- Certified annual shareholder report for management investment companies (N-CSR)

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: 811-01639

Engex, Inc.

(Exact name of registrant as specified in charter)

44 Wall Street, 2nd Floor, New York, NY 10005

(Address of principal executive offices) (Zip code)

CT Corporation, 111 Eight Avenue, New York, New York 10011

(Name and address of agent for service)

Registrant's telephone number, including area code: 212-495-4519

Date of fiscal year end: September 30

Date of reporting period: March 31, 2012

Item 1. Reports to Stockholders. Directors J. Morton Davis Jerome Fisch Dov Perlysky Howard Spindel Leonard Toboroff		ENGEX, Inc.

I. Officers

J. Morton Davis, Chairman of the Board and President David Nachamie, Secretary Michael Siciliano, Treasurer

II. Custodian

Bank of America 100 Federal Street, 17 th Floor Boston, Massachusetts 02110		FINANCIAL STATEMENTS and SEMI-ANNUAL REPORT

III. Transfer Agent

American Stock Transfer & Trust Co. 59 Maiden Lane New York, New York 10038 Toll Free: (800) 937-5449 Website: www.amstock.com E-mail: info@amstock.com		March 31, 2012

IV. Independent Accountants		ENGEX, INC. is listed on

EisnerAmper LLP 750 Third Avenue New York, New York 10017		NYSE MKT Symbol – EGX

Engex, Inc. 44 Wall Street New York, New York 10005 (212) 495-4200 http://www.engexinc.com

ENGEX, INC. STATEMENT OF ASSETS AND LIABILITIES March 31, 2012 (UNAUDITED)

Assets:

Investment in securities at fair value (identified cost, $9,099,604)	$	3,751,376

Private investments at fair value (identified cost, $2,756,016)		392,190
Cash and cash equivalents		19,016

GFK Receivable		176,796

Prepaid expenses		3,235

TOTAL ASSETS			$	4,342,613


Liabilities:

Accrued expenses		65,906



TOTAL LIABILITIES				65,906


COMMITMENTS AND CONTINGENCIES

NET ASSETS APPLICABLE TO OUTSTANDING SHARES			$	4,276,707

NET ASSET VALUE PER SHARE			$	2.63


NET ASSETS APPLICABLE TO OUTSTANDING SHARES:

Common stock - $0.10 par value:

Authorized – 2,500,000 shares, Issued – 1,626,938 shares			$	162,693

Additional paid-in capital				17,891,905

Unrealized depreciation on investments				(7,712,055	)

Cumulative net realized loss from investment transactions				(3,421,177	)

Accumulated net investment loss				(2,644,659	)

NET ASSETS			$	4,276,707
The accompanying notes are an integral part of this statement.

ENGEX, INC. SCHEDULE OF PORTFOLIO INVESTMENTS March 31, 2012 (UNAUDITED)
	Number of Shares		Fair Value
COMMON STOCK* (87.7%)**

Biotechnology (87.2%)**

Enzo Biochem, Inc.		1,216,196		$	3,271,568
MiMedx Group Inc.		407,092			455,943
				$	3,727,511
Technology (-0%-)**

Silverstar Holdings Ltd.		51,600			139

Gaming Industry (0.5%)**

American Vantage Companies		474,500			23,726



TOTAL INVESTMENT IN MARKETABLE SECURITIES (IDENTIFIED COST, $9,099,604)				$	3,751,376

PRIVATE INVESTMENTS* (9.2%)**


LifeSync Holdings, Inc.		4,675		$	0
Corente, Inc.		11,793			0
MRI Interventions, Inc.		569,684			333,312
MRI Interventions, Inc. Note due 2020					38,923
MiMedx Group, Inc. B 1 Warrants Restricted		50,000			12,500
MiMedx Group, Inc. B 3 Warrants Restricted		25,000			7,455


TOTAL PRIVATE INVESTMENTS (IDENTIFIED COST, $2,756,016)				$	392,190

*Non income-producing securities

**The percentage shown for each investment category in the Portfolio of Investments is based on net assets

The accompanying notes are an integral part of this statement.

