0001493152-17-002423.txt : 20170315 0001493152-17-002423.hdr.sgml : 20170315 20170314174800 ACCESSION NUMBER: 0001493152-17-002423 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20161231 FILED AS OF DATE: 20170315 DATE AS OF CHANGE: 20170314 EFFECTIVENESS DATE: 20170315 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Millennium Investment & Acquisition Co Inc. CENTRAL INDEX KEY: 0001358656 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-22156 FILM NUMBER: 17689196 BUSINESS ADDRESS: STREET 1: 301 WINDING ROAD STREET 2: OLD BETHPAGE CITY: NEW YORK STATE: NY ZIP: 11804 BUSINESS PHONE: 212-751-9200 MAIL ADDRESS: STREET 1: 301 WINDING ROAD STREET 2: OLD BETHPAGE CITY: NEW YORK STATE: NY ZIP: 11804 FORMER COMPANY: FORMER CONFORMED NAME: Millennium India Acquisition CO Inc. DATE OF NAME CHANGE: 20060407 N-CSR 1 formn-csr.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-22156

Millennium Investment & Acquisition Company Inc.

(Exact name of registrant as specified in charter)

301 Winding Road, Old Bethpage, NY 11804

(Address of principal executive offices) (Zip code)

Registrant’s telephone number, including area code: 212 750-0371

Date of fiscal year end: 12/31

Date of reporting period: 12/31/2016

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

Item 1. Reports to Stockholders.

MILLENNIUM INVESTMENT & ACQUISITION COMPANY INC.

(formerly Millennium India Acquisition Company Inc.)

301 Winding Road

Old Bethpage, NY 11804

March 14, 2017

Dear Fellow Shareholder:

As previously described, Millennium Investment & Acquisition Company Inc. (“MIAC” or “we”) has embarked on a new direction and during 2015 and 2016 we continued to make progress.

As previously disclosed, on June 11, 2015, we completed the acquisition of an activated carbon plant in Kawaihae, Hawaii for $1.28 million. The acquisition price is a small fraction of the more than $44 million originally invested in the plant from 2009 to 2012. Despite commencing operations in 2011, the plant failed to achieve full commercial operations and generate profits. It ceased operating in 2012 and its owner filed for bankruptcy. MIAC acquired the facility out of bankruptcy and is in the early stages of upgrading the plant in order to establish full commercial operation and profitability. MIAC believes this acquisition is a compelling opportunity that should generate an attractive return on investment. We currently anticipate commencing trial runs of the plant during the first part of 2017 and look forward to reporting on our progress.

We also continue to strategically evaluate the realization of value from our investment in SMC Global. During 2015 we completed the sale of approximately 1.1 million shares of SMC Global for which we received approximately $2.1 million. During 2016, we completed the sale of 900,000 shares of SMC Global for which we received approximately $1.1 million which is approximately $1.23 per SMC Global share. As of December 31, 2016 MIAC holds 12,704,690 shares of SMC Global which represents an approximately 11.2% ownership of SMC Global . In addition, as previously disclosed, we have entered into a Right to Sell agreement pursuant to which MIAC will have a right to sell 100,000 shares of SMC back to the “promoter group” of SMC on the first day of each month commencing April 1, 2016,and continuing until SMC completes a qualified public offering and listing on either a primary stock exchange in India or the Unites States. SMC Global has notified MIAC that it is pursuing an Initial Public Offering in the United States and has indicated that it is targeting completion of its offering and listing during the second quarter of 2017.

I remain enthusiastic about the opportunities to create shareholder value for MIAC and I look forward to a prosperous year. As part of this, I have continued to acquire stock in MIAC as a demonstration of my confidence in our plans.

Very truly yours,

David H. Lesser

Chairman and CEO

MILLENNIUM INVESTMENT & ACQUISITION COMPANY INC.

PORTFOLIO OF INVESTMENTS

DECEMBER 31, 2016

	Shares		Value
India -- 28.85% Financials -- 28.85% Private placement - 28.85% SMC Global Securities LTD (cost $37,379,593)		12,704,690	$	7,387,401

United States -- 62.40% Materials -- 59.99% Millennium HI Carbon, LLC (cost $2,771,836)		N/A		15,361,339

Renewable Energy -- 2.41% Solar Farm Construction Loan (cost $617,593)		N/A		617,593

Total Investments -- 91.25% (Cost $40,769,022)			$	23,366,333

Cash and other assets, less liabilities -- 8.81%				2,240,345

NET ASSETS - 100.00%			$	25,606,678

See accompanying notes which are an integral part of these financial statements.

MILLENNIUM INVESTMENT & ACQUISITION COMPANY INC.

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2016

Assets:
Investments, at fair value (Cost $40,769,022)	$	23,366,333
Cash		2,586,617
Prepaid expenses and other assets		23,614
Total Assets		25,976,564

Liabilities:
Accrued expenses and other payables		82,024
Deferred Rent		287,862
Total Liabilities		369,886

Net Assets	$	25,606,678

Net Assets Consist of:

Preferred shares; par value $0.0001 per share, 5,000 share authorized, no shares issued	$	-
Common Stock; par value $0.0001 per share, 12,000,000 shares authorized, 10,959,814 issued and outstanding		1,096
Paid-in capital		52,400,025
Accumulated net investment loss		(26,794,443	)
Net Assets	$	25,606,678

Net Asset Value Per Share:
Net assets	$	25,606,678

Basic and diluted shares of common stock outstanding		10,959,814

Net asset value (Net Assets/Shares of Common Stock Outstanding)	$	2.34

See accompanying notes which are an integral part of these financial statements.

MILLENNIUM INVESTMENT & ACQUISITION COMPANY INC.

STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2016

Investment Income:
Dividend income	$	138,360
Interest Income		47,458
Other income		126,839
Total Income		312,657

Operating Expenses:
Franchise tax		22,052
Insurance expense		42,079
Miscellaneous expenses		5,503
Officer expense		240,000
Trustee fees		12,000
Rent expense		10,575
Public company expenses		54,339
Total Operating Expenses		386,548

Net Investment Income		(73,891	)

Realized and Unrealized Gain on Investments:
Net change in unrealized loss on investments		2,124,646
Net realized loss on investment		(1,541,509	)
Net Realized and Unrealized Gain on Investments:		583,137

Net Increase in Net Assets Resulting From Operations	$	509,246

See accompanying notes which are an integral part of these financial statements.

MILLENNIUM INVESTMENT & ACQUISITION COMPANY INC.

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended			Year Ended
	December 31, 2016			December 31, 2015

Operations:
Net investment (loss) income	$	(73,891	)	$	(99,281	)
Net change in unrealized loss on investments		2,124,646			16,211,274
Net realized loss on investment		(1,541,509	)		(1,189,620	)
Net Increase in Net Assets Resulting from Operations		509,246			14,922,373

Capital Transactions:
Proceeds from issuance of Common Stock		-			1,342,310

Net Assets:
Beginning of year		25,097,430			8,832,747
End of period*	$	25,606,678		$	25,097,430

* Millennium Investment & Acquisition Company Inc. does not have any undistributed net investment income.

See accompanying notes which are an integral part of these financial statements.

MILLENNIUM INVESTMENT & ACQUISITION COMPANY INC.

