Ellsworth Growth & Income Fund Ltd.

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            811-04656            

                         Ellsworth Growth and Income Fund Ltd.                        

(Exact name of registrant as specified in charter)

One Corporate Center

                    Rye, New York 10580-1422                    

(Address of principal executive offices) (Zip code)

James A. Dinsmore

Gabelli Funds, LLC

One Corporate Center

                             Rye, New York 10580-1422                            

(Name and address of agent for service)

Registrant’s telephone number, including area code:  1-800-422-3554

Date of fiscal year end:  September 30

Date of reporting period:  March 31, 2018

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.

The Report to Shareholders is attached herewith.

Ellsworth Growth and Income Fund Ltd.

Semiannual Report — March 31, 2018

(Y)our Portfolio Management Team

 

LOGO

To Our Shareholders,

For the six months ended March 31, 2018, the net asset value (“NAV”) total return of the Ellsworth Growth and Income Fund Ltd. was 3.5%, compared with total returns of 4.0% and 0.8% for the ICE Bank of America Merrill Lynch U.S. Convertibles Index and the Bloomberg Barclays Balanced U.S. Convertibles Index, respectively. The total return for the Fund’s publicly traded shares was 1.2%. The Fund’s NAV per share was $10.31, while the price of the publicly traded shares closed at $9.15 on the NYSE American. See below for additional performance information.

Enclosed are the financial statements, including the schedule of investments, as of March 31, 2018.

Comparative Results

 

Average Annual Returns through March 31, 2018 (a)(b) (Unaudited)

 

     Six Months   1 Year   3 Year   5 Year   10 Year   Since
Inception
(06/30/86)

Ellsworth Growth and Income Fund Ltd.

                         

NAV Total Return (c)

        3.48 %       7.89 %       6.20 %       8.53 %       7.07 %       7.95 %

Investment Total Return (d)

        1.20       11.23       8.49       10.01       7.16       8.23

ICE Bank of America Merrill Lynch U.S. Convertibles Index

        3.99       10.63       6.59       9.66       8.23       N/A (e)

Bloomberg Barclays Balanced U.S. Convertibles Index

        0.80       3.18       2.63       5.34       5.62       N/A (f)

Standard & Poor’s (“S&P”) 500 Index

        5.84       13.99       10.78       13.31       9.49       10.17
  (a)

Returns represent past performance and do not guarantee future results. Investment returns and the principal value of an investment will fluctuate. When shares are sold, they may be worth more or less than their original cost. Current performance may be lower or higher than the performance data presented. Visit www.gabelli.com for performance information as of the most recent month end. Performance returns for periods of less than one year are not annualized. Returns would have been lower had Gabelli Funds, LLC (the “Adviser”) not reimbursed certain expenses of the Fund. Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. The ICE Bank of America Merrill Lynch U.S. Convertibles Index is a market value weighted index of all dollar denominated convertible securities that are exchangeable into U.S. equities and have a market value of more than $50 million. The Bloomberg Barclays Balanced U.S. Convertibles Index is a market value weighted index that tracks the performance of publicly placed, dollar denominated convertible securities that are between 40% and 80% sensitive to movements in their underlying common stocks. The S&P 500 Index is an unmanaged indicator of stock market performance. Dividends and interest income are considered reinvested. You cannot invest directly in an index.

 
  (b)

The Fund’s fiscal year ends on September 30.

 
  (c)

Total returns and average annual returns reflect changes in the NAV per share, reinvestment of distributions at NAV on the ex-dividend date for the period beginning November 2015, and are net of expenses. Total returns and average annual returns were not adjusted for the 2004 rights offering. For the period from December 2008 through October 2015, the distributions were reinvested on the payable date using market prices. From inception through November 2008, distributions were reinvested on the payable date using NAV. Since inception return is based on an initial NAV of $9.30.

 
  (d)

Total returns and average annual returns reflect changes in closing market values on the NYSE American and reinvestment of distributions. Total returns and average annual returns were not adjusted for the 2004 rights offering. Since inception return is based on an initial offering price of $10.00.

 
  (e)

The ICE Bank of America Merrill Lynch U.S. Convertibles Index inception date is December 31, 1994.

 
  (f)

The Bloomberg Barclays Balanced U.S. Convertibles Index inception date is January 1, 2003.

 

Summary of Portfolio Holdings (Unaudited)

The following table presents portfolio holdings as a percent of total investments as of March 31, 2018:

Ellsworth Growth and Income Fund Ltd.

 

Computer Software and Services

      17.1 % 

Health Care

      16.4 % 

Financial Services

      12.4 % 

Semiconductors

      8.5 % 

Energy and Utilities

      7.9 % 

Real Estate

      7.0 % 

Diversified Industrial

      4.7 % 

Consumer Services

      3.8 % 

Cable and Satellite

      3.3 % 

Business Services

      3.1 % 

Telecommunications

      2.3 % 

Communications Equipment

      2.0 % 

Consumer Products

      2.0 % 

Aerospace

      1.9 % 

Food and Beverage

      1.8 % 

Transportation

      1.8 % 

Entertainment

      1.5 % 

Building and Construction

      1.3 % 

Automotive

      0.6 % 

Agriculture

      0.5 % 

U.S. Government Obligations

     

 

 0.1

 

 % 

 

  

 

 

  
  

 

 

 

100.0

 

% 

  

 

 

  
 

 

The Fund files a complete schedule of portfolio holdings with the Securities and Exchange Commission (the “SEC”) for the first and third quarters of each fiscal year on Form N-Q. Shareholders may obtain this information at www.gabelli.com or by calling the Fund at 800-GABELLI (800-422-3554). The Fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330.

Proxy Voting

The Fund files Form N-PX with its complete proxy voting record for the twelve months ended June 30, no later than August 31 of each year. A description of the Fund’s proxy voting policies, procedures, and how the Fund voted proxies relating to portfolio securities is available without charge, upon request, by (i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC’s website at www.sec.gov.

 

2

Ellsworth Growth and Income Fund Ltd.

Schedule of Investments — March 31, 2018 (Unaudited)

 

 

 

Principal

Amount

          

Cost

    

Market

Value

  
  

 

 

CONVERTIBLE CORPORATE BONDS — 60.2%

 

  
  

Aerospace — 1.9%

     
$ 1,000,000     

Aerojet Rocketdyne Holdings Inc.,
2.250%, 12/15/23

    $ 1,030,639     $ 1,272,362  
  1,638,000     

Kaman Corp.,
3.250%, 05/01/24(a)

      1,656,827       1,866,404  
     

 

 

    

 

 

  
        2,687,466       3,138,766  
     

 

 

    

 

 

  
  

Automotive — 0.6%

     
  1,000,000     

Tesla Inc.,
1.250%, 03/01/21

      915,956       995,524  
     

 

 

    

 

 

  
  

Business Services — 1.2%

     
  1,049,000     

Bristow Group Inc.,
4.500%, 06/01/23

      1,141,959       1,161,188  
  399,000     

Q2 Holdings Inc.,
0.750%, 02/15/23(a)

      406,801       409,890  
  400,000     

RingCentral Inc.,
Zero Coupon, 03/15/23(a)

      400,000       402,960  
     

 

 

    

 

 

  
        1,948,760       1,974,038  
     

 

 

    

 

 

  
  

Cable and Satellite — 3.3%

     
  3,000,000     

DISH Network Corp.,
3.375%, 08/15/26

      3,159,648       2,897,100  
  1,525,000     

Global Eagle Entertainment Inc.,
3.250%, 02/15/35

      1,007,585       963,800  
  1,592,000     

Liberty Media Corp.,
2.125%, 03/31/48(a)

      1,592,000       1,578,309  
     

 

 

    

 

 

  
        5,759,233       5,439,209  
     

 

 

    

 

 

  
  

Communications Equipment — 2.0%

 

  
  1,000,000     

Harmonic Inc.,
4.000%, 12/01/20

      1,000,000       986,250  
  2,000,000     

InterDigital Inc.,
1.500%, 03/01/20

      2,039,213       2,324,000  
     

 

 

    

 

 

  
        3,039,213       3,310,250  
     

 

 

    

 

 

  
  

Computer Software and Services — 15.6%

 

  
  1,195,000     

Apptio Inc.,
0.875%, 04/01/23(a)

      1,205,920       1,179,465  
  683,000     

Coupa Software Inc.,
0.375%, 01/15/23(a)

      690,711       827,522  
  2,500,000     

CSG Systems International Inc.,
4.250%, 03/15/36

      2,594,900       2,760,095  
  198,000     

Guidewire Software Inc.,
1.250%, 03/15/25

      198,000       194,578  
  817,000     

HubSpot Inc.,
0.250%, 06/01/22(a)

      817,741       1,054,542  
  1,502,000     

IAC FinanceCo. Inc.,
0.875%, 10/01/22(a)

      1,692,916       1,799,244  
  2,135,000     

Lumentum Holdings Inc.,
0.250%, 03/15/24

      2,208,082       2,710,824  
  450,000     

Maxwell Technologies Inc.,
5.500%, 09/15/22(a)(b)

      450,000       518,062  

Principal

Amount

          

Cost

    

Market

Value

  

 

 

 