ENGEX, INC. STATEMENT OF OPERATIONS March 31, 2012 (UNAUDITED)
INVESTMENT INCOME:

Dividends & Interest			$	3,038


EXPENSES:

Professional fees	67,750

Insurance	9,703

Custodian and transfer agent fees	16,282

Directors’ fees and expenses	10,500

State and local taxes other than income taxes	1,569

Miscellaneous	3,493

Management Fee	20,290

TOTAL EXPENSES BEFORE WAIVER OF MANAGEMENT FEE	129,587

LESS: WAIVER OF MANAGEMENT FEE	(20,290	)

TOTAL EXPENSES AFTER WAIVER OF MANAGEMENT FEE				109,297

NET INVESTMENT LOSS				(106,259	)

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
NET REALIZED (LOSS) FROM SECURITIES TRANSACTIONS				(183,966	)

NET CHANGE IN UNREALIZED DEPRECIATION ON INVESTMENTS				483,890
NET REALIZED AND UNREALIZED GAIN FROM INVESTMENTS				299,924

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS			$	193,665

The accompanying notes are an integral part of this statement.

ENGEX, INC. STATEMENT OF CHANGES IN NET ASSETS For The Six Months Ended March 31, (UNAUDITED)
	2012			2011
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:

Net investment loss	$	(106,259	)	$	(110,154	)

Net realized loss on investments		(183,966	)		(369,933	)

Net change in unrealized depreciation on investments		483,890			610,371



NET INCREASE IN NET ASSETS FROM OPERATIONS		193,665			130,284

ASSETS CONTRIBUTED BY SHAREHOLDER		--			501,014

NET INCREASE IN NET ASSETS		193,665			631,298

NET ASSETS – BEGINNING OF PERIOD		4,083,042			5,375,640

NET ASSETS – END OF PERIOD	$	4,276,707		$	6,006,938

The accompanying notes are an integral part of this statement.

ENGEX, INC. STATEMENT OF CASH FLOWS For The Six Months Ended March 31, 2012 (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:

Net increase in net assets from operations	$	193,665


Adjustments to reconcile net increase in net assets to net cash used in operating activities:
Net change in unrealized depreciation on investments		(483,890	)
Net realized loss on investments		183,966
Proceeds from disposition of common stock		55,986
Purchase of common stock		(159,003	)
Decrease in prepaid expenses		15,953
Increase in GFK Receivable		(3,007	)
Increase in accrued expenses		20,759

Net cash used in operating activities and net decrease in cash and cash equivalents		(175,571	)

Cash – beginning of period		194,587
Cash – end of period	$	19,016


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for income taxes	$	1,569

The accompanying notes are an integral part of this statement.

ENGEX, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Engex, Inc. (the “Fund”) is registered under the Investment Company Act of 1940, as a nondiversified, closed-end investment company. The investment objective of the Fund is capital appreciation.

The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements:

(a)	SECURITY TRANSACTIONS – Security transactions are accounted for on the trade dates the securities are purchased or sold. Dividend income and distributions to stockholders are recorded on the ex-dividend date.

(b)

SECURITY VALUATION – Investments in securities traded on a national securities exchange are valued at the last reported sales price on March 31, 2012. Securities traded on the over-the-counter market and listed securities for which no sale was reported on that date are valued at the last reported bid price.

(c)

Investments for which quotations are not readily available are valued at fair value, as determined by Management in accordance with guidelines adopted by the Fund’s Board of Directors after taking into consideration market conditions and operational progress. These estimated values may not reflect amounts that could ultimately be realized upon sale. The estimated fair values also may differ from the values that would have been used had a liquid market existed, and such differences could be significant.

(d)	FEDERAL INCOME TAXES – The Fund does not qualify under subchapter M of the Internal Revenue Code as a regulated investment company, and accordingly, is taxed as a regular corporation.