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2016

CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in net assets from operations	$	509,246

Adjustments to reconcile net decrease in net assets from operations to net cash
provided by operating activities:
Unrealized loss on private placement		523,324
Investment in Millennium HI Carbon, LLC		(1,080,118	)
Changes in operating Assets and Liabilities:
Prepaid expenses and other assets		24,015
Accrued expenses and other payables		(92,537	)
Solar construction loan		(1,000,000	)
Solar construction loan - accrued interest		(47,007	)
Solar construction loan - repayment		429,414
Deferred rent		184,800
Net Cash Provided by Operating Activities		(548,863	)

Net increase in cash for the year	$	(548,863	)

CASH:
Cash at beginning of year		3,135,480
Cash at end of period	$	2,586,617

See accompanying notes which are an integral part of these financial statements.

FINANCIAL HIGHLIGHTS

Per Share Data and Ratios for a Share of Common Stock Outstanding Through Each Period

	For the Year Ended December 31,
	2016			2015			2014			2013			2012

Net Asset Value, Beginning of Period	$	2.29		$	1.07		$	0.91		$	2.72		$	2.64
Income (Loss) from Investment Operations:
Net investment (loss) income*		(0.01	)		(0.01	)		0.03			0.09			(0.02	)
Net realized and unrealized gain (loss)*		0.05			1.04			0.13			(1.90	)		0.10
Total from investment operations		0.05			1.03			0.16			(1.81	)		0.08

Net Asset Value, End of Period	$	2.34		$	2.29		$	1.07		$	0.91		$	2.72

Market Value, End of Period	$	0.82		$	0.58		$	0.62		$	1.14		$	0.75

Total Return		41.38	%		-6.45	%		-45.61	%		52.00	%		11.94	%
Ratios and Supplemental Data:
Net assets, end of period (000s)	$	25,607		$	25,097		$	8,833		$	7,485		$	22,380
Ratio of operating expenses to average net assets		1.51	%		1.90	%		4.91	%		3.69	%		3.68	%
Ratio of net investment gain (loss) to average net assets		2.28	%		-0.59	%		6.23	%		7.40	%		-0.66	%
Portfolio Turnover Rate		2.0	%		25.6	%		0	%		0	%		0	%

* Calculated based on average shares outstanding

** Unaudited

See accompanying notes which are an integral part of these financial statements.

MILLENNIUM INVESTMENT & ACQUISITION COMPANY INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Millennium India Acquisition Company Inc. (“MIAC” or the “Company”), formerly Millennium India & Acquisition Company, Inc., was incorporated in Delaware on March 15, 2006, for the purpose of effecting a merger, capital stock exchange, asset acquisition or other similar transaction (a “Business Combination”) with an operating business or businesses that have operations primarily in India. In January 2008, the acquisition of a 14.75% equity interest in the SMC Group was consummated by the Company. As a result investing substantially all of its assets in SMC Group stock, MIAC was required to register with the SEC as a closed-end, non-diversified investment company under the Investment Company Act of 1940 (the “Act”). As a registered investment company, MIAC is subject to the Act and the related rules, which contain detailed requirements for the organization and operation of investment companies.

In March 2008, MIAC’s interest in the SMC Group was reduced to 14.44% due to Bennett Coleman & Co., a leading New Delhi based financial media and investment firm investing in SMC Group. In May 2009, the merger of SMC Group’s two underlying companies, SAM Global Securities Limited (“SAM”) and SMC Global Securities Limited (“SMC Global”) was finalized. In June 2009, MIAC’s interest was increased to 15.14% with the shares of SAM and SMC Global (1,298,400 and 1,730,026 shares, respectively) converting to 1,586,738 shares of SMC Global. On July 2, 2011, Sanlam, a South African based investment management company, increased its stake in SMC Global to a total of approximately 8.36%, by purchasing an additional 3.25% equity stake in SMC Global which reduced MIAC’s equity interest in SMC Global to approximately 14.03%. On July 31, 2012, SMC Global held a shareholder meeting and consented to a stock-split of the equity shares of the Company 10:1, increasing MIAC’s position of 1,586,738 shares to 15,867,380 shares. On December 12, 2013, the Company sold 1,131,345 shares of its investment in SMC Global, reducing MIAC’s equity interest in SMC Global to approximately 13%. On November 20, 2015, the Company sold an additional 1,131,345 shares of its investment in SMC Global, reducing MIAC’s equity interest in SMC Global to 13,604,690 shares. As previously disclosed, MIAC has entered into a Right to Sell Agreement (the “Right to Sell”) with the “promoter group” of SMC Global pursuant to which MIAC will have a right to sell 100,000 shares of SMC Global back to the “promoter group” on the first day of each month commencing April 1, 2016, and continuing until SMC completes a qualified public offering and listing on either a primary stock exchange in India or the Unites States. The purchase price will be the Fair Market Value, as defined, of the stock at the time of the transaction. There can be no assurance the “promoter group” will comply with their obligations related to the Right to Sell Agreement. Pursuant to the Right to Sell agreement, during 2016, MIAC completed the sale of 900,000 shares of SMC Global for net proceeds of approximately $1,100,000 which is approximately $1.23 per SMC Global share. As of December 31, 2016 MIAC holds 12,704,690 shares of SMC Global which represents an approximately 11.2% ownership of SMC Global (See Note 3).

On October 3, 2013, MIAC announced that public efforts by MIAC shareholder Hudson Bay Partners, LP (“HBP”) to secure shareholder support for the replacement of MIAC’s Board of Directors with a new director slate resulted in the delivery to MIAC of written consents representing more than 50% of the outstanding shares. Accordingly, all of HBP’s director nominees were appointed to the MIAC Board of Directors (the “Board”) including the principal of HBP, David H. Lesser, MIAC’s Chief Executive Officer (“CEO”) and Chairman.

On March 4, 2014, the Company’s Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), was amended to reduce the number of the Company’s shares of authorized capital stock from 45,005,000 to 12,005,000. The Certificate of Incorporation currently authorizes the issuance of 12,000,000 shares of common stock and 5,000 shares of preferred stock, in each case with a par value of $0.0001 per share.

Effective June 11, 2014, the Company completed a corporate reorganization under the laws and procedures of Delaware which has resulted in the change of its name to Millennium Investment & Acquisition Company Inc. The corporate reorganization was undertaken following a change of investment policy, pursuant to which the Company’s Board voted to abandon the former policy of investing at least 80% of the value of its net assets and borrowings in equity securities of companies operating in India. In conjunction with the change in investment policy, the Board affected the change of name to remove reference to India in compliance with the Act and the rules thereunder.

These financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company is considered an investment company under GAAP and follows the accounting and reporting guidance applicable to investment companies in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, “Financial Services—Investment Companies.” The following is a summary of significant accounting policies followed by the Company in preparation of its financial statements

(a)

Valuation of Investments in Securities

Fair Value of Financial Instruments—The Company’s investments are valued at (1) the market price for those securities for which a market quotation is readily available and (2) for all other securities and assets, fair value as determined by the Company’s Board pursuant to procedures approved by the Board. Except as otherwise specifically provided in the valuation procedures the Company will value portfolio securities for which market quotations are readily available at market value. The Company values all other securities and assets, including the shares of SMC Global, at fair value as determined in accordance with the valuation procedures approved by the Board. Because of the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments determined under the Company’s procedures may differ significantly from the values that would have been used had a ready market existed for the investments or from the values that would have been placed on the Company’s assets by other market participants, and the differences could be material.

Determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment. The Company has a significant investment in stock ownership of SMC Global, which is listed, but not traded on the New Delhi Stock Exchange. The Company values its position in SMC Global based on a valuation methodology that includes the examination of, among other things, (1) the nature and price (if any) of the portfolio security; (2) whether any broker quotations for the portfolio security are available; (3) the last sale price of the portfolio security; (4) whether any other financial or derivative security traded on other markets or among dealers is indicative of the appropriate price; (5) whether values of baskets of securities, or indices, traded on other markets, exchanges, or among brokers are indicative of the appropriate price; (6) the extent to which the fair value to be determined for the portfolio security will result from the use of data or formulas produced by third parties independent of management; (7) the liquidity or illiquidity of the market for the particular portfolio security; (8) the financial statements and condition of SMC Global; (9) general information concerning the issuer’s business including, without limitation, material developments in business prospects, management changes, litigation, governmental approvals, actions and contracts and extraordinary events; (10) the competitive position of the issuer’s major products, the demand therefore or any material changes in the marketplace; (11) general and specific market trends and the existence of any merger proposals, tender offers or other similar corporate actions affecting the securities; (12); the market value of any unrestricted securities of the same class; (13) the availability of registration rights; (14) legal or other restrictions on the disposition of the securities (including any registration expenses that might be borne by the Company in connection with such disposition); (15) the characteristics of the market in which the securities are purchased and sold; (16) the market value of similar securities of the same issuer or comparable companies; (17) in the case of securities that trade primarily in markets that close before the valuation time, financial market or other developments that occur after such market close but before the valuation time; (18) changes in interest rates; (19) observations from financial institutions; (20) government (U.S. or non-U.S.) actions or pronouncements; (21) other news events; (22) for securities traded on non-U.S. markets, the value of non-U.S securities traded on other non-U.S. markets, ADR trading, closed-end fund trading, non-U.S. currency exchange activity, the trading prices of financial products that are tied to baskets of non-U.S. securities (such as ADRs and World Equity Benchmark Shares) and futures contracts or other derivative securities based on indices representative of the appropriate market; and (23) the nature and duration of any material event and the forces influencing the operation of financial markets, factors relating to the event that precipitated the problem, whether the event is likely to recur, whether the effects of the event are isolated or whether they affect entire markets, countries or regions.

For all securities held by the Company, when market quotations or other information used in valuing such securities are not readily available or current or otherwise appropriate, management may be required to supply an “unobservable input” or determine whether to adjust a supplied price, as described below.

Generally, management must act reasonably and in good faith in considering all appropriate information available to it in identifying fair valuation situations and may consult with, as appropriate, investment personnel, general news and financial market information sources, industry sources, regulatory authorities, other market participants and legal, compliance and accounting personnel. Management has also engaged the services of third-party vendors to assist it. Management may believe at times that a significant event affecting a portfolio security has occurred that would require it to adjust a supplied price. In the case of holdings denominated in foreign currencies, management converts the values of fund assets nominally reported in foreign currencies into U.S. Dollars daily at the valuation time. The Company is responsible for monitoring currency prices and related markets to identify significant events that call into question whether the exchange rate (established as of an earlier pricing time) applied to a security denominated in a foreign currency reliably represents the security’s market value at the valuation time.

In determining the fair value of securities held by the Company, no single factor is determinative. Each Director may have accorded a different weight, or no weight, to different factors and, thus, each Director may have had a different basis for his ultimate determination of value.

The fair values of the Company’s assets and liabilities that qualify as financial instruments approximate their carrying amounts presented in the statement of assets and liabilities at December 31, 2016.

The Company utilizes various methods to measure the fair value of most of its investments on a recurring basis. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of input are:

Level 1 – Unadjusted quoted prices in active markets for identical assets and liabilities that the Company has the ability to access.

Level 2 – Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument in an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

Level 3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Company’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following tables summarize the inputs used as of December 31, 2016 for the Company’s investments measured at fair value:

	Level 1		Level 2		Level 3		Total
Private Placement - SMC	$	-	$	-	$	7,387,401	$	7,387,401
Private Placement - Solar Loan					$	617,593	$	617,593
Materials	$	-	$	-	$	15,361,339	$	15,361,339
Total	$	-	$	-	$	23,366,333	$	23,366,333

There were no transfers into or out of Level 1, Level 2, and Level 3 during the year ended December 31, 2016. It is the Company’s policy to recognize transfers into and out of Level 1, Level 2, and Level 3 at the end of the reporting year.

The following is a reconciliation of assets in which significant unobservable (Level 3) were used in determining fair value:

	Private			Millennium
	Placement			HI Carbon		Total
Beginning balance	$	7,910,724		$	14,281,222	$	22,191,946
Investment in Millennium HI Carbon, LLC		-			1,080,117		1,080,117
Investment in private placement (net) - solar loan		617,593			-		617,593
Change in unrealized (loss) on investment		(523,323	)		-		-523,323
Ending Balance	$	8,004,994		$	15,361,339	$	23,366,333

In valuing its investment in SMC Global, the Company uses a valuation model, in addition to the previously disclosed valuation factors, which considers revenue, earnings and book value multiples of comparable companies as well as transactions with respect to similar securities.

As of June 30, 2013, MIAC valued its investment in SMC Global at $21,804,829 ($1.37 per SMC share). As described in MIAC’s annual report to shareholders for the year ended December 31, 2013, the new management of MIAC appointed in October 2013 reviewed the valuation methodology and conclusions used by MIAC previously to value its SMC Global holding, and established a new valuation for that holding of $6,500,000 ($0.41 per SMC share). The principal change in valuation approach between the old valuation and the new was the re-weighting certain valuation metrics. The new management gave a greater weighting to the valuation of the investment based on a Multiple of Net Income, and gave zero weight to the use of a prior transaction in SMC Global stock that MIAC’s new management did not deem relevant for purposes of establishing a current valuation.

As of December 31, 2014, MIAC valued its investment in SMC Global at approximately $7,616,000 ($0.52 per SMC share). The increase in valuation is attributable primarily to improved earnings at SMC Global, offset by reducing to zero the weight given to the use of a Multiple of Revenue as a valuation metric.

As of December 31, 2015, MIAC valued its investment in SMC Global at approximately $7,920,000 ($0.58 per SMC share). The valuation of SMC Global stock was increased in February 2015 based on a review of improved financial performance relative to prior periods. The valuation has not been adjusted (on a per share basis) since that time.

As of December 31, 2016, MIAC valued its investment in SMC Global at approximately $7,390,000 ($0.581 per SMC share). The Company will consider the re-valuation of its position in SMC Global as facts warrant.

(b)

Foreign Currency Translation

The books and records of the Company are maintained in U.S. Dollars. Foreign currency amounts are translated into U.S. Dollars on the following basis: (i) market value of investment securities, assets, and liabilities at the closing daily rate of exchange, and (ii) purchases and sales of investment securities and dividend income at the rate of exchange prevailing on the respective dates of such transactions.

(c)

Cash

The Company maintains a cash account at financial institutions, which are federally insured up to $250,000. At various times during the year, the account balance may have exceeded the insured limit. The Company mitigates this risk by regularly monitoring the financial stability of the financial institution.

(d)

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The accounting estimates that require management’s most difficult and subjective judgments are reflected in management’s valuation of its investments and the realization of deferred tax assets. Because of the uncertainty in such estimates, actual results may differ from these estimates.

(e)

Income Taxes

Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts and are based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred income tax assets to the amount expected to be realized.

The Company recognizes the tax benefits of uncertain tax positions only when the position is “more likely than not” to be sustained assuming examination by tax authorities. Management reviewed the tax positions during the year ended December 31, 2016, and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the year ended December 31, 2016, the Company did not incur any interest or penalties. Generally tax authorities can examine tax returns filed for the last three years.