$750,000

 

 

   

 

MercadoLibre Inc.,
2.250%, 07/01/19

   

 

$

 

781,882

 

 

  

 

$

 

2,123,999

 

 

  1,032,000     

Nice Systems Inc.,
1.250%, 01/15/24

      1,081,879       1,282,570  
  1,755,000     

Nutanix Inc.,
Zero Coupon, 01/15/23(a)

      1,776,131       2,116,184  
  812,000     

Okta Inc.,
0.250%, 02/15/23(a)

      838,480       888,896  
  1,500,000     

Proofpoint Inc.,
0.750%, 06/15/20

      1,550,037       2,196,899  
  

PROS Holdings Inc.,

     
  500,000     

2.000%, 12/01/19

      501,232       571,200  
  1,700,000     

2.000%, 06/01/47(a)

      1,503,228       1,638,290  
  1,491,000     

RealPage Inc.,
1.500%, 11/15/22(a)

      1,582,579       2,034,283  
  1,500,000     

Synchronoss Technologies Inc.,
0.750%, 08/15/19

      1,511,826       1,421,453  
     

 

 

    

 

 

  
        20,985,544       25,318,106  
     

 

 

    

 

 

  
  

Consumer Products — 0.8%

     
  1,100,000     

GoPro Inc.,
3.500%, 04/15/22(a)(b)

      1,100,000       902,485  
  367,000     

JAKKS Pacific Inc.,
4.875%, 06/01/20(a)

      384,303       309,318  
     

 

 

    

 

 

  
        1,484,303       1,211,803  
     

 

 

    

 

 

  
  

Consumer Services — 3.8%

     
  1,000,000     

Carriage Services Inc.,
2.750%, 03/15/21

      1,011,501       1,315,674  
  1,500,000     

Extra Space Storage LP,
3.125%, 10/01/35(a)

      1,530,571       1,673,113  
  972,000     

Quotient Technology Inc.,
1.750%, 12/01/22(a)

      972,000       1,009,739  
  1,000,000     

Square Inc.,
0.375%, 03/01/22

      1,172,995       2,192,400  
     

 

 

    

 

 

  
        4,687,067       6,190,926  
     

 

 

    

 

 

  
  

Diversified Industrial — 3.3%

     
  750,000     

Chart Industries Inc.,
1.000%, 11/15/24(a)

      752,951       880,083  
  2,000,000     

Knowles Corp.,
3.250%, 11/01/21

      2,083,450       2,087,564  
  1,695,000     

Team Inc.,
5.000%, 08/01/23(a)

      1,633,597       1,682,393  
  500,000     

TimkenSteel Corp.,
6.000%, 06/01/21

      507,606       735,350  
     

 

 

    

 

 

  
        4,977,604       5,385,390  
     

 

 

    

 

 

  
  

Energy and Utilities — 3.6%

     
  1,900,000     

Cheniere Energy Inc.,
4.250%, 03/15/45

      1,262,251       1,484,175  
  1,500,000     

Chesapeake Energy Corp.,
5.500%, 09/15/26

      1,508,758       1,299,150  
 

 

See accompanying notes to financial statements.

 

3

Ellsworth Growth and Income Fund Ltd.

Schedule of Investments (Continued) — March 31, 2018 (Unaudited)

 

 

 

Principal

Amount

          

Cost

    

Market

Value

  
  

CONVERTIBLE CORPORATE BONDS (Continued)

 

  
  

Energy and Utilities (Continued)

 

  
$ 258,000     

Goodrich Petroleum Escrow
Bond,
Zero Coupon,
12/31/21†(a)(b)(c)(d)

    $ 0     $ 0  
  667,000     

Newpark Resources Inc.,
4.000%, 12/01/21(a)

      707,417       775,388  
  2,850,000     

SunPower Corp.,
4.000%, 01/15/23

      2,369,333       2,281,710  
     

 

 

    

 

 

  
        5,847,759       5,840,423  
     

 

 

    

 

 

  
  

Entertainment — 1.0%

     
  1,000,000     

World Wrestling Entertainment Inc.,
3.375%, 12/15/23(a)

      1,058,296       1,567,500  
     

 

 

    

 

 

  
  

Financial Services — 2.4%

     
  1,000,000     

Blackhawk Network Holdings Inc.,
1.500%, 01/15/22

      1,061,783       1,106,875  
  

Encore Capital Group Inc.,

     
  1,000,000     

3.000%, 07/01/20

      877,883       1,147,000  
  509,000     

3.250%, 03/15/22

      504,119       594,003  
  641,000     

LendingTree Inc.,
0.625%, 06/01/22(a)

      652,277       1,078,554  
     

 

 

    

 

 

  
        3,096,062       3,926,432  
     

 

 

    

 

 

  
  

Health Care — 11.3%

     
  1,595,000     

Accelerate Diagnostics Inc.,
2.500%, 03/15/23(a)

      1,595,000       1,546,563  
  1,000,000     

ANI Pharmaceuticals Inc.,
3.000%, 12/01/19

      1,056,157       1,095,309  
  550,000     

Array BioPharma Inc.,
2.625%, 12/01/24

      642,756       733,535  
  1,300,000     

BioMarin Pharmaceutical Inc.,
0.599%, 08/01/24

      1,276,305       1,223,625  
  500,000     

Dermira Inc.,
3.000%, 05/15/22(a)

      552,154       397,538  
  500,000     

Horizon Pharma Investment Ltd.,
2.500%, 03/15/22

      546,292       460,405  
  1,080,000     

Insulet Corp.,
1.375%, 11/15/24(a)

      1,203,902       1,238,783  
  1,083,000     

Intercept Pharmaceuticals Inc.,
3.250%, 07/01/23

      1,098,495       873,169  
  500,000     

Invacare Corp.,
4.500%, 06/01/22(a)

      503,256       641,563  
  1,000,000     

Ironwood Pharmaceuticals Inc.,
2.250%, 06/15/22

      1,138,369       1,182,119  
  1,171,000     

Neurocrine Biosciences Inc.,
2.250%, 05/15/24(a)

      1,215,234       1,536,804  
  1,000,000     

NuVasive Inc.,
2.250%, 03/15/21

      1,042,278       1,103,436  

Principal

Amount

          

Cost

    

Market

Value

  
  $1,500,000     

Pacira Pharmaceuticals Inc.,
2.375%, 04/01/22

    $ 1,532,923     $ 1,374,375  
  100,000     

Sarepta Therapeutics Inc.,
1.500%, 11/15/24(a)

      100,000       124,871  
  504,000     

Supernus Pharmaceuticals Inc.,
0.625%, 04/01/23(a)

      525,223       537,437  
  1,500,000     

Teladoc Inc.,
3.000%, 12/15/22(a)

      1,564,076       1,779,941  
  1,250,000     

Teligent Inc.,
3.750%, 12/15/19

      1,246,590       1,167,500  
  1,000,000     

Theravance Biopharma Inc.,
3.250%, 11/01/23

      1,000,000       1,016,845  
  500,000     

Vitamin Shoppe Inc.,
2.250%, 12/01/20

      443,647       367,694  
     

 

 

    

 

 

  
        18,282,657       18,401,512  
     

 

 

    

 

 

  
  

Semiconductors — 7.6%

     
  500,000     

Advanced Micro Devices Inc.,
2.125%, 09/01/26

      513,953       732,900  
  1,500,000     

Cypress Semiconductor Corp.,
4.500%, 01/15/22

      1,632,066       2,096,550  
  2,250,000     

Inphi Corp.,
1.125%, 12/01/20

      2,455,377       2,361,451  
  1,000,000     

Microchip Technology Inc.,
1.625%, 02/15/27

      997,910       1,187,222  
  500,000     

Micron Technology Inc.,
3.000%, 11/15/43

      449,731       897,201  
  2,209,000     

Rambus Inc.,
1.375%, 02/01/23(a)

      2,229,392       2,183,928  
  1,180,000     

Silicon Laboratories Inc.,
1.375%, 03/01/22

      1,226,495       1,368,800  
  1,000,000     

Teradyne Inc.,
1.250%, 12/15/23

      1,032,235       1,527,206  
     

 

 

    

 

 

  
        10,537,159       12,355,258  
     

 

 

    

 

 

  
  

Transportation — 1.8%

     
  1,000,000     

Air Transport Services Group Inc.,
1.125%, 10/15/24(a)

      1,014,899       1,007,637  
  1,700,000     

Atlas Air Worldwide Holdings Inc.,
2.250%, 06/01/22

      1,699,077       1,944,521  
     

 

 

    

 

 

  
        2,713,976       2,952,158  
     

 

 

    

 

 

  
  

TOTAL CONVERTIBLE CORPORATE BONDS

      88,021,055       98,007,295  
     

 

 

    

 

 

  

Shares

                    
  

CONVERTIBLE PREFERRED STOCKS — 3.9%

 

  
  

Agriculture — 0.5%

     
  7,500     

Bunge Ltd., 4.875%

      726,780       817,275  
     

 

 

    

 

 

  
 

 

See accompanying notes to financial statements.

 

4

Ellsworth Growth and Income Fund Ltd.

