, valuation and administration of the Company’s investment portfolio, subject to the supervision of the Company’s Board of Directors.  Keating Investments is a registered investment adviser under the Investment Advisers Act of 1940, as amended.                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 2.     | Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Under the 1940 Act rules and the regulations pursuant to Article 6 of Regulation S-X, the Company is precluded from consolidating any entity other than another investment company or an operating company that provides substantially all of its services and benefits to the Company. The Company’s financial statements include only the accounts of Keating Capital as the Company has no subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Reclassifications                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | For the year ended December 31, 2010, the Company separately classified Stock Transfer Agent Fees, Printing and Fulfillment Expenses and Postage and Delivery Expenses as individual line items in its Statement of Operations.  Stock Transfer Agent Fees were previously included as a component of Legal and Professional Fees, and Printing and Fulfillment Expenses and Postage and Delivery Expenses were previously included as components of General and Administrative Expenses in the Statement of Operations.  For comparative purposes, these line items have also been separately classified in the Company’s Statement of Operations for the year ended December 31, 2009 and for the period from May 9, 2008 (Inception) to December 31, 2008.                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | The preparation of financial statements in conformity with Generally Accepted Accounting Principles in the United States of America (“GAAP”) requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reported period. Actual results could differ from these estimates and the differences could be material.  The Company considers its significant estimates to include the fair value of investments in portfolio company securities.                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Valuation of Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | Investments are stated at value as defined under the 1940 Act, in accordance with the applicable regulations of the Securities and Exchange Commission (the “SEC”) and in accordance with Accounting Standards Codification Topic 820, “Fair Value Measurement and Disclosures,” (“ASC 820”).  Value, as defined in Section 2(a)(41) of the 1940 Act, is: (i) the market price for those securities for which a market quotation is readily available, and (ii) the fair value as determined in good faith by, or under the direction of, the Board of Directors for all other assets (see Note 3).                                                                                                                                                                                                                                                                               |

----

----

|   | At December 31, 2010, the Company’s financial statements included portfolio company investments valued at $4,177,607, with a cost of $3,600,491.  The fair value of the Company’s portfolio company investments was determined in good faith by the Company’s Board of Directors and in accordance with ASC 820.  Upon sale of the Company’s portfolio company investments, the value that is ultimately realized could be different from what is currently reflected in the Company’s financial statements, and this difference could be material.                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Portfolio Company Investment Classification                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | The Company classifies its portfolio company investments in accordance with the requirements of the 1940 Act. Under the 1940 Act, “Control Investments” are defined as investments in which the Company owns more than 25% of the voting securities or has rights to maintain greater than 50% of the board representation. Under the 1940 Act, “Affiliate Investments” are defined as investments in which the Company owns between 5% and 25% of the voting securities. Under the 1940 Act, “Non-Control/Non-Affiliate Investments” are defined as investments that are neither Control Investments nor Affiliate Investments.                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | Cash and cash equivalents are comprised of demand deposits.  Investments in certificates of deposit, which have original maturities of 90 days or less, are separately classified as short-term investments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Deferred Offering Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Deferred offering costs are comprised of expenses directly related to the continuous public offering of the Company’s common stock that were previously deferred and which are currently being amortized and charged against the gross proceeds of the continuous public offering, as a reduction to additional paid-in capital, on a straight-line basis beginning with the closing of the first common stock issuance on January 11, 2010 and continuing through the expiration of the offering period on June 30, 2011.  Offering expenses incurred subsequent to January 11, 2010 associated with maintaining the registration of the continuous public offering (i.e., legal, accounting, printing and blue sky) are expensed as incurred while other offering-related expenses are capitalized and subsequently amortized and charged against the gross proceeds of the continuous public offering on a straight-line basis over the remaining term of the offering (see Note 6). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Concentration of Credit Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The Company may place its cash and cash equivalents with various financial institutions and, at times, cash held in depository accounts at such institutions may exceed the Federal Deposit Insurance Corporation insured limit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Securities Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Securities transactions are accounted for on the date the transaction for the purchase or sale of the securities is entered into by the Company (i.e., trade date).  Securities transactions outside conventional channels, such as private transactions, are recorded as of the date the Company obtains the right to demand the securities purchased or to collect the proceeds from a sale, and incurs an obligation to pay for securities purchased or to deliver securities sold, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Interest and Dividend Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Interest income from certificates of deposit and other short-term investments is recorded on an accrual basis to the extent such amounts are expected to be collected, and accrued interest income is evaluated periodically for collectability.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | The Company’s preferred equity investments may pay fixed or adjustable rate dividends and will generally have a “preference” over common equity in the payment of dividends and the liquidation of a portfolio company's assets. In order to be payable, distributions on such preferred equity must be declared by the portfolio company's board of directors.  Dividend income from preferred equity investments in portfolio companies is recorded when dividends are declared or at the point an obligation exists for a portfolio company to make a distribution.                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | No dividend income from portfolio company investments was recorded for the years ended December 31, 2010 and 2009 or for the period from May 9, 2008 (Inception) to December 31, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

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|   | Other Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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|   | Other income is comprised of fees, if any, for due diligence, structuring, transaction services, consulting services and management services rendered to portfolio companies and prospective portfolio companies.  For services that are separately identifiable from the Company’s investment, income is recognized as earned, which is generally when the investment or other applicable transaction closes, or when the services are rendered if payment is not subject to the closing of an investment transaction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | During the year ended December 31, 2010, the Company recorded $10,000 in other income representing a non-refundable due diligence fee received from a prospective portfolio company in December of 2009, which was initially recorded as deferred income and was subsequently recognized as income when the proposed investment transaction failed to close in February 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Realized Gain or Loss and Unrealized Appreciation or Depreciation of Portfolio Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Realized gain or loss is recognized when an investment is disposed of and is computed as the difference between the Company's cost basis in the investment at the disposition date and the net proceeds received from such disposition.  Realized gains and losses on investment transactions are determined by specific identification.  Unrealized appreciation or depreciation is computed as the difference between the fair value of the investment and the cost basis of such investment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Federal and State Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | During 2010, the Company satisfied the requirements to qualify as a RIC under Subchapter M of the Code and will elect to be treated as a RIC for U.S. federal income tax purposes for its 2010 taxable year when it files its 2010 tax return.  As a RIC, the Company generally will not have to pay corporate-level federal income taxes on any investment company taxable income (which is generally the Company’s net ordinary income plus the excess, if any, of realized net short-term capital gains over realized net long-term capital losses) or any realized net capital gains (which is generally realized net long-term capital gains in excess of realized net short-term capital losses) that the Company distributes to its stockholders from its taxable earnings and profits. To obtain and maintain RIC tax treatment, the Company must meet specified source-of-income and asset diversification requirements and distribute annually at least 90% of its investment company taxable income. In order to avoid certain excise taxes imposed on RICs, the Company currently intends to distribute during each calendar year an amount at least equal to the sum of: (i) 98% of its ordinary income for the calendar year, (ii) 98.2% of its capital gains in excess of capital losses for the one-year period ending on October 31 of the calendar year, and (iii) any ordinary income and net capital gains for preceding years that were not distributed during such years.  The Company has made no provision for income taxes as it will elect to be treated as a RIC for its 2010 taxable year and did not generate any investment company taxable income or realized net capital gains during the year ended December 31, 2010 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Prior to its 2010 taxable year, the Company was taxed as a C corporation.  A corporation that converts to taxation as a RIC may hold assets (including intangible assets not reflected on the balance sheet, such as goodwill) with “built-in gains,” which are assets whose fair market value as of the effective date of the election exceeds their tax bases.  In general, a corporation that converts to taxation as a RIC must pay corporate level tax on any of the net built-in gains it recognizes during the 10-year period beginning on the effective date of its election to be treated as a RIC.  Alternatively, the corporation may elect to recognize all of its built-in gain at the time of its conversion and pay tax on the built-in gain at that time.  As of December 31, 2009, the Company did not have any built-in gains and, accordingly, it does not anticipate having to pay any corporate level tax as a result of its election to be treated as a RIC beginning with its 2010 taxable year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | A corporation that converts to taxation as a RIC is also required, by the end of its first taxable year as a RIC, to eliminate the earnings and profits it may have accumulated while it was taxable as a C corporation. This is accomplished by paying to its stockholders in the first quarter of the tax year for which it makes a RIC election a cash dividend representing all of its accumulated earnings and profits (if any) for the period from inception through the end of the prior tax year.  For the period from inception through December 31, 2009, while the Company was taxable as a C corporation, it generated a cumulative net operating loss and, accordingly, the Company will not be required to make any distributions to satisfy this requirement to eliminate accumulated earnings and profits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

