dninqsept2013.htm

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM N-Q
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
 
Investment Company Act File Number:  811-8747
 
DIVIDEND AND INCOME FUND
(Exact name of registrant as specified in charter)
 
11 Hanover Square, 12th Floor
New York, NY
10005
(Address of principal executive offices)
(Zip Code)


John F. Ramírez, Esq.
Dividend and Income Fund
11 Hanover Square
New York, NY 10005
(Name and address of agent for service)

Registrant's telephone number, including area code: 1-212-785-0900

 
 
Date of Fiscal Year End:   12/31
 
Date of Reporting Period:  9/30/2013
 
Item 1. Schedule of Investments
 
 
DIVIDEND AND INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
September 30, 2013
(Unaudited)
                 
Shares
      
Cost
    
Value
  
   
COMMON STOCKS (74.14%) (a)
            
   
 Aircraft Engines & Engine Parts (0.77%)
            
  10,000  
United Technologies Corp.
   $ 727,426     $ 1,078,200  
                       
     
Beverages (1.37%)
                
  30,000  
Coca-Cola Company
     835,674       1,136,400  
  10,000  
PepsiCo, Inc.
     529,400       795,000  
            1,365,074       1,931,400  
                       
     
Biological Products (0.96%)
                
  12,100  
Amgen Inc.
     783,805       1,354,474  
                       
     
Cable & Other Pay Television Services (1.00%)
                
  21,400  
Time Warner Inc.
     781,678       1,408,334  
                       
     
Cigarettes (1.35%)
                
  30,000  
Altria Group, Inc.
     634,550       1,030,500  
  10,000  
Philip Morris International, Inc.
     485,376       865,900  
            1,119,926       1,896,400  
                       
     
Computer & Office Equipment (0.26%)
                
  2,000  
International Business Machines Corporation
     258,964       370,360  
                       
     
Computer Communications Equipment (0.69%)
                
  41,300  
Cisco Systems, Inc.
     783,771       967,246  
                       
     
Construction, Mining & Materials Handling Machinery & Equipment (0.86%)
          
  13,500  
Dover Corp.
     781,673       1,212,705  
                       
     
Converted Paper & Paperboard Products (0.84%)
                
  12,500  
Kimberly-Clark Corp.
     890,751       1,177,750  
                       
     
Crude Petroleum & Natural Gas (0.54%)
                
  8,160  
Occidental Petroleum Corporation
     527,752       763,286  
                       
     
Deep Sea Foreign Transportation of Freight (0.87%)
                
  50,000  
Seaspan Corp.
     347,030       1,223,500  
                       
     
Dolls & Stuffed Toys (0.74%)
                
  25,000  
Mattel, Inc.
     610,742       1,046,500  
                       
     
Electric Services (1.85%)
                
  11,000  
Entergy Corp.
     693,431       695,090  
  18,600  
FirstEnergy Corp.
     785,714       677,970  
  30,000  
Southern Company
     1,094,052       1,235,400  
            2,573,197       2,608,460  
                       
     
Electromedical & Electrotherapeutic Apparatus (0.76%)
                
  20,200  
Medtronic, Inc.
     788,000       1,075,650  
                       
     
Electronic & Other Electrical Equipment (3.76%)
                
  20,000  
Emerson Electric Company
     747,590       1,294,000  
  111,900  
General Electric Company (b)
     1,949,675       2,673,291  
  41,400  
Koninklijke Philips Electronics N.V.
     783,100       1,335,150  
            3,480,365       5,302,441  
                       
     
Electronic & Other Services Combined (0.91%)
                
  17,000  
Exelon Corp.
     715,134       503,880  
  19,100  
PG&E Corp.
     784,489       781,572  
            1,499,623       1,285,452  
                       
     
Fire, Marine & Casualty Insurance (1.33%)
                
  20,000  
Ace Ltd.
     829,324       1,871,200  
                       
     
Food & Kindred Products (1.76%)
                
  25,000  
Campbell Soup Co.
     783,645       1,017,750  
  22,000  
Kraft Foods Group, Inc.*
     964,842       1,153,680  
  10,000  
Mondelez International, Inc.
     168,344       314,200  
            1,916,831       2,485,630  
                       
     
Grain Mill Products (0.85%)
                