Schedule of Investments (Continued) — March 31, 2018 (Unaudited)

 

 

 

Shares

          

Cost

    

Market

Value

  
  

CONVERTIBLE PREFERRED STOCKS (Continued)

 

  
  

Business Services — 0.3%

     
  711,039     

Amerivon Holdings LLC,
4.000% (c)

    $ 1,294,693     $ 433,734  
  272,728     

Amerivon Holdings LLC,
common equity units (c)

      0       16,364  
     

 

 

    

 

 

  
        1,294,693       450,098  
     

 

 

    

 

 

  
  

Financial Services — 2.4%

     
  1,500     

Bank of America Corp.,
7.250%

      1,523,408       1,934,175  
  1,500     

Wells Fargo & Co.,
7.500%

      1,758,200       1,935,000  
     

 

 

    

 

 

  
        3,281,608       3,869,175  
     

 

 

    

 

 

  
  

Food and Beverage — 0.7%

     
  8,000     

Post Holdings Inc.,
2.500%

      1,192,236       1,151,144  
     

 

 

    

 

 

  
  

TOTAL CONVERTIBLE PREFERRED STOCKS

      6,495,317       6,287,692  
     

 

 

    

 

 

  
  

MANDATORY CONVERTIBLE SECURITIES (e) — 13.4%

 

  
  

Building and Construction — 1.3%

     
  18,778     

Stanley Black & Decker Inc.,
5.375%, 05/15/20

      2,049,817       2,163,695  
     

 

 

    

 

 

  
  

Computer Software and Services — 0.7%

     
  10,000     

MTS Systems Corp.,
8.750%, 07/01/19

      1,119,226       1,173,433  
     

 

 

    

 

 

  
  

Diversified Industrial — 1.4%

     
  35,100     

Rexnord Corp.,
5.750%, 11/15/19

      1,842,160       2,256,228  
     

 

 

    

 

 

  
  

Energy and Utilities — 3.7%

     
  15,000     

Anadarko Petroleum Corp.,
7.500%, 06/07/18

      575,550       447,000  
  30,000     

Dominion Energy, Inc.,
6.750%, 08/15/19

      1,473,596       1,392,300  
  18,600     

DTE Energy Co.,
6.500%, 10/01/19

      977,476       968,874  
  21,666     

Hess Corp.,
8.000%, 02/01/19

      1,148,425       1,290,427  
  25,000     

NextEra Energy Inc.,
6.123%, 09/01/19

      1,429,975       1,441,500  
  5,383     

Sempra Energy,
6.000%, 01/15/21

      548,300       551,058  
     

 

 

    

 

 

  
        6,153,322       6,091,159  
     

 

 

    

 

 

  

Shares

          

Cost

    

Market

Value

  
  

Financial Services — 4.9%

     
  10,000     

2017 Mandatory Exchangeable Trust,
5.188%, 12/01/20

    $ 1,000,000     $ 1,240,700  
  20,000     

Alibaba - Mandatory Exchange Trust,
5.750%, 06/03/19 (a)

      2,130,000       4,133,630  
  9,938     

Assurant Inc.,
6.500%, 03/15/21

      998,172       1,035,043  
  30,000     

New York Community Capital Trust V,
6.000%, 11/01/51

      1,349,254       1,500,000  
     

 

 

    

 

 

  
        5,477,426       7,909,373  
     

 

 

    

 

 

  
  

Health Care — 1.3%

     
  36,573     

Becton Dickinson and Co.,
6.125%, 05/01/20

      1,951,947       2,136,960  
     

 

 

    

 

 

  
  

Telecommunications — 0.1%

     
  11,289     

Frontier Communications Corp.,
11.125%, 06/29/18

      485,797       129,146  
     

 

 

    

 

 

  
  

TOTAL MANDATORY CONVERTIBLE SECURITIES

      19,079,695       21,859,994  
     

 

 

    

 

 

  
  

COMMON STOCKS — 22.4%

     
  

Business Services — 1.6%

     
  5,000     

Alliance Data Systems Corp.

      1,070,395       1,064,300  
  20,000     

PayPal Holdings Inc.†

      818,351       1,517,400  
     

 

 

    

 

 

  
        1,888,746       2,581,700  
     

 

 

    

 

 

  
  

Computer Software and Services — 0.8%

 

  
  14,300     

Microsoft Corp.

      388,674       1,305,161  
     

 

 

    

 

 

  
  

Consumer Products — 1.2%

     
  23,352     

Newell Brands Inc.

      1,038,704       595,009  
  24,000     

Unilever NV

      1,015,518       1,353,360  
     

 

 

    

 

 

  
        2,054,222       1,948,369  
     

 

 

    

 

 

  
  

Energy and Utilities — 0.6%

     
  8,000     

Chevron Corp.

      871,279       912,320  
  91     

Goodrich Petroleum Corp.†

      915       998  
     

 

 

    

 

 

  
        872,194       913,318  
     

 

 

    

 

 

  
  

Entertainment — 0.5%

     
  7,500     

The Walt Disney Co.

      227,391       753,300  
     

 

 

    

 

 

  
  

Financial Services — 2.7%

     
  132,068     

BlackRock Capital Investment Corp.

      1,147,541       796,370  
  24,546     

Citigroup Inc.

      1,515,620       1,656,855  
  50,000     

Huntington Bancshares Inc.

      743,524       755,000  
  36,434     

Synchrony Financial

      1,003,121       1,221,632  
     

 

 

    

 

 

  
        4,409,806       4,429,857  
     

 

 

    

 

 

  
 

 

See accompanying notes to financial statements.

 

5

Ellsworth Growth and Income Fund Ltd.

Schedule of Investments (Continued) — March 31, 2018 (Unaudited)

 

 

 

Shares

          

Cost

    

Market

Value

  
  

COMMON STOCKS (Continued)

     
  

Food and Beverage — 1.1%

     
  30,000     

B&G Foods Inc.

      $  885,580       $  711,000  
  30,000     

Conagra Brands Inc.

      744,389       1,106,400  
     

 

 

    

 

 

  
        1,629,969       1,817,400  
     

 

 

    

 

 

  
  

Health Care — 3.8%

     
  15,000     

AbbVie Inc.

      623,329       1,419,750  
  5,476     

Allergan plc.

      1,537,426       921,556  
  15,000     

Eli Lilly & Co.

      800,267       1,160,550  
  22,651     

Merck & Co. Inc.

      839,335       1,233,800  
  40,000     

Pfizer Inc.

      923,760       1,419,600  
     

 

 

    

 

 

  
        4,724,117       6,155,256  
     

 

 

    

 

 

  
  

Real Estate — 7.0%

     
  15,000     

American Tower Corp., REIT

      1,342,800       2,180,100  
  16,100     

Crown Castle International Corp., REIT

      1,276,059       1,764,721  
  7,000     

Equinix Inc., REIT

      1,828,368       2,926,980  
  58,700     

Invesco Mortgage Capital Inc., REIT

      899,407       961,506  
  15,000     

SBA Communications Corp., REIT†

      1,470,771       2,563,800  
  20,000     

Welltower Inc., REIT

      1,121,190       1,088,600  
     

 

 

    

 

 

  
        7,938,595       11,485,707  
     

 

 

    

 

 

  
  

Semiconductors — 0.9%

     
  30,000     

Intel Corp.

      742,000       1,562,400  
     

 

 

    

 

 

  
  

Telecommunications — 2.2%

     
  40,000     

AT&T Inc.

      1,202,897       1,426,000  
  16,119     

T-Mobile US Inc.†

      573,400       983,904  
  25,000     

Verizon Communications Inc.

      937,353       1,195,500  
     

 

 

    

 

 

  
        2,713,650       3,605,404  
     

 

 

    

 

 

  
  

TOTAL COMMON STOCKS

      27,589,364       36,557,872  
     

 

 

    

 

 

  
  

WARRANTS — 0.0%

     
  

Energy and Utilities — 0.0%

     
  781     

Goodrich Petroleum Corp., expire 10/12/26†(c)

      0       0  
     

 

 

    

 

 

  

Principal

Amount

                    
  

U.S. GOVERNMENT OBLIGATIONS — 0.1%

     
  $120,000     

U.S. Treasury Bills,
1.739%††, 06/14/18

      119,573       119,598  
     

 

 

    

 

 

  
         

Cost

    

Market

Value

  

 

TOTAL INVESTMENTS — 100.0%

   

 

 

$

 

 

141,305,004

 

 

 

  

 

 

$

 

 

162,832,451

 

 

 

     

 

 

    

 

Other Assets and Liabilities (Net)

        559,570  
       

 

 

  

PREFERRED STOCK

     
     (1,200,000 preferred shares outstanding)        (30,000,000)  
       

 

 

  

 

NET ASSETS

     
     (12,934,886 common shares outstanding)      $ 133,392,021  
       

 

 

  

 

NET ASSET VALUE PER SHARE

     

     ($133,392,021 ÷ 12,934,886 shares outstanding)

      $ 10.31  
       

 

 

  

 

(a)

Security 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. At March 31, 2018, the market value of Rule 144A securities amounted to $41,321,319 or 25.38% of total investments.

