SEC Form N-CSRS filed by XAI Madison Equity Premium Income Fund

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

811-21582

(Investment Company Act File Number)

XAI Madison Equity Premium Income Fund

(Exact Name of Registrant as Specified in Charter)

321 North Clark Street, Suite 2430

Chicago, IL 60654

(Address of Principal Executive Offices)

Benjamin D. McCulloch, Esq.

XA Investments LLC

321 North Clark Street, Suite 2430

Chicago, IL 60654

(Name and Address of Agent for Service)

(312) 374-6930

(Registrant’s Telephone Number)

Date of Fiscal Year End: September 30

Date of Reporting Period: March 31, 2026

TABLE OF CONTENTS

XAI Madison Equity Premium Income Fund

SHAREHOLDER LETTER

March 31, 2026 (Unaudited)

Dear Shareholder:

We thank you for your investment in the XAI Madison Equity Premium Income Fund (the “Fund”). This report covers the six-month period ended March 31, 2026 (the “Period”). In 2025, the Fund changed its fiscal year from December 31 to September 30. This report represents the first semi-annual report under the new fiscal year.

During the Period, discourse around Federal Reserve governance and long-term policy frameworks underscored broader investor uncertainty around the future path of monetary policy. This environment paired with escalating tensions in the Middle East, culminating with the war in Iran—Operation Epic Fury—that began on February 28, 2026, and reinforced the importance of disciplined management amid evolving macroeconomic conditions. Uncertainty during the Period was further underscored by the lack of regular economics reports, such as non-farm payrolls and inflation, caused by the U.S. Federal Government shutdown that began on October 1, 2025 and continued through November 12, 2025, making it the longest government shutdown in U.S. history. Equity markets experienced elevated and persistent volatility driven by the combination of geopolitical developments, inflation concerns, and shifts in investor sentiment. Markets entered the fourth quarter of 2025 supported by a narrow group of mega cap growth and artificial intelligence related companies; however, as the Period progressed, elevated valuations, evolving trade policy dynamics, and heightened geopolitical risk contributed to increased dispersion and episodic risk-off behavior.

After moderating earlier in 2025, price pressures re-emerged in the Period as energy prices rose sharply amid global supply disruptions and the escalating tensions in the Middle East. Despite these headwinds, the U.S. economy demonstrated resilience, supported by steady employment conditions and continued consumer activity, though uncertainty around interest rates and global growth remained elevated.

During the first quarter of 2026, equity returns weakened and volatility increased as market leadership rotated away from higher multiple growth stocks toward value oriented, defensive, and hard asset linked sectors. Energy and other inflation sensitive areas outperformed, while prior market leaders experienced valuation compression. Brent crude entered 2026 at near $75 per barrel of oil, but reached prices above $100 in mid-March as a result of Operation Epic Fury and Iran's closure of the Strait of Hormuz.

Against this backdrop, the Fund’s disciplined covered call strategy continued to play an important role, providing meaningful downside mitigation during periods of market weakness. While the S&P 500 fell 1.8% over the six-month period, the Fund gained 4.1% on an NAV basis. As of March 31, 2026, call options were written on 91.7% of the Fund’s equity holdings, with the majority positioned out of the money.

The Fund’s net asset value (“NAV”) decreased during the Period by -1.54% from $6.48 per common share to $6.38 per common share as of March 31, 2026, resulting in a NAV total return (including the reinvestment of distributions) of 4.05%. The Fund’s benchmark, the CBOE S&P 500 BuyWrite Index, returned 5.55% for the Period.

The market price per common share of $5.83 on March 31, 2026, represented an 8.62% discount to the Fund’s NAV of $6.38 per common share. During the Period, the Fund’s common shares traded on average at a 7.36% discount to NAV.

During the Period, the Fund declared monthly distributions totaling an aggregated amount of $0.36 per common share. The monthly distribution of $0.06 per common share declared on March 2, 2026, represented an annualized distribution rate of 12.35% based on the Fund’s closing market price of $5.83 per common share on March 31, 2026.

As we navigate the dynamic market environment, we remain committed to the Fund’s 20-year track record of delivering lower volatility and strong cash flows for our shareholders. We believe the Fund is positioned well to pursue attractive investment opportunities throughout the remainder of 2026 and beyond.

We appreciate your investment and look forward to serving your investment needs in the future. For the most up-to-date information on your investment, please visit the Fund’s website at www.xainvestments.com/MCN.

Sincerely,

Kimberly Flynn

President

XA Investments LLC
May 15, 2026

XAI Madison Equity Premium Income Fund 

QUESTIONS & ANSWERS

March 31, 2026 (Unaudited)

What happened in the market during the six-month period ending March 31, 2026?

The overall stock market had been on a tear since the tariff fears of last April subsided, driven mainly by mega-cap growth stocks and anything related to artificial intelligence. That trend continued into the 4th quarter of 2025 but showed signs of losing steam as a few blooms came off the Artificial Intelligence (“AI”) rose. 2025 ended with the S&P 500 advancing by 2.7% in the fourth quarter. Uncertainty remained front and center for investors as the US Government was shutdown with Congress failing to come to a funding agreement. Investors were left without regular economic reports, such as nonfarm payrolls and inflation. The Federal Reserve cut interest rates twice during the quarter which provided a tailwind for equity markets. Looking to 2026, economists anticipate the U.S. economy will continue to grow, with expectations for 2.1% Real GDP growth while inflation (Consumer Price Index) is estimated to moderate to 2.8% from 3.0%. The fourth quarter was a bit unusual with most sectors being up or down modestly, with two exceptions. Health Care, which had lagged all year, had a strong fourth quarter up 12%, leading sector performance, following the various drug pricing deals with the U.S. Government. Communication Services also performed well and outpaced the S&P 500 in the final quarter of 2025. Technology, which had performed well post Liberation Day, was up only 1% during the fourth quarter as investors questioned the dramatic investments in AI. Real Estate and Utilities were down modestly during the fourth quarter.

The first quarter of 2026 proved to be a difficult environment for equity investors as most major indices posted negative returns. In US markets, the script flipped from 2025 as value outperformed growth by a wide margin and mid and small caps outperformed large caps. International equities were a mixed bag, with Japanese equities posting modest gains, while China was a notable laggard. Developed markets slightly lagged emerging markets, which were essentially flat in the quarter. The Russell 1000 Growth Index was the worst performing major index, falling 9.8% during the quarter, while the Russell 1000 Value index led the way, benefiting from energy exposure, with a 2.1% return, a stark reversal from the growth-led rally of last year. Oil markets experienced their most dramatic quarter since 2020. Brent crude entered the year near $75/barrel of oil (bbl) and traded in a narrow range through mid-February before Operation Epic Fury was launched on February 28th, 2026 fundamentally altering the supply picture. Iran's closure of the Strait of Hormuz disrupted roughly 20% of global crude oil supply and sent Brent crude above $100/bbl in mid-March, briefly touching $118/bbl before settling near $110 by quarter-end. The spike in energy prices reignited inflation concerns that many had assumed were behind us. Higher energy costs complicate the Federal Reserve's path toward further rate cuts, with markets repricing expectations from three cuts to just one this year.