(e)

USE OF ACCOUNTING ESTIMATES - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

NOTE 2. INVESTMENT ADVISER AND TRANSACTIONS WITH RELATED PARTY

The Fund has entered into an investment advisory agreement (the “Agreement”) with American Investors Advisors, Inc. (“Advisors”) which is wholly owned by the Chairman of the Fund (the “Chairman”). Certain officers of Advisors are also officers of the Fund. Under this Agreement, Advisors will serve as an investment adviser of the Fund for a management fee computed at an annual rate of 1.0% of the Fund’s average weekly net assets. At its meeting held on October 26, 2011, the Board of Directors, including a majority of the Independent Directors voting separately, approved the continuation of the Agreement for an additional one-year period. Simultaneously, Advisors agreed to extend the waiver of its management fee until further notice.

Throughout the six month period ended March 31, 2012, Advisors voluntarily waived its management fee. Without the waiver of the management fee, the Fund’s net increase in net assets resulting from operations for the six months ended March 31, 2012 would have been approximately $20,290 lower, or a 10.5% decrease over the gain as reported.

ENGEX, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

NOTE 3. INVESTMENT TRANSACTIONS

For the six months ended March 31, 2012, sales and purchases of investment securities were $55,986 and $159,003, respectively. Gross unrealized appreciation amounted to $485,311 and gross unrealized depreciation amounted to $1,421 for the six months ended March 31, 2012.

During fiscal 2009, Etilize, one of the Fund’s private investment interests, was acquired by a foreign company (the “Purchaser”). The purchase price called for three Closing Price Payments from the Purchaser. The First Closing Price Payment was for $355,134, of which the Fund received cash of $275,094 on January 7, 2009, and received interest of $80,040 escrowed from sale proceeds that was subsequently used for legal fees and therefore will not be forthcoming. The Second Closing Price Payment is contingent upon earnings before interest and taxes (“EBIT”) of the Purchaser and Etilize for the fiscal years ended December 31, 2009 and 2010. Based on the contingent nature of this payment, with no minimum payment defined, the Fund did not recognize any gain under the Second Closing Price Payment. The Third Closing Price Payment established a minimum payout to the Fund of $341,200, which is expected to be paid in 2013. In April, 2011, the Fund received a payment of approximately $158,200 towards this minimum payout due to certain earnings criteria being met as of December 31, 2010. The current fair market value receivable of $176,796 was computed using a discounted rate of 3.5% on the minimum expected payment of $183,000 and is shown as GFK Receivable on the Statement of Assets and Liabilities.

NOTE 4. FAIR VALUE MEASUREMENTS

Investments in securities are carried at fair value. Fair value estimates are made at a specific point in time, are subjective in nature, and involve uncertainties and matters of significant judgment.

Fair Value Measurements - The applicable accounting pronouncement on fair value measurements clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value, and requires additional disclosure about the use of the fair value measurements. Under the pronouncement, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the “exit price”) in an orderly transaction between market participants. The most significant element of the fair value standard is the development of a three-level fair value hierarchy. The three levels of the hierarchy and the material input considerations are as follows:

Fair Value Hierarchy

Level 1 Inputs – include unadjusted quoted prices for identical investments or liabilities in active markets. An active market is defined as a market in which transactions for the investment or liability occur with sufficient frequency and volume to provide reliable pricing information on an ongoing basis.

Level 2 Inputs – inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Fund.

Level 3 Inputs – valuations are based on unobservable inputs which include option-pricing models using historical volatility, the Fund’s own data or assumptions as a multiple of earnings or discounted cash flow, projections and forecasts made available to the Fund by the private investment entities and other similar financial and operational information not available to, or observable by, the public domain.

Black-Scholes method was used to determine the price of the MiMedx Group, Inc. warrants.

ENGEX, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

An asset or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Availability of observable inputs can vary and is affected by a variety of factors. The Investment Advisor uses judgment in determining fair value of assets and liabilities and Level 3 assets and liabilities involve greater judgment than Level 1 or Level 2 assets or liabilities.