(b)

At March 31, 2018, the Fund held investments in restricted and illiquid securities amounting to $1,420,547 or 0.87% of the Fund’s total investments, which were valued under methods approved by the Board of Trustees as follows:

Acquisition

Principal

  Amount  

    

Issuer

  

Acquisition

      Date      

   

Acquisition

        Cost         

  

3/31/18

Carrying

Value

Per Bond

  
  $  258,000    

Goodrich Petroleum Escrow Bond, Zero Coupon,
12/31/21

     12/14/16     $0   $ 0.00  
  1,100,000    

GoPro Inc.,
3.500%, 04/15/22

    
 04/07/17-
04/12/17		  
 		   1,100,000   $ 82.04  
  450,000    

Maxwell Technologies Inc.,
5.500%, 09/15/22

     09/21/17     450,000   $ 115.12  
(c)

Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

(d)

Security in default.

(e)

Mandatory convertible securities are required to be converted on the dates listed; they generally may be converted prior to these dates at the option of the holder.

†

Non-income producing security.

††

Represents annualized yield at date of purchase.

 

REIT

Real Estate Investment Trust

 

 

See accompanying notes to financial statements.

 

6

Ellsworth Growth and Income Fund Ltd.

 

Statement of Assets and Liabilities

March 31, 2018 (Unaudited)

 

Assets:

   

Investments, at value (cost $141,305,004)

    $ 162,832,451  

Receivable for investments sold

      1,536,995  

Dividends and interest receivable

      623,164  

Deferred offering expense

      114,239  

Prepaid expenses

      2,211  
  

 

 

  

Total Assets

      165,109,060  
  

 

 

  

Liabilities:

   

Payable to custodian

      1,478,527  

Distributions payable

      21,875  

Payable for investment advisory fees

      98,405  

Payable for payroll expenses

      31,730  

Payable for accounting fees

      7,500  

Other accrued expenses

      79,002  
  

 

 

  

Total Liabilities

      1,717,039  
  

 

 

  

Preferred Shares:

   

Series A Cumulative Preferred Shares (5.250%, $25 liquidation value, $0.01 par value, unlimited shares authorized with 1,200,000 shares issued and outstanding)

      30,000,000  
  

 

 

  

Net Assets Attributable to Common Shareholders

    $ 133,392,021  
  

 

 

  

Net Assets Attributable to Common Shareholders Consist of:

   

Paid-in capital

    $ 111,256,732  

Distributions in excess of net investment income

      (5,389,152 ) 

Accumulated net realized gain on investments

      5,996,994  

Net unrealized appreciation on investments

      21,527,447  
  

 

 

  

Net Assets

    $ 133,392,021  
  

 

 

  

Net Asset Value per Common Share:

   

($133,392,021 ÷ 12,934,886 shares outstanding at $0.01 par value; unlimited number of shares authorized)

      $10.31  
  

 

 

  

Statement of Operations

For the Six Months Ended March 31, 2018 (Unaudited)

 

Investment Income:

   

Dividends (net of foreign withholding taxes of $3,121)

    $ 1,289,584  

Interest

      843,661  
  

 

 

  

Total Investment Income

      2,133,245  
  

 

 

  

Expenses:

   

Investment advisory fees

      574,308  

Trustees’ fees

      61,258  

Payroll expenses

      33,506  

Shareholder communications expenses

      32,655  

Accounting fees

      22,500  

Legal and audit fees

      16,524  

Shareholder services fees

      12,326  

Custodian fees

      5,235  

Miscellaneous expenses

      24,791  
  

 

 

  

Total Expenses

      783,103  
  

 

 

  

Net Investment Income

      1,350,142  
  

 

 

  

Net Realized and Unrealized Gain on Investments:

   

Net realized gain on investments

      3,439,604  
  

 

 

  

Net change in unrealized appreciation: on investments

      648,157  
  

 

 

  

Net Realized and Unrealized Gain on Investments

      4,087,761  
  

 

 

  

Net Increase in Net Assets Resulting from Operations

      5,437,903  
  

 

 

  

Total Distributions to Preferred Shareholders

      (787,500 ) 
  

 

 

  

Net Increase in Net Assets Attributable to Common Shareholders Resulting from Operations

    $ 4,650,403  
  

 

 

  
 

 

See accompanying notes to financial statements.

 

7

Ellsworth Growth and Income Fund Ltd.

Statement of Changes in Net Assets Attributable to Common Shareholders

 

 

 

     Six Months Ended
March 31, 2018
(Unaudited)		   Year Ended
September 30, 2017

Operations:

         

Net investment income

      $ 1,350,142     $ 2,435,018

Net realized gain on investments

        3,439,604       3,511,086

Net change in unrealized appreciation on investments

        648,157       8,350,640
    

 

 

      

 

 

  

Net Increase in Net Assets Resulting from Operations

        5,437,903       14,296,744
    

 

 

      

 

 

  

Distributions to Preferred Shareholders:

         

Net investment income

        (259,875 )*       (30,340 )

Net realized gain

        (527,625 )*       (26,535 )
    

 

 

      

 

 

  

Total Distributions to Preferred Shareholders

        (787,500 )       (56,875 )
    

 

 

      

 

 

  

Net Increase in Net Assets Attributable to Common Shareholders Resulting from Operations

        4,650,403       14,239,869
    

 

 

      

 

 

  

 

Distributions to Common Shareholders:

         

Net investment income

        (1,380,521 )*       (3,022,372 )

Net realized gain

        (709,614 )*       (2,643,433 )

Return of capital

        (748,320 )*       —
    

 

 

      

 

 

  

Total Distributions to Common Shareholders

        (2,838,455 )       (5,665,805 )
    

 

 

      

 

 

  

 

Fund Share Transactions:

         

Net increase in net assets from common shares issued upon reinvestment of distributions

        604,486       646,865

Net decrease from repurchase of common shares

        —       (1,005,727 )

Offering costs for preferred shares charged to paid-in capital

        (39,619 )       (1,105,000 )
    

 

 

      

 

 

  

Net Increase/(Decrease) in Net Assets from Fund Share Transactions

        564,867       (1,463,862 )
    

 

 

      

 

 

  

Net Increase in Net Assets Attributable to Common Shareholders

        2,376,815       7,110,202

 

Net Assets Attributable to Common Shareholders:

         

Beginning of year

        131,015,206       123,905,004
    

 

 

      

 

 

  

End of period (including undistributed net investment income of $0 and $0, respectively)

      $ 133,392,021     $ 131,015,206
    

 

 

      

 

 

  

 

*

Based on year to date book income. Amounts are subject to change and recharacterization at year end.

See accompanying notes to financial statements.

 

8

Ellsworth Growth and Income Fund Ltd.

Financial Highlights

 

 

 

Selected data for a common share of beneficial interest outstanding throughout each period:

 

   

Six Months Ended

March 31, 2018

     Year Ended September 30,  
    (Unaudited)                          2017                          2016                          2015                          2014                          2013  

Operating Performance:

            

Net asset value, beginning of year

   $ 10.18     $ 9.60     $ 9.45     $ 10.29     $ 9.54     $ 8.48  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net investment income

     0.11       0.18       0.20       0.13       0.14       0.18  

Net realized and unrealized gain/(loss) on investments

     0.31       0.93       0.76       (0.35 )      0.80       1.15  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total from investment operations

     0.42       1.11       0.96       (0.22 )      0.94       1.33  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Distributions to Preferred Shareholders: (a)

            

Net investment income

     (0.02 )*      (0.00 )(b)      —       —       —       —  

Net realized gain

     (0.04 )*      (0.00 )(b)      —       —       —       —  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total distributions to preferred shareholders

     (0.06 )      (0.00 )(b)      —       —       —       —  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net Increase/(Decrease) in Net Assets Attributable to Common Shareholders Resulting from Operations

     0.36       1.11       0.96       (0.22 )      0.94       1.33  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Distributions to Common Shareholders:

            

Net investment income

     (0.11 )*      (0.23 )      (0.26 )      (0.25 )      (0.24 )      (0.26 ) 

Net realized gain

     (0.05 )*      (0.21 )      (0.53 )      (0.43 )      —       —  

Return of capital

     (0.06 )*      —       —       —       —       —  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total distributions to common shareholders

     (0.22 )      (0.44 )      (0.79 )      (0.68 )      (0.24 )      (0.26 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Fund Share Transactions:

            

Decrease in net asset value from common shares issued upon reinvestment of distributions

     (0.01 )      (0.01 )      (0.04 )      (0.00 )(b)      —       (0.01 ) 

Increase in net asset value from repurchase of common shares (includes transaction costs)

     —       0.01       0.02       0.06       0.05       0.00 (b) 

Offering costs for preferred shares charged to paid-in capital

     (0.00 )(b)      (0.09 )      —       —       —       —  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Fund share transactions

     (0.01 )      (0.09 )      (0.02 )      0.06       0.05       (0.01 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net Asset Value Attributable to Common Shareholders, End of Period

   $ 10.31     $ 10.18     $ 9.60     $ 9.45     $ 10.29     $ 9.54  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

NAV total return†

     3.48 %      10.89 %      10.64 %      (0.78 )%      10.92 %      16.45 % 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Market value, end of period

   $ 9.15     $ 9.26     $ 8.19     $ 7.82     $ 8.65     $ 7.87  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Investment total return††

     1.20 %      18.89 %      15.98 %      (2.32 )%      13.03 %      10.84 % 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ratios to Average Net Assets and Supplemental Data:

            

Net assets including liquidation value of preferred shares, end of period (in 000’s)

   $ 163,392     $ 161,015       —       —       —       —  

Net assets attributable to common shares, end of period (in 000’s)

   $ 133,392     $ 131,015     $ 123,905     $ 120,948     $ 135,267     $ 128,814  

Ratio of net investment income to average net assets attributable to common shares

     2.02 %(c)      1.92 %      2.19 %      1.40 %      1.30 %      1.90 % 

Ratio of operating expenses to average net assets attributable to common shares before reimbursement

     1.17 %(c)(d)      1.08 %(d)(e)      1.10 %(e)      1.10 %      1.10 %      1.10 % 

Ratio of operating expenses to average net assets attributable to common shares net of reimbursement

     1.17 %(c)(f)      1.08 %(e)(f)      1.10 %(e)      1.10 %      1.10 %      1.10 % 

Portfolio turnover rate

     10.5 %      32.0 %      38.0 %      45.0 %      48.0 %      48.0 % 

See accompanying notes to financial statements.