(f)

Security Transactions, Dividend Income and Other Income

Security transactions are recorded on the trade date. In determining the gain or loss from the sale of securities, the cost of securities sold is determined on the basis of identified cost. Dividends are recorded on the ex-dividend date.

2.	ADMINISTRATION FEES AND OTHER TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES

Administrative Fees

	(a)	The Board approved compensation for the CEO of the Company, David Lesser, at a rate of $10,000 per month. On April 12, 2016 the Board approved a bonus for David Lesser in the amount of 120,000.

	(b)	Gemini Fund Services (“GFS”) formerly provided administrative services to the Company including fund administration and fund accounting, pursuant to an Administration Agreement. GFS deferred certain of its fees and as of December 31, 2014, approximately $127,000 of such fees were accrued. During 2015 the Company commenced internalizing administrative, accounting and reporting functions and did not accrue additional fees to Gemini. Effective February 10, 2016 the Company terminated its agreement with GFS and settled the outstanding amount owed by paying $80,000 which is approximately $47,000 less than what the Company had accrued on its books.

Transactions with Affiliates

	(a)	Commencing September 2016, the Board approved payment to an entity affiliated with the CEO of the Company, David Lesser, to reimburse such entity for accounting and administrative functions at a rate of $750 per month for each of Millennium Investment & Acquisition Company and Millennium HI Carbon LLC. During 2016, the total amount paid to such affiliate of David Lesser was $6,000.

	(b)	The Company has engaged Morrison Cohen, LLP (“MoCo”) as its legal counsel with respect to general corporate matters. The spouse of the Company’s CEO is a partner at MoCo. During the year ended December 31, 2016, the Company paid $0 in legal fees to MoCo.

3. INVESTMENT TRANSACTIONS

Private Placement

As previously disclosed, MIAC negotiated a right to sell 1,131,345 shares of SMC Global back to the “promoter group” at a price of 125 Indian Rupees per share in the event SMC Global did not complete a public offering and a listing on a primary exchange in India by March 31, 2015. On April 1, 2015, MIAC exercised its right and on November 19, 2015 MIAC closed on this contemplated sale and received proceeds of $2,139,011 ($0.20 per MIAC share). After completion of the sale, MIAC held 13,604,690 shares of SMC Global which represents approximately 12% of the outstanding shares of SMC Global.

As previously disclosed, MIAC has entered into a Right to Sell Agreement (the “Right to Sell”) with the “promoter group” of SMC Global pursuant to which MIAC will have a right to sell 100,000 shares of SMC back to the “promoter group” on the first day of each month commencing with April 1, 2016, and continuing until SMC completes a qualified public offering and listing on either a primary stock exchange in India or the Unites States. The purchase price will be the Fair Market Value, as defined, of the stock at the time of the transaction. There can be no assurance the “promoter group” will comply with their obligations related to the Right to Sell Agreement. Pursuant to this Right to Sell, during 2016, MIAC completed the sale of 900,000 shares of SMC Global for net proceeds of approximately $1,100,000 which is approximately $1.23 per SMC Global share. As of December 31, 2016 MIAC holds 12,704,690 shares of SMC Global which represents an approximately 11.2% ownership of SMC Global

In addition, MIAC has entered into a Consulting Agreement with SMC and received an initial payment of approximately $85,000 in 2015 related thereto and received approximately $80,000 in 2016.

As previously disclosed, on October 20, 2014, SMC Global publicly filed a Draft Red Herring Prospectus (“DRHP”) with the Indian securities regulatory authority (“SEBI”), in anticipation of conducting a Further Public Offering (“FPO”) of its shares and a listing of its shares on India’s principal stock exchanges, the Bombay Stock Exchange and the National Stock Exchange of India. On April 8, 2015, SMC was notified that it has cleared the SEBI regulatory process for the FPO and is now in the Red Herring Prospectus stage in anticipation of the FPO. The FPO contemplates the sale of approximately $20 million (as converted to U.S. Dollars) of new shares of SMC Global. MIAC has negotiated the right to participate in the FPO by selling up to approximately $3 million (as converted to U.S. Dollars) of its SMC shares as part of the FPO. MIAC believes that it has complied with all requirements to participate as a selling shareholder in the FPO. There can be no assurance as to when or if the FPO will occur. In addition, there can be no assurance as to what the ultimate price per share will be, if the FPO occurs.

SMC Global has notified MIAC that it is exploring an initial public offering (“IPO”) and listing in the United States as an alternative to its offering and listing in India. There can be no assurance as to when or if the IPO will occur. The current estimate provided by SMC Global to MIAC with respect to timing targets a completion of the IPO in or about the second quarter of 2017. In addition, there can be no assurance as to what the ultimate price per share will be, if the IPO occurs.

Millennium HI Carbon, LLC

On June 11, 2015, the Company, through a wholly owned subsidiary, Millennium HI Carbon, LLC (“MHC”) completed the acquisition of an activated carbon plant in Kawaihae, Hawaii for $1.28 million. Despite previously commencing operations under its former ownership in 2011, the plant failed to achieve full commercial operations and generate profits. It ceased operating in 2012 and the previous owner filed for bankruptcy. MIAC is in the process of upgrading the plant and establishing full commercial operations.

When operating, the plant will process a waste stream of macadamia nut shells into a special form of activated carbon (“AC”). AC has many small pores, which give the substance an extremely large surface area. The plant consists of 13 acres of land leased from the Department of Hawaiian Home Lands (“DHHL”), the existing equipment, and approximately 24,000 tons of macadamia nut shells, which represent more than a 2-year supply. AC’s large surface area and complex network of pores provide benefits in a variety of chemical processes including filtration, purification, and energy storage. The plant is designed to produce a premium-grade AC with characteristics that are particularly attractive for energy storage applications and that should command a price premium relative to commodity-grade AC. In particular, the AC produced by the plant should be of value in the manufacture of ultra-capacitors, an advanced alternative to traditional batteries for electricity storage. There are also other emerging applications for premium-grade AC, such as natural gas storage, that present additional growth opportunities. The plant is proximate to the port of Kawaihae, which will facilitate AC transportation.

MIAC is developing a capital plan for returning the plant to commercial operation and profitability and currently anticipates that between $8 and $12 million of additional investment will be required to upgrade the plant, provide working capital, and cover contingencies until stabilized commercial operation is achieved. MIAC is currently exploring a potential debt financing and has received an appraisal that estimates the “as-is and in-place” fair market value of the asset to be approximately $13.9 million as of March 28, 2015. This valuation was primarily based on an estimate of the asset values of all of the assets that were acquired by MHC and adjusting for in place work and remaining work to complete elements of the plant.

As part of preparing its financial statements as of December 31, 2016, the Company performed a review of the valuation of its investment in MHC. The review included updating the valuation estimates provided by the appraisal (described above). In addition, MIAC performed a valuation based on a discounted cash flow analysis of the investment (the “DCF”). Since the DCF valuation supported a higher valuation than the build-up of the individual asset values, the Company elected to use build up of the individual asset values in establishing its valuation. The valuation at December 31, 2016 reflects additional value created since the acquisition date based on capitalizing the cost of the work that has been performed at the site. The value of the MHC investment at December 31, 2016 is approximately $15.4 million.