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|   | Accounting Standards Codification Topic 740, “Income Taxes,” (“ASC 740”) provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in a Company’s financial statements.  ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions deemed to meet a “more-likely-than-not” threshold would be recorded as a tax benefit or expense in the applicable period. Although the Company files federal and state tax returns, its major tax jurisdiction is federal. The 2008, 2009 and 2010 federal tax years for the Company remain subject to examination by the Internal Revenue Service. |
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | As of December 31, 2010 and 2009, the Company had not recorded a liability for any unrecognized tax benefits.  Management’s evaluation of uncertain tax positions may be subject to review and adjustment at a later date based upon factors including, but not limited to, an on-going analysis of tax laws, regulations and interpretations thereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | The aggregate cost of portfolio company securities for federal income tax purposes and portfolio company securities with unrealized appreciation and depreciation based on tax cost basis, were as follows as of December 31, 2010 and 2009:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

|   |                                                          |   | December 31, |      |   | December 31, |   |
|--------|---------------------------------------------------------------|--------|--------------|-----------|--------|--------------|--------|
|   |                                                          |   | 2010         |      |   | 2009         |   |
|   |                                                          |   |         |      |   |         |   |
|   | Aggregate cost of portfolio company securities                |   |         |      |   |         |   |
|   | for federal income tax purposes                               |   | $            | 3,600,491 |   |         | $      | - |   |
|   |                                                          |   |         |      |   |         |   |   |   |
|   | Gross unrealized appreciation of portfolio company securities |   |         | 578,705   |   |         |   | - |   |
|   | Gross unrealized depreciation of portfolio company securities |   |         | (1,589    | )      |         |   | - |   |
|   |                                                          |   |         |      |   |         |   |   |   |
|   | Net unrealized appreciation of portfolio company securities   |   | $            | 577,116   |   |         | $      | - |   |

|   | Dividends and Distributions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Dividends and distributions to common stockholders are recorded when declared. No dividends or distributions were declared or paid during the period from May 9, 2008 (Inception) to December 31, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | Net realized capital gains, if any, after reduction for any incentives fees payable to the investment adviser, are expected to be distributed at least annually.  In the event the Company retains some or all of its realized net capital gains, including amounts retained to pay incentive fees to the investment adviser, the Company will likely designate the retained amount as a deemed distribution to stockholders. In such case, among other consequences, the Company will pay corporate-level tax on the retained amount, each U.S. stockholder will be required to include its share of the deemed distribution in income as if it had been actually distributed to the U.S. stockholder, and the U.S. stockholder will be entitled to claim a credit or refund equal to its allocable share of the corporate-level tax the Company pays on the retained realized net capital gain. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | On February 11, 2011, the Company’s Board of Directors declared a special cash distribution of $0.13 cents per share.  The distribution was paid on February 17, 2011 to the Company’s stockholders of record as of February 15, 2011 (see Note 8).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | Per Share Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | Net changes in net assets resulting from operations per common share, or basic earnings per share, are calculated using the weighted average number of common shares outstanding for the period presented. Diluted earnings per share are not presented as there are no potentially dilutive securities outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | Recently Issued Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial statements upon adoption.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

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|   | In January 2010, the FASB issued Accounting Standards Update No. 2010-06 (“ASU 2010-06”), Fair Value Measurements and Disclosures (Topic 820), Improving Disclosures about Fair Value Measurements.  ASU 2010-06 requires reporting entities to make new disclosures about recurring and nonrecurring fair value measurements, including significant transfers into and out of Level 1 and Level 2 fair value measurements and information on purchases, sales, issuances and settlements, on a gross basis, in the reconciliation of Level 3 fair value measurements.  ASU 2010-06 also requires disclosure of fair value measurements by “class” instead of by “major category” as well as any changes in valuation techniques used during the reporting period.  For disclosures of Level 1 and Level 2 activity, fair value measurements by “class” and changes in valuation techniques, ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009.  The adoption of this portion of ASU 2010-06 on January 1, 2010, did not have a material impact on the Company's financial condition or results of operations.  For the reconciliation of Level 3 fair value measurements, this portion of ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2010.  The adoption of this portion of ASU 2010-06 is not expected to have a material impact on the Company's financial condition or results of operations. |
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.     | Valuation of Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The 1940 Act requires periodic valuation of each investment in the Company’s portfolio to determine the Company’s net asset value. Under the 1940 Act, unrestricted securities with readily available market quotations are to be valued at the current market value; all other assets must be valued at fair value as determined in good faith by or under the direction of the Board of Directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | The following is a description of the steps the Company takes each quarter to determine the value of the Company’s portfolio investments. Investments for which market quotations are readily available are recorded in the Company’s financial statements at such market quotations. With respect to investments for which market quotations are not readily available, the Company’s Board of Directors undertakes a multi-step valuation process each quarter, as described below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

|   | ● | The Company’s quarterly valuation process begins with each portfolio company or investment being initially valued by Keating Investments’ senior investment professionals responsible for the portfolio investment;                                                                                                                                                                           |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | ● | A nationally recognized third-party valuation firm engaged by the Company’s Board of Directors reviews these preliminary valuations at such times as determined by the Company’s Board of Directors, but in all cases a review will be conducted by the third-party valuation firm for each new portfolio company investment made during a calendar quarter and at least annually thereafter; |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | ● | The Company’s Valuation Committee reviews the preliminary valuations, and the Company’s investment adviser and the nationally recognized third-party valuation firm respond and supplement the preliminary valuation to reflect any comments provided by the Valuation Committee; and                                                                                                    |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | ● | The Company’s Board of Directors discusses the valuations and determines, in good faith, the fair value of each investment in the Company’s portfolio for which market quotations are not readily available based on the input of the Company’s investment adviser, the nationally recognized third-party valuation firm and the Company’s Valuation Committee.                   |

|   | Investment Categories and Approaches to Determining Fair Value                                                                                                                                                                                                                                                                                                    |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ASC 820 defines fair value as 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 (exit price). In accordance with ASC 820, the Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: |

|   | ● | Level 1:  Observable inputs such as unadjusted quoted prices in active markets;                                                                                                  |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                       |
|   | ● | Level 2: Includes inputs such as quoted prices for similar securities in active markets and quoted prices for identical securities where there is little or no activity in the market; and |
|   |    |                                                                                                                                                                                       |
|   | ● | Level 3: Unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.                                                      |