 

9

Ellsworth Growth and Income Fund Ltd.

Financial Highlights (Continued)

 

 

 

    

Six Months Ended

March 31, 2018

     Year Ended September 30,  
     (Unaudited)                          2017                          2016                           2015                           2014                           2013  

Cumulative Preferred Shares:

                

5.250% Series A Preferred

                

Liquidation value, end of period (in 000’s)

      $30,000       $30,000       —        —        —        —  

Total shares outstanding (in 000’s)

      1,200       1,200       —        —        —        —  

Liquidation preference per share

      $  25.00       $  25.00       —        —        —        —  

Average market value(g)

      $  24.79       $  25.14       —        —        —        —  

Asset coverage per share

      $136.16       $134.18       —        —        —        —  

Asset Coverage

      545 %      537 %      —        —        —        —  

 

†

For the six months ended March 31, 2018 and the years ended September 30, 2017 and 2016, the return was based on net asset value per share, adjusted for reinvestment of distributions at net asset value on the ex-dividend date. For the fiscal years ended on September 30, 2013 through 2015, returns were based on the market price on the payable date. Total return for a period of less than one year is not annualized.

††

Based on market value per share, adjusted for reinvestment of distributions at prices obtained under the Fund’s dividend reinvestment plan. Total return for a period of less than one year is not annualized.

*

Based on year to date book income. Amounts are subject to change and recharacterization at year end.

(a)

Calculated based on average common shares outstanding on the record dates throughout the year.

(b)

Amount represents less than $0.005 per share.

(c)

Annualized.

(d)

Ratio of operating expenses to average net assets including liquidation value of preferred shares before reimbursement for the six months ended March 31, 2018 and the year ended September 30, 2017 would have been 0.96% and 1.07%, respectively.

(e)

The Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. For the years ended September 30, 2017 and 2016, there was no impact on the expense ratios.

(f)

Ratio of operating expenses to average net assets including liquidation value of preferred shares net of reimbursement for the six months ended March 31, 2018 and the year ended September 30, 2017 would have been 0.96% and 1.07%, respectively.

(g)

Based on weekly prices.

See accompanying notes to financial statements.

 

10

Ellsworth Growth and Income Fund Ltd.

Notes to Financial Statements (Unaudited)

 

 

 

1. Organization. Ellsworth Growth and Income Fund Ltd. currently operates as a diversified closed-end management investment company organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). Investment operations commenced in July 1986.

The Fund’s primary investment objective is to provide income and the potential for capital appreciation, which objectives the Fund considers to be relatively equal over the long term due to the nature of the securities in which it invests. The Fund invests primarily in convertible and equity securities.

2. Significant Accounting Policies. As an investment company, the Fund follows the investment company accounting and reporting guidance, which is part of U.S. generally accepted accounting principles (“GAAP”) that may require the use of management estimates and assumptions in the preparation of its financial statements. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.

Security Valuation. Portfolio securities listed or traded on a nationally recognized securities exchange or traded in the U.S. over-the-counter market for which market quotations are readily available are valued at the last quoted sale price or a market’s official closing price as of the close of business on the day the securities are being valued. If there were no sales that day, the security is valued at the average of the closing bid and asked prices or, if there were no asked prices quoted on that day, then the security is valued at the closing bid price on that day. If no bid or asked prices are quoted on such day, the security is valued at the most recently available price or, if the Board of Trustees (the “Board”) so determines, by such other method as the Board shall determine in good faith to reflect its fair market value. Portfolio securities traded on more than one national securities exchange or market are valued according to the broadest and most representative market, as determined by Gabelli Funds, LLC (the “Adviser”).

Portfolio securities primarily traded on a foreign market are generally valued at the preceding closing values of such securities on the relevant market, but may be fair valued pursuant to procedures established by the Board if market conditions change significantly after the close of the foreign market, but prior to the close of business on the day the securities are being valued. Debt obligations for which market quotations are readily available are valued at the average of the latest bid and asked prices. If there were no asked prices quoted on such day, the security is valued using the closing bid price, unless the Board determines such amount does not reflect the securities’ fair value, in which case these securities will be fair valued as determined by the Board. Certain securities are valued principally using dealer quotations. Futures contracts are valued at the closing settlement price of the exchange or board of trade on which the applicable contract is traded. OTC futures and options on futures for which market quotations are readily available will be valued by quotations received from a pricing service or, if no quotations are available from a pricing service, by quotations obtained from one or more dealers in the instrument in question by the Adviser.

Securities and assets for which market quotations are not readily available are fair valued as determined by the Board. Fair valuation methodologies and procedures may include, but are not limited to: analysis and review of available financial and non-financial information about the company; comparisons with the valuation and changes in valuation of similar securities, including a comparison of foreign securities with the equivalent U.S. dollar value American Depositary Receipt securities at the close of the U.S. exchange; and evaluation of any other information that could be indicative of the value of the security.

 

11

Ellsworth Growth and Income Fund Ltd.

Notes to Financial Statements (Unaudited) (Continued)

 

 

 

The inputs and valuation techniques used to measure fair value of the Fund’s investments are summarized into three levels as described in the hierarchy below:

  ●  

Level 1 — quoted prices in active markets for identical securities;

  ●  

Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.); and

  ●  

Level 3 — significant unobservable inputs (including the Board’s determinations as to the fair value of investments).

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input both individually and in the aggregate that is significant to the fair value measurement. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of the Fund’s investments in securities by inputs used to value the Fund’s investments as of March 31, 2018 is as follows:

 

     Valuation Inputs      Total Market Value
at 3/31/18		  
     Level 1
Quoted Prices		      Level 2 Other Significant
Observable Inputs		      Level 3 Significant
Unobservable Inputs		     

INVESTMENTS IN SECURITIES:

            

ASSETS (Market Value):

            

Convertible Corporate Bonds:

            

Energy and Utilities

      —        $    5,840,423        $           0        $    5,840,423  

Other Industries (a)

      —        92,166,872        —        92,166,872  

Total Convertible Corporate Bonds

      —        98,007,295        0        98,007,295  

Convertible Preferred Stocks:

            

Business Services

      —        —        450,098        450,098  

Other Industries (a)

      $  5,837,594        —        —        5,837,594  

Total Convertible Preferred Stocks

      5,837,594        —        450,098        6,287,692  

Mandatory Convertible Securities:

            

Building and Construction

      —        2,163,695        —        2,163,695  

Computer Software and Services

      —        1,173,433        —        1,173,433  

Financial Services

      2,535,043        5,374,330        —        7,909,373  

Other Industries (a)

      10,613,493        —        —        10,613,493  

Total Mandatory Convertible Securities

      13,148,536        8,711,458        —        21,859,994  

Common Stocks (a)

      36,557,872        —        —        36,557,872  

Warrants (a)

      —        —        0        0  

U.S. Government Obligations

      —        119,598        —        119,598  

TOTAL INVESTMENTS IN SECURITIES

      $55,544,002        $106,838,351        $450,098        $162,832,451  

 

(a)

Please refer to the Schedule of Investments (“SOI”) for the industry classifications of these portfolio holdings.

During the six months ended March 31, 2018, the Fund had transfers from Level 1 to Level 2 of $1,579,648 or 1.21% of net assets as of September 30, 2017. Transfers from Level 1 to Level 2 are due to a decrease in market activity, e.g., frequency of trades, which resulted in a decrease in available market inputs to determine the price. The Fund’s policy is to recognize transfers among levels as of the beginning of the period.

Additional Information to Evaluate Qualitative Information.

General. The Fund uses recognized industry pricing services – approved by the Board and unaffiliated with the Adviser – to value most of its securities, and uses broker quotes provided by market makers of securities not valued by these and other recognized pricing sources. Several different pricing feeds are received to value domestic equity securities, international equity securities, preferred equity securities, and fixed income securities.

 

12

Ellsworth Growth and Income Fund Ltd.

