Completes Sale of Wellbore Working Interest For $5.6 MillionGross Oil Production Over 1,000 Barrels Per Day HOUSTON, Feb. 13, 2024 (GLOBE NEWSWIRE) --  Equus Total Return, Inc. (NYSE:EQS) ("Equus") today announced that Morgan E&P, LLC ("Morgan"), a wholly-owned subsidiary of Equus, has completed its first two wells in Billings County, North Dakota, the Baranko 1-28H and the Obrigewitch 1-33H. Morgan received its drilling permits from the North Dakota Industrial Commission ("NDIC") in September 2023 and succ ...

Investment Strategy - Equus Total Return, Inc. aims to maximize stockholder returns through capital appreciation and current income by investing in companies with a total enterprise value between $5.0 million and $75.0 million [169]. - Equus is evaluating opportunities to transform into an operating company, with a potential shareholder authorization expected in 2023 or 2024 [172]. Economic Indicators - During Q3 2023, oil prices increased from $70.64 to $90.79 per barrel, while gas prices rose from $2.48 to $2.68, indicating a recovery in the energy sector [177]. - The U.S. GDP grew at an annualized rate of 4.9% in Q3 2023, surpassing consensus estimates of 4.3%, driven by increased consumer spending and service consumption [180]. - The unemployment rate in the U.S. stood at 3.8% as of September 30, 2023, with projections suggesting it may rise to 4.0% to 4.5% in 2024 due to anticipated recession [181]. - The Conference Board projects a mild recession for the U.S. economy in 2024, with overall GDP growth of 2.2% for 2023 and 0.8% for 2024 [180]. - The annualized inflation rate in October 2023 was reported at 3.7%, up from 2.6% at the end of Q2 2023, driven by rising energy prices [182]. Financial Performance - Net asset value increased from $2.61 per share to $3.49 per share, a rise of 33.7% [187]. - Common stock is trading at a 57.6% discount to net asset value, compared to 45.2% as of December 31, 2022 [187]. - Net investment loss for the nine months ended September 30, 2023, was $3.2 million, up from $2.6 million in the same period of 2022 [195]. - Investment income was $0.04 million for the three months ended September 30, 2023, and $0.06 million for the nine months ended September 30, 2023 [196]. - A $2.4 million debt investment was made in Morgan E&P, LLC, with a recorded change in fair value of $15.0 million due to increased acreage rights and oil prices [198]. Operational Management - Management evaluated the impact of market conditions on portfolio company valuations, indicating sufficient operating cash flow for the next twelve months [194]. - Compensation expense increased to $1.5 million for the nine months ended September 30, 2023, from $1.1 million in the same period of 2022 [196]. - Professional fees remained stable at $0.7 million for the nine months ended September 30, 2023, compared to $0.6 million in 2022 [197]. - The company advanced an additional $3.9 million to Morgan under its existing credit facility during October and November 2023 [201]. Financial Risks - The company has not incurred additional borrowings since the reduction of its asset coverage ratio from 200% to 150% approved by shareholders in November 2019 [173]. - The Federal Reserve set the federal funds rate at 5.5% in July 2023, the highest in 22 years, with no further increases expected for the remainder of 2023 [184]. - The company is subject to financial market risks, including interest rate changes and marketable equity security price fluctuations [202].