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|   | The Company applies the framework for determining fair value as described above to the valuation of investments in each of the following categories:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Short-Term Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | Short-term investments, which include certificates of deposit with original maturities of 90 days or less, are valued at amortized cost, which approximates fair value. The amortized cost method involves recording a security at its cost (i.e., principal amount plus any premium and less any discount) on the date of purchase and thereafter amortizing/accreting that difference between the principal amount due at maturity and cost assuming a constant yield to maturity as determined at the time of purchase.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | During the year ended December 31, 2010, the Company’s short term investments were comprised exclusively of investments in certificates of deposit with four week maturities, which the Company typically purchases each month upon maturity of existing certificates of deposit, resulting in cumulative purchases totaling $84,000,000 and cumulative maturities totaling $73,500,000.  During the year ended December 31, 2009, the Company’s short term investments were comprised of investments in certificates of deposit with four week maturities and investments in money market funds, with cumulative purchases of $16,703,814 and cumulative sales of $18,114,941.  During the period from May 9, 2008 (Inception) through December 31, 2008, the Company’s short term investments were comprised of Investments in money market funds, with cumulative purchases of $4,411,127 and no sales.                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Equity Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | Equity investments for which market quotations are readily available will generally be valued at the most recently available closing market prices.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | The fair value of the Company’s equity investments for which market quotations are not readily available (including investments in convertible preferred stock) is determined based on various factors, including the enterprise value remaining for equity holders after the repayment of the portfolio company’s debt and other preference capital, and other pertinent factors such as recent offers to purchase a portfolio company, recent transactions involving the purchase or sale of the portfolio company’s equity securities, or other liquidity events. The determined equity values are generally discounted when the Company has a minority position, when there are restrictions on resale, when there are specific concerns about the receptiveness of the capital markets to a specific company at a certain time, or other factors.                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Enterprise value means the entire value of the company to a potential buyer, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time. There is no one methodology to determine enterprise value and, in fact, for any one portfolio company, enterprise value is best expressed as a range of fair values, from which the Company derives a single estimate of enterprise value. To determine the enterprise value of a portfolio company, the Company analyzes the portfolio company’s historical and projected financial results and also uses industry valuation benchmarks and public market comparables.  The Company also considers other events, including private mergers and acquisitions, a purchase transaction, public offering or subsequent debt or equity sale or restructuring, and includes these events in the enterprise valuation process.  In addition, the trends of the portfolio company’s basic financial metrics from the time of the original investment until the measurement date are analyzed; material improvement of these metrics may indicate an increase in enterprise value, while material deterioration of these metrics may indicate a reduction in enterprise value. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | The fair value of common and preferred stock warrants is determined by using the Black-Scholes option pricing model.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Portfolio Company Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | On January 25, 2010, the Company made a $1,000,000 investment in the Series X convertible preferred stock of NeoPhotonics Corporation (“NeoPhotonics”).  NeoPhotonics is headquartered in San Jose, California and develops and manufactures photonic integrated circuit based components, modules and subsystems for use in telecommunications networks.   On February 2, 2011, NeoPhotonics completed an initial public offering of its common stock at a price of $11.00 per share.  Prior to the initial public offering, the Company’s preferred stock converted into 160,000 shares of NeoPhotonics common stock, which common shares are subject to a 180-day lock-up provision (see Note 8).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

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|   | On July 1, 2010, the Company made a $500,500 investment in the Series C convertible preferred stock and warrants of Livescribe, Inc (“Livescribe”). Livescribe is a private company headquartered in Oakland, California and is a developer and marketer of a mobile, paper-based computing platform consisting of smartpens, dot paper, smartpen applications, accessories, desktop software, an online community and development tools.   For financial reporting purposes, the Series C convertible preferred stock was assigned a cost of $471,295 and the warrants were assigned a cost of $29,205 based on the fair value of the warrants as of the initial investment date calculated using the Black-Scholes option pricing model. |
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | On July 16, 2010, the Company made a $999,991 investment in the Series D convertible preferred stock of Solazyme, Inc. (“Solazyme”).  Solazyme is a private company headquartered in South San Francisco, California and is considered a leader in the development and commercialization of algal oil and bioproducts for the fuels and chemicals, nutritionals and health sciences markets.                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | On October 15, 2010, the Company made a $1,100,000 investment in the Series G convertible preferred stock of MBA Polymers, Inc. (“MBA Polymers”).  MBA Polymers is a private company headquartered in Richmond, California and is a global manufacturer of recycled plastics sourced from end of life durable goods, such as computers, electronics, appliances and automobiles.  On February 22, 2011, the Company made an additional $900,000 investment in MBA Polymers Series G convertible preferred stock (see Note 8).                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | Since NeoPhotonics, Livescribe, Solazyme and MBA Polymers were private companies for which market quotations for their shares were not readily available as of December 31, 2010, the fair value of the Company’s investments in each of these companies was determined in accordance with the Company’s valuation policy for such types of equity investments, including a review of the fair value of each investment being performed by a nationally recognized third-party valuation firm.                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | Except for the Company’s investments in NeoPhotonics, Livescribe, Solazyme and MBA Polymers, there were no other purchases of equity investments during the years ended December 31, 2010 , 2009 and during the period from May 9, 2008 (Inception) through December 31, 2008.  There were no sales of equity investments during the years ended December 31, 2010, 2009 and during the period from May 9, 2008 (Inception) through December 31, 2008.                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | Fair Value of Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | Each of the Company’s portfolio company investments were categorized as Level 3 in the fair value hierarchy as of December 31, 2010.  The following table categorizes the Company’s short-term investments and portfolio company investments measured at fair value based upon the lowest level of significant input used in the valuation as of December 31, 2010 and 2009:                                                                                                                                                                                                                                                                                                                                                               |

|                                  |                            |      |             |   |      |              |   |       |                |   |       |      |   |
|---------------------------------------|---------------------------------|-----------|------------------|--------|-----------|-------------------|--------|------------|---------------------|--------|------------|-----------|--------|
|                                  |                            |      | Quoted Prices In |   |      | Significant Other |   |       | Significant         |   |       |      |   |
|                                  |                            |      | Active Markets   |   |      | Observable Inputs |   |       | Unobservable Inputs |   |       | Total     |   |
|  Description                     |                            | (Level 1) |             |   | (Level 2) |              |   | (Level 3)  |                |   | Fair Value |      |
|                                  |                            |      |             |   |      |              |   |       |                |   |       |      |   |
| As of December 31, 2010               |                            |      |             |   |      |              |   |       |                |   |       |      |
| Private Portfolio Company Securities: |                            |      |             |   |      |              |   |       |                |   |       |      |
|                                  | Preferred Stock                 |      | $                | -      |      |              | $      | -          |                |   | $          | 4,149,991 |   |   | $ | 4,149,991 |   |
|                                  | Preferred Stock Warrants        |      |             | -      |      |              |   | -          |                |   |       | 27,616    |   |   |   | 27,616 |   |
|                                  |                            |      |             |   |      |              |   |       |                |   |       |      |   |   |   |   |   |
| Short-Term Investments:               |                            |      |             |   |      |              |   |       |                |   |       |      |   |   |   |   |
|                                  | Certificates of Deposit (1)     |      |             |   |      |              |   |       |                |   |       |      |   |   |   |   |   |
|                                  | (Maturing on January 6, 2011)   |      |             | -      |      |              |   | 13,500,000 |                |   |       | -         |   |   |   | 13,500,000 |   |
|                                  |                            |      |             |   |      |              |   |       |                |   |       |      |   |   |   |   |   |
|                                  | Total Investments at Fair Value |      | $                | -      |      |              | $      | 13,500,000 |                |   | $          | 4,177,607 |   |   | $ | 17,677,607 |   |
|                                  |                            |      |             |   |      |              |   |       |                |   |       |      |   |   |   |   |   |
| As of December 31, 2009               |                            |      |             |   |      |              |   |       |                |   |       |      |   |   |   |   |
| Short-Term Investments:               |                            |      |             |   |      |              |   |       |                |   |       |      |   |   |   |   |
|                                  | Certificates of Deposit (1)     |      |             |   |      |              |   |       |                |   |       |      |   |   |   |   |   |
|                                  | (Maturing on January 7, 2010)   |      | $                | -      |      |              | $      | 3,000,000  |                |   | $          | -         |   |   | $ | 3,000,000 |   |
|                                  |                            |      |             |   |      |              |   |       |                |   |       |      |   |   |   |   |   |
|                                  | Total Investments at Fair Value |      | $                | -      |      |              | $      | 3,000,000  |                |   | $          | -         |   |   | $ | 3,000,000 |   |

| (1) | Fair value reflects amortized cost as of December 31, 2010 and 2009. |
|-----|----------------------------------------------------------------------|