Notes to Financial Statements (Unaudited) (Continued)

 

 

 

The data within these feeds are ultimately sourced from major stock exchanges and trading systems where these securities trade. The prices supplied by external sources are checked by obtaining quotations or actual transaction prices from market participants. If a price obtained from the pricing source is deemed unreliable, prices will be sought from another pricing service or from a broker/dealer that trades that security or similar securities.

Fair Valuation. Fair valued securities may be common or preferred equities, warrants, options, rights, or fixed income obligations. Where appropriate, Level 3 securities are those for which market quotations are not available, such as securities not traded for several days, or for which current bids are not available, or which are restricted as to transfer. When fair valuing a security, factors to consider include recent prices of comparable securities that are publicly traded, reliable prices of securities not publicly traded, the use of valuation models, current analyst reports, valuing the income or cash flow of the issuer, or cost if the preceding factors do not apply. A significant change in the unobservable inputs could result in a lower or higher value in Level 3 securities. The circumstances of Level 3 securities are frequently monitored to determine if fair valuation measures continue to apply.

The Adviser reports quarterly to the Board the results of the application of fair valuation policies and procedures. These may include backtesting the prices realized in subsequent trades of these fair valued securities to fair values previously recognized.

Investments in Other Investment Companies. The Fund may invest, from time to time, in shares of other investment companies (or entities that would be considered investment companies but are excluded from the definition pursuant to certain exceptions under the 1940 Act) (the “Acquired Funds”) in accordance with the 1940 Act and related rules. Shareholders in the Fund would bear the pro rata portion of the periodic expenses of the Acquired Funds in addition to the Fund’s expenses. During the six months ended March 31, 2018, the Fund’s pro rata portion of the periodic expenses charged by the Acquired Funds was approximately 0.04%.

Foreign Currency Translations. The books and records of the Fund are maintained in U.S. dollars. Foreign currencies, investments, and other assets and liabilities are translated into U.S. dollars at current exchange rates. Purchases and sales of investment securities, income, and expenses are translated at the exchange rate prevailing on the respective dates of such transactions. Unrealized gains and losses that result from changes in foreign exchange rates and/or changes in market prices of securities have been included in unrealized appreciation/depreciation on investments and foreign currency translations. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between trade date and settlement date on investment securities transactions, foreign currency transactions, and the difference between the amounts of interest and dividends recorded on the books of the Fund and the amounts actually received. The portion of foreign currency gains and losses related to fluctuation in exchange rates between the initial purchase trade date and subsequent sale trade date is included in realized gain/(loss) on investments.

Foreign Securities. The Fund may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible revaluation of currencies, the inability to repatriate funds, less complete financial information about companies, and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than securities of comparable U.S. issuers.

 

13

Ellsworth Growth and Income Fund Ltd.

Notes to Financial Statements (Unaudited) (Continued)

 

 

 

Foreign Taxes. The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.

Restricted Securities. The Fund may invest up to 15% of its net assets in securities for which the markets are restricted. Restricted securities include securities whose disposition is subject to substantial legal or contractual restrictions. The sale of restricted securities often requires more time and results in higher brokerage charges or dealer discounts and other selling expenses than the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. Restricted securities may sell at a price lower than similar securities that are not subject to restrictions on resale. Securities freely saleable among qualified institutional investors under special rules adopted by the SEC may be treated as liquid if they satisfy liquidity standards established by the Board. The continued liquidity of such securities is not as well assured as that of publicly traded securities, and accordingly the Board will monitor their liquidity. For the restricted securities as of March 31, 2018, please refer to the Schedule of Investments.

Securities Transactions and Investment Income. Securities transactions are accounted for on the trade date with realized gain/(loss) on investments determined by using the identified cost method. Interest income (including amortization of premium and accretion of discount) is recorded on the accrual basis. Premiums and discounts on debt securities are amortized using the effective yield to maturity method. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities that are recorded as soon after the ex-dividend date as the Fund becomes aware of such dividends. For certain securities known as “contingent payment debt instruments,” Federal tax regulations require the Fund to record non-cash, “contingent” interest income in addition to interest income actually received.

Custodian Fee Credits. When cash balances are maintained in the custody account, the Fund receives credits which are used to offset custodian fees. The gross expenses paid under the custody arrangement are included in custodian fees in the Statement of Operations with the corresponding expense offset, if any, shown as “Custodian fee credits.”

Distributions to Shareholders. Distributions to common shareholders are recorded on the ex-dividend date. The characterization of distributions to shareholders is based on income and capital gains as determined in accordance with federal income tax regulations, which may differ from income and capital gains as determined under GAAP. These differences are primarily due to differing treatments of income and gains on various investment securities and foreign currency transactions held by the Fund, timing differences, and differing characterizations of distributions made by the Fund. Distributions from net investment income for federal income tax purposes include net realized gains on foreign currency transactions. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, adjustments are made to the appropriate capital accounts in the period when the differences arise. These reclassifications have no impact on the NAV of the Fund.

Under the Fund’s current common share distribution policy, the Fund declares and pays quarterly distributions from net investment income, capital gains, and paid-in capital. The actual source of the distribution is determined after the end of the year. Pursuant to this policy, distributions during the year may be made in excess of required distributions. To the extent such distributions are made from current earnings and profits, they are considered ordinary income or long term capital gains. The Fund’s current distribution policy may restrict the Fund’s ability

 

14

Ellsworth Growth and Income Fund Ltd.

Notes to Financial Statements (Unaudited) (Continued)

 

 

 

to pass through to shareholders all of its net realized long term capital gains as a Capital Gain Dividend and may cause such gains to be treated as ordinary income, subject to the maximum federal income tax rate. Distributions sourced from paid-in capital should not be considered as dividend yield or the total return from an investment in the Fund. The Board will continue to monitor the Fund’s distribution level, taking into consideration the Fund’s NAV and the financial market environment. The Fund’s distribution policy is subject to modification by the Board at any time.

Distributions to 5.250% Series A Preferred Shares are recorded on a daily basis and are determined as described in Note 5.

The tax character of distributions paid during the year ended September 30, 2017 was as follows:

 

     Common      Preferred  

Distributions paid from:

      

Ordinary income (inclusive of short term capital gains)

    $ 3,044,635        $30,563  

Net long term capital gains

      2,621,170        26,312  
  

 

 

     

 

 

  

Total distributions paid

    $ 5,665,805        $56,875  
  

 

 

     

 

 

  

Provision for Income Taxes. The Fund intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). It is the policy of the Fund to comply with the requirements of the Code applicable to regulated investment companies and to distribute substantially all of its net investment company taxable income and net capital gains. Therefore, no provision for federal income taxes is required.

The following summarizes the tax cost of investments and the related net unrealized appreciation at March 31, 2018:

 

     Cost        Gross
Unrealized
Appreciation		        Gross
Unrealized
Depreciation		        Net
Unrealized
Appreciation		  

Investments

      $141,355,445          $26,679,541          $(5,202,535)          $21,477,006  

The Fund is required to evaluate tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Income tax and related interest and penalties would be recognized by the Fund as tax expense in the Statement of Operations if the tax positions were deemed not to meet the more-likely-than-not threshold. During the six months ended March 31, 2018, the Fund did not incur any income tax, interest, or penalties. As of March 31, 2018, the Adviser has reviewed all open tax years and concluded that there was no impact to the Fund’s net assets or results of operations. The Fund’s federal and state tax returns for the prior three fiscal years remain open, subject to examination. On an ongoing basis, the Adviser will monitor the Fund’s tax positions to determine if adjustments to this conclusion are necessary.

3. Agreements and Other Transactions. The Fund has entered into an investment advisory agreement (the “Advisory Agreement”) with the Adviser which provides that the Fund will pay the Adviser a fee, computed daily and paid monthly, equal on an annual basis to 0.80% of the first $100,000,000 of the Fund’s average weekly net assets including the liquidation value of preferred stock and 0.55% of the Fund’s average weekly net assets including the liquidation value of preferred stock in excess of $100,000,000. In accordance with the

 

15

Ellsworth Growth and Income Fund Ltd.

Notes to Financial Statements (Unaudited) (Continued)

 

 

 

Advisory Agreement, the Adviser provides a continuous investment program for the Fund’s portfolio and oversees the administration of all aspects of the Fund’s business and affairs.

During the six months ended March 31, 2018, the Fund paid $15 in brokerage commissions on security trades to G.research, LLC, Inc., an affiliate of the Adviser.

Through October 31, 2017, the Adviser waived fees or reimbursed expenses of the Fund to the extent the total expenses of the Fund (excluding brokers costs, interest, taxes, acquired fund fees and expenses, expenses chargeable to capital, and extraordinary expenses) exceed 1.10% of the weekly average net assets of the Fund. During the six months ended March 31, 2018, the Adviser neither waived fees nor reimbursed expenses to the Fund.

The cost of calculating the Fund’s NAV per share is a Fund expense pursuant to the Advisory Agreement between the Fund and the Adviser. During the six months ended March 31, 2018, the Fund paid or accrued $22,500 to the Adviser in connection with the cost of computing the Fund’s NAV.