Investments are classified within Level 3 of the fair value hierarchy because they trade infrequently (or not at all) and therefore have little or no readily available pricing. Private Investments are classified within Level 3 of the fair value hierarchy. Management’s estimate of the fair value of private investments is based on most recent information provided by the management of the investee companies, including but not limited to, financial statements and most recent capital financing transactions.

When a pricing model is used to value Level 3 investments, inputs to the model are adjusted when changes to inputs and assumptions are corroborated by evidence such as transactions in similar instruments, completed or pending third-party transactions in the underlying investment or comparable entities, subsequent rounds of financing, recapitalization and other transactions, offering in the equity or debt capital markets, and changes in financial ratios or cash flows.

A summary of the inputs used at March 31, 2012 in valuing each of the Fund’s assets were:

	Level 1– Quoted Prices		Level 2- Other Significant Observable Inputs		Level 3- Significant Unobservable Inputs		Total Fair Value at March 31, 2012
Marketable Securities:
American Vantage Companies	$	23,726		--	$	--	$	23,726
Enzo Biochem, Inc.		3,271,568		--		--		3,271,568
MiMedx Group, Inc.		455,943						455,943
Silverstar Holdings Ltd		139				--		139

Total Investment in Marketable Securities	$	3,751,376	$	--	$	--	$	3,751,376

Private Investments:
MiMedx Group, Inc. Warrants Restricted B1	$	--	$	--	$	12,500	$	12,500
MiMedx Group, Inc. Warrants Restricted B3		--		--		7,455		7,455
MRI Interventions, Inc.		--		--		333,312		333,312
MRI Interventions, Inc. Note *		--		--		38,923		38,923

Total Private Investments	$	--	$	--	$	392,190	$	392,190

_____________

* MRI Interventions, Inc. Note – Face amount of $138,512, with interest at 3.5% and 10-year maturity term. The Fund will receive a single payment of $186,991 ($138,512 plus $48,479 accrued interest). The $186,991 payment has been present valued at an appropriate, risk adjusted rate of 20%.

ENGEX, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

The following table sets forth the changes in fair value measurements attributable to Level 3 investments during the six month period ended March 31, 2012:

	Beginning Balance September 30, 2011		Total Change In Unrealized Appreciation/ (Depreciation)			Exercise of Warrants Level 3			Ending Balance March 31, 2012
MRI Interventions, Inc.	$	333,312	$	--		$	--		$	333,312

MRI Interventions, Inc. Note		35,541		3,382						38,923

MiMedx Group, Inc. ( B1 Warrants Restricted)		12,500		--						12,500

MiMedx Group, Inc. ( B2 Warrants Restricted)		8,698		52			(8,750	)		--

MiMedx Group, Inc. ( B3 Warrants Restricted)		8,757		(1,302	)					7,455


	$	398,808	$	2,132		$	( 8,750	)	$	392,190

NOTE 5. INCOME TAXES

The Fund accounts for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of the Fund’s assets and liabilities and the related tax basis for such assets and liabilities. This method may generate a net deferred income tax asset or liability for the Fund as of the end of the year, as measured by the statutory tax rate in effect as enacted. The Fund derives its net deferred income tax charge/benefit by recording a change in net deferred income tax assets or liabilities for the reporting period. At March 31, 2012, all deferred tax assets have been fully reserved through the valuation allowance. The current interim period tax provision consists of state franchise and local taxes.

The Fund recognizes the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a “more-likely-than-not” threshold, the amount recognized in the financial statements is the benefit expected to be realized upon settlement with tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. As of March 31, 2012, the Fund has had no uncertain tax positions. The Fund recognizes interest and penalties, if any, related to uncertain tax positions as operating expenses. The Fund currently has no federal or state tax examinations in progress. The Fund is not subject to examinations by U.S. federal and state tax authorities for tax years ended before September 30, 2008.