Achieving full-scale commercial operation may take several years after which the plant should generate an attractive return on its invested capital. There can be no assurance as to how much capital or how long this process will take or what the ultimate stabilized cash flow, if any, from the project will be. MIAC believes that purchasing the plant at a substantial discount to the capital investment made by the original developer increases the likelihood of generating attractive rates of return. In addition, as part of the acquisition and bankruptcy process, MIAC amended the terms of the ground lease with DHHL to reduce the annual rental amount, defer the rent for the first two years, and eliminate other historical liabilities, which should further enhance MIAC’s likelihood of success. There can be no assurance that the investment in the plant will generate an attractive return on MIAC’s invested capital.

Solar Farm Financing

As previously disclosed, on September 30, 2016, MIAC agreed to provide construction financing to a community solar farm being developed in upstate New York. The solar farm will comprise 500 kW of solar panels on approximately 2.5 acres of land and is the expansion of a similarly sized solar farm on an adjacent property. MIAC provided $1,000,000 in total financing during construction based on achieving certain milestones. As of December 31, 2016, the solar farm was substantially complete. During 2016 the borrower repaid $429,414 of the construction loan. As of December 31, 2016 MIAC accrued approximately $47,000 of interest on the loan. The financing matures on July 1, 2017 and has expected total income to MIAC of $140,000.

4. INVESTMENTS IN RESTRICTED OR ILLIQUID SECURITIES

Restricted securities include securities that have not been registered under the Securities Act of 1933, as amended, and securities that are subject to restrictions on resale. An investment company may invest in restricted securities that are consistent with the Company’s investment objective and investment strategies. Investments in restricted securities are valued at fair value as determined in good faith in accordance with procedures adopted by the Board. It is possible that the estimated value may differ significantly from the amount that might ultimately be realized in the near term, and the difference could be material. As of December 31, 2016, the Company was invested in the following restricted securities:

Security	Acquisition Date	Shares			Cost			Cost/Share		Value		Value/SMC Share		% of Net Assets
SMC Global Securities LTD	January 21,2008		13,604,690			40,027,563		$	2.94		7,910,724		0.581		31.52	%

Sale on 4/19/16			(100,000	)		(294,219	)	$	2.94
Sale on 5 6 16			(200,000	)		(588,438	)	$	2.94
Sale on 8 14 16			(300,000	)		(882,657	)	$	2.94
Sale on 11 25 16			(300,000	)		(882,657	)	$	2.94
			4554
Total 12/31/16			12,704,690			37,379,593		$	2.94		7,387,401		0.581		28.84	%

5. INCOME TAXES

The provision for income taxes is comprised of the following for the year ended December 31, 2016:

The provision for income taxes consists of the following:	December 31, 2016
Current
Federal	$	-
State and Local		-
Total Current Tax Expense (Benefit)		-

Deferred
Federal		(547,750	)
State and Local		-
Total Deferred Tax Expense (Benefit)		(547,750	)
Less Valuation allowance adjustment		547,750

Total Tax Expense (Benefit)	$	-

At December 31, 2016, the Company had total net operating and capital loss carry forwards of approximately $11.7 million for federal income tax purposes available to offset future taxable income as follows. The loss carry forwards can be carried forward 20 years and will expire at various dates ranging from 2018 through 2035.

Deferred tax assets reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes and consist of the following:

	December 31, 2016
Deferred Tax Assets
Net unrealized loss on investments	$	10,497,267
Net loss carry-forwards		1,184750
Total Deferred Tax Assets		11,682,017
Less: Valuation Allowance		(11,682,017	)
Net Deferred Taxes	$	-

A reconciliation of the statutory United States federal tax rate to the Company’s effective income tax rate is as follows:

	December 31, 2016
Tax at Federal Statutory Rate		35.0	%
Change in Valuation Allowance		(35.0	)%
Provision for Taxes		0.0	%

Management evaluates the Company’s deferred income tax assets and liabilities to determine whether or not a valuation allowance is necessary. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Realization of future tax benefits related to the deferred tax assets is dependent on many factors, including the Company’s ability to generate future taxable income during those periods in which temporary differences become deductible and/or credits can be utilized. Based on decrease in value of the Company’s investment in SMC Global, and the uncertainty as to when the value will improve enough to allow the Company to recognize gains on the SMC Global investment and enable the Company to utilize its deferred tax assets, the Company recorded a full valuation allowance against its deferred tax assets as of December 31, 2016.

The Company’s policy for recording interest and penalties associated with uncertain tax positions is to record such items as a component of income tax expense. There were no amounts accrued for penalties or interest as of or during the period from February 14, 2007 (inception) through December 31, 2016. The Company does not expect its unrecognized tax benefit position to change during the next twelve months and is currently unaware of any issues that could result in significant payments, accruals or material deviations from its position. The Company’s tax positions for 2011 to 2016 have been analyzed, and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years.

6. COMMON STOCK

In November 2013 the Company’s Board of Directors authorized a buyback of up to 800,000 shares of its common stock. Buybacks will be made from time to time based on the view of the Company of its trading price relative to its underlying value and subject to compliance with applicable legal requirements. No buybacks were made during the twelve months ended December 31, 2016.

American Stock Transfer & Trust Company, LLC, serves as the transfer agent and dividend disbursing agent for the Company under a transfer agency agreement.

8. SUBSEQUENT EVENTS

The Company is required to recognize in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the Statement of Assets and Liabilities. For non-recognized subsequent events that must be disclosed to keep the financial statements from being misleading, the Company is required to disclose the nature of the event as well as an estimate of its financial effect, or a statement that such an estimate cannot be made. Management has determined that there were no subsequent events to report through the issuance of these financial statements.

As of the date of filing, a total of $124,364 was repaid on the Solar Loan during 2017.

On February 14, 2017, MIAC completed the sale of 250,000 shares of SMC for total proceeds of approximately $302,000.

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

Millennium Investment & Acquisition Company Inc.:

We have audited the accompanying statement of assets, liabilities and net assets of Millennium Investment & Acquisition Company, Inc. (the “Company”), including the portfolio of investments, as of December 31, 2016, and the related statements of operations, changes in net assets, cash flows, and financial highlights for the year then ended. These financial statements and financial highlights are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Millennium Investment & Acquisition Company, Inc. as of December 31, 2016, the results of its operations, changes in net assets, cash flows, and financial highlights for the year then ended in conformity with U.S. generally accepted accounting principles.

/s/ BDO USA, LLP

New York, NY March 14, 2017

Additional Information

The Company files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Company’s Form N-Q is available on the Commission’s website at http://www.sec.gov and may also be reviewed and copied at the Commission’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

A description of the policies and procedures that the Company uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling collect (212) 751-0371 and on the Commission’s website at http://www.sec.gov.

Information regarding how the Company voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling collect (212) 751-0371 and on the Commission’s website at http://www.sec.gov.

The Company’s Statement of Additional Information includes additional information about directors of the Company and is available, without charge, upon request, by calling collect (212) 751-0371.

Item 2. Code of Ethics.

(a) As of the end of the period covered by this report, the registrant has adopted a Code of Ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party (the “Code of Ethics”).

(b) For purposes of this item, “code of ethics” means written standards that are reasonably designed to deter wrongdoing and to promote:

(1) Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

(2) Full, fair, accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, the Commission and in other public communications made by the registrant;

(3) Compliance with applicable governmental laws, rules, and regulations;

(4) The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and

(5) Accountability for adherence to the code.

(d) The registrant has not granted any waivers during the period covered by this report from any provisions of the Code of Ethics.

(e) The Code of Ethics is not posted on registrant’s website.

(f) A copy of the registrant’s Code of Ethics is filed as an exhibit pursuant to Item 12(a)(1).

Item 3. Audit committee Financial Expert.