The Fund pays each Trustee who is not considered an affiliated person an annual retainer of $8,500 plus $1,000 for each Board meeting attended. Each Trustee is reimbursed by the Fund for any out of pocket expenses incurred in attending meetings. All Board committee members receive $500 per meeting attended. The Lead Independent Trustee receives an annual fee of $1,000 and the Audit and Nominating Committee Chairman each receives an annual fee of $2,000. A Trustee may receive a single meeting fee, allocated among the participating funds, for participation in certain meetings held on behalf of multiple funds. Trustees who are directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Fund.

4. Portfolio Securities. Purchases and sales of securities during the six months ended March 31, 2018, other than short term securities and U.S. Government obligations, aggregated $31,713,698 and $16,447,243, respectively.

5. Capital. The Fund is authorized to issue an unlimited number of common shares of beneficial interest (par value $0.01). The Board has authorized the repurchase of its shares in the open market when the shares are trading at a discount of 10.0% or more (or such other percentage as the Board may determine from time to time) from the NAV of the shares. During the year ended September 30, 2017, the Fund repurchased and retired 121,457 shares in the open market at an investment of $1,005,727 and an average discount of approximately 13.95% from its NAV. During the six months ended March 31, 2018, the Fund did not repurchase any shares.

 

16

Ellsworth Growth and Income Fund Ltd.

Notes to Financial Statements (Unaudited) (Continued)

 

 

 

Transactions in common shares of beneficial interest for the six months ended March 31, 2018 and the year ended September 30, 2017 were as follows:

 

     Six Months Ended
March 31, 2018
(Unaudited}		      Year Ended
September 30, 2017		  
     

Shares

     

Amount

     

Shares

     

Amount

  

Net increase in net assets from common shares issued upon reinvestment of distributions

      65,634        $604,486        80,356      $ 646,865  

Net decrease from repurchase of common shares

      —        —        (121,457 )       (1,005,727 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Net increase/(decrease) from transactions in Fund shares

      65,634        $604,486        (41,101 )     $ (358,862 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

The Fund has an effective shelf registration authorizing the offering of an additional $100 million of common or preferred shares. As of March 31, 2018, after considering the Series A offering, the Fund has approximately $70 million available for issuance under the current shelf registration

On September 18, 2017, the Fund issued 1,200,000 shares of 5.250% Series A Cumulative Preferred Shares (“Series A Preferred”), receiving $28,855,381, after the deduction of offering expenses of $199,619 and underwriting fees of $945,000. The liquidation value of the Series A Preferred is $25 per share. The Series A Preferred has an annual dividend rate of 5.250%. The Series A Preferred is noncallable before September 18, 2022. At March 31, 2018, 1,200,000 shares of Series A Preferred were outstanding and accrued dividends amounted to $21,875.

The Fund’s Declaration of Trust, as amended, authorizes the issuance of an unlimited number of Series A Preferred, par value $0.01. The Series A Preferred are senior to the common shares and result in the financial leveraging of the common shares. Such leveraging tends to magnify both the risks and opportunities to common shareholders. Dividends on the Series A Preferred are cumulative. The Fund is required by the 1940 Act and by the Statement of Preferences to meet certain asset coverage tests with respect to the Series A Preferred. If the Fund fails to meet these requirements and does not correct such failure, the Fund may be required to redeem, in part or in full, the Series A Preferred at the redemption price of $25 per share plus an amount equal to the accumulated and unpaid dividends whether or not declared on such shares in order to meet these requirements. Additionally, failure to meet the foregoing asset coverage requirements could restrict the Fund’s ability to pay dividends to common shareholders and could lead to sales of portfolio securities at inopportune times. The income received on the Fund’s assets may vary in a manner unrelated to the fixed rate, which could have either a beneficial or detrimental impact on net investment income and gains available to common shareholders.

The holders of Series A Preferred generally are entitled to one vote per share held on each matter submitted to a vote of shareholders of the Fund and will vote together with holders of common shares as a single class. The holders of Series A Preferred voting together as a single class also have the right currently to elect two Trustees and under certain circumstances are entitled to elect a majority of the Board of Trustees. In addition, the affirmative vote of a majority of the votes entitled to be cast by holders of all outstanding shares of the Series A Preferred, voting as a single class, will be required to approve any plan of reorganization adversely affecting the Series A Preferred, and the approval of two-thirds of each class, voting separately, of the Fund’s outstanding voting stock must approve the conversion of the Fund from a closed-end to an open-end investment company. The approval of a majority (as defined in the 1940 Act) of the outstanding Series A Preferred and

 

17

Ellsworth Growth and Income Fund Ltd.

Notes to Financial Statements (Unaudited) (Continued)

 

 

 

a majority (as defined in the 1940 Act) of the Fund’s outstanding voting securities are required to approve certain other actions, including changes in the Fund’s investment objectives or fundamental investment policies.

6. Convertible Securities Concentration. It is the Fund’s policy to invest at least 65% of its assets in convertible securities. Although convertible securities do derive part of their value from that of the securities into which they are convertible, they are not considered derivative financial instruments. However, the Fund’s mandatory convertible securities include features which render them more sensitive to price changes of their underlying securities. Thus they expose the Fund to greater downside risk than traditional convertible securities, but generally less than that of the underlying common stock.

7. Indemnifications. The Fund enters into contracts that contain a variety of indemnifications. The Fund’s maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts. Management has reviewed the Fund’s existing contracts and expects the risk of loss to be remote.

8. Change in Independent Registered Public Accounting Firm. On December 29, 2017, Tait, Weller & Baker LLP (“Tait”) resigned, at the request of the Fund, as the independent registered public accounting firm to the Fund. The Audit Committee of the Fund’s Board of Trustees participated in, and approved, the decision to change the independent registered public accounting firm. Tait’s reports on the Fund’s financial statements for the fiscal periods ended September 30, 2017 and September 30, 2016 contained no adverse opinion or disclaimer of opinion nor were they qualified or modified as to uncertainty, audit scope, or accounting principle. During the Fund’s fiscal periods ended September 30, 2017 and September 30, 2016 and the subsequent interim period through December 29, 2017, (i) there were no disagreements with Tait on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Tait, would have caused them to make reference to the subject matter of the disagreements in connection with their reports on the Fund’s financial statements for such periods, and (ii) there were no “reportable events” of the kind described in Item 304(a)(1)(v) of Regulation S-K under the Securities Exchange Act of 1934, as amended.

The Audit Committee of the Fund’s Board of Trustees approved the engagement of PricewaterhouseCoopers LLP (“PwC”) as the Fund’s independent registered public accounting firm for the fiscal year ending September 30, 2018. The selection of PwC does not reflect any disagreements with or dissatisfaction by the Fund or the Board of Trustees with the performance of the Fund’s prior independent registered public accounting firm, Tait. During the Fund’s fiscal periods ended September 30, 2017 and September 30, 2016 and the subsequent interim period through December 29, 2017, neither the Fund, nor anyone on its behalf, consulted with PwC on items which: (i) concerned the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Fund’s financial statements; or (ii) concerned the subject of a disagreement (as defined in paragraph (a)(1)(iv) of Item 304 of Regulation S-K) or reportable events (as described in paragraph (a)(1)(v) of said Item 304).

9. Subsequent Events. Management has evaluated the impact on the Fund of all subsequent events occurring through the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.

 

18

Ellsworth Growth and Income Fund Ltd.

One Corporate Center

Rye, NY 10580-1422

(Y)our Portfolio Management Team Biographies

Thomas H. Dinsmore, CFA, joined Gabelli Funds, LLC in 2015. He currently serves as a portfolio manager of Gabelli Funds, LLC and manages several funds within the Gabelli/GAMCO Funds Complex. From 1996 to 2015, Mr. Dinsmore was Chairman and CEO of Dinsmore Capital Management; CEO and Portfolio Manager of Bancroft Fund Ltd; and CEO, Portfolio Manager, and co-founder of Ellsworth Growth and Income Fund Ltd. He received a BS in Economics from the Wharton School of Business and an MA degree in Economics from Fairleigh Dickinson University.

Jane D. O’Keeffe joined Gabelli Funds, LLC in 2015. She currently serves as a portfolio manager of Gabelli Funds, LLC and manages several funds within the Gabelli/GAMCO Funds Complex. From 1996 to 2015, Ms. O’Keeffe was President and Director of Dinsmore Capital Management where she was also a Portfolio Manager of Bancroft Fund Ltd. and Ellsworth Growth and Income Fund Ltd. Prior to joining Dinsmore Capital Management, Ms. O’Keeffe held positions of increasing responsibilities at IDS Progressive Fund, Soros Fund Management Company, Simms Capital Management, and Fiduciary Trust International. She earned a BA from the University of New Hampshire and attended the Lubin Graduate School of Business at Pace University.

James A. Dinsmore, CFA, joined Gabelli Funds, LLC in 2015. He currently serves as a portfolio manager of Gabelli Funds, LLC and manages several funds within the Gabelli/GAMCO Funds Complex. Mr. Dinsmore received a BA in Economics from Cornell University and an MBA degree from Rutgers University.

 

 

We have separated the portfolio managers’ commentary from the financial statements and investment portfolio due to corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that the content of the portfolio managers’ commentary is unrestricted. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com.