  25,000  
General Mills, Inc. *
     1,062,157       1,198,000  
                       
     
Investment Advice (0.45%)
                
  20,000  
Invesco Ltd.
     437,950       638,000  
                       
     
Life Insurance (1.33%)
                
  40,000  
MetLife, Inc.
     699,693       1,878,000  
                       
     
Malt Beverages (0.57%)
                
  16,000  
Molson Coors Brewing Company
     707,427       802,080  
                       
     
Measuring & Controlling Devices, NEC (0.81%)
                
  10,700  
Rockwell Automation, Inc.
     780,522       1,144,258  
                       
     
Miscellaneous Fabricated Metal Products (0.78%)
                
  10,100  
Parker-Hannifin Corp.
     787,011       1,098,072  
                       
     
Motor Vehicle Parts & Accessories (1.47%)
                
  25,000  
Honeywell International, Inc.
     889,529       2,076,000  
                       
     
Motor Vehicles & Passenger Car Bodies (0.77%)
                
  19,600  
PACCAR Inc.
     788,028       1,090,936  
                       
     
National Commercial Banks (2.96%)
                
  36,800  
JPMorgan Chase & Co.
     774,303       1,902,192  
  27,000  
U.S. Bancorp *
     880,419       987,660  
  30,000  
Wells Fargo & Company *
     1,044,225       1,239,600  
            2,698,947       4,129,452  
                       
     
Natural Gas Transmission (0.63%)
                
  25,000  
Kinder Morgan, Inc. *
     924,542       889,250  
                       
     
Natural Gas Transmission & Distribution (0.73%)
                
  30,000  
Spectra Energy Corp. *
     825,096       1,026,900  
                       
     
Paints, Varnishes, Lacquers, Enamels & Allied Products (1.01%)
                
  8,501  
PPG Industries, Inc. *
     537,142       1,420,177  
                       
     
Petroleum Refining (2.00%)
                
  7,200  
Chevron Corp.
     782,448       874,800  
  11,000  
ConocoPhillips
     557,868       764,610  
  10,000  
Exxon Mobil Corp.
     738,274       860,400  
  5,500  
Phillips 66
     173,935       318,010  
            2,252,525       2,817,820  
                       
     
Pharmaceutical Preparations (8.08%)
                
  30,000  
Abbott Laboratories
     728,258       995,700  
  30,000  
AbbVie Inc. *
     793,789       1,341,900  
  55,000  
Bristol-Myers Squibb Company
     1,241,872       2,545,400  
  23,100  
Johnson & Johnson
     1,492,730       2,002,539  
  40,300  
Merck & Co., Inc. (b)
     1,463,305       1,918,683  
  37,924  
Pfizer Inc. *
     750,477       1,088,798  
  21,900  
Sanofi
     787,206       1,108,797  
  11,952  
Zoetis Inc. *
     238,972       371,946  
            7,496,609       11,373,763  
                       
     
Plastic Materials, Resins & Nonvulcanelastomers (1.38%)
                
  20,000  
E.I. du Pont de Nemours and Company
     751,716       1,171,200  
  20,000  
Dow Chemical Company
     580,754       768,000  
            1,332,470       1,939,200  
                       
     
Radio & TV Broadcasting & Communications Equipment (0.48%)
                
  10,000  
QUALCOMM, Inc.
     383,189       673,600  
                       
     
Radio Telephone Communications (0.50%)
                
  20,000  
Vodafone Group PLC ADR
     453,234       703,600  
                       
     
Railroads, Line-Haul Operating (1.45%)
                
  34,100  
CSX Corp.
     785,517       877,734  
  15,000  
Norfolk Southern Corp. *
     1,042,125       1,160,250  
            1,827,642       2,037,984  
                       
     
Real Estate Investment Trusts (3.70%)
                
  10,600  
AvalonBay Communities, Inc. *
     1,418,947       1,347,154  
  22,650  
Mid-America Apartment Communities, Inc. *
     1,420,551       1,415,625  
  200,000  
Newcastle Investment Corp. *
     681,224       1,124,000  
  200,000  
New Residential Investment Corp. *
     771,976       1,324,000  
            4,292,698       5,210,779  
                       
     
Refuse Systems (0.44%)
                