ENGEX, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

At March 31, 2012, the Fund had a gross deferred tax asset of approximately $4,807,000. The deferred tax asset arose from tax net operating loss and capital loss carry forwards of realized and unrealized transactions of approximately $12,381,000 for federal income tax purposes and approximately $14,273,000 for state tax purposes. The capital loss carryforwards of $1,647,000 expire in 2012 and 2014 and the net operating loss carryforwards of $3,619,000 expire during the years 2024 through 2032. The net unrealized losses on securities investments are approximately $7,712,055. The Fund has established a valuation allowance of $4,807,000 since management is unable to determine if the utilization of all of the future tax benefits is more likely than not to occur, and accordingly, the deferred federal, state and local tax assets of $4,209,000 and $598,000, respectively, have been fully reserved.

The effective tax rate for the Fund’s income tax liability is reconcilable to the federal statutory rate, as follows:

Statutory rate	34	%
State, net of federal tax benefit	1	%
Tax benefit of net operating loss	(35	%)
	0	%

The components of the net deferred tax asset are as follows:

Deferred Tax Asset:
Net operating and capital loss carryforwards	$ 1,974,000

Unrealized depreciation on securities investments	2,833,000

	4,807,000

Less: Valuation allowance	(4,807,000	)

Net Deferred Tax Asset	$ -0-

NOTE 6. CONTINGENCIES

On January 5, 2012, the Fund received a letter from NYSE Amex (“NYSE Amex”)* which is the exchange on which the Fund is listed. The letter indicated that the Fund was not in compliance with continued listing requirements set forth in: (1) Section 1003(a)(ii) of the NYSE Amex Company Guide (related to stockholders’ equity of less than $4,000,000 and losses from continued operations and net losses in three of the Fund’s four most recent fiscal years); (2) Section 1003(a)(iii) of the Company Guide (related to stockholders’ equity of less than $6,000,000 and losses from continued operations and net losses in the Fund’s five most recent fiscal years); and (3) Section 1003(b)(v)(A) of the Company Guide (related to total market value of publicly held shares and net assets of less than $5,000,000 for more than 60 consecutive days).

On March 16, 2012, NYSE Amex notified Engex, Inc. (the “Fund”) that it accepted the Fund’s plan to regain compliance with Section 1003(a)(iii) and Section 1003(b)(v)(A) by April 30, 2012.

On April 26, 2012, NYSE Amex agreed to extend the Fund’s request to continue to maintain its listing until June 11, 2012, as a result of the Fund making a reasonable demonstration of its ability to regain compliance by such date.

_________________

* NYSE MKT

ENGEX, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

NOTE 7. FINANCIAL INSTRUMENTS AND RISK

The Fund has historically intended to seek investment opportunities in one or more additional companies in which it would acquire a controlling interest. Such acquisitions are likely to require a substantial investment of the Fund’s assets and a further concentration of the Fund’s investments in particular companies or industries. Such concentration might increase the risk of loss to the Fund as a result of the negative results or financial condition of any particular company and/or industry.

In the normal course of its business, the Fund trades various financial instruments and enters into various financial transactions where the risk of potential loss due to market risk, interest rate risk, credit risk and other risks can equal the related amounts recorded. The success of any investment activity is influenced by general economic conditions that may affect the level and volatility of equity prices, interest rates and the extent and timing of investor participation in the markets for both equity and interest rate sensitive investments. Unexpected volatility or illiquidity in the markets in which the Fund directly or indirectly holds positions could impair its ability to carry out its business and could cause losses to be incurred.

Market risk represents the potential loss that can be caused by increases or decreases in the fair value of investments resulting from market fluctuations.

Interest rate risk is the risk that the fair value or future cash flows of fixed income or rate sensitive investments will increase or decrease because of changes in interest rates. Generally the value of fixed income securities will change inversely with changes in interest rates. As interest rates rise, the fair value of fixed income securities tends to decrease. Conversely, as interest rates fall, the fair value of fixed income securities tends to increase. The risk of adverse market fluctuation is generally greater for long-term securities than for short-term securities.