The Net Asset Value per share appears in the Publicly Traded Funds column, under the heading “Specialized Equity Funds,” in Monday’s The Wall Street Journal. It is also listed in Barron’s Mutual Funds/Closed End Funds section under the heading “Convertible Securities Funds.”

The Net Asset Value per share may be obtained each day by calling (914) 921-5070 or visiting www.gabelli.com.

The NASDAQ symbol for the Net Asset Value is “XECFX.”

 

Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that the Fund may from time to time purchase its common shares in the open market when the Fund’s shares are trading at a discount of 10.0% or more from the net asset value of the shares. The Fund may also from time to time purchase its preferred shares in the open market when the preferred shares are trading at a discount to the liquidation value.

ELLSWORTH GROWTH AND INCOME FUND LTD.

One Corporate Center

Rye, NY 10580-1422

t   800-GABELLI (800-422-3554)

f   914-921-5118

e  info@gabelli.com

    GABELLI.COM

 

 

 

TRUSTEES

Mario J. Gabelli, CFA

Chairman and

Chief Executive Officer,

GAMCO Investors, Inc.

Executive Chairman,

Associated Capital Group Inc.

Kinchen C. Bizzell

Managing Director,

CAVU Securities

Elizabeth C. Bogan

Senior Lecturer, Economics

Princeton University

James P. Conn

Former Managing Director &

Chief Investment Officer,

Financial Security Assurance

Holdings Ltd.

James A. Dinsmore, CFA

Portfolio Manager,

Gabelli Funds, LLC

Frank J. Fahrenkopf, Jr.

Former President &

Chief Executive Officer,

American Gaming Association

Daniel D. Harding

Managing General Director,

Global Equity Income Fund

Michael J. Melarkey

Of Counsel,

McDonald Carano Wilson LLP

Kuni Nakamura

President,

Advanced Polymer, Inc.

Nicholas W. Platt

Former Managing Director,

FTI Consulting Inc.

Anthonie C. van Ekris

Chairman,

BALMAC International Inc.

OFFICERS

James A. Dinsmore, CFA

President

John C. Ball

Treasurer

Agnes Mullady

Vice President

Andrea R. Mango

Secretary & Vice President

Richard J. Walz

Chief Compliance Officer

Laurissa M. Martire

Vice President & Ombudsman

Bethany A. Uhlein

Assistant Vice President & Ombudsman

INVESTMENT ADVISER

Gabelli Funds, LLC

CUSTODIAN

State Street Bank and Trust

Company

COUNSEL

Skadden, Arps, Slate, Meagher & Flom LLP

TRANSFER AGENT AND

REGISTRAR

American Stock Transfer and

Trust Company

 

 

 

ECF Q1/2018

LOGO

 

Item 2. Code of Ethics.

Not applicable.

Item 3. Audit Committee Financial Expert.

Not applicable.

Item 4. Principal Accountant Fees and Services.

Not applicable.

Item 5. Audit Committee of Listed Registrants.

Not applicable.

Item 6. Investments.

 

(a)

Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form.

 

(b)

Not applicable.

 

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

Not applicable.

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

There has been no change, as of the date of this filing, in any of the portfolio managers identified in response to paragraph (a)(1) of this Item in the registrant’s most recently filed annual report on Form N-CSR.

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

REGISTRANT PURCHASES OF EQUITY SECURITIES

 

Period

   (a) Total
Number of
Shares (or
Units)
Purchased)		   (b) Average
Price Paid per
Share (or Unit)		   (c) Total
Number of Shares (or Units)
Purchased as Part of Publicly Announced
Plans or
Programs		   (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet be Purchased Under the Plans or Programs

Month #1

10/01/2017

through

10/31/2017

  

Common –

N/A

 

Preferred

Series A –

N/A

  

Common – N/A

 

Preferred Series

A – N/A

  

Common – N/A

 

Preferred Series

A – N/A

  

Common – 12,869,252

 

Preferred Series A – 1,200,000

Month #2

11/01/2017

through

11/30/2017

  

Common –

N/A

 

Preferred

Series A –

N/A

  

Common – N/A

 

Preferred Series

A – N/A

  

Common – N/A

 

Preferred Series

A – N/A

  

Common – 12,869,252

 

Preferred Series A –

1,200,000

Month #3

12/01/2017

through

12/31/2017

  

Common –

N/A

 

Preferred

Series A –

N/A

  

Common – N/A

 

Preferred Series

A – N/A

  

Common – N/A

 

Preferred Series

A – N/A

  

Common – 12,934,886

 

Preferred Series A –

1,200,000

Month #4

01/01/2018

through

01/31/2018

  

Common –

N/A

 

Preferred

Series A –

N/A

  

Common – N/A

 

Preferred Series

A – N/A

  

Common – N/A

 

Preferred Series

A – N/A

  

Common – 12,934,886

 

Preferred Series A –

1,200,000

Month #5

02/01/2018

through

02/28/2018

  

Common –

N/A

 

Preferred

Series A –

N/A

  

Common – N/A

 

Preferred Series

A – N/A

  

Common – N/A

 

Preferred Series

A – N/A

  

Common – 12,934,886

 

Preferred Series A –

1,200,000

Month #6

03/01/2018

through

03/31/2018

  

Common –

N/A

 

Preferred

Series A –

N/A

  

Common – N/A

 

Preferred Series

A – N/A

  

Common – N/A

 

Preferred Series

A – N/A

  

Common – 12,934,886

 

Preferred Series A –

1,200,000

Total

  

Common –

N/A

 

Preferred

Series A –

N/A

  

Common – N/A

 

Preferred Series

A – N/A

  

Common – N/A

 

Preferred Series

A – N/A

   N/A

Footnote columns (c) and (d) of the table, by disclosing the following information in the aggregate for all plans or programs publicly announced:

a. The date each plan or program was announced – The notice of the potential repurchase of common and preferred shares occurs quarterly in the Fund’s quarterly report in accordance with Section 23(c) of the Investment Company Act of 1940, as amended.

b. The dollar amount (or share or unit amount) approved – Any or all common shares outstanding may be repurchased when the Fund’s common shares are trading at a discount of 10% or more from the net asset value of the shares. Any or all preferred shares outstanding may be repurchased when the Fund’s preferred shares are trading at a discount to the liquidation value of $25.00.

c. The expiration date (if any) of each plan or program – The Fund’s repurchase plans are ongoing.

d. Each plan or program that has expired during the period covered by the table – The Fund’s repurchase plans are ongoing.

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

There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s Board of Directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.

Item 11. Controls and Procedures.

 

  (a)

The registrant’s principal executive and principal financial officers, or persons performing similar functions, 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”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).

 

  (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 (17 CFR 270.30a-3(d))) that occurred during the registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

Not applicable.

Item 13. Exhibits.

 

  (a)(1)

Not applicable.

 

  (a)(2)

Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.

 

  (a)(3)

Not applicable.

 

  (a)(4) On December 29, 2017, Tait, Weller & Baker LLP (“Tait”) resigned, at the request of the Fund, as the independent registered public accounting firm to the Fund. The Audit Committee of the Fund’s Board of Trustees participated in, and approved, the decision to change the independent registered public accounting firm. Tait’s reports on the Fund’s financial statements for the fiscal periods ended September 30, 2017 and September 30, 2016 contained no adverse opinion or disclaimer of opinion nor were they qualified or modified as to uncertainty, audit scope or accounting principle. During the Fund’s fiscal periods ended September 30, 2017 and September 30, 2016 and the subsequent interim period through December 29, 2017, (i) there were no disagreements with Tait on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Tait, would have caused them to make reference to the subject matter of the disagreements in connection with their reports on the Fund’s financial statements for such periods, and (ii) there were no “reportable events” of the kind described in Item 304(a)(1)(v) of Regulation S-K under the Securities Exchange Act of 1934, as amended.

The Audit Committee of the Fund’s Board of Trustees approved the engagement of PricewaterhouseCoopers LLP (“PwC”) as the Fund’s independent registered public accounting firm for the fiscal year ending September 30, 2018. The selection of PwC does not reflect any disagreements with or dissatisfaction by the Fund or the Board of Trustees with the performance of the Fund’s prior independent registered public accounting firm, Tait. During the Fund’s fiscal periods ended September 30, 2017 and September 30, 2016 and the subsequent interim period through December 29, 2017, neither the Fund, nor anyone on its behalf, consulted with PwC on items which: (i) concerned the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Fund’s financial statements; or (ii) concerned the subject of a disagreement (as defined in paragraph (a)(1)(iv) of Item 304 of Regulation S-K) or reportable events (as described in paragraph (a)(1)(v) of said Item 304).

 

  (b)

Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.

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.

 

(Registrant)    Ellsworth Growth and Income Fund Ltd.                                                          
By (Signature and Title)*     /s/ James A. Dinsmore                                                                   
         James A. Dinsmore, Principal Executive Officer
Date 5/25/2018                                                                                                                            

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/ James A. Dinsmore                                                                   
         James A. Dinsmore, Principal Executive Officer
Date 5/25/2018                                                                                                                            

 

By (Signature and Title)*     /s/ John C. Ball                                                                               
         John C. Ball, Principal Financial Officer and Treasurer
Date 5/25/2018                                                                                                                            

* Print the name and title of each signing officer under his or her signature.