  15,000  
Waste Management, Inc.
     532,822       618,600  
                       
     
Retail - Eating Places (0.61%)
                
  9,000  
McDonald's Corp.
     888,124       865,890  
                       
     
Retail - Grocery Stores (0.93%)
                
  32,300  
The Kroger Co.
     782,471       1,302,982  
                       
     
Retail - Variety Stores (0.73%)
                
  16,000  
Target Corp.
     660,150       1,023,680  
                       
     
Retail - Women's Clothing Stores (2.34%)
                
  54,000  
L Brands, Inc. (b)
     475,950       3,299,400  
                       
     
Savings Institution, Federally Chartered (0.61%)
                
  60,000  
People's United Financial, Inc.
     826,108       862,800  
                       
     
Security & Commodity Brokers, Dealers, Exchanges & Services (0.45%)
                
  15,000  
NYSE Euronext *
     372,671       629,700  
                       
     
Semiconductors & Related Devices (4.55%)
                
  23,000  
Analog Devices, Inc.
     726,743       1,082,150  
  120,000  
Intel Corp.
     2,608,156       2,750,400  
  35,000  
Microchip Technology, Inc.
     998,143       1,410,150  
  127,300  
STMicroelectronics N.V.
     786,574       1,171,160  
            5,119,616       6,413,860  
     
Services - Business Services (1.51%)
                
  40,000  
Lender Processing Services, Inc.
     733,684       1,330,800  
  42,900  
The Western Union Company
     785,465       800,514  
            1,519,149       2,131,314  
                       
     
Services - Engineering, Accounting, Research, Management (0.29%)
                
  10,000  
Paychex, Inc. (c)
     309,491       406,400  
                       
     
Services - Miscellaneous Repair Services (0.05%)
                
  756  
Aquilex Holdings LLC Units * (d)
     496,372       71,359  
                       
     
Services - Prepackaged Software (0.71%)
                
  30,000  
Microsoft Corp. (b)
     900,672       999,300  
                       
     
Soap, Detergent, Cleaning Preparations, Perfumes, Cosmetics (0.64%)
                
  12,000  
The Procter & Gamble Company
     739,290       907,080  
                       
     
Specialty Cleaning, Polishing and Sanitation Preparations (0.68%)
                
  11,700  
Clorox Co.
     788,186       956,124  
                       
     
Surety Insurance (1.09%)
                
  100,000  
Old Republic International Corp. *
     1,167,370       1,540,000  
                       
     
Surgical & Medical Instruments & Apparatus (3.19%)
                
  20,000  
3M Company
     1,133,436       2,388,200  
  15,700  
Baxter International Inc.
     785,058       1,031,333  
  10,700  
Becton, Dickinson and Company
     782,308       1,070,214  
            2,700,802       4,489,747  
                       
     
Telephone Communications (2.80%)
                
  45,000  
AT&T, Inc. (b)
     1,672,513       1,521,900  
  25,000  
CenturyLink, Inc.*
     1,009,687       784,500  
  35,000  
Verizon Communications, Inc.
     1,206,032       1,633,100  
            3,888,232       3,939,500  
                       
     
Trucking & Courier Services (No Air) (0.78%)
                
  12,000  
United Parcel Service, Inc. *
     909,767       1,096,440  
                       
     
Water Transportation (0.55%)
                
  23,800  
Carnival Corp.
     785,476       776,832  
                       
     
Wholesale - Groceries & Related Products (0.62%)
                
  27,500  
Sysco Corp. *
     877,382       875,325  
                       
                       
     
Total common stocks
     73,982,444       104,413,192  
                       
Principal
                    
Amount
                    
     
CORPORATE BONDS AND NOTES (6.83%) (a)
                
     
Cable & Other Pay Television Services (0.38%)
                
  500,000  
CCO Holdings LLC, 7.00%, 1/15/19
     499,660       530,625  
                       
     
Cogeneration Services & Small Power Producers (0.34%)
                
  450,000  
Covanta Holding Corp., 7.25%, 12/1/20
     456,439       484,785  
                       
     
Electric Services (0.73%)
                
  650,000  
Edison Mission Energy, 7.00%, 5/15/17
     650,694       433,875  
  566,930  
Elwood Energy LLC, 8.159%, 7/5/26
     597,173       598,111  
            1,247,867       1,031,986  
     