----

----

|   | The following table provides a reconciliation of the changes in fair value for the Company’s portfolio company investments measured at fair value using significant unobservable inputs (Level 3) for the year ended December 31, 2010: |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                                             |   | Level 3           |      |   | Level 3           |   |   |   |   |
|--------|------------------------------------------------------------------|--------|-------------------|-----------|--------|-------------------|--------|--------|--------|--------|
|   |                                                             |   | Portfolio Company |      |   | Portfolio Company |   |   |   |   |
|   |                                                             |   | Investments       |      |   | Investments       |   |   |   |   |
|   | Year ended December 31, 2010:                                    |   | (Preferred Stock) |      |   | (Warrants)        |   |   | Total  |   |
|   |                                                             |   |              |      |   |              |   |   |   |   |
|   | Fair Value at December 31, 2009                                  |   | $                 | -         |   |              | $      | -      |   |   | $ | - |   |
|   |                                                             |   |              |      |   |              |   |   |   |   |   |   |   |
|   | New investments in Level 3 portfolio company securities at cost  |   |              | 3,571,286 |   |              |   | 29,205 |   |   |   | 3,600,491 |   |
|   |                                                             |   |              |      |   |              |   |   |   |   |   |   |   |
|   | Total unrealized appreciation (depreciation) included in change  |   |              |      |   |              |   |   |   |   |   |   |   |
|   | in net assets                                                    |   |              | 578,705   |   |              |   | (1,589 | )      |   |   | 577,116 |   |
|   |                                                             |   |              |      |   |              |   |   |   |   |   |   |   |
|   | Fair Value at December 31, 2010                                  |   | $                 | 4,149,991 |   |              | $      | 27,616 |   |   | $ | 4,177,607 |   |
|   |                                                             |   |              |      |   |              |   |   |   |   |   |   |   |
|   | Total gains and losses for the year ended December 31, 2010      |   |              |      |   |              |   |   |   |   |   |   |   |
|   | included in change in net assets atrributable to the change      |   |              |      |   |              |   |   |   |   |   |   |   |
|   | in unrealized gains or losses relating to investments still held |   |              |      |   |              |   |   |   |   |   |   |   |
|   | at December 31, 2010                                             |   | $                 | 578,705   |   |              | $      | (1,589 | )      |   | $ | 577,116 |   |

| 4.     | Investment Portfolio                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | As of December 31, 2010, the Company’s investment portfolio, excluding short-term investments, consisted exclusively of convertible preferred stock and warrant investments in privately held companies.  As of December 31, 2010, the Company had convertible preferred stock and warrant investments in four private portfolio companies with an aggregate cost of $3,600,491 and an aggregate fair value of $4,177,607.  As of December 31, 2009, the Company had not made any portfolio company investments, and the Company’s investment portfolio consisted solely of short-term investments. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | The following table summarizes the composition of the Company’s investment portfolio, excluding short-term investments in certificates of deposit, at cost and fair value as of December 31, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                            |

|   |                                |   |   |      |   |       |   |      | Percentage of     |   |   |          |   |
|--------|-------------------------------------|--------|--------|-----------|--------|------------|--------|-----------|-------------------|--------|--------|---------------|--------|
|   |                                |   |   |      |   |       |   |      | Portfolio Company |   |   | Percentage of |   |
|   |                                |   |   |      |   |       |   |      | Investments       |   |   | Net Assets    |   |
|   |                                |   | Cost   |      |   | Fair Value |   |      | At Fair Value     |   |   | At Fair Value |   |
|   |                                |   |   |      |   |       |   |      |              |   |   |          |   |
|   | As of December 31, 2010             |   |   |      |   |       |   |      |              |   |   |          |   |
|   | Private Portfolio Companies:        |   |   |      |   |       |   |      |              |   |   |          |   |
|   | NeoPhotonics Corporation            |   | $      | 1,000,000 |   |       | $      | 1,550,000 |              |   |   | 37.10         | %      |   |   | 6.90 | % |
|   | Livescribe, Inc.                    |   |   | 500,500   |   |       |   | 527,616   |              |   |   | 12.63         | %      |   |   | 2.35 | % |
|   | Solazyme, Inc.                      |   |   | 999,991   |   |       |   | 999,991   |              |   |   | 23.94         | %      |   |   | 4.45 | % |
|   | MBA Polymers, Inc.                  |   |   | 1,100,000 |   |       |   | 1,100,000 |              |   |   | 26.33         | %      |   |   | 4.90 | % |
|   |                                |   |   |      |   |       |   |      |              |   |   |          |   |   |   |   |   |
|   | Total - Private Portfolio Companies |   | $      | 3,600,491 |   |       | $      | 4,177,607 |              |   |   | 100.00        | %      |   |   | 18.60 | % |

----

----

|   | The following table summarizes the composition of the Company’s investment portfolio, excluding short-term investments in certificates of deposit, at cost and fair value by industry classification as of December 31, 2010. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                |   |   |      |   |       |   |      | Percentage of     |   |   |          |   |
|--------|-------------------------------------|--------|--------|-----------|--------|------------|--------|-----------|-------------------|--------|--------|---------------|--------|
|   |                                |   |   |      |   |       |   |      | Portfolio Company |   |   | Percentage of |   |
|   |                                |   |   |      |   |       |   |      | Investments       |   |   | Net Assets    |   |
|   |                                |   | Cost   |      |   | Fair Value |   |      | At Fair Value     |   |   | At Fair Value |   |
|   |                                |   |   |      |   |       |   |      |              |   |   |          |   |
|   | As of December 31, 2010             |   |   |      |   |       |   |      |              |   |   |          |   |
|   | Private Portfolio Companies:        |   |   |      |   |       |   |      |              |   |   |          |   |
|   | Technology Equipment                |   | $      | 1,000,000 |   |       | $      | 1,550,000 |              |   |   | 37.10         | %      |   |   | 6.90 | % |
|   | Consumer Products                   |   |   | 500,500   |   |       |   | 527,616   |              |   |   | 12.63         | %      |   |   | 2.35 | % |
|   | Clean Technology                    |   |   | 2,099,991 |   |       |   | 2,099,991 |              |   |   | 50.27         | %      |   |   | 9.35 | % |
|   |                                |   |   |      |   |       |   |      |              |   |   |          |   |   |   |   |   |
|   | Total - Private Portfolio Companies |   | $      | 3,600,491 |   |       | $      | 4,177,607 |              |   |   | 100.00        | %      |   |   | 18.60 | % |