(a)(1) The registrant’s board of directors has determined that the fund has at least one audit committee financial expert serving on its audit committee.

(a)(2) The audit committee financial expert is Dionisio D’Aquilar. Mr. D’Aquilar is independent as defined in form N-CSR Item 3(a)(2).

Item 4. Principal Accountant Fees and Services.

Effective February 26, 2016, the registrant engaged BDO USA, LLP as the registrant’s principal accountant. Aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant are as follows:

	2016		2015
(a) Audit Fees (1)	$	40,000		34,000
(b) Audit-Related Fees		-		-
(c) Tax Fees (2)		8,000		8,000
(d) All Other Fees		-		-

(1) Audit Fees include fees related to the audit of the registrant’s annual financial statements and services normally provided by the accountant in connection with statutory and regulatory filings.

(2) Tax Fees consist of tax compliance services for the registrant. These services primarily included preparation of federal and state income tax returns and federal excise tax returns, as well as review of annual excise distribution requirements.

(e)(1) Audit Committee’s Pre-Approval Policies

The registrant’s audit committee pre-approves any audit or non-audit services provided by the independent auditors to the registrant, and pre-approves, if applicable, any non-audit services provided by the independent auditors to the registrant’s investment adviser, or any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant if the engagement relates directly to the operations and financial reporting of the registrant.

(e)(2) Percentages of Services Approved by the Audit Committee

The percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows:

	2016			2015
(b) Audit-Related Fees		N/A			N/A
(c) Tax Fees		100	%		0	%
(d) All Other Fees		N/A			N/A

(f) Not applicable.

(g) Not applicable.

(h) Not applicable.

Item 5. Audit Committee of Listed Registrants.

The registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The members of the committee are Dionisio D’Aguilar and Kevin McTavish.

Item 6. Schedule of Investments.

Schedule of investments is included under Item 1.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

A copy of the registrant’s proxy voting policies and procedures is filed as an exhibit hereto.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

(a)(1) Our officers, their ages, their term of office and length of time served, a description of their principal occupations during the past five years are listed in the table immediately following. Except as shown, each officer’s principal occupation and business experience for the last five years have been with the employer(s) indicated, although in some cases the officer may have held different positions with such employer(s). Unless otherwise indicated, the business address of the persons listed below is c/o Millennium Investment & Acquisition Company Inc., 301 Winding Road, Old Bethpage, New York 11804.

Name, Address and Age

Position(s) Held

With the Fund

Term of Office and Length of Tme Served

Principal Occupations(s) During the Past 5 Years

Nunber of Portfolios in Find Complex^(d)Overseen by Director

Other Directorships

Held by Director

During the Past 5

Years

David H. lesser

301 Winding Road, Old

Bethpage, NY, 11804 50

Interested Director^(d), Chairman, CEO, Secretary, Treasurer

Took office October 3, 2013 by means of written consent of majority of stockholders

Chairman and CEO of Power REIT (NYSE MKT: PW) since 2011; President of Hudson Bay Partners LP since 1995

Chairman of Power REIT (NYSE MKT: PW); Director of elab Incubator and Student Agencies Foundation

(a)(2) Mr. David H. Lesser is not currently primarily responsible for the day-to-day management of the portfolio of any other account. However, the employees and officers of the registrant are not obligated to devote their full time to the registrant, but will devote such time as they deem necessary to carry out the operations of the registrant effectively. The employees and officers of the registrant may have investments or other interests in other companies or funds which have investment objectives similar to the registrant. This may result in a conflict of interest in the allocation of investment opportunities and there is no guarantee that any investment opportunities would be allocated to the registrant.

(a)(3) The Board has approved that Mr. David H. Lesser receive $10,000 per month as base compensation and is eligible for incentive compensation as determined by the Compensation Committee. On April 12, 2016, the Board approved a bonus for David Lesser in the amount of $120,000.

(a)(4) For each officer, the following table discloses the dollar range of equity securities beneficially owned by the officer in the registrant and, on an aggregate basis, in any registered investment companies within the registrant’s family of investment companies as of December 31, 2016:

Name of Director		Dollar Range of Equity Securities in the Fund		Aggregate Dollar Range of Equity Securities in All Registered Investment Companies Overseen by Director in Family of Investment Companies
David H. Lesser		Over $100,000		N/A

(b) Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

None

Item 11. Controls and Procedures.

(a) Based upon an evaluation of the registrant’s disclosure controls and procedures as conducted within 90 days of the filing date of this report, the registrant’s principal executive officer and principal financial officer concluded that the registrant’s disclosure controls and procedures are effective.

(b) There were no changes in the registrant’s internal control over financial reporting that occurred during the registrant’s fiscal half-year that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a)(1) Not applicable.

(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (and item 11 (a)(2) of Form N-CSR) are filed herewith.

(a)(3) Not applicable

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (and item 11(b) of Form N-CSR) are filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Millennium Investment & Acquisition Company Inc.

By (Signature and Title)	/s/ David H. Lesser
	David H. Lesser, Chairman, CEO, Secretary, and Treasurer
	March 14, 2017

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title)	/s/ David H. Lesser
	David H. Lesser, Chairman, CEO, Secretary, and Treasurer
	March 14, 2017

EX-99.CERT 2 ex99.htm

Exhibit 99. CERT

CERTIFICATIONS

I, David H. Lesser, certify that:

1. I have reviewed this report on Form N-CSR of Millennium Investment & Acquisition Company Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the Registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation;

d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	3/14/17
		/s/ David H. Lesser
		David H. Lesser, Chief Executive Officer

I, David H. Lesser, certify that:

1. I have reviewed this report on Form N-CSR of Millennium Investment & Acquisition Company Inc.;

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	3/14/17
		/s/ David H. Lesser
		David H. Lesser, Treasurer

EX-99.906 CERT 3 ex99-906.htm

EX-99.906CERT

certification

David H. Lesser, Chief Executive Officer of Millennium Investment & Acquisition Company Inc. (the “Registrant”), certifies to the best of his or her knowledge that:

1. The Registrant’s periodic report on Form N-CSR for the year ended December 31, 2016 (the “Form N-CSR”) fully complies with the requirements of Sections 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ David H. Lesser
David H. Lesser
Chief Executive Officer

Date:	3/14/17

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Millennium Investment & Acquisition Company Inc. and will be retained by Millennium Investment & Acquisition Company Inc. and furnished to the Securities and Exchange Commission (the “Commission”) or its staff upon request.

This certification is being furnished to the Commission solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Form N-CSR filed with the Commission.

EX-99.906CERT

certification

David H. Lesser, Treasurer of Millennium Investment & Acquisition Company Inc. (the “Registrant”), certifies to the best of his or her knowledge that:

2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ David H. Lesser
David H. Lesser
Treasurer

Date:	3/14/2017

This certification is being furnished to the Commission solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Form N-CSR filed with the Commission.

EX-99.CODE ETH 4 coe.htm

May 2006

CODE OF ETHICS

Millennium India Acquisition Company, Inc. (the “Company”) expects all of its employees, including its principal executive officer, principal financial officer and principal accounting officer, as well as the members of its board of directors, to act in accordance with the highest standards of personal and professional integrity in all aspects of their activities, to comply with all applicable laws, rules and regulations, to deter wrongdoing and to abide by other policies and procedures adopted by the Company that govern the conduct of its employees and directors. This Code of Ethics is intended to supplement any other policies and procedures adopted by the Company.