Fats & Oils (0.39%)
                
  500,000  
Darling International Inc., 8.50%, 12/15/18 (b)
     515,836       555,000  
                       
     
Hospital & Medical Service Plans (0.19%)
                
  250,000  
Health Net, Inc., 6.375%, 6/1/17
     239,959       266,875  
                       
     
Ice Cream & Frozen Desserts (0.40%)
                
  500,000  
Dean Foods Company, 9.75%, 12/15/18
     504,174       568,750  
                       
     
Natural Gas Transmission (1.00%)
                
  500,000  
Energy Transfer Equity LP, 7.50%, 10/15/20
     511,718       537,500  
  500,000  
Niska Gas Storage US LLC, 8.875%, 3/15/18
     507,868       520,000  
  350,000  
Southern Star Central Corp., 6.75%, 3/1/16
     335,440       354,375  
            1,355,026       1,411,875  
                       
     
Oil & Gas Field Exploration Services (0.37%)
                
  500,000  
CGG-Veritas, 7.75%, 5/15/17
     507,582       515,625  
                       
     
Papers & Allied Products (0.37%)
                
  500,000  
Cascades, Inc., 7.75%, 12/15/17
     493,581       525,000  
                       
     
 Personal Credit Institutions (0.56%)
                
  740,000  
Credit Acceptance Corp., 9.125%, 2/1/17
     752,329       788,100  
                       
     
 Services - Equipment Rental & Leasing, NEC (0.39%)
                
  500,000  
Aircastle Ltd., 9.75%, 8/1/18
     502,305       555,000  
                       
     
 Services - Miscellaneous Amusement & Recreation (0.59%)
                
  750,000  
Cedar Fair LP, 9.125%, 8/1/18
     752,806       825,938  
                       
     
Services - Prepackaged Software (0.31%)
                
  400,000  
Scientific Games International, Inc., 9.25%, 6/15/19
     423,862       433,000  
                       
     
Special Industry Machinery (0.38%)
                
  500,000  
Novelis, Inc., 8.375%, 12/15/17
     504,245       538,125  
                       
     
Wholesale - Electronic Parts & Equipment, NEC (0.22%)
                
  300,000  
Brightstar Corp., 9.50%, 12/1/16 (e)
     300,000       315,000  
                       
     
Wholesale - Petroleum & Petroleum Products (0.21%)
                
  275,000  
Crosstex Energy LP, 8.875%, 2/15/18
     275,406       293,563  
                       
     
Total corporate bonds and notes
     9,331,077       9,639,247  
                       
     
MASTER LIMITED PARTNERSHIPS (2.31%) (a)
                
     
Natural Gas Transmission (2.31%)
                
  39,000  
Energy Transfer Partners, L.P. (b)
     1,979,798       2,030,730  
  20,000  
Enterprise Products Partners LP (b)
     374,214       1,220,800  
                       
     
Total master limited partnerships
     2,354,012       3,251,530  
                       
     
PREFERRED STOCK (0%)
                
     
Financial (0%)
                
  80,000  
Solar Cayman Ltd. (a) (c) (d)
     568,802       0  
                       
     
MONEY MARKET FUND (0.02%)
                
  21,846  
SSgA Money Market Fund, 7 day annualized yield 0.01%
     21,846       21,846  
                       
     
Total investments (83.30%)
   $ 86,258,181       117,325,815  
                       
     
Other assets in excess of liabilities (16.70%)
             23,519,775  
                       
     
Net assets (100.00%)
           $ 140,845,590  
                       
     
Net asset value per share
                
     
(applicable to 8,597,619 shares issued and outstanding)
           $ 16.38  
                       
                       
(a) All or a portion of these securities have been segregated as collateral pursuant to the bank credit facility, except for, those denoted by a * symbol. As of September 30, 2013, the value of securities pledged as collateral was $95,239,551.
  
(b) All or portion of these securities are on loan pursuant to the Lending Agreement in the aggregate amount of $8,023,284.
  
(c) Non-income producing.
                
(d) Illiquid and/or restricted security that has been fair valued.
                