|   | The following table summarizes the composition of the Company’s investment portfolio, excluding short-term investments in certificates of deposit, at cost and fair value by geographic region of the United States as of December 31, 2010.  The geographic composition is determined by the location of the corporate headquarters of the portfolio company. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                 |   |   |      |   |       |   |      | Percentage of     |   |   |          |   |
|--------------------------------------|--------|--------|-----------|--------|------------|--------|-----------|-------------------|--------|--------|---------------|--------|
|                                 |   |   |      |   |       |   |      | Portfolio Company |   |   | Percentage of |   |
|                                 |   |   |      |   |       |   |      | Investments       |   |   | Net Assets    |   |
|    Geographic Location     |   | Cost   |      |   | Fair Value |   |      | At Fair Value     |   |   | At Fair Value |   |
|                                 |   |   |      |   |       |   |      |              |   |   |          |   |
|    As of December 31, 2010 |   |   |      |   |       |   |      |              |   |   |          |   |
| West                                 |   | $      | 3,600,491 |   |       | $      | 4,177,607 |              |   |   | 100.00        | %      |   |   | 18.60 | % |
|                                 |   |   |      |   |       |   |      |              |   |   |          |   |   |   |   |   |
| Total                                |   | $      | 3,600,491 |   |       | $      | 4,177,607 |              |   |   | 100.00        | %      |   |   | 18.60 | % |

| 5.     | Related Party Agreements and Transactions                                                                                                                                                                                                                                                                                                                |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                     |
|   | Investment Advisory and Administrative Services Agreement                                                                                                                                                                                                                                                                                                |
|   | Subject to the overall supervision of its Board of Directors, Keating Investments, the Company’s external Investment Adviser, manages the Company’s day-to-day operations and provides the Company with investment advisory services. Under the terms of the Investment Advisory and Administrative Services Agreement, Keating Investments: |

|   | ● | Determines the composition of the Company’s investment portfolio, the nature and timing of the changes to the  investment portfolio and the manner of implementing such changes; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                             |
|   | ● | Determines which securities the Company will purchase, retain or sell;                                                                                                                           |
|   |    |                                                                                                                                                                                             |
|   | ● | Identifies, evaluates and negotiates the structure of investments the Company makes, including performing due diligence on prospective portfolio companies; and                             |
|   |    |                                                                                                                                                                                             |
|   | ● | Closes, monitors and services the investments the Company makes.                                                                                                                                 |

|   | Keating Investments’ services under the Investment Advisory and Administrative Services Agreement are not exclusive and it is free to furnish similar services to other entities so long as its services to the Company are not impaired. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                            |
|   | The Company pays Keating Investments a fee for its investment advisory services under the Investment Advisory and Administrative Services Agreement consisting of two components: (i) a base management fee, and (ii) an incentive fee.         |

----

----

|   | Base Management Fee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The base management fee (the “Base Fee”) is calculated at an annual rate of 2% of the Company’s gross assets, where gross assets include any borrowings for investment purposes.  The Company did not have any borrowings for the years ended December 31, 2010 and 2009, or the period from May 9, 2008 (Inception) to December 31, 2008.  The Base Fee is payable quarterly in arrears, and is calculated based on the value of the Company’s gross assets at the end of the most recently completed calendar quarter, and adjusted for any equity capital raises or repurchases during the current calendar quarter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | The Company recorded Base Fees of $218,876, $90,904 and $11,990 for the years ended December 31, 2010 and 2009 and for the period from May 9, 2008 (Inception) to December 31, 2008, respectively.  As of December 31, 2010 and 2009, Base Fees payable to Keating Investments were $90,631 and $41,387, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | At December 31, 2009, the aggregate Base Fee liability payable to Keating Investments of $41,387 was comprised of: (i) $29,468 accrued as “Base management fees payable to Investment Adviser” in the accompanying Statement of Assets and Liabilities, and (ii) $11,919 included in “Accounts Payable” in the accompanying Statement of Assets and Liabilities.  The $11,919 included in Accounts Payable represented amounts (25% of cumulative Base Fees earned) that Keating Investments agreed to defer the collection of until the Company had completed at least one portfolio company investment.  As the Company completed its first portfolio company investment on January 25, 2010, the previously deferred Base Fees of $11,919 included in Accounts Payable at December 31, 2009, were paid to Keating Investments during the first quarter of 2010.                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | Incentive Fee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory and Administrative Services Agreement, as of the termination date), and equals 20% of the Company’s realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fees, with respect to each of the investments in the Company’s portfolio.  Keating Investments is not entitled to an incentive fee on investment income generated from interest or dividends on its portfolio investments.                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | During the years ended December 31, 2010 and 2009, and during the period from May 9, 2008 (Inception) to December 31, 2008, no incentive fees were earned by or payable to Keating Investments in accordance with the contractual terms of the Investment Advisory and Administrative Services Agreement since the Company did not generate any realized capital gains during such periods.  However, as of December 31, 2010, the Company accrued an incentive fee payable to Keating Investments in the amount of $115,423 with respect to $577,116 of net unrealized appreciation on its portfolio company investments as of December 31, 2010.  Since the incentive fee is only payable based on realized capital gains (after reduction for realized capital losses and unrealized depreciation), this accrued incentive fee of $115,423 may differ from the actual incentive fee that may be paid to Keating Investments depending on whether the Company is ultimately able to dispose of its portfolio company investments and generate a net realized capital gain at least commensurate with the unrealized appreciation recorded as of December 31, 2010. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | Administrative Services                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | Pursuant to the Investment Advisory and Administrative Services Agreement, Keating Investments furnishes the Company with office facilities, equipment, and clerical, bookkeeping and record-keeping services. Keating Investments also performs, or facilitates the performance of, certain administrative services, which includes being responsible for the financial records which the Company is required to maintain, and preparing reports to the Company’s stockholders and reports filed with the SEC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | In addition, Keating Investments assists the Company with its portfolio accounting and bookkeeping, managing portfolio collections and reporting, performing stockholder and investor relations services, determining and publishing its net asset value, overseeing the preparation and filing of its tax returns, printing and disseminating reports to its stockholders, providing support for its risk management efforts and generally overseeing the payment of its expenses and performance of administrative and professional services rendered to the Company by others.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | The Company reimburses Keating Investments for the allocable portion of overhead and other expenses incurred by Keating Investments in performing its administrative obligations under the Investment Advisory and Administrative Services Agreement, including the allocable portion of compensation of the Company’s Chief Financial Officer and Chief Compliance Officer, and their respective staff.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