You agree to:

(a) Engage in and promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

(b) Take all reasonable measures to protect the confidentiality of non-public information about the Company and its subsidiaries and their customers obtained or created in connection with your activities and to prevent the unauthorized disclosure of such information unless required by applicable law or regulation or legal or regulatory process;

(c) Produce full, fair, accurate, timely, and understandable disclosure in reports and documents that the Company and its subsidiaries files with, or submits to, the Securities and Exchange Commission and other regulators and in other public communications made by the Company and its subsidiaries;

(d) Comply with applicable governmental laws, rules and regulations, as well as the rules and regulations of self-regulatory organizations of which the Company or its subsidiaries is a member; and

(e) Promptly report any possible violation of this Code of Ethics to the Company’s Audit Committee.

You are prohibited from directly or indirectly taking any action to fraudulently influence, coerce, manipulate or mislead the Company or its subsidiaries’ independent public auditors for the purpose of rendering the financial statements of the Company or its subsidiaries misleading.

You understand that you will be held accountable for your adherence to this Code of Ethics. Your failure to observe the terms of this Code of Ethics may result in disciplinary action, up to and including termination of employment. Violations of this Code of Ethics may also constitute violations of law and may result in civil and criminal penalties for you, your supervisors and/or the Company.

If you have any questions regarding the best course of action in a particular situation, you should promptly contact the Company’s Audit Committee. You may choose to remain anonymous in reporting any possible violation of this Code of Ethics.

EX-1 5 ex1.htm

EX-1 5 proxyvoting.htm

MILLENNIUM INVESTMENT & ACQUISITION COMPANY INC.

PROXY POLICY & VOTE PROCEDURES

(Effective January 17, 2008)

VOTING POLICY AND GUIDELINES

Millennium Investment & Acquisition Company Inc. (“MIAC”) believes it has a fiduciary obligation to vote its clients’ proxies in favor of the economic interest of shareholders. MIAC’s officers have a fiduciary responsibility that includes protecting and enhancing the economic interests of shareholders. The following guidelines have been established to assist the appropriate officers (the “Officers”) in evaluating relevant facts and circumstances that will enable the Officers to vote in a manner consistent with their fiduciary responsibility.

ROUTINE MANAGEMENT PROPOSALS

Election of Directors

Case by Case

The Officers operate on a belief that the structure and functioning of a company’s board of directors are critical to that company’s economic success, and therefore board-related issues are treated in a separate section below.

Appointment of Auditors	Approve

Fix Auditor Remuneration	Approve

Approval of Audited Financial Statements	Approve

Set/Eliminate Dividends	Approve

Grant Board Authority to Repurchase Shares	Approve

Approve Stock Splits or Reverse Stock Splits	Approve

Change Name of Corporation	Approve

Eliminate Preemptive Rights

	Preemptive rights give current shareholders the opportunity to maintain their current percentage ownership through any subsequent equity offerings. These provisions are no longer common in the United States, and can restrict management’s ability to raise new capital.

	The Officers generally will approve the elimination of preemptive rights, but will oppose the elimination of limited preemptive rights, e.g., on proposed issues representing more than an acceptable level of dilution.

Employee Stock Purchase Plan	Approve

Establish 401(k) Plan	Approve

BOARD OF DIRECTORS

The Officers support measures that encourage and enable boards to fulfill their primary responsibility to represent the economic interests of shareholders. While they may take into consideration the specific needs of companies that are in early rapid growth phases, closely held, or in severe financial difficulties, the Officers view strong independent boards as a key protection for shareholder value.

Election of Directors

Case by Case

The Officers support management in most elections. However, they will withhold approval if the Board gives evidence of acting contrary to the best economic interests of shareholders. The Officers will also withhold approval of individual Directors whose remuneration appears to be blatantly excessive and exploitative of the shareholders.

Majority Voting

Approve

Many companies require directors to receive only a plurality of votes. This procedure allows directors to remain on the board even when the majority of votes are withheld. The Officers believe directors should garner at least a majority of the votes in order to serve on the Board.

Classified Board of Directors/Staggered Terms

Oppose

A classified board of directors is one that is divided generally into three classes, each of which is elected for a three-year term, but on a staggered schedule. At each annual meeting therefore, one-third of the directors would be subject to reelection.

The Officers’ belief is that all directors should be subject to reelection on an annual basis to discourage entrenchment, and will most frequently vote against classification and for management and shareholder proposals to eliminate classification of the board.

Occasionally, proposals to classify a board of directors will contain a clause stipulating that directors may be removed only for cause. We will oppose these proposals.

Confidential Voting

Approve

Confidential voting is most often proposed by shareholders as a means of eliminating undue management pressure on shareholders regarding their vote on proxy issues.

Cumulative Voting for Directors

Case by Case

Cumulative voting allocates one vote for each share of stock held times the number of directors subject to election. A shareholder may cumulate his/her votes and cast all of them in favor of a single candidate, or split them among any combination of candidates. Cumulative voting enables minority shareholders to secure board representation.

The Officers generally support cumulative voting proposals. However, they may withhold approval of proposals that further the candidacy of minority shareholders whose interests do not coincide with the Officers’ fiduciary responsibility.

Director Compensation

Case by Case

The Officers believe that compensation for independent outside directors should be structured to align the interests of the directors with those of shareholders, whom they have been elected to represent. To this end, the Officers have a preference toward compensation packages which are based on the company’s performance and which include stock and stock options.

Independent Board Committees

Approve

The Officers believe that a board’s nominating, compensation and audit committees should consist entirely of independent outside directors in order to avoid conflict of interests. The Officers will therefore normally approve reasonable shareholder proposals to that effect; an example of an unreasonable request would be a case where a board consists of only two or three directors.

Majority Independent Board Composition

Approve

The Officers will generally support shareholder proposals requesting that the board consist of majority independent outside directors, as the Officers believe that an independent board faces fewer conflicts and is best prepared to protect shareholder interests.

Separation of Chairman and CEO Positions

Case by Case

The Officers will support shareholder proposals requesting that the positions of chairman and CEO be separated if the board is composed of less than a majority of independent directors.

CORPORATE GOVERNANCE

Adjourn Meeting to Solicit Additional Votes

Oppose

Additional solicitation is costly and could result in coercive pressure on shareholders, who usually have sufficient information in the proxy materials to make an informed decision prior to the original meeting date.

Anti-Greenmail Provision	Approve

Eliminate Shareholders’ Right to Call Special Meeting	Oppose

Increase in Authorized Shares	Case by Case

The Officers approve proposals for increases of up to 100%. The Officers will consider larger increases if a need is demonstrated. The Officers may apply a stricter standard if the company has no stated use for the additional shares and/or has previously authorized shares still available for issue. Additionally, proposals which include shares with unequal voting rights may warrant opposition.

Indemnification of Directors and Officers

Approve

The Officers support the protection of directors and officers against frivolous and potentially ruinous legal actions, in the belief that failure to do so might severely limit a company’s ability to attract and retain competent leadership. The Officers will support proposals to provide indemnification which is limited to coverage of legal expenses.

Liability Insurance of Directors and Officers

Approve

Proposals regarding liability insurance for directors and officers often appear separately from indemnification proposals. The Officers will generally support insurance against liability for acts committed in an individual’s capacity as a director or officer of a company. However, the Officers will withhold approval of proposals which cover breaches of the duty of loyalty, acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, willful or negligent conduct in connection with the payment of an unlawful dividend, or any transaction from which the director derived an improper personal benefit.

Prohibit Shareholder Action Outside Meetings	Oppose

Reincorporate	Case by Case

Proposals to reincorporate in another state are most frequently motivated by considerations of anti-takeover protections or cost savings. Where cost savings are the sole issue, the Officers will favor reincorporation.