(e) These securities are exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
  
   
                       
ADR
  
American Depositary Receipt
                
LLC
  
Limited Liability Company
                
LP
  
Limited Partnership
                
PLC
  
Public Limited Company
                

Notes to Schedule of Portfolio Investments (Unaudited)

Security Valuation
 
Portfolio securities are valued by various methods depending on the primary market or exchange on which they trade.  Most equity securities for which the primary markets is the United States are valued at the official closing price, last sale price or, if no sale has occurred, at the closing bid price.  Most equity securities for which the primary market is outside the United States are valued using the official closing price or the last sale price in the principal market in which they are traded.  If the last sale price on the local exchange is unavailable, the last evaluated quote or closing bid price normally is used. Debt obligations with remaining maturities of 60 days or less are valued at cost adjusted for amortization of premiums and accretion of discounts. Certain of the securities in which the Fund may invest are priced through pricing services that may utilize a matrix pricing system which takes into consideration factors such as yields, prices, maturities, call features, and ratings on comparable securities.  Bonds may be valued according to prices quoted by a bond dealer that offers pricing services.  Open end investment companies are valued at their net asset value.  Securities for which quotations are not readily available or reliable and other assets may be valued as determined in good faith by Bexil Advisers LLC, the Fund’s Investment Manager, under the direction of or pursuant to procedures established by the Fund’s Board of Trustees, called fair value pricing. Due to the inherent uncertainty of valuation, these values may differ from the value that would have been used had a readily available market for the securities existed.  These differences in valuation could be material.  A security’s valuation may differ depending on the method used for determining value.  The use of fair value pricing by the Fund may cause the net asset value of its shares to differ from the net asset value that would be calculated using market prices. A fair value price is an estimate and there is no assurance that such price will be at or close to the price at which a security is next quoted or next trades.

Value Measurements
Inputs to valuation methods are prioritized by a three level hierarchy as follows:

●
Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities including securities actively traded on a securities exchange.
●
Level 2 – observable inputs other than quoted prices included in level 1 that are observable for the asset or liability which may include quoted 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 including the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability.

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 investments categorized in level 3.

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, 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 investments are not an indication of the risk associated with investing in those securities.

The following is a description of the valuation techniques applied to the Fund’s major categories of assets and liabilities measured at fair value on a recurring basis:

Equity securities (common and preferred stock) – Most publicly traded equity securities are valued normally at the most recent official closing price, last sale price, evaluated quote, or closing bid price. To the extent these securities are actively traded and valuation adjustments are not applied, they may be categorized in level 1 of the fair value hierarchy. Preferred stock and other equities on inactive markets or valued by reference to similar instruments may be categorized in level 2.

Corporate bonds and notes - The fair value of corporate bonds and notes are estimated using various techniques which may consider, among other things, recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. Although most corporate bonds and notes may be categorized in level 2 of the fair value hierarchy, in instances where lower relative weight is place on transaction prices, quotations, or similar observable inputs, they may be categorized in level 3.

Restricted and/or illiquid securities - Restricted and/or illiquid securities for which quotations are not readily available or reliable may be valued with fair value pricing as determined in good faith by the Investment Manager under the direction of or pursuant to procedures established by the Fund’s Board of Trustees. Restricted securities issued by publicly traded companies are generally valued at a discount to similar publicly traded securities. Restricted or illiquid securities issued by nonpublic entities may be valued by reference to comparable public entities or fundamental data relating to the issuer or both or similar inputs. Depending on the relative significance of valuation inputs, these instruments may be classified in either level 2 or level 3 of the fair value hierarchy.

The following is a summary of the inputs used as of September 30, 2013 in valuing the Fund’s assets carried at fair value. Refer to the Schedule of Portfolio Investments for detailed information on specific investments.
 
 
   
Level 1
    
Level 2
    
Level 3
    
Total
  
                         
 Assets
                        
 Investments at value
                        
 Common stock
   $ 104,341,833     $ -     $ 71,359     $ 104,413,192  
 Corporate bonds and notes
     -       9,639,247       -       9,639,247  
 Master limited partnerships
     3,251,530       -       -       3,251,530  
 Preferred stock
     -       -       0       0  
 Money market fund
     21,846       -       -       21,846  
                                 
 Total investments, at value
   $ 107,615,209     $ 9,639,247     $ 71,359     $ 117,325,815  

There were no securities transferred from level 1 on December 31, 2012 to level 2 on September 30, 2013. Transfers from level 1 to level 2, or from level 2 to level 1 are valued utilizing values at the beginning of the period.