Credit risk represents the potential loss that would occur if counterparties fail to perform pursuant to the terms of their obligations. In addition to its investments, the Fund is subject to credit risk to the extent a custodian or broker with whom it conducts business is unable to fulfill contractual obligations.

Liquidity risk is the risk that the Fund will not be able to raise funds to fulfill its commitments, including inability to sell investments quickly or at close to fair value.

ENGEX, INC.

FINANCIAL HIGHLIGHTS

(UNAUDITED)

	Six Months Ended March 31,			Six Months Ended March 31,			Years Ended September 30,
	2012			2011			2011			2010			2009			2008
Per share operating performance
(For a share of capital stock outstanding throughout the period):

Net asset value – beginning of period	$	2.51		$	3.30		$	3.30		$	3.84		$	5.26		$	6.05

Income from investment operations:

Net investment loss		(0.06	)		(0.07	)		(0.12	)		(0.14	)		(0.20	)		(0.30	)

Net realized and unrealized gain (loss) on investment transactions		0.18			0.15			(0.98	)		(1.15	)		(2.11	)		(0.70	)

Total from investment operations		0.12			0.08			(1.10	)		(1.29	)		(2.31	)		(1.00	)

Assets contributed by shareholders		-			0.31			0.31			0.75			0.67			0.21

Additional shares issued to shareholder		-			-			-			-			0.22			-

Total increase (decrease) in net asset value for the period		0.12			0.39			(0.79	)		(0.54	)		(1.42	)		(0.79	)

Net asset value – end of period	$	2.63		$	3.69		$	2.51		$	3.30		$	3.84		$	5.26

Number of shares outstanding at end of period		1,626,938			1,626,938			1,626,938			1,626,938			1,626,938			1,465,837

Market value at end of period		2.72			3.53			2.34			3.31			5.38			5.28

Average debt per share		-			-			-			-			-			1.32


Ratios:
Expense to average net assets		2.67	%*		1.81	%*		3.65	%*		4.19	%*		8.97	%*		5.42	%
Net investment income loss to average net assets		(2.60	%)*		(1.81	%)*		(3.31	%)*		(4.18	%)*		(8.12	%)*		(5.45	)
Portfolio turnover		1.44	%		4.25	%		20.1	%		0.00	%		0.55	%		17.03	%
Total Return (a)		16.24	%		6.65	%		(29.31	%)		(38.48	%)		1.89	%		(9.74	%)
Ratios including waived management fee *:
Expense to average net assets		3.17	%		2.31	%		4.65	%		5.22	%		9.67	%		-
Net investment loss to average net assets		(3.10	%)		(2.31	%)		(4.3	%)		(5.21	%)		(8.82	%)		-

(a)	Total Return. A periodic measure of a fund’s overall change in market value, which assumes the reinvestment

of dividends and capital gain distributions.

Effective June 26, 2009, the Advisor agreed to waive its 1.00% management fee, and simultaneously waive any and all accrued and unpaid management fees (see Note 2 to the financial statements).

ENGEX, INC.

SUPPLEMENTAL INFORMATION

March 31, 2012

(UNUADITED)

Board Approval of Investment Advisory Agreement

At its meeting held on October 26, 2011, the Directors of the Fund, including a majority of the Directors who are not “interested persons” (as such term is defined in Section 2(a)(19) of the Investment Company Act of 1940), met in person and voted to approve the continuation of the investment advisory agreement between the Fund and American Investors Advisors, Inc. (the “Adviser”) (the “Agreement”). In reaching their decision to approve the continuation of the Agreement, the Directors considered information requested by them and provided by the Adviser.

The Directors discussed the Adviser’s capabilities with management of the Adviser and received materials provided by Lipper, Inc. (“Lipper”) comparing the Fund’s expenses and performance with other similar funds determined by Lipper to be comparable to the Fund. In addition, the Directors received from Fund counsel a memorandum discussing the legal standards for their consideration of the Agreement. In their deliberations, the Directors did not identify any particular information that was all important or controlling, and each Director may have attributed different weight to various factors. The Directors considered whether the continuation of the Agreement would be in the best interests of the Fund and its stockholders and whether the fee to be paid under the Agreement was fair and reasonable in relation to the services to be rendered by the Adviser.