In cases where there are significant differences in anti-takeover protections, we will vote in favor of reincorporation only if shareholder discretion is not diminished by the change. As state corporation laws are continuously evolving, such determination requires case by case analysis.

Change of Location of Corporate Headquarters

Case by Case

Changes in location of headquarters must have clear economic benefits. Changing the physical location of headquarters to meet the personal geographic or lifestyle preferences of senior executives will be opposed.

Require more than simple majority vote to pass proposals

Oppose

ANTI-TAKEOVER

Blank Check Preferred

Case by Case

These proposals are for authorization of a class of preferred stock in which voting rights are not established in advance, but are left to the discretion of the board of directors on a when issued basis. The authority is generally viewed as affording the board the ability to place a block of stock with an investor sympathetic to management, thereby foiling a takeover bid without reference to a shareholder vote. However, in some cases it may be used to provide management with the flexibility to consummate beneficial acquisitions, combinations or financings.

The Officers oppose these proposals as a transfer of authority from shareholders to the board and a possible entrenchment device. However, if there are few or no other anti-takeover measures on the books and the company appears to have a legitimate financing motive for requesting the authority, or has used blank check preferred stock for past financings, the Officers will approve the proposal.

Differential Voting Power

Oppose

Authorize a class of common having superior voting rights over the existing common or entitled to elect a majority of the board.

Poison Pill Plans

Oppose

Also known as “shareholder rights plans,” involve call options to purchase securities in a target firm on favorable terms. The options are exercisable only under certain circumstances, usually hostile tender offers. These plans are not subject to shareholder vote. However, the shares required to fund the plan must be authorized. Since these shares are generally blank check preferred, we oppose them.

Therefore, these proposals generally only appear on the proxy as shareholder proposals requesting that existing plans be put to a vote. The vote is non-binding. The Officers will vote in favor of shareholder proposals to rescind poison pills.

The Officers’ policy is to examine these plans individually. Most plans will be opposed, however. The Officers will approve most plans which include a “permitted bid” feature. Permitted bid features have appeared in some Canadian poison pill plans. They require shareholder ratification of the pill, stipulate a sunset provision whereby the pill expires unless it is renewed and specify that an all cash bid for all shares that includes a fairness opinion and evidence of financing does not trigger the pill, but forces a special meeting at which the offer is put to a shareholder vote.

Stakeholder Provision

Oppose

Stakeholder provisions introduce the concept that the board may consider the interests of constituencies other than shareholders in the evaluation of takeover offers.

The Officers believe that this concept is inconsistent with public ownership of corporations.

MANAGEMENT COMPENSATION

Golden Parachutes

Case by Case

Golden parachutes provide for compensation to management in the event of a change in control. The Officers view this as encouragement to management to consider proposals which might be beneficial to shareholders, but are very sensitive to excess or abuse.

Pay-for-Performance Plans

Approve

The Omnibus Budget Reconciliation Act requires companies to link executive compensation exceeding $1 million to preset performance goals and submit the plans for shareholder approval in order for such compensation to qualify for federal tax deductions. The law further requires that such plans be administered by a compensation committee comprised solely of outside directors. Because the primary objective of such proposals is to preserve the deductibility of such compensation, the Officers are biased toward approval in order to preserve net income. However, proposals which authorize excessive dilution or provide executives extraordinary windfalls will be opposed. Moreover, when an objectionable plan is coupled with poor performance, the Officers will consider withholding votes from compensation committee members.

OPTION PLANS

The Officers support option plans that provide incentive to directors, managers and other employees by aligning their economic interests with those of the shareholders while limiting the transfer of wealth out of the company. Option plan evaluations are therefore based on the total cost to shareholders and give effect to the incentive aspects of the plan. The Officers are wary of over-dilution or not-insignificant shareholder wealth transfer.

MERGERS, ASSET SALES & CAPITAL RESTRUCTURINGS

In reviewing merger and asset sale proposals, the Officers’ primary concern is with the best economic interests of shareholders. This does not necessarily indicate that the Officers will vote in favor of all proposals which provide a market premium relative to pre-announcement prices. Due to the subjective nature of the value of individual proposals, transaction-specific characteristics or conditions may prevail. Factors affecting the voting decision will likely include transaction consideration relative to intrinsic value, strategic reason for transaction, board approval/transaction history, and financial advisors’ fairness opinions.

OTHER SHAREHOLDER PROPOSALS

For those shareholder-proposed issues that are not covered specifically elsewhere.

Shareholder Proposal Requesting a Yearly Report on Director Attendance at Meetings	Approve

Shareholder Proposal Requesting a Minimum Stock Ownership by Directors	Oppose

Shareholder Proposal to Compensate Directors in Stock	Approve

SOCIAL ISSUES

The Officers receive proxies containing shareholder proposals which address social issues which are varied and tend to shift from year to year. However, the Officers’ philosophy in reviewing social proposals is consistent; that is, they will vote in all cases in the best economic interests of their clients.

II.

PROCEDURES

A.	Instructions to Bank/Broker Custodians

All custodian banks/brokers are to be notified that all proxy voting materials should be forwarded to MIAC upon receipt unless client has other instructions. This notification typically occurs at the time the account is opened at the custodian.

B.	MIAC Administrative Responsibilities for Proxy Voting

MIAC’s Executive Vice President will delegate and oversee the proxy voting process as Proxy Administrator..

(1) Upon notification of an upcoming vote, the Proxy Administrator will create a file with the portfolio company (the “Portfolio Company”) name and meeting date on the tab. All proxies and related materials for this particular Portfolio Company will then be placed in this file until ready to be voted on.

(2) When the Proxy Administrator completes his review of the proxy statement, he will complete the “Proxy Instruction Form” which instructs how to vote and briefly identifies reasons for voting against management, if applicable. The Proxy Administrator who will then vote the proxy.

(3) Each proxy is then cross-referenced by the Proxy Administrator to make sure the shares we are voting on are the actual shares owned for that client.

(4) All proxies received from the same company for all clients will be voted as the original without review by the Proxy Administrator unless specific client circumstances require otherwise.

(5) After the proxy is voted, all Proxy Instruction Forms will be maintained in a separate file.

(6) The Proxy Administrator will review the voting records for each security to ensure that all shares owned are voted.

(7) Copies of each proxy are kept in the above mentioned folder along with a copy of the annual report, Proxy Instruction Form, and other notes related to each company vote.

A.	Treatment of Personal Conflicts of Interest

From time to time, individuals involved in the proxy voting process may have personal relationships with people connected to the Portfolio Company, including (a) individual members of the board of directors, (b) candidates for the board of directors, (c) proponents of proxy proposals, and (d) participants in proxy contests. Such relationships could create a conflict of interest with respect to the voting of a proxy. The following procedures are designed to hand over the proxy voting responsibility to a different Officer or to an Independent Director of MIAC in the event that such conflicts of interest arise in a particular proxy vote.

As part of the initial process in overseeing proxy voting and prior to the voting of any proxy, the Proxy Administrator shall determine whether a personal relationship exists between himself and the following people connected with the Portfolio Company: (a) individual members of the board of directors, (b) candidates for the board of directors, (c) proponents of proxy proposals, and (d) participants in proxy contests. In the event that such a personal relationship exists, the Proxy Administrator shall provide the proxy materials to the President if he does not have a personal conflict of interest or to an Independent Director of MIAC, who shall make the determinations required for voting.