Investment Strategy - Equus Total Return, Inc. aims to maximize stockholder returns through capital appreciation and current income by investing in companies with an enterprise value between $5.0 million and $75.0 million [175]. - The company’s investment strategy includes engaging in leveraged buyouts and management buyouts to pursue growth opportunities [175]. - The company plans to pay out net investment income and/or realized capital gains annually as required under the Investment Company Act of 1940 [205]. Company Transformation - The company plans to transform into an operating company and expects to receive further shareholder authorization for this transition later in 2023 [177]. - The company has internalized management, which is expected to lead to efficiencies in the cost structure as the Fund grows [192]. Financial Performance - The net asset value increased from $2.61 per share to $2.96 per share, representing a 13.4% increase, while common stock is trading at a 48.6% discount to net asset value [191]. - Net investment income was $0.02 million for the six months ended June 30, 2023, while net investment loss was $2.0 million for the same period [199][200]. - A $0.75 million debt investment and $1.00 equity investment were made in Morgan E&P, LLC, with a recorded change in fair value of $6.8 million due to expected future cash flow generation [202]. Market Conditions - As of June 30, 2023, natural gas prices stood at $2.48 per MMBTU, while Brent crude oil is projected to reach $85.00 per barrel by the end of 2023 [181]. - U.S. GDP increased at an annualized rate of 2.4% in Q2 2023, surpassing consensus estimates of 2.0% [184]. - The unemployment rate in the U.S. was 3.6% as of June 30, 2023, with projections indicating it may rise to 4.5% by the end of 2023 [185]. - The annualized inflation rate in July 2023 was reported at 2.6%, with a trailing average of 3.0% for the previous 12 months [186]. - The Federal Reserve raised the federal funds rate to a range of 5.25%-5.5%, the highest level in 22 years, significantly increasing borrowing costs for homebuyers and small businesses [187]. - Global merger and acquisition activity in the first half of 2023 reached over $1.0 trillion, indicating a recovery from the slowdown experienced at the end of 2022 [188]. Cash Management - Equus Energy intends to secure equity or debt financing, request operators to shut-in wells, or sell certain oil and gas holdings to conserve cash resources [182]. - The company expects significant capital expenditures for oil and gas development from its subsidiary Morgan during Q3 and Q4 of 2023 [183]. - On July 6, 2023, the company repaid a margin loan after a $13.0 million holding in U.S. Treasury Bills matured [206]. Risk Management - The company is evaluating the impact of current market conditions on portfolio company valuations and their ability to provide current income [197]. - The company does not use derivative financial instruments to mitigate financial market risks, including interest rate changes and foreign currency fluctuations [209]. - The company has not incurred additional borrowings since the reduction of its asset coverage ratio from 200% to 150% approved by shareholders in November 2019 [178].

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q 1934 For the transition period to Commission File Number 814-00098 EQUUS TOTAL RETURN, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organizat ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the year ended December 31, 2022 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 814-00098 EQUUS TOTAL RETURN, INC. (Exact name of registrant as specified in its charter) Delaware 76-0345915 (State or other jurisdiction of incorpor ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period to Commission File Number 814-00098 | --- | --- | |----------------------------------------------------------------------------------------------------------------------- ...

Investment Strategy - Equus Total Return, Inc. aims to provide the highest total return through capital appreciation and current income by investing in companies with a total enterprise value between $5.0 million and $75.0 million [168]. - The company is evaluating various opportunities to transform into an operating company, although it cannot assure successful implementation within a specific timeframe [169]. - The Fund's ability to borrow funds and issue senior securities is subject to restrictions, impacting its investment strategy and tax status as a RIC [190]. Financial Performance - Net investment loss was $0.8 million for the three months ended June 30, 2022, unchanged from the same period in 2021, while the loss for the six months was $1.7 million compared to $1.8 million in 2021 [193]. - The fair value of Equus Energy, LLC increased by $2.5 million during the six months ended June 30, 2022, contributing to a net change in unrealized appreciation of $7.5 million due to rising mineral acreage prices and crude oil prices [199]. - The Fund's net asset value increased from $2.69 per share to $2.75 per share, reflecting a 2.23% increase [185]. Market Conditions - As of March 31, 2022, the global death toll from the coronavirus exceeded 6.3 million, impacting market conditions and economic forecasts [176]. - The U.S. GDP declined at