With respect to the nature, extent and quality of the advisory services provided by the Adviser, it was noted that the Fund was the only entity utilizing the Adviser’s services and that it was the next to the smallest fund in the expense group provided by Lipper in its customized report, making it difficult to make direct comparisons given the fixed expenses incurred and minimum services that must be provided in managing the Fund. The Directors noted that the next largest company in the selected peer group had assets exceeding the Fund’s by just under $14 million. The Directors determined that the Adviser’s general investment philosophy had not changed and concluded that, because of the size of the Fund and the unlikelihood that another adviser would be willing to manage a portfolio of the Fund’s size at the fee currently being paid, it was impractical for the Directors to consider a different adviser. Based on this review, the Directors concluded that retaining the Adviser would be most appropriate for the Fund.

In assessing the fee to be paid by the Fund, the Directors noted that the Adviser had voluntarily waived its entire management fee during 2011 and that the Fund ranked in the first quartile in the Lipper expense group of five companies comparing actual management fees. The Directors also noted that the Fund ranked in the second quartile in the Lipper expense group comparing contractual management fees. The Directors considered a commitment by the Adviser to continue to waive its fee indefinitely to control expenses. The Directors also considered the fact that the Fund is not able to avail itself of the special tax treatment under the Internal Revenue Code afforded to registered investment companies and is, therefore, taxed as a corporation. The Directors concluded that because the Fund was significantly smaller than any other fund in the comparative group, evaluating the Fund with respect to the other funds was of little relevance.

The Directors also reviewed the Fund’s performance for the quarter ended September 30, 2011, and the one-, three- and five-year periods ending September 30, 2011. The Directors noted that performance was unfavorable for each of the periods when measured against the Lipper performance group, ranking in the fifth quintile for each period. The Directors recognized that the Fund was unique in that more that 80% of the value of its portfolio was comprised of the securities of one issuer and, therefore, was almost entirely dependent upon the performance of that issuer.

The Directors noted that even though the Adviser was financially sound, it had not made any profit from its services to the Fund. They noted that, in fact, the owner of the Adviser had in the past made capital contributions to the Fund in order to maintain its stock exchange listing, something believed to be in the best interests of the Fund’s stockholders. The Directors recognized that since common management by the Adviser was not shared with other funds, it was difficult for the Adviser to realize economies of scale and that, as a closed-end fund, the Fund’s assets would not grow. Based on its evaluation of all material factors, including those described above, the Directors concluded that the continuation of the Agreement was in the best interests of the Fund and its stockholders.

ENGEX, INC.

SUPPLEMENTAL INFORMATION (cont’d)

March 31, 2012

(UNUADITED)

Change in Accountants

On October 26, 2011, Raich Ende Malter & Co. LLP (“Raich”), the accounting firm selected by the Fund’s Board of Directors and ratified by stockholders as the Fund’s independent accountants for the fiscal year ended September 30, 2011, informed the Audit Committee that during an internal review they discovered an event that caused them to conclude that they no longer met the auditor independence requirements as defined in PCAOB Rule 3520 as of September 30, 2011. As a result, Raich resigned as independent auditors for the Fund with respect to the fiscal year ended September 30, 2011. Raich was the independent auditors for the Fund commencing with the fiscal year ended September 30, 2005 and remained as auditors through March 31, 2011. During the periods that Raich was engaged preceding the resignation, there were no disagreements on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure. During the fiscal years ended September 30, 2009 and 2010 and through the fiscal period ended March 31, 2011, Raich did not report to the Fund any matters related to (a) lack of internal controls, (b) lack of inability to rely upon management, (c) the need to expand the attest scope during either the audit or interim reviews, (d) information that may materially affect the fairness or reliability of a previously issued audit report on the Fund’s financial statements. During this period, Raich’s reports on the financial statements of the Fund contained no adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope, or accounting principles.