----

----

|   | The Company recorded allocated administrative expenses of $404,633, $269,384 and $28,041 for the years ended December 31, 2010 and 2009 and for the period from May 9, 2008 (Inception) to December 31, 2008, respectively.  As of December 31, 2010 and 2009, allocated administrative expenses payable to Keating Investments were $41,348 and $67,136, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Reimbursable Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Reimbursable expenses payable to Keating Investments totaling $3,068 and $18,063 in the accompanying Statement of Assets and Liabilities at December 31, 2010 and 2009, respectively, represent amounts owed to Keating Investments for direct expenses of the Company that were paid on its behalf by Keating Investments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Duration and Termination                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | The Investment Advisory and Administrative Services Agreement was initially approved by the Company’s Board of Directors and its sole stockholder on July 28, 2008. An amended and restated version of the Investment Advisory and Administrative Services Agreement, which is presently in effect, was approved by the Company’s Board of Directors on April 17, 2009, and by the Company’s stockholders at its Annual Meeting on May 14, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Unless earlier terminated as described below, the Investment Advisory and Administrative Services Agreement will remain in effect for a period of two years from the date it was approved by the Board of Directors and will remain in effect from year-to-year thereafter if approved annually by: (i) the vote of a majority of the Company’s Board of Directors, or by the vote of a majority of the Company’s outstanding voting securities, and (ii) the vote of a majority of the Company’s directors who are not interested persons. An affirmative vote of the holders of a majority of the Company’s outstanding voting securities is also necessary in order to make material amendments to the Investment Advisory and Administrative Services Agreement. The Company’s Board of Directors (including its independent directors) is expected to consider the renewal of the Investment Advisory and Administrative Services Agreement for an additional year at its meeting scheduled for March 2011. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | The Investment Advisory and Administrative Services Agreement automatically terminates in the event of its assignment. As required by the 1940 Act, the Investment Advisory and Administrative Services Agreement provides that the Company may terminate the agreement without penalty upon 60 days’ written notice to Keating Investments.  If Keating Investments wishes to voluntarily terminate the Investment Advisory and Administrative Services Agreement, it must give stockholders a minimum of 120 days’ notice prior to termination and must pay all expenses associated with its termination. The Investment Advisory and Administrative Services Agreement may also be terminated, without penalty, upon the vote of a majority of the Company’s outstanding voting securities.                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | License Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | On July 28, 2008, the Company entered into a license agreement (the “License Agreement”) with Keating Investments pursuant to which Keating Investments granted the Company a non-exclusive license to use the name “Keating.” Under the License Agreement, the Company has a right to use the Keating name and logo, for as long as Keating Investments or one of its affiliates remains the Company’s investment adviser. Other than with respect to this limited license, the Company has no legal right to the “Keating” name or logo. The License Agreement will remain in effect for as long as the Investment Advisory and Administrative Services Agreement with Keating Investments is in effect.                                                                                                                                                                                                                                                                                           |

| 6.     | Capital Stock                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | The Company’s authorized capital stock consists of 200,000,000 shares of stock, par value $0.001 per share, all of which has initially been designated as common stock.                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | From August 27, 2008 through November 12, 2008, the Company sold 569,800 shares of common stock in a private offering to various qualified purchasers at $10.00 per share, resulting in gross proceeds of $5,698,000 (the “Private Offering”).  After the payment of placement agent commissions and other offering costs of $454,566, the Company received net proceeds of $5,243,434 in connection with the Private Offering. |

----

----

|   | On June 11, 2009, the Company commenced a continuous public offering pursuant to which the Company intends to sell from time-to-time up to 10 million shares of its common stock at an initial offering price of $10.00 per share, adjusted for volume discounts and commission waivers, through the period ending June 30, 2011.  During the period from June 11, 2009 through December 31, 2009, no shares of common stock were sold and no proceeds were received from the Company’s continuous public offering.  During the year ended December 31, 2010, the Company sold 2,290,399 shares of common stock at an average price of $9.96 per share, resulting in gross proceeds of $22,809,653 and net proceeds of $20,613,587, after payment of $2,196,606 in dealer manager fees and commissions. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | The following table summarizes the sales of the Company’s common stock under its continuous public offering by month during the year ended December 31, 2010:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

|                                 |   |     |    |      |          |          |   |     |   |   |        | Dealer Manager |   |     |    |      |
|--------------------------------------|--------|----------|---------|-----------|---------------|---------------|--------|----------|--------|--------|-------------|----------------|--------|----------|---------|-----------|
|                                 |   |     | Shares  |      |          | Average Price |   |     | Gross  |   |        | Fees and       |   |     | Net     |      |
|    Month                   |   | Sold (1) |    |      | Per Share (1) |          |   | Proceeds |   |   | Commissions |           |   | Proceeds |    |
|                                 |   |     |    |      |          |          |   |     |   |   |        |           |   |     |    |      |
|    January (first closing) |   |     | 114,695 |      |          | $             | 10.00  |     |   | $      | 1,146,500   |           |   | $        | 114,243 |      |   | $ | 1,032,257 |   |
|    February                |   |     | 54,638  |      |          |          | 9.99   |     |   |   | 546,000     |           |   |     | 54,261  |      |   |   | 491,739 |   |
|    March                   |   |     | 175,283 |      |          |          | 9.98   |     |   |   | 1,749,436   |           |   |     | 171,896 |      |   |   | 1,577,540 |   |
|    April                   |   |     | 151,554 |      |          |          | 9.84   |     |   |   | 1,491,050   |           |   |     | 127,062 |      |   |   | 1,363,988 |   |
|    June                    |   |     | 233,277 |      |          |          | 9.98   |     |   |   | 2,327,331   |           |   |     | 227,840 |      |   |   | 2,099,491 |   |
|    July                    |   |     | 113,780 |      |          |          | 9.99   |     |   |   | 1,136,483   |           |   |     | 112,457 |      |   |   | 1,024,026 |   |
|    August                  |   |     | 203,128 |      |          |          | 9.99   |     |   |   | 2,028,643   |           |   |     | 200,493 |      |   |   | 1,828,150 |   |
|    September               |   |     | 146,716 |      |          |          | 9.95   |     |   |   | 1,459,215   |           |   |     | 138,771 |      |   |   | 1,320,444 |   |
|    October                 |   |     | 249,310 |      |          |          | 9.96   |     |   |   | 2,482,410   |           |   |     | 238,622 |      |   |   | 2,243,788 |   |
|    November                |   |     | 371,395 |      |          |          | 9.96   |     |   |   | 3,697,520   |           |   |     | 354,967 |      |   |   | 3,342,553 |   |
|    December                |   |     | 476,623 |      |          |          | 9.96   |     |   |   | 4,745,065   |           |   |     | 455,454 |      |   |   | 4,289,611 |   |
|                                 |   |     |    |      |          |          |   |     |   |   |        |           |   |     |    |      |   |   |   |   |   |
|                                 |   |     |    | 2,290,399 |          |          | $      | 9.96     |   |   | $           | 22,809,653     |   |     | $       | 2,196,066 |   |   | $ | 20,613,587 |   |

|    (1) | All shares were sold at a price of either $9.30 or $10.00, depending on whether or not sales commissions were waived by the dealer manager. |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | Deferred offering costs are comprised of: (i) $501,897 of expenses directly related to the continuous public offering that were deferred prior to the first closing on January 11, 2010, and (ii) $308,591 of other offering-related expenses incurred subsequent to January 11, 2010 through December 31, 2010.  Deferred offering costs are being amortized and charged against the gross proceeds of the continuous public offering, as a reduction to additional paid-in capital, on a straight-line basis beginning with the first closing on January 11, 2010 and continuing through the expiration of the offering period on June 30, 2011.  During the year ended December 31, 2010, deferred offering costs totaling $476,806 were amortized and charged as a reduction to additional paid-in capital. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | Offering expenses incurred subsequent to January 11, 2010 associated with maintaining the registration of the continuous public offering (i.e., legal, accounting, printing and blue sky) are expensed as incurred.  During the year ended December 31, 2010, $156,941 in offering expenses associated with maintaining the registration of the continuous public offering were expensed as incurred and are classified as “Stock issuance expenses” in the accompanying Statement of Operations.                                                                                                                                                                                                                                                                                                             |