The S&P 500 fell 4.3% in the first quarter of 2026, its worst quarter since the third quarter of 2022. The decline masked a shift in market leadership. The average S&P 500 stock outperformed the cap-weighted index by nearly 5% while the equal-weight S&P 500 gained 0.7%. The quarter's sharpest drawdown came in March following the launch of Operation Epic Fury by U.S. and Israeli militaries against Iran on February 28, 2026. Rising energy prices, inflation concerns, and the threat of stagflation weighed on equities in the final weeks of the quarter.

How did the Fund perform given the marketplace conditions during the period?

With market leadership shifting away from mega-cap growth stocks associated with AI toward hard asset and defensive sectors, the Fund was well positioned to perform well relative to the broad market indices. While the S&P 500 fell 1.8% over the six-month period, the Fund gained 4.1% on an NAV basis. On a price basis, the Fund gained 0.3%. The Cboe S&P BuyWrite Index (BXM) gained 5.6% primarily due to the fortuitous timing of short-term hedges working in its favor during a volatile fourth quarter which did not occur during an even more volatile first quarter.

Given the overall market’s expensive valuation at year end coupled with exuberant expectations around AI, the Fund maintained its defensive posture. This positioning continued into the new year as market leadership moved toward hard asset sectors such as Energy and Materials well before the Iran conflict became kinetic. Defensive sectors such as Consumer Staples also performed well as investors looked for a port in the storm as AI related companies struggled. The Fund’s overweight positioning in the Energy and Consumer Staples sectors were key elements in the Fund’s ability to out-perform in a very volatile market environment. In addition, the Fund’s lower exposure to the prior leadership sectors, such as Technology, Communication Services and Consumer Discretionary, allowed the Fund to sidestep areas of significant weakness. The Fund’s sector positioning was the largest positive factor in terms of beating the S&P 500 during the period.

Performance of the Fund’s individual equity positions lagged in the fourth quarter of last year but rebounded very strongly during the opening quarter of 2026. Over the full period, stock selection was a net positive contributor to relative performance. While the Energy sector has been a stellar performer of late, the Fund’s Energy holdings performed even better than the sector. Apache Corp. (NYSE: APA) and Transocean (NYSE: RIG) were among the leaders in relative performance given the positive shift in expected fundamental outlook. The outlook for the sector had been improving before Iran conflict commenced with an expected improvement in supply/demand factors coming in the second half of the year. However, the spike in crude oil price and historic supply disruption has resulted in fundamental improvement arriving sooner than expected. Shares of Las Vegas Sands (NYSE: LVS) performed exceptionally well late last year before correcting somewhat early this year. Continued strength in the company’s Singapore hotel/gambling operations led the way and overshadowed more tepid growth in the Macau operations. Shares of ASMLHoldings (NYSE: ASML) ramped up strongly during the period. The company supplies key lithography components to semiconductor manufacturers that have been booming due to AI related enhanced chip demand. CME Group (NYSE: CME) performed very well during the first quarter of 2026 as market volatility rose significantly. As the company owns the Chicago and New York Mercantile Exchanges, the Chicago Board of Trade and the COMEX Commodity Exchange, it is a prime beneficiary of higher market and economic volatility as hedging volumes soar during such periods.

Laggards during the period included companies that investors believe may suffer from AI competition. Software companies such as Adobe (NASDAQ: ADBE) and financial services companies such as Paypal (NASDAQ: PYPL) have fallen into this category and underperformed during the period. Utility company AES (NYSE: AES) also lagged as takeover expectations became real but the offer price was well below expectations. Healthcare tools and diagnostic companies with China exposure also came under pressure as concerns grew over the health of the Chinese economy and trade frictions with the U.S. Portfolio holdings Agilent (NYSE: A) and Danaher (NYSE: DHR) fell into this category. In both companies, China exposure is less than 15% of sales.

Given the market’s decline, the Fund’s cash position was a small positive contributor to relative performance. From a call option coverage perspective, the Fund has maintained a relatively conservative stance with options written against equity positions ending the period above 91%. Typically this would have resulted in a positive contribution to performance as equity values fell, however, as the majority of the Fund’s equity positions actually rose during the period, the defensive option coverage ended up being a slight drag to relative performance.

XAI Madison Equity Premium Income Fund

QUESTIONS & ANSWERS

March 31, 2026 (Continued) (Unaudited)

Describe the Fund’s portfolio equity and option structure:

As of March 31, 2026, the Fund held 39 equity securities and unexpired call options had been written against 91.7% of the Fund’s stock holdings. It is the strategy of the Fund to write “out-of-the-money” call options, as of period end, 93% of the Fund’s call options (37 of 41 different options) remained “out-of-the-money.” (Out- of-the-money means the stock price is below the strike price at which the shares could be called away by the option holder). On average, the Fund’s call options had 58.6 days to expiration.

Which sectors are prevalent in the Fund?

From a sector perspective, MCN’s largest exposure as of March 31, 2026, was to the Energy sector, followed by Information Technology, Health Care, Consumer Staples, Financials, Consumer Discretionary, and Communication Services. This was followed by smaller exposures in the Real Estate, Industrial, Materials and Utilities sectors.

Discuss the Fund’s security and option selection process:

The Fund is managed by primarily focusing on active stock selection before adding the call option overlay utilizing individual equity call options rather than index options. We use fundamental analysis to select solid companies with good growth prospects and attractive valuations. We then seek attractive call options to write on those stocks. It is our belief that this partnership of active management of the equity and option strategies provides investors with an innovative, risk-moderated approach to equity investing. The Fund’s portfolio managers seek to invest in a portfolio of common stocks that have favorable “PEG” ratios (Price-Earnings ratio to Growth rate) as well as financial strength and industry leadership. As bottom-up investors, we focus on the fundamental businesses of our companies. Our stock selection philosophy strays away from the “beat the street” mentality, as we seek companies that have sustainable competitive advantages, predictable cash flows, solid balance sheets and high-quality management teams. By concentrating on long-term prospects and circumventing the “instant gratification” school of thought, we believe we bring elements of consistency, stability and predictability to our shareholders.

Once we have selected attractive and solid names for the Fund, we employ our call writing strategy. This procedure entails selling calls that are primarily out-of- the-money, meaning that the strike price is higher than the common stock price, so that the Fund can participate in some stock appreciation. By receiving option premiums, the Fund may receive a high level of investment income and add an element of downside protection. Call options may be written over several time periods and at differing strike prices in an effort to maximize the protective value to the strategy and spread income evenly throughout the year.