On November 3, 2011, in accordance with the requirements of the 1940 Act, the Audit Committee selected EisnerAmper LLP (“Eisner”) as the Fund’s independent auditors to audit the Fund’s financial statements for the fiscal year ended September 30, 2011. On December 9, 2011, the Audit Committee selected Eisner as the Fund’s independent accounts for the fiscal year ending September 30, 2012. The Audit Committee’s selection was ratified by stockholders at the Annual Meeting of Stockholders held on January 18, 2012.

Portfolio Holdings

The Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the SEC’s website at http://www.sec.gov, and may 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 1-800-SEC-0330.

Proxy Voting

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, by calling 1-800-999-0015, and can also be found on the SEC’s website at http://www.sec.gov.

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, 2011 is available, without charge, by calling 1-800-999-0015, and can also be found on the SEC’s website at http://www.sec.gov .

ENGEX, INC.

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ENGEX, INC.

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.	Schedule of Investments. Schedule appears as part of the report to stockholders filed in response to Item 1 of this Form.

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. Not Applicable

Item 9.	Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. There were no purchases of shares of registrant's equity securities by or on behalf of the Registrant or any "affiliated purchaser," as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended.

Item 10	Submission of Matters to a Vote of Security Holders. Since last disclosed, there have been no material changes to Registrant’s procedures by which stockholders may recommend nominees to the Board of Directors.


Item 11.	Controls and Procedures. (a) Registrant's principal executive and principal financial officers conclude that registrant's disclosure controls and procedures, as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”), are effective based on their evaluation within the last 90 days of those controls and procedures as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) under the Securities Exchange Act of 1934. (b) There has been no change in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) during Registrant’s fiscal quarter ended March 31, 2011 that has materially affected, or is reasonably likely to materially affect, Registrant’s internal control over financial reporting.

Item 12.	Exhibits. (a)(2)(i) Certification of principal executive officer (a)(2)(ii) Certification of principal financial officer

ENGEX, INC.

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.

Engex, Inc.

By /s/ J. Morton Davis

J. Morton Davis

Date May 31, 2012

ENGEX, INC.

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/ J. Morton Davis

J. Morton Davis, President

Date May 31, 2012

By /s/ Michael Siciliano

M ichael Siciliano, Treasurer

Date May 31, 2012

ENGEX, INC.

Exhibit (a)(1)

I, J. Morton Davis, certify that:

1. I have reviewed this report on Form N-CSR of Engex, Inc. (the "registrant");

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

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

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

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

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

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

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

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

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

May 31, 2012

Date

/s/ J. Morton Davis

J. Morton Davis

President

ENGEX, INC.

Exhibit (a)(2)

I, Michael Siciliano, certify that:

1. I have reviewed this report on Form N-CSR of Engex, Inc. (the "registrant");

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

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

May 31, 2012

Date

/s/ Michael Siciliano

Michael Siciliano

Treasurer

ENGEX, INC.

Certification Required By Section 906 of the Sarbanes-Oxley Act

(Not an exhibit of Form N-CSR)

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. ss. 1350, and accompanies the report on Form N-CSR for the period ended March 31, 2011 of Engex, Inc. (the "Registrant").

I, Michael Siciliano, the Principal Financial Officer of the Registrant, certify that, to the best of my knowledge:

1. the Form N-CSR fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78m(a) or 78o(d); and

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

May 31, 2012

Date

/s/ Michael Siciliano

Michael Siciliano

Treasurer

A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.

ENGEX, INC.

Certification Required By Section 906 of the Sarbanes-Oxley Act

(Not an exhibit of Form N-CSR)

I, J. Morton Davis, the Principal Executive Officer of the Registrant, certify that, to the best of my knowledge:

1. the Form N-CSR fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78m(a) or 78o(d); and

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

May 31, 2012

Date

/s/ J. Morton Davis

J. Morton Davis

President

Engex (AMEX:EGX)
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