----

----

| 7.     | Changes in Net Assets Per Share                                                                                                                                                                                                                             |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                        |
|   | The following table sets forth the computation of the basic and diluted per share net decrease in net assets resulting from operations for the years ended December 31, 2010 and 2009 and for the period from May 9, 2008 (Inception) to December 31, 2008: |

|   |                                                   |   |         |       |   |           |   |     | Period from  |   |
|--------|--------------------------------------------------------|--------|--------------|------------|--------|----------------|--------|----------|--------------|--------|
|   |                                                   |   |         |       |   |           |   |     | May 9, 2008  |   |
|   |                                                   |   | Years Ended  |       |   | (Inception) to |   |
|   |                                                   |   | December 31, |       |   | December 31,   |   |     | December 31, |   |
|   |                                                   |   | 2010         |       |   | 2009           |   |     | 2008         |   |
|   |                                                   |   |         |       |   |           |   |     |         |   |
|   | Numerator for decrease in net assets per share         |   | $            | (1,399,877 | )      |           | $      | (995,978 | )            |   | $ | (528,960 | ) |
|   |                                                   |   |         |       |   |           |   |     |         |   |   |   |   |
|   | Denominator for basic and diluted                      |   |         |       |   |           |   |     |         |   |   |   |   |
|   | weighted average shares                                |   |         | 1,383,537  |   |           |   | 569,900  |         |   |   | 294,824 |   |
|   |                                                   |   |         |       |   |           |   |     |         |   |   |   |   |
|   | Basic and diluted net decrease in net assets per share |   |         |       |   |           |   |     |         |   |   |   |   |
|   | resulting from operations                              |   | $            | (1.01      | )      |           | $      | (1.75    | )            |   | $ | (1.79 | ) |

|   | During the years ended December 31, 2010 and 2009 and for the period from May 9, 2008 (Inception) to December 31, 2008, the Company had no dilutive securities outstanding. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8.     | Subsequent Events                                                                                                                                                 |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                              |
|   | The following table summarizes the sales of the Company’s common stock under its continuous public offering from January 1, 2011 through February 22, 2011: |

|   |          |   |     |    |   |          |   |   |     |   |   | Dealer Manager |   |   |     |    |
|--------|---------------|--------|----------|---------|--------|---------------|--------|--------|----------|--------|--------|----------------|--------|--------|----------|---------|
|   |          |   | Shares   |    |   | Average Price |   |   | Gross    |   |   | Fees and       |   |   | Net      |    |
|   | Month         |   | Sold (1) |    |   | Per Share (1) |   |   | Proceeds |   |   | Commissions    |   |   | Proceeds |    |
|   |          |   |     |    |   |          |   |   |     |   |   |           |   |   |     |    |
|   | January 2011  |   |     | 315,143 |   |          |   | 9.97   |     |   |   | 3,141,484      |   |   |     | 305,195 |   |   |   | 2,836,289 |   |
|   | February 2011 |   |     | 536,034 |   |          |   | 9.94   |     |   |   | 5,328,486      |   |   |     | 504,176 |   |   |   | 4,824,310 |   |
|   |          |   |     |    |   |          |   |   |     |   |   |           |   |   |     |    |   |   |   |   |   |
|   |          |   |     | 851,177 |   |          | $      | 9.95   |     |   | $      | 8,469,970      |   |   | $        | 809,371 |   |   | $ | 7,660,599 |   |

|   | (1)    | All shares were sold at a price of either $9.30 or $10.00, depending on whether or not sales commissions were waived by |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|
|   |   | the dealer manager.                                                                                                     |

|   | On February 2, 2011, NeoPhotonics, the Company’s first portfolio company, completed an initial public offering selling 7,500,000 shares of common stock at a price of $11.00 per share.  NeoPhotonics is listed on the New York Stock Exchange under the ticker symbol NPTN.  Prior to the initial public offering, the Company’s Series X convertible preferred stock converted at a conversion price of $6.25 per share into 160,000 shares of NeoPhotonics common stock, which common shares are subject to a 180-day lock-up provision.  At December 31, 2010, the Company’s Series X convertible preferred stock investment in NeoPhotonics was valued at $1,550,000, including $550,000 in unrealized appreciation based upon a fair value determination made in good faith by the Company’s Board of Directors. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | On February 11, 2011, the Company’s Board of Directors declared a special cash distribution of $0.13 cents per share.  The distribution was paid on February 17, 2011 to the Company’s stockholders of record as of February 15, 2011.  As of the record date, there were 3,437,212 shares of common stock outstanding resulting in a cash distribution totaling approximately $446,837. This special cash distribution was paid based on the unrealized appreciation previously recorded on the Company’s NeoPhotonics investment and, as such, will be initially treated as a return of capital to its stockholders.  However, in the event the Company is able to sell all or a portion of its NeoPhotonics common shares at a gain during 2011 after the expiration of its six-month lock-up period, all or a portion of this special distribution may be reclassified at year end as a capital gain distribution to the Company’s stockholders. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | On February 22, 2011, the Company made an additional investment of $900,000 in MBA Polymers in the same series of convertible preferred stock as its initial investment.  The additional investment was part of an aggregate additional offering of approximately $14.6 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

| 9. | Selected Quarterly Financial Data (Unaudited) |
|----|-----------------------------------------------|

|   |               |   |       |   |   |           |   |   |                          |   |   |            |   |   |       |   |   |                    |   |    |   |   |   |      |   |
|--------|--------------------|--------|------------|--------|--------|----------------|--------|--------|-------------------------------|--------|--------|-----------------|--------|--------|------------|--------|--------|-------------------------|--------|---------|--------|--------|--------|-----------|--------|
|   |               |   |       |   |   |           |   |   |                          |   |   |            |   |   | Net Change |   |   | Net Increase (Decrease) |   |
|   |               |   | Investment |   |   | Net Investment |   |   | in Unrealized Appreciation    |   |   | in Net Assets   |   |
|   |               |   | Income     |   |   | Loss           |   |   | (Depreciation) on Investments |   |   | from Operations |   |
|   |               |   |       |   |   |           |   |   |                          |   |   |            |   |   |       |   |   |                    |   |    |   |   |   |      |   |
|   |               |   |       |   |   | Per            |   |   |                          |   |   | Per             |   |   |       |   |   | Per                     |   |    |   |   |   | Per       |   |
|   | Quarter Ended      |   | Total      |   |   | Share (1)      |   |   | Total                         |   |   | Share (1)       |   |   | Total      |   |   | Share (1)               |   |    | Total  |   |   | Share (1) |   |
|   |               |   |       |   |   |           |   |   |                          |   |   |            |   |   |       |   |   |                    |   |    |   |   |   |      |   |
|   | March 31, 2009     |   |       | 1,231  |   |           |   | *      |                          |   |   | (214,297        | )      |   |       | (0.38  | )      |                    |   | -       |   |   |   | -         |   |   |   | (214,297 | ) |   |   | (0.38 | ) |
|   | June 30, 2009      |   |       | 286    |   |           |   | *      |                          |   |   | (296,919        | )      |   |       | (0.52  | )      |                    |   | -       |   |   |   | -         |   |   |   | (296,919 | ) |   |   | (0.52 | ) |
|   | September 30, 2009 |   |       | 3,723  |   |           |   | 0.01   |                          |   |   | (234,346        | )      |   |       | (0.41  | )      |                    |   | -       |   |   |   | -         |   |   |   | (234,346 | ) |   |   | (0.41 | ) |
|   | December 31, 2009  |   |       | 5,397  |   |           |   | 0.01   |                          |   |   | (250,416        | )      |   |       | (0.44  | )      |                    |   | -       |   |   |   | -         |   |   |   | (250,416 | ) |   |   | (0.44 | ) |
|   |               |   |       |   |   |           |   |   |                          |   |   |            |   |   |       |   |   |                    |   |    |   |   |   |      |   |   |   |   |   |   |   |   |   |
|   | March 31, 2010     |   |       | 15,725 |   |           |   | 0.02   |                          |   |   | (309,532        | )      |   |       | (0.42  | )      |                    |   | 550,000 |   |   |   | 0.75      |   |   |   | 240,468 |   |   |   | 0.33 |   |
|   | June 30, 2010      |   |       | 7,894  |   |           |   | 0.01   |                          |   |   | (503,859        | )      |   |       | (0.48  | )      |                    |   | -       |   |   |   | -         |   |   |   | (503,859 | ) |   |   | (0.48 | ) |
|   | September 30, 2010 |   |       | 12,428 |   |           |   | 0.01   |                          |   |   | (414,186        | )      |   |       | (0.28  | )      |                    |   | 27,364  |   |   |   | 0.02      |   |   |   | (386,822 | ) |   |   | (0.26 | ) |
|   | December 31, 2010  |   |       | 17,962 |   |           |   | 0.01   |                          |   |   | (749,416        | )      |   |       | (0.34  | )      |                    |   | (248    | )      |   |   | *         |   |   |   | (749,664 | ) |   |   | (0.34 | ) |