What is the management’s outlook for the market and Fund for the remainder of 2026?

Expectation continues to be that the economy and corporate earnings will maintain their growth posture despite higher inflation and no near-term interest rate cuts. As we entered 2026, investors expected the opposite, tame inflation and lower interest rates. The main assumption seems to be that once the shooting stops in the Middle East, everything will revert to normal very quickly. While there may no doubt be a rally once positive news emanates from the Gulf region, it is not likely, in our opinion, that economic fundamentals simply revert to the prior expectations. It is more likely that inflation remains higher for longer and rate cut decisions continue to get pushed into the future. As these realizations become more entrenched, equity markets should remain quite volatile. As a reminder, the overall stock market has barely sold off in response to a major oil supply shock. And this, while coming off near all-time high valuation levels. If it takes longer than expected to return to a normalized environment, markets could continue to adjust lower or, at very least, pause until expectations adjust to reality. We believe that maintaining a defensive posture remains the prudent approach.

XAI Madison Equity Premium Income Fund

FUND PORTFOLIO INFORMATION

March 31, 2026 (Unaudited)

Growth of a $10,000 Investment (as of March 31, 2026)

The chart above represents historical performance of a hypothetical investment of $10,000 in the Fund over the past ten years. Past performance does not guarantee future results. Performance reflects the partial waiver of the Fund’s advisory fees and/or reimbursement of expenses for certain periods. Without these waivers and/or reimbursements, performance would have been lower. This chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the sale of Fund shares. The chart assumes that distributions from the Fund are reinvested.

Summary Performance (as of March 31, 2026)

Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than performance data quoted.

XAI Madison Equity Premium Income Fund

FUND PORTFOLIO INFORMATION

March 31, 2026 (Continued) (Unaudited)

Top Ten Portfolio Holdings (as a % of Total Investments)*

XAI Madison Equity Premium Income Fund

SCHEDULE OF INVESTMENTS

March 31, 2026 (Unaudited)

See Notes to Financial Statements.

XAI Madison Equity Premium Income Fund

SCHEDULE OF INVESTMENTS

March 31, 2026 (Continued) (Unaudited)

See Notes to Financial Statements.

XAI Madison Equity Premium Income Fund

SCHEDULE OF INVESTMENTS

March 31, 2026 (Continued) (Unaudited)

Call Options Written 

See Notes to Financial Statements.

XAI Madison Equity Premium Income Fund

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2026 (Unaudited)

See Notes to Financial Statements.

XAI Madison Equity Premium Income Fund

STATEMENT OF OPERATIONS

For the Six Months Ended March 31, 2026 (Unaudited)

See Notes to Financial Statements.

XAI Madison Equity Premium Income Fund

STATEMENTS OF CHANGES IN NET ASSETS

Applicable to Common Shareholders

See Notes to Financial Statements.

XAI Madison Equity Premium Income Fund

FINANCIAL HIGHLIGHTS

For a Share Outstanding Common Stock Through the Periods Presented

See Notes to Financial Statements.

XAI Madison Equity Premium Income Fund

NOTES TO FINANCIAL STATEMENTS

March 31, 2026 (Unaudited)

NOTE 1 - ORGANIZATION

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting and Use of Estimates – The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which requires management to make estimates and assumptions that affect the reported amounts and disclosures, including contingent assets and liabilities, in the financial statements during the period reported. Management believes the estimates and security valuations are appropriate; however, actual results may differ from those estimates, and the security valuations reflected in the financial statements may differ from the value the Fund ultimately realizes upon sale of the securities. The Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946. The financial statements have been prepared as of the close of the New York Stock Exchange (“NYSE”) on March 31, 2026.

Expense Recognition – Expenses are recorded on the accrual basis of accounting.

Calculation of Net Asset Value – The calculation of net asset value ("NAV") per common share of the Fund is determined daily, on each day that the NYSE is open for trading, as of the close of regular trading on the NYSE (normally 4:00 p.m. Eastern Time). The Fund’s net asset value per common share is calculated by dividing the value of the Fund’s total assets, less its liabilities, by the number of shares outstanding.

Cash– The Fund considers its investment in an FDIC insured interest bearing account to be cash. Cash is valued at cost. The Fund maintains cash balances, which at times may exceed federally insured limits. The Fund maintains these balances with a high quality financial institution.

The Fund monitors this credit risk and has not experienced any losses related to this risk.

Securities Transactions and Investment Income – Investment security transactions are accounted for on a trade date basis. Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Realized gains and losses from securities transactions and unrealized appreciation and depreciation of securities are determined using the identified cost basis method for financial reporting purposes.

Portfolio Valuation – Investments are presented at fair value using the following techniques. Securities traded on a national securities exchange are valued at their closing sale price, except for securities traded on the National Association of Securities Dealers Automated Quotation System (“NASDAQ”), which are valued at the NASDAQ official closing price (“NOCP”). If no sale occurs, equities traded on a U.S. exchange or on NASDAQ are valued at the bid price. Options are valued at the mean between the best bid and best ask price across all option exchanges. Debt securities are valued on the basis of the last available bid prices or current market quotations provided by dealers or pricing services approved by the Fund. Mutual funds are valued at their NAV. Securities for which market quotations are not readily available are valued at their fair value as determined in good faith under procedures approved by the Board of Trustees.

The Board of Trustees has designated the Adviser as the “valuation designee” for the Fund pursuant to Rule 2a-5 under the Investment Company Act. The valuation designee is responsible for making fair value determinations pursuant to Valuation Policies and Procedures adopted by XAI and the Fund (the “Valuation Policy”). A committee of voting members comprised of senior personnel of XAI considers various pricing issues and establishes fair valuations of portfolio securities and other instruments held by the Fund in accordance with the Valuation Policy (the “Pricing Committee”). XAI as valuation designee is subject to monitoring and oversight by the Board of Trustees. As a general principle, the fair value of a portfolio instrument is the amount that an owner might reasonably expect to receive upon the instrument’s current sale. A range of factors and analysis may be considered when determining fair value, including relevant market data, interest rates, credit considerations and/or issuer specific news. The Pricing Committee may consult with and receive input from third parties, such as the Sub-Adviser, and will utilize a variety of market data including yields or prices of investments of comparable quality, type of issue, indications of value from security dealers, evaluations of anticipated cash flows or collateral, spread over U.S. Treasury obligations, and other information and analysis. In addition, the Pricing Committee may consider valuations provided by valuation firms retained to assist in the valuation of certain of the Fund’s investments. Fair valuation involves subjective judgments. While the Fund’s use of fair valuation is intended to result in calculation of NAV that fairly reflects values of the Fund’s portfolio securities as of the time of pricing, the Fund cannot guarantee that any fair valuation will, in fact, approximate the amount the Fund would actually realize upon the sale of the securities in question. It is possible that the fair value determined for a portfolio instrument may be materially different from the value that could be realized upon the sale of that instrument.