The following is a reconciliation of assets for which significant unobservable inputs were used to determine fair value:
 
   
Common Stocks
    
Preferred Stocks
    
Total
  
                   
Balance at December 31, 2012
   $ 204,152     $ 2,000     $ 206,152  
                         
Proceeds from sales
     (66,021 )     -       (66,021 )
Realized loss
     (620,124 )     -       (620,124 )
Transfers into (out of) level 3
     -       -       -  
Change in unrealized depreciation
     553,352       (2,000 )     551,352  
                         
Balance at September 30, 2013
   $ 71,359     $ 0     $ 71,359  
                         
Net change in unrealized depreciation attributable to assets still held as level 3 at September 30, 2013
   $ (21,641 )   $ (2,000 )   $ (23,641 )
 
The Investment Manager under the direction of the Fund’s Board of Trustees considers various valuation approaches for valuing securities categorized within level 3 of the fair value hierarchy. The factors used in determining the value of the Fund’s private investments may include, but are not limited to: the discounts applied to the selection of comparable investments due to the private nature of the investment; the type of the security; the size of the holding; the initial cost of the security; the existence of any contractual restrictions on the security’s disposition; the price and extent of public trading in similar securities of the issuer or of comparable companies; quotations or evaluated prices from broker-dealers and/or pricing services; information obtained from the issuer or analysts; an analysis of the company’s or issuer’s financial statements; or an evaluation of the forces that influence the issuer and the market in which the security is purchased and sold. Significant changes in any of those inputs in isolation may result in a significantly lower or higher fair value measurement. The pricing of all fair value holdings is subsequently reported to the Fund’s Board of Trustees.

The following table presents additional information about valuation methodologies and inputs used for investments that are measured at fair value and categorized with level 3 as of September 30, 2013:

   
Fair Value
            
   
September 30, 2013
  
Valuation Technique
Unobservable Input
  
Range
  
                 
Common stocks
                
Services - Miscellaneous Repair Services
   $ 71,359  
Share of taxable income and comparable exchange offer
Discount rate for lack of marketability
     75% - 90 %
Preferred stock
                    
Financial
   $ 0  
Analysis of operating results and net asset value
Discount rate for lack of marketability
     100 %

Cost for Federal Income Tax Purposes
As of September 30, 2013, for federal income tax purposes the aggregate cost of securities was $86,258,181 and net unrealized appreciation was $31,067,634, comprised of gross unrealized appreciation of $33,120,929 and gross unrealized depreciation of $2,053,295.

Illiquid and Restricted Securities
The Fund owns securities which have a limited trading market and/or certain restrictions on trading and, therefore, may be illiquid and/or restricted. Such securities have been valued using fair value pricing. Due to the inherent uncertainty of valuation, these values may differ from the values that would have been used had a readily available market for the securities existed. These differences in valuation could be material. Illiquid and/or restricted securities owned as of September 30, 2013, were as follows:

 
Acquisition
            
 
Date
  
Cost
    
Value
  
               
Acquilex Holdings LLC Units
12/23/09
   $ 496,372     $ 71,359  
Solar Cayman Ltd.
3/7/07
     568,802       0  
                   
Total     $ 1,065,174     $ 71,359  
                   
Percent of net assets
       0.76 %     0.05 %
                   


Item 2.  Controls and Procedures

(a)  
The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act")) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934.

(b)  
There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.

Item 3. Exhibits

(a)  
Certifications of the registrant's principal executive officer and principal financial officer as required by Rule 30a-2(a) under the 1940 Act.

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.

Dividend and Income Fund

By: /s/ Thomas B. Winmill
Thomas B. Winmill, President

Date: November 12, 2013
 
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: /s/ Thomas B. Winmill
Thomas B. Winmill, President

Date: November 12, 2013
 
By: /s/ Thomas O'Malley
Thomas O'Malley, Chief Financial Officer

Date: November 12, 2013
 
 
EXHIBIT INDEX
 
(a) Certifications of the registrant's principal executive and principal financial officer as required by Rule 30a-2(a) under the 1940 Act. (EX-99.CERT)