|   | (1)     | Per  share amounts are calculated using weighted average shares outstanding during the period. |
|--------|---------|----------------------------------------------------------------------------------------------------------|
|   |  * | Per share amounts less than $0.01.                                                                       |

----

Item 9. 

Item 9A.

Item 9B.

----

Item 10.

Item 11.

Item 12.

Item 13.

Item 14.

----

Item 15.

| Financial Statements                                                                                                                                         |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                         |   |
| Report of Independent Registered Public Accounting Firm                                                                                                      | 78     |
|                                                                                                                                                         |   |
| Statements of Assets and Liabilities as of December 31, 2010 and December 31, 2009                                                                           | 79     |
|                                                                                                                                                         |   |
| Statements of Operations for the years ended December 31, 2010 and 2009 and for the period from May 9, 2008 (Inception) to December 31, 2008       | 80     |
|                                                                                                                                                         |   |
| Statements of Changes in Net Assets for the years ended December 31, 2010 and 2009 and for the period from May 9, 2008 (Inception) to December 31, 2008 | 81     |
|                                                                                                                                                         |   |
| Statements of Cash Flows for the years ended December 31, 2010 and 2009 and for the period from May 9, 2008 (Inception) to December 31, 2008       | 82     |
|                                                                                                                                                         |   |
| Schedule of Investments as of December 31, 2010                                                                                                              | 83     |
|                                                                                                                                                         |   |
| Schedule of Investments as of December 31, 2009                                                                                                              | 84     |
|                                                                                                                                                         |   |
| Financial Highlights for the years ended December 31, 2010 and 2009 and for the period from May 9, 2008 (Inception) to December 31, 2008           | 85     |
|                                                                                                                                                         |   |
| Notes to Financial Statements                                                                                                                                | 86     |

| 3.1    | Amended and Restated Articles of Incorporation (Incorporated by reference to Post-Effective Amendment No. 1 to the Registrant’s Registration Statement on Form N-2 (File No. 333-157217), filed on April 21, 2010)                        |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                            |
| 3.2    | Articles of Amendment to Amended and Restated Articles of Incorporation (Incorporated by reference to Post-Effective Amendment No. 3 to the Registrant’s Registration Statement on Form N-2 (File No. 333-157217), filed on May 27, 2010) |
|   |                                                                                                                                                                                                                                            |
| 3.3    | Amended and Restated Bylaws (Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 0-53504), filed on April 23, 2009)                                                                                        |
|   |                                                                                                                                                                                                                                            |
| 3.4    | Amendment to Bylaws dated August 5, 2010 (Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 0-53504), filed on August 9, 2010)                                                                           |
|   |                                                                                                                                                                                                                                            |
| 3.5    | Amendment to Bylaws dated October 22, 2010 (Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 0-53504), filed on October 26, 2010)                                                                       |
|   |                                                                                                                                                                                                                                            |
| 3.6    | Form of Amended and Restated Dividend Reinvestment Plan (Incorporated by reference to Post-Effective Amendment No. 2 to the Registrant’s Registration Statement on Form N-2  (File No. 333-157217), filed on May 21, 2010)      |
|   |                                                                                                                                                                                                                                            |
| 4.1    | Form of Share Certificate (Incorporated by reference to the Registrant’s Annual Report on Form 10-K (File No. 0-53504), filed on March 9, 2009)                                                                                           |

----

| 10.1   | Form of Amended and Restated Investment Advisory and Administrative Services Agreement (Incorporated by reference to Amendment No. 1 to the Registrant’s Registration Statement on Form N-2 (File No. 333-157217), filed on May 1, 2009) |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                           |
| 10.2   | License Agreement between the Company and Keating Investments, LLC (Incorporated by reference to the Registrant’s Registration Statement on Form 10 (File No. 0-53504), filed on November 20, 2008)                                      |
|   |                                                                                                                                                                                                                                           |
| 10.3   | Form of Indemnification Agreement for Directors (Incorporated by reference to Amendment No. 2 to the Registrant’s Registration Statement on Form N-2 (File No. 333-157217), filed on June 5, 2009)                                       |
|   |                                                                                                                                                                                                                                           |
| 10.4   | Custody Agreement between the Company and Steele Street Bank & Trust (Incorporated by reference to the Registrant’s Registration Statement on Form 10 (File No. 0-53504), filed on November 20, 2008)                                |
|   |                                                                                                                                                                                                                                           |
| 11     | Computation of Per Share Earnings (included in the notes to the unaudited financial statements contained in this report)                                                                                                                       |
|   |                                                                                                                                                                                                                                           |
| 31.1*  | Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.                                                                                                                           |
|   |                                                                                                                                                                                                                                           |
| 31.2*  | Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.                                                                                                                           |
|   |                                                                                                                                                                                                                                           |
| 32.1*  | Certification of Chief Executive Officer pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.                                                                                                                                            |
|   |                                                                                                                                                                                                                                           |
| 32.2*  | Certification of Chief Financial Officer pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.                                                                                                                                            |

| * | Filed herewith. |
|---|-----------------|

----

SIGNATURES

|                                    |                                                                                    |
|-----------------------------------------|-----------------------------------------------------------------------------------------|
|                                    | KEATING CAPITAL, INC.                                                                   |
|                                    |                                                                                    |
| Date:  February 28, 2011 | /S/    Timothy J. Keating        |
|                                    | Timothy J. KeatingPresident and Chief Executive Officer                                 |

|                                    | /s/    Timothy J. Keating                                   |
|-----------------------------------------|-------------------------------------------------------------------------------------------------------------------------|
| Date:  February 28, 2011 | Timothy J. KeatingPresident, Chief Executive Officer andChairman of the Board of Directors(Principal Executive Officer) |
|                                    |                                                                                                                    |
|                                    | /s/   Ranjit P. Mankekar                                         |
| Date:  February 28, 2011 | Ranjit P. MankekarChief Financial Officer, Treasurer and Director(Principal Accounting and Financial Officer)           |
|                                    |                                                                                                                    |
|                                    | /s/    J. Taylor Simonton                                   |
| Date:  February 28, 2011 | J. Taylor SimontonDirector                                                                                              |
|                                    |                                                                                                                    |
|                                    | /s/    Andrew S. Miller                                     |
| Date:  February 28, 2011 | Andrew S. MillerDirector                                                                                                |
|                                    |                                                                                                                    |
|                                    | /s/    William F. Owens                                     |
| Date:  February 28, 2011 | William F. OwensDirector                                                                                                |