XAI Madison Equity Premium Income Fund

NOTES TO FINANCIAL STATEMENTS

March 31, 2026 (Continued) (Unaudited)

Covered Call and Put Options – An option on a security is a contract that gives the holder of the option, in return for a premium, the right to buy from (in the case of a call) or sell to (in the case of a put) the writer of the option the security underlying the option at a specified exercise or “strike” price. The writer of an option on a security has an obligation upon exercise of the option to deliver the underlying security upon payment of the exercise price (in the case of a call) or pay the exercise price upon delivery of the underlying security (in the case of a put).

The number of call options the Fund can write (sell) is limited by the amount of equity securities the Fund holds in its portfolio. The Fund will not write (sell) “naked” or uncovered call options. The Fund seeks to produce a high level of current income and gains generated from option writing premiums and, to a lesser extent, from dividends.

Options on securities indices are designed to reflect price fluctuations in a group of securities or segment of the securities market rather than price fluctuations in a single security and are similar to options on single securities, except that the exercise of securities index options requires cash settlement payments and does not involve the actual purchase or sale of securities.

When an option is written, a liability is recorded equal to the premium received. This liability for options written is marked-to-market on a daily basis to reflect the current market value of the option written. These liabilities are reflected as options written in the Statement of Assets and Liabilities. Premiums received from writing options that expire unexercised are recorded on the expiration date as a realized gain. The difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or if the premium is less than the amount paid for the closing purchase transactions, as a realized loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether there has been a realized gain or loss.

Adopted Accounting Standards – The Fund adopted FASB Accounting Standards Update 2023-07, Segment Reporting (“Topic 280”) – Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires a public entity to make enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker (the “CODM”). The Fund’s Secretary and Chief Legal Officer acts as the CODM. Adoption of the new standard impacted financial statement disclosures only and did not affect the Fund’s financial position or the results of its operations. The Fund represents a single operating segment, as the CODM monitors the operating results of the Fund as a whole and the Fund’s long-term strategic asset allocation is pre-determined in accordance with the terms of its prospectus, based on a defined investment strategy which is executed by the Fund’s portfolio managers as a team. The financial information in the form of the Fund’s portfolio composition, total returns, expense ratios and changes in net assets resulting from operations, which are used by the CODM to assess the segment’s performance versus the Fund’s comparative benchmarks and to make resource allocation decisions for the Fund’s single segment, is consistent with that presented within the Fund’s financial statements. Segment assets are reflected on the accompanying Statement of Assets and Liabilities and significant segment expenses are listed on the accompanying Statement of Operations.

The Fund adopted FASB ASU 2023-09, "Income Taxes (Topic 740) Improvements to Income Tax Disclosures" ("ASU 2023-09"), which establishes new income tax disclosure requirements and modifies or eliminates certain existing disclosure provisions. The amendments in this ASU are intended to address investor requests for more transparency about income tax information and to improve the effectiveness of income tax disclosures. The Fund's adoption of ASU 2023-09 did not have a material impact on the Fund's financial statements.

Valuation – The Fund has adopted FASB applicable guidance on fair value measurements. Fair value is defined as the price that the fund would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. A three-tier hierarchy is used to maximize the use of observable market data “inputs” and minimize the use of unobservable “inputs” and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk (for example, the risk inherent in a particular valuation technique used to measure fair value including such a pricing model and/or the risk inherent in the inputs to the valuation technique). Inputs may be observable or unobservable.

Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

Level 1 – Unadjusted quoted prices in active markets for identical investments, unrestricted assets or liabilities that the Fund has the ability to access at the measurement date;

Level 2 – Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and

Level 3 – Significant unobservable prices or inputs (including the Fund’s own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date.

XAI Madison Equity Premium Income Fund

NOTES TO FINANCIAL STATEMENTS

March 31, 2026 (Continued) (Unaudited)

The valuation techniques used by the Fund to measure fair value seek to maximize the use of observable inputs and minimize the use of unobservable inputs.

The following is a summary of the inputs used to value the Fund’s investments as of March 31, 2026:

There were no transfers into or out of level 3 for the six month period ended March 31, 2026.

Indemnification – The Fund indemnifies its officers and Trustees for certain liabilities that may arise from the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities.

The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. However, based on industry experience, the Fund expects the risk of loss due to these warranties and indemnities to be remote.

NOTE 3 - INVESTMENT ADVISORY AND OTHER AGREEMENTS

XAI serves as the investment adviser to the Fund and is responsible for overseeing the Fund’s overall management and implementation of the investment strategy. The Sub-Adviser serves as the investment sub-adviser of the Fund and is responsible for investing the Fund’s assets. The Fund pays an advisory fee to the Adviser. The Adviser pays to the Sub-Adviser a sub-advisory fee out of the advisory fee received by the Adviser.

On December 2, 2024, a new investment advisory agreement (the “New Advisory Agreement”) between the Fund and XAI, pursuant to which XAI serves as the investment adviser to the Fund, and a new investment sub-advisory agreement (the “New Sub-Advisory Agreement”) among the Fund, XAI and Madison, pursuant to which Madison serves as the sub-adviser to the Fund was approved by the Board of Trustees.

Pursuant to the New Advisory Agreement, the Fund pays the Adviser a fee, payable monthly in arrears, in an annual amount equal to 0.80% of the Fund’s average daily Managed Assets. “Managed Assets” means the total assets of the Fund, including assets attributable to the Fund’s use of leverage and preferred shares, minus the sum of its accrued liabilities (other than liabilities incurred for the purpose of creating leverage). For the six months ended March 31, 2026, the Fund incurred $545,729 in investment advisory fees.

Pursuant to the New Sub-Advisory Agreement, the sub-advisory fee, payable monthly in arrears to the Sub-Adviser, is calculated as a specified percentage of the advisory fee payable by the Fund to the Adviser (before giving effect to any fees waived or expenses reimbursed by the Adviser). The specified percentage is equal to either an absolute or blended percentage, as the case may be, computed by applying the following percentages to the aggregate average daily Managed Assets of the advisory fee payable to the Adviser from the Fund:

XAI Madison Equity Premium Income Fund

NOTES TO FINANCIAL STATEMENTS

March 31, 2026 (Continued) (Unaudited)

The Fund does not pay a performance or incentive fee to the Adviser or the Sub-Adviser.

Prior to December 2, 2024, pursuant to an investment advisory agreement with the Fund, Madison served as the Fund's investment adviser and received an advisory fee payable monthly, in an amount equal to an annualized rate of 0.80% of the Fund's average daily Managed Assets.

Prior to December 2, 2024, Madison contractually agreed to enter into an operating expense limitation agreement with the Fund (the “Prior OELA”), as approved by the Fund's Board of Trustees, under which the Adviser agreed to waive its management fees and/or reimburse expenses to the Fund to the extent necessary to limit the Fund's total operating expenses (excluding taxes, leverage/borrowing interest, interest expense, dividends paid on short sales, brokerage commissions, acquired fund fees and expenses, extraordinary expenses such as litigation and other “Excluded Expenses”) to the annual rate, as referenced in the Fund's 2023 Annual Report to Shareholders. The Prior OELA became effective on December 1, 2023 and remained in place until it was superseded by the New OELA (as defined below).

The Adviser has contractually agreed to enter into an Operating Expense Limitation Agreement with the Fund (the “New OELA”), under which the Adviser agreed to waive its management fees and/or reimburse expenses of the Fund to the extent necessary to limit the Fund’s total operating expenses (excluding taxes, leverage/ borrowing interest, interest expense, dividends paid on short sales, brokerage commissions, acquired fund fees and expenses, extraordinary and non-routine expenses such as litigation and other “Excluded Expenses” (as defined in the Administrative Services Agreement, described below)) to 1.08%. The New OELA became effective on December 2, 2024 and will remain in place until at least December 2, 2026. For the six months ended March 31, 2026, the Fund did not receive a reimbursement for any expenses or waiver of any advisory fees.

Under a services agreement between the Fund and the Adviser dated December 2, 2024 (the “Administrative Services Agreement”), XAI provides or arranges to have a third party provide the Fund with such services as it may require in the ordinary course of its business. Services to the Fund include: transfer agent services, custodial services, Fund administration services, Fund accounting services, and such other services necessary to conduct the Fund’s business. In addition, the Adviser shall arrange and pay for independent public accounting services for audit and tax purposes, legal services, a fidelity bond, and directors and officers/ errors and omissions insurance. In exchange for these services, the Fund pays the Adviser a service fee, payable monthly, equal to an annualized rate of 0.26% of the Fund’s managed assets. Not included in this fee and, therefore, the responsibility of the Fund are the following fees and expenses: (i) any fees and expenses relating to portfolio holdings (e.g., brokerage commissions, interest on loans, etc.); (ii) extraordinary and non-recurring fees and expenses (e.g., costs relating to any borrowing costs, overdrafts or taxes the Fund may owe, etc.); (iii) the costs associated with investment by the Fund in other investment companies (i.e., acquired fund fees and expenses); and (iv) Independent Trustees compensation, including Lead Independent Trustee compensation (collectively referred to as “Excluded Expenses”).

The Fund has also retained the Adviser to provide investor support services and secondary market support services in connection with the ongoing operation of the Fund. Such services include providing ongoing contact with respect to the Fund with financial intermediaries, communicating with the NYSE specialist for the shares and with the closed-end fund analyst community regarding the Fund on a regular basis, and hosting and maintaining a website for the Fund. The Fund pays the Adviser an investor support services and secondary market support services fee, payable monthly in arrears, in an annual amount equal to 0.20% of the Fund’s average daily Managed Assets. The Adviser has agreed to waive all fees under the agreement until at least December 2, 2026.

Under direction of the Adviser, Paralel Technologies LLC (“PRT”) provides sub-administration and accounting services to the Fund. PRT’s fees are paid by the Adviser.

Employees of PINE Advisors LLC (“PINE”) serve as the Fund’s chief compliance officer and principal financial officer. PINE provides services that assist the Fund’s chief compliance officer in monitoring and testing the policies and procedures of the Fund in conjunction with requirements under Rule 38a-1 under the 1940 Act. PINE receives from the Adviser an annual base fee for the services provided to the Fund and is reimbursed for certain out-of-pocket expenses by the Adviser.

Under direction of the Adviser, Computershare Inc. and Computershare Fund Company, N.A. (together, “Computershare”) provide transfer, dividend paying and shareholder servicing services for the Fund. U.S. Bank N.A. serves as the Fund’s custodian, under which the Custodian holds the Fund’s assets in compliance with the 1940 Act. Transfer agent and custodian fees are paid by the Adviser.

Certain officers and Trustees of the Fund may also be officers, directors and/or employees of XAI or its affiliates. The Fund does not compensate its officers or Trustees who are officers, directors and/or employees of XAI or its affiliates.

XAI Madison Equity Premium Income Fund

NOTES TO FINANCIAL STATEMENTS

March 31, 2026 (Continued) (Unaudited)

NOTE 4 - DISTRIBUTIONS

The Fund declares and pays monthly distributions to shareholders. Distributions to shareholders are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. These distributions consist of investment company taxable income, which generally includes qualified dividend income, ordinary income and short-term capital gains, including premiums received on written options. Distributions may also include a return of capital. Any net realized long-term capital gains are distributed annually to shareholders. The character of the distributions are determined annually in accordance with federal income tax regulations.

During the fiscal period ended September 30, 2025, the Fund changed the cadence of its distribution payments from quarterly payment to monthly payment. For the six months ended March 31, 2026, the Fund declared the following distributions or dividends totaling $0.36 per common share or $7,602,020 in the aggregate:

The Fund’s net investment income and capital gain can vary significantly over time; however, the Fund seeks to maintain more stable monthly common share distributions over time.

To permit the Fund to maintain more stable monthly common share distributions, the Fund may initially distribute less than the entire amount of the net investment income earned in a particular period. The undistributed net investment income may be available to supplement future common share distributions. Undistributed net investment income is included in the common shares’ NAV, and, correspondingly, distributions from net investment income will reduce the common shares’ NAV.

All or a portion of a distribution may be a return of capital, which is in effect a partial return of the amount a shareholder invested in the Fund, up to the amount of the shareholder’s tax basis in their shares, which would reduce such tax basis. Although a return of capital may not be taxable, it will generally increase the shareholder’s potential gain, or reduce the shareholder’s potential loss, on any subsequent sale or other disposition of shares. Shareholders who periodically receive the payment of a distribution consisting of a return of capital may be under the impression that they are receiving net income or profits when they are not. Shareholders should not assume that the source of a distribution from the Fund is net income or profit.

Pursuant to the requirements of the 1940 Act, in the event the Fund makes distributions from sources other than income, such as return of capital, a notice will be provided in connection with each monthly distribution with respect to the estimated source of the distribution made. Such notices will describe the portion, if any, of the monthly dividend which, in the Fund’s good faith judgment, constitutes long-term capital gain, short-term capital gain, investment company taxable income or a return of capital. The characterization of distributions paid to shareholders reflect estimates made by the Fund. Such estimates are subject to be characterized differently for federal income tax purposes at year-end. The actual character of such dividend distributions for U.S. federal income tax purposes will only be determined finally by the Fund at the close of its fiscal year, based on the Fund’s full year performance and its actual net investment company taxable income and net capital gains for the year, which may result in a recharacterization of amounts distributed during such fiscal year from the characterization in the monthly estimates.

The Fund may, but is not required to, seek to obtain exemptive relief to permit the Fund to make periodic distributions of long-term capital gains with respect to its common shares as frequently as monthly. Such relief, if obtained, would permit the Fund to implement a “managed distribution policy” pursuant to which the Fund would distribute a fixed percentage of the net asset value (or market price if then applicable) of the common shares at a particular point in time or a fixed monthly amount, any of which may be adjusted from time to time. It is anticipated that under such a distribution policy, the minimum annual distribution rate with respect to the common shares would be independent of the Fund’s performance during any particular period but would be expected to correlate with the Fund’s performance over time.

XAI Madison Equity Premium Income Fund

NOTES TO FINANCIAL STATEMENTS

March 31, 2026 (Continued) (Unaudited)

The Fund reserves the right to change its distribution policy and the basis for establishing the rate of distributions at any time and may do so without prior notice to common shareholders. Future distributions will be made if and when declared by the Fund’s Board of Trustees, based on a consideration of number of factors, including the Fund’s net investment income, financial performance and available cash. There can be no assurance that the amount or timing of distributions in the future will be equal or similar to that of past distributions or that the Board of Trustees will not decide to suspend or discontinue the payment of distributions in the future.

Common share distributions shall be paid on their payment date unless the payment of such distribution is deferred by the Board of Trustees upon a determination that such deferral is required in order to comply with applicable law or to ensure that the Fund remains solvent and able to pay its debts as they become due and continue as a going concern.

NOTE 5 - DERIVATIVES

The FASB issued guidance intended to enhance financial statement disclosure for derivative instruments and enable investors to understand: a) how and why a fund uses derivative investments, b) how derivative instruments are accounted for, and c) how derivative instruments affect a fund’s financial position, and results of operations.

In addition, in November 2020, the SEC adopted Rule 18f-4 under the 1940 Act to govern the use of derivatives and certain related instruments by registered investment companies. Rule 18f-4, which had a compliance date of August 19, 2022, replaced existing SEC and staff guidance with a new framework for the use of derivatives by registered investment companies. Unless a fund qualifies as a “limited derivatives user,” as defined in Rule 18f-4, Rule 18f-4 requires registered investment companies that trade derivatives and other instruments that create future payment or delivery obligations to adopt a value at-risk leverage limit and implement a derivatives risk management program. Because the Fund’s strategy involves investing in derivatives, and the Fund’s use of such derivatives does not meet the conditions applicable to the “limited derivatives user exception” in Rule 18f-4, the Fund has adopted a derivatives program that complies with the requirements of the rule. As part of this, certain officers of the Adviser and the Fund serve as the “derivatives risk manager” for the Fund.

The following table presents the types of derivatives in the Fund by location and as presented in the Statement of Assets and Liabilities as of March 31, 2026

The following table presents the effect of derivative instruments on the Statement of Operations for the six months ended March 31, 2026.

The average notional value of purchased option contracts was $2,503,755 during the six months ended March 31, 2026. The average notional value of written option contracts for the Fund was $106,910,135 during the six months ended March 31, 2026.

NOTE 6 - SECURITIES LENDING

The Fund is authorized to engage in securities lending. During the six months ended March 31, 2026, the Fund was subject to a Securities Lending Authorization Agreement (the “Securities Lending Agreement”) with U.S. Bank as securities lending agent. The Securities Lending Agreement required that loans of Fund securities be collateralized at all times by cash or U.S. government securities, initially equal to at least 102% of the value of the domestic securities and 105% of non-domestic securities, based upon the prior day’s market value for securities loaned. Any loaned securities and collateral were marked to market daily to maintain collateral at 102% of the total loaned portfolio. Amounts earned as interest on investments of cash collateral, net of rebates and fees, if any, are included in the Statement of Operations. As of March 31, 2026, there were not any securities lent for the Fund.

XAI Madison Equity Premium Income Fund

NOTES TO FINANCIAL STATEMENTS

March 31, 2026 (Continued) (Unaudited)

NOTE 7 - PORTFOLIO INFORMATION

Purchase and Sale of Securities – For the six months ended March 31, 2026, the cost of purchases and proceeds from sales of securities, excluding short-term obligations were as follows:

NOTE 9 - TAXES

Classification of Distributions – Because U.S. federal income tax regulations differ from U.S. GAAP, net investment income and net realized gains may differ for financial statement and tax purposes. Due to the timing of distributions, the fiscal year in which the amounts are distributed for tax purposes may differ from the fiscal year in which the income or realized gain was recorded by the Fund.

The tax character of distributions paid by the Fund during the year ended September 30, 2025, was as follows:

Tax Basis of Investments – Net unrealized appreciation/(depreciation) of investments (including written options) based on federal tax cost as of March 31, 2026, was as follows:

Federal Income Tax Status – For federal income tax purposes, the Fund currently qualifies, and intends to continue to qualify, as a regulated investment company under the provisions of Subchapter M of the Internal Revenue Code of 1986, as amended, by distributing substantially all of its investment company taxable net income and realized gain, not offset by capital loss carryforwards, if any, to its shareholders. No provision for federal income taxes has been made.

As of and during the six months ended March 31, 2026, the Fund did not have a liability for any unrecognized tax benefits. The Fund files U.S. federal, state, and local tax returns as required. The Fund’s tax returns are subject to examination by the relevant tax authorities until expiration of the applicable statute of limitations which is generally three years after the filing of the tax return.

As a registered investment company, the Fund is subject to a 4% excise tax that is imposed if the Fund does not distribute by the end of any calendar year at least the sum of (i) 98% of its ordinary income (not taking into account any capital gain or loss) for the calendar year and (ii) 98.2% of its capital gain in excess of its capital loss (adjusted for certain ordinary losses) for a one-year period generally ending on October 31 of the calendar year. In certain circumstances, the Fund may elect to retain income or capital gain to the extent that the Board of Trustees, in consultation with Fund management, determines it to be in the interest of shareholders to do so. Alternatively, the Fund may have to dispose of portfolio securities to make a distribution at a time when independent investment judgment might not dictate such disposition.

Depending on the level of taxable income earned in a tax year, the Fund may choose to carry forward such taxable income in excess of current year dividend distributions from such current year taxable income into the next tax year and pay a 4% excise tax on such income, as required. To the extent that the Fund determines that its estimated current year taxable income will be in excess of estimated dividend distributions for the current year from such income, the Fund accrues excise tax, if any, on estimated excess taxable income as such taxable income is earned.

XAI Madison Equity Premium Income Fund

NOTES TO FINANCIAL STATEMENTS

March 31, 2026 (Continued) (Unaudited)

XAI Madison Equity Premium Income Fund

NOTES TO FINANCIAL STATEMENTS

March 31, 2026 (Continued) (Unaudited)

NOTE 11 - SUBSEQUENT EVENTS

On April 1, 2026, the Fund declared a distribution of $0.06 per Common Share, which was paid on May 1, 2026 to common shareholders of record on April 15, 2026.

On May 1, 2026, the Fund declared a distribution of $0.06 per Common Share, which will be paid on June 1, 2026 to common shareholders of record on May 15, 2026.

On May 14, 2026, the Board of Trustees, including the trustees who are not “interested persons” (as defined in Section 2(a)(19) of the 1940 Act) of the Fund (the “Independent Trustees”), has unanimously approved, subject to approval by shareholders, PineBridge Investments, LLC (“PineBridge”) to serve as an additional investment sub-adviser for the Fund, alongside Madison, the Fund's current sub-adviser. If approved by shareholders, PineBridge would enter into a new investment sub-advisory agreement among the Fund, XAI, and PineBridge. As part of adding PineBridge, Madison will continue to serve as a sub-adviser of the Fund, managing the Fund’s covered call equity strategy. Additionally, PineBridge will manage a portion of the Fund’s portfolio that will be invested in preferred equity securities. Following approval of the PineBridge Sub-Advisory Agreement, assets of the Fund will be allocated to the preferred equity strategy at the discretion of XAI. The addition of PineBridge as a sub-adviser to the Fund will not result in a change to the Fund’s investment objective. The Fund’s investment objective will remain focused on providing a high level of current income and gains, with a secondary objective of capital appreciation.

XAI Madison Equity Premium Income Fund

DIVIDEND REINVESTMENT PLAN

March 31, 2026 (Unaudited)

Unless the registered owner of common shares elects to receive cash by contacting Computershare Trust Company, Inc. (the “Plan Administrator”), all distributions declared on common shares of the Fund will be automatically reinvested by the Plan Administrator in the Fund’s Dividend Reinvestment Plan (the “Plan”) in additional common shares of the Fund. Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and processed by the Plan Administrator prior to the distribution record date; otherwise such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution. Some brokers may automatically elect to receive cash on your behalf and may re-invest that cash in additional common shares of the Fund for you. If you wish for all distributions declared on your common shares of the Fund to be automatically reinvested pursuant to the Plan, please contact your broker.

The Plan Administrator will open an account for each common shareholder under the Plan in the same name in which such common shareholder’s common shares are registered. Whenever the Fund declares a dividend or other distribution (together, a “Distribution”) payable in cash, non-participants in the Plan will receive cash and participants in the Plan will receive the equivalent in common shares. The common shares will be acquired by the Plan Administrator for the participants’ accounts, depending upon the circumstances described below, either (i) through receipt of additional unissued but authorized common shares from the Fund (“Newly Issued Common Shares”) or (ii) by purchase of outstanding common shares on the open market (“Open-Market Purchases”) on the New York Stock Exchange or elsewhere. If, on the payment date for any Distribution, the closing market price plus estimated brokerage commission per common share is equal to or greater than the net asset value per common share, the Plan Administrator will invest the Distribution amount in Newly Issued Common Shares on behalf of the participants. The number of Newly Issued Common Shares to be credited to each participant’s account will be determined by dividing the dollar amount of the Distribution by the net asset value per common share on the payment date; provided that, if the net asset value is less than or equal to 95% of the closing market value on the payment date, the dollar amount of the Distribution will be divided by 95% of the closing market price per common share on the payment date. If, on the payment date for any Distribution, the net asset value per common share is greater than the closing market value plus estimated brokerage commission, the Plan Administrator will invest the Distribution amount in common shares acquired on behalf of the participants in Open-Market Purchases.

If, before the Plan Administrator has completed its Open-Market Purchases, the market price per common share exceeds the net asset value per common share, the average per common share purchase price paid by the Plan Administrator may exceed the net asset value of the common shares, resulting in the acquisition of fewer common shares than if the Distribution had been paid in Newly Issued Common Shares on the Distribution payment date. Because of the foregoing difficulty with respect to Open-Market Purchases, the Plan provides that if the Plan Administrator is unable to invest the full Distribution amount in Open-Market Purchases during the purchase period or if the market discount shifts to a market premium during the purchase period, the Plan Administrator may cease making Open- Market Purchases and may invest the uninvested portion of the Distribution amount in Newly Issued Common Shares at net asset value per common share at the close of business on the Last Purchase Date provided that, if the net asset value is less than or equal to 95% of the then current market price per common share; the dollar amount of the Distribution will be divided by 95% of the market price on the payment date. The Plan Administrator maintains all shareholders’ accounts in the Plan and furnishes written confirmation of all transactions in the accounts, including information needed by shareholders for tax records. Common shares in the account of each Plan participant will be held by the Plan Administrator on behalf of the Plan participant, and each shareholder proxy will include those shares purchased or received pursuant to the Plan. The Plan Administrator will forward all proxy solicitation materials to participants and vote proxies for shares held under the Plan in accordance with the instruction of the participants.

There will be no brokerage charges with respect to common shares issued directly by the Fund. However, each participant will pay a pro rata share of brokerage commission incurred in connection with Open-Market Purchases. The automatic reinvestment of Distributions will not relieve participants of any Federal, state or local income tax that may be payable (or required to be withheld) on such Distributions.

The Fund reserves the right to amend or terminate the Plan. There is no direct service charge to participants with regard to purchases in the Plan; however, the Fund reserves the right to amend the Plan to include a service charge payable by the participants.

All correspondence or questions concerning the Plan should be directed to the Plan Administrator, Computershare Trust Company, N.A., P.O. Box 505000, Louisville, KY 40233, Phone Number: 1-781-575-4523.

XAI Madison Equity Premium Income Fund

ADDITIONAL INFORMATION

March 31, 2026 (Unaudited)

PROXY VOTING

You may obtain (i) Information on how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 and (ii) a description of the policies and procedures that the Fund used to determine how to vote proxies relating to portfolio securities, without charge, upon request, by calling (888) 903-3358 or on the Fund’s website. This information is also available on the SEC’s website at www.sec.gov.

NOTICE TO SHAREHOLDERS REGARDING PURCHASES OF COMMON SHARES

Notice is hereby given in accordance with Section 23(c) of the 1940 Act, that the Fund from time to time may purchase its Common Shares in the open market or in private transactions.

FUND CERTIFICATIONS

The Fund’s Chief Executive Officer (“CEO”) has submitted to the NYSE the annual CEO certification as required by Section 303A.12(a) of the NYSE Listed Company Manual. The Fund has filed with the SEC the certification of its CEO and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act.

DELAWARE STATUTORY TRUST ACT – CONTROL SHARE ACQUISITIONS

Because the Fund is organized as a Delaware statutory trust, it is subject to the control share acquisition statute (the “Control Share Statute”) contained in Subchapter III of the Delaware Statutory Trust Act (the “DSTA”), which became automatically applicable to listed closed-end funds, such as the Fund, upon its effective date of August 1, 2022 (the “Effective Date”).

The Control Share Statute provides for a series of voting power thresholds above which shares are considered control shares. These thresholds are:

Voting power is defined by the Control Share Statute as the power to directly or indirectly exercise or direct the exercise of the voting power of Fund shares in the election of trustees. Whether a voting power threshold is met is determined by aggregating the holdings of the acquirer as well as those of its “associates,” as defined by the Control Share Statute.

Once a threshold is reached, an acquirer has no voting rights under the DSTA or the governing documents of the Fund with by the Board of Trustees. Approval by shareholders requires the affirmative vote of two-thirds of all votes entitled to be cast on the matter, excluding shares held by the acquirer and its associates as well as shares held by certain insiders of the Fund. The Control Share Statute provides procedures for an acquirer to request a shareholder meeting for the purpose of considering whether voting rights shall be accorded to control shares. Further approval by the Fund’s shareholders would be required with respect to additional acquisitions of control shares above the next applicable threshold level.

The Control Share Statute effectively allows non-interested shareholders to evaluate the intentions and plans of an acquiring person above each threshold level.

Alternatively, the Board of Trustees is permitted, but not obligated, to exempt specific acquisitions or classes of acquisitions of control shares, either in advance or retroactively. As of the date hereof, the Board of Trustees of the Fund has not exempted, and has no present intention to exempt, any acquisition of class of acquisitions.

The Control Share Statute does not retroactively apply to acquisitions of shares that occurred prior to the Effective Date. However, such shares will be aggregated with any shares acquired after the Effective Date for purposes of determining whether a voting power threshold is exceeded, resulting in the newly acquired shares constituting control shares.

The Control Share Statute requires shareholders to disclose to the Fund any control share acquisition within 10 days of such acquisition and, upon request, to provide any information that the Board of Trustees reasonably believes is necessary or desirable to determine whether a control share acquisition has occurred.

The Board of Trustees has considered the Control Share Statute and the uncertainty around the general application under the 1940 Act of state control share statutes and enforcement of state control share statutes. The Board intends to continue to monitor developments relating to the Control Share Statute and state control share statutes generally.

The foregoing is only a summary of certain aspects of the Control Share Statute. Shareholders should consult their own legal counsel to determine the application of the Control Share Statute with respect to their shares of the Fund and any subsequent acquisitions of shares.

Some uncertainty around the general application under the 1940 Act of state control share statutes exists as a result of recent federal and state court decisions that have found that certain control share by-laws adopted by Massachusetts business trusts violated the 1940 Act. Additionally, in some circumstances uncertainty may also exist in how to enforce the control share restrictions contained in state control share statutes against beneficial owners who hold their shares through financial intermediaries.

QUARTERLY SCHEDULE OF PORTFOLIO INVESTMENTS INFORMATION

The Fund is required to file its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. You may obtain this information on the SEC’s website at http://www.sec.gov.

XAI Madison Equity Premium Income Fund

ADDITIONAL INFORMATION

March 31, 2026 (Continued) (Unaudited)

AVAILABILITY OF FUND UPDATES

The Fund regularly updates performance and certain other data and publishes press releases and other material information as necessary from time to time on its website at www.xainvestments.com/MCN. Investors and others are advised to check the website for updated performance information and the release of other material information about the Fund. References herein to the Fund’s website are intended to allow investors public access to information regarding the Fund and do not, and are not intended to, incorporate the Fund’s website in this report.

PRIVACY PRINCIPLES OF THE FUND

The Fund is committed to maintaining the privacy of its shareholders and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information the Fund collects, how the Fund protects that information and why, in certain cases, the Fund may share information with select other parties.

Generally, the Fund does not receive any non-public personal information relating to its shareholders, although certain non-public personal information of its shareholders may become available to the Fund. The Fund does not disclose any non-public personal information about its shareholders or former shareholders to anyone except as permitted by law or as is necessary in order to service shareholder accounts (for example, to a transfer agent or third-party administrator).

The Fund restricts access to non-public personal information about its shareholders to employees of the Adviser and its delegates and affiliates with a legitimate business need for the information. The Fund maintains physical, electronic and procedural safeguards designed to protect the non-public personal information of its shareholders.

TRANSFER AGENT, CUSTODIAN, ADMINISTRATOR, AND PINE ADVISORS

XAI provides or arranges to have a third party provide the Fund with such services as it may require in the ordinary course of its business. Services to the Fund include: transfer agent services, custodial services, Fund administration services, Fund accounting services, and such other services necessary to conduct the Fund’s business. In addition, the Adviser shall arrange and pay for independent public accounting services for audit and tax purposes, legal services, a fidelity bond, and directors and officers/errors and omissions insurance. In exchange for these services, the Fund pays the Adviser a service fee.

Computershare, Inc. serves as the Fund’s dividend disbursing agent under the Fund’s Plan, transfer agent and registrar with respect to the Fund’s Common Shares.

U.S. Bank N.A., 1555 N. River Center Drive, Milwaukee, Wisconsin 53212, serves as the Fund’s custodian. Under the custody agreement, the custodian is required to hold the Fund’s assets in compliance with the 1940 Act. For its services, the custodian receives a monthly fee from the Adviser based upon, among other things, the average value of the total assets of the Fund, plus certain charges for securities transactions.

Paralel Technologies LLC (“Paralel”), 1700 Broadway, Suite 2100, Denver, Colorado 80920, serves as the administrator of the Fund. Pursuant to an administration and fund accounting agreement, the administrator provides certain administrative services to the Fund.

The Fund has entered into a Services Agreement (the “Services Agreement”) with PINE Advisors LLC (“PINE”), pursuant to which PINE provides Chief Financial Officer and Chief Compliance Officer services to the Fund, and qualified employees of PINE serve as Chief Financial Officer and Treasurer of the Fund and Chief Compliance Officer of the Fund. Notwithstanding the Services Agreement, the designations of the Chief Financial Officer and Treasurer of the Fund and the Chief Compliance Officer of the Fund must be approved by the Board of Trustees, including, in the case of the Chief Compliance Officer, a majority of the Trustees who are not “interested persons” (as defined in the 1940 Act) of the Fund. PINE receives from the Adviser an annual base fee for the services provided to the Fund and is reimbursed for certain out-of-pocket expenses by the Adviser. PINE’s principal business address is 501 S. Cherry Street, Suite 610, Denver, Colorado 80246.

LEGAL COUNSEL

Skadden, Arps, Slate, Meagher & Flom LLP, 320 South Canal Street, Chicago, Illinois 60606, serves as the Fund’s legal counsel.

UNRESOLVED SEC STAFF COMMENTS

None.

Not applicable.

Not applicable.

Not applicable.

Not applicable.

Not applicable.

Not applicable.

Not applicable.

Not applicable.

Not applicable.

None.

There have been no material changes to the procedures by which shareholders may recommend nominees to the Board of Directors of the Registrant.

Not applicable.

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.

XAI MADISON EQUITY PREMIUM INCOME FUND

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.