an annualized rate of 0.9% in Q2 2022, following a 1.6% decline in Q1 2022, indicating potential recessionary conditions [179]. - Consumer prices reached an annualized rate of 9.1% by the end of Q2 2022, the highest since 1981, driven primarily by a nearly 60% increase in gasoline prices from June 2021 to June 2022 [182]. - The Federal Reserve raised the short-term federal funds rate by 0.5% on May 4, 2022, and by 0.75% in both June and July 2022, significantly increasing borrowing costs and recession risks [183]. Company Operations - The company has approved an increase in authorized shares from 50 million to 100 million to facilitate its transformation into an operating company and evaluate larger acquisition candidates [171]. - The company has not incurred additional borrowings beyond a margin loan for U.S. Treasury bills, despite a reduction in its asset coverage ratio from 200% to 150% [172]. - Equus Energy, a portfolio company, plans to secure equity or debt financing, shut-in additional wells, or sell certain holdings to conserve cash resources amid volatile oil and gas prices [178]. - Management has implemented initiatives to enhance liquidity and reduce operational costs, including internalizing management and modifying investment strategies [186]. - The company has taken steps to minimize employee exposure to the coronavirus by enabling remote work and utilizing cloud-based systems for operations [177]. Mergers and Acquisitions - Global merger and acquisition activity in 2021 exceeded $5.0 trillion, a 38.9% increase from 2020, with U.S. corporate acquirers accounting for over 50% of this activity [184]. - Private equity firms completed 8,548 transactions worth $2.1 trillion in 2021, more than double the $1.0 trillion total for 2020, with technology, media, and telecommunications leading the sectors [185]. Employee Incentives - The 2016 Equity Incentive Plan allows for the award of up to 2,434,728 shares to promote the interests of the Fund and retain essential personnel [173]. Employment Statistics - The unemployment rate in the U.S. remained stable at 3.6% from March to June 2022, significantly lower than the 14.5% peak in April 2020 [180].

PART I. FINANCIAL INFORMATION [Unaudited Condensed Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Condensed%20Financial%20Statements) Unaudited Q1 2022 financial statements show increased net assets to **$37.4 million** due to unrealized appreciation of its sole energy investment, as the company pursues an operating company transformation [Condensed Balance Sheets](index=3&type=section&id=Condensed%20Balance%20Sheets) As of March 31, 2022, total assets increased to **$40.9 million** and net assets to **$37.4 million**, primarily due to increased fair value of portfolio investments, resulting in a NAV per share of **$2.77** Condensed Balance Sheet Highlights (in thousands, except per share data) | Metric | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Total Investments at Fair Value | $15,000 | $13,000 | | Cash and cash equivalents | $22,300 | $23,465 | | **Total Assets** | **$40,937** | **$39,716** | | Total Liabilities | $3,502 | $3,351 | | **Total Net Assets** | **$37,435** | **$36,365** | | **Net Asset Value Per Share** | **$2.77** | **$2.69** | [Condensed Statements of Operations](index=4&type=section&id=Condensed%20Statements%20of%20Operations) For Q1 2022, the company reported a net increase in net assets of **$1.07 million** or **$0.08 per share**, driven by **$2.0 million** net unrealized appreciation of portfolio securities, offsetting a net investment loss Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Total Expenses | $930 | $1,025 | | Net Investment Loss | ($930) | ($1,025) | | Net Unrealized Appreciation of Portfolio Securities | $2,000 | $1,500 | | **Net Increase in Net Assets** | **$1,070** | **$298** | | **Net Increase in Net Assets Per Share** | **$0.08** | **$0.02** | [Condensed Statements of Changes in Net Assets](index=5&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Net%20Assets) Total net assets increased by **$1.07 million** in Q1 2022, entirely from operations, growing from **$36.37 million** to **$37.44 million** with no capital share activity Changes in Net Assets (in thousands) | Description | Q1 2022 | | :--- | :--- | | Net Assets at January 1, 2022 | $36,365 | | Net increase in net assets from operations | $1,070 | | **Net Assets at March 31, 2022** | **$37,435** | [Condensed Statements of Cash Flows](index=6&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Q1 2022 net cash used in operating activities was **$1.66 million**, a significant shift from Q1 2021, with overall cash and cash equivalents decreasing by **$1.16 million** Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net Cash (Used in) Provided by Operating Activities | ($1,660) | $25,630 | | Net Cash Provided by (Used in) Financing Activities | $500 | ($24,000) | | **Net (Decrease) Increase in Cash** | **($1,160)** | **$1,630** | | Cash and cash equivalents at end of period | $22,330 | $25,509 | [Schedules of Investments](index=8&type=section&id=Schedules%20of%20Investments) As of March 31, 2022, the company's sole investment is Equus Energy, LLC, valued at **$15.0 million**, representing **40.1%** of net assets, posing significant concentration risk as a 'non-diversified' investment company - The company's sole portfolio investment is in Equus Energy, LLC, an energy company based in Houston, TX[28](index=28&type=chunk)[38](index=38&type=chunk) Investment in Equus Energy, LLC (in thousands) | Metric | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cost | $7,961 | $7,961 | | Fair Value | $15,000 | $13,000 | | Fair Value as % of Net Assets | 40.1% | 35.7% | - The company is classified as a 'non-diversified' investment company, meaning it is not limited in the proportion of assets that can be invested in a single issuer. This concentration increases risk, as the company's performance is heavily tied to this single energy investment[34](index=34&type=chunk) [Notes to Condensed Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Notes detail the company's BDC/RIC status and operating company conversion plan, focusing on the valuation of its Level 3 investment, Equus Energy, LLC, whose fair value increased due to rising energy prices, despite going concern doubts - The company is a BDC and RIC, but shareholders have authorized the withdrawal of the BDC election to facilitate a transformation into an operating company. This transformation is a core part of the company's current strategy[50](index=50&type=chunk)[118](index=118&type=chunk) - The company's sole investment, Equus Energy, LLC, is a Level 3 asset valued using unobservable inputs. Its fair value increased by **$2.0 million** in Q1 2022 due to higher mineral acreage prices and a substantial increase in crude oil and natural gas prices[94](index=94&type=chunk)[116](index=116&type=chunk) - Despite improved commodity prices, Equus Energy's operators have not undertaken significant capital expenditures. This, among other factors, raises substantial doubt about Equus Energy's ability to continue as a going concern[127](index=127&type=chunk)[128](index=128&type=chunk) - The company periodically borrows funds via a margin account at quarter-end to purchase U.S. Treasury bills, a practice used to maintain its RIC diversification status. On April 7, 2022, a **$3.0 million** margin loan was repaid after the purchased Treasury Bills matured[66](index=66&type=chunk)[67](index=67&type=chunk)[160](index=160&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2022 performance, liquidity, and strategic direction, focusing on the planned BDC to operating company conversion and the positive impact of rising energy prices on its sole investment, while acknowledging concentration risks - The company's primary strategic focus is to transform from a BDC into an operating company. Shareholders have approved measures to facilitate this, including authorizing the withdrawal of the BDC election and increasing authorized shares[165](index=165&type=chunk)[167](index=167&type=chunk) - The increase in oil and gas prices, influenced by high demand and the conflict in Ukraine, has improved the outlook for the company's sole investment, Equus Energy. This led to a **$2.0 million** increase in the investment's fair value in Q1 2022[174](index=174&type=chunk)[192](index=192&type=chunk) Operational Results Comparison (in millions) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net Investment Loss | $0.9 | $1.0 | | Net Change in Unrealized Appreciation | $2.0 | $1.5 | | Net Realized Loss | $0.0 | ($0.2) | - Management believes that operating cash flow and cash on hand are sufficient to meet operating requirements for the next twelve months[187](index=187&type=chunk) [Quantitative and Qualitative Disclosure about Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20about%20Market%20Risk) The company faces market risks primarily from equity price changes affecting its private company investment, with its valuation sensitive to public market equity price fluctuations, though interest rate changes do not directly impact income - The company's primary market risk is equity price risk associated with its investment in a private company. Significant changes in market equity prices can affect the valuation of this investment[199](index=199&type=chunk) - The company does not currently use derivative financial instruments to mitigate market risks and has no exposure to foreign currency fluctuations[197](index=197&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal controls over financial reporting during the quarter - The CEO and CFO concluded that the Fund's disclosure controls and procedures were effective as of March 31, 2022[201](index=201&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[201](index=201&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company is occasionally involved in legal proceedings incidental to normal business, which management does not expect to materially affect financial condition or results of operations - The company does not expect any current legal proceedings to have a material effect on its financial condition or results of operations[203](index=203&type=chunk) [Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) The company highlights key risks, including those associated with its strategic plan to convert into an operating company and the ongoing uncertain impact of the coronavirus pandemic on its business and financial condition - Significant risks are associated with the company's effort to convert from a BDC into an operating company[204](index=204&type=chunk) - The ultimate impact of the coronavirus pandemic remains highly uncertain and could continue to impact the company's business, results of operations, and financial condition[205](index=205&type=chunk) [Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO and CFO certifications required by Rule 13a-14(a) and Section 1350, and incorporates previously filed documents by reference - The filing includes certifications by the Chief Executive Officer and Chief Financial Officer as required by the Sarbanes-Oxley Act (Rule 13a-14(a)/15d-14(a) and Section 1350)[210](index=210&type=chunk)[213](index=213&type=chunk)[212](index=212&type=chunk)

Investment Strategy and Portfolio Management - The company has invested in private, small, and/or new companies, which typically have shorter operating histories and narrower product lines, making them more vulnerable to market conditions[39] - The company is shifting its investment emphasis from manufacturing and services to sectors such as energy, requiring management to analyze and invest in industries with which they have less experience[42] - Management's ability to successfully implement the investment strategy is crucial, as it involves due diligence and monitoring in a broader range of securities[42] - The company expects to have limited public information regarding the companies in which it invests, relying heavily on management's diligence for investment decisions[50] - The company may not be able to make additional investments in portfolio companies, which could dilute its interests and negatively impact those companies[46] - The company has a limited number of portfolio investments, which means changes in the financial condition or market assessment of any single portfolio company can greatly affect its net asset value[47] - The company is classified as a "non-diversified" investment company, allowing for concentrated investments in specific sectors[129] - The company seeks to maximize returns through investments in companies with a total enterprise value between $5.0 million and $75.0 million[161] Financial Performance and Position - The company has incurred a net investment loss of $3.4 million for the year ended December 31, 2021, indicating challenges in generating net investment income[54] - The company’s net asset value is significantly impacted by the fair value determinations of its portfolio investments, which may differ materially from market values due to the lack of readily ascertainable market values[40] - As of December 31, 2021, the net asset value (NAV) per share was $2.69, with a high closing price of $2.75 and a low of $1.61 during the year[83] - The company's net asset value increased from $2.50 per share as of December 31, 2020, to $2.62 per share as of December 31, 2021[98] - The common stock was trading at a 10.1% discount to net asset value as of December 31, 2021, compared to a 36.0% discount as of December 31, 2020[98] - The Fund recorded a net unrealized appreciation of $5.0 million as of December 31, 2021, an increase from an unrealized depreciation of $0.6 million at the end of 2020[119] - The Fund's net asset value was significantly impacted by the performance of its energy sector investments, which accounted for 33.9% of net asset value as of December 31, 2021[129] - The accumulated deficit increased to $(38,333,000) from $(22,378,000), indicating a growing loss position[138] Regulatory and Compliance Issues - The company must derive at least 90% of its gross income from qualifying sources to maintain its RIC status, which is crucial for tax benefits[67] - The company is required to maintain a coverage ratio of total assets to total senior securities of at least 150%, limiting its borrowing capacity[67] - If the company fails to maintain its status as a Business Development Company (BDC), it could face increased regulatory restrictions and reduced operational flexibility[65] - The company is exploring strategic alternatives to transform into an operating company, which may result in the loss of RIC status and subject it to corporate income tax[73] - Changes in laws or regulations governing BDCs could significantly impact the company's operations and profitability[71] Market Conditions and Economic Factors - An economic downturn could adversely affect small and medium-sized companies, which are the primary market for the company's investments, potentially leading to decreased revenues and increased funding costs[57] - The company may experience fluctuations in quarterly results due to various factors, including competition and general economic conditions, which could impact performance predictability[58] - The company faces significant competition from larger private equity funds and financial institutions, which may hinder its ability to secure attractive investment opportunities[56] - U.S. GDP growth for 2021 was reported at 5.5%, the highest annual increase since 1984, driven by consumer spending and inventory purchases[96] - Global merger and acquisition activity in 2021 reached an all-time record of over $5.0 trillion, a 38.9% increase from 2020[96] Liquidity and Capital Management - The lack of liquidity of privately held securities may adversely affect the company’s ability to liquidate investments when needed, impacting cash flow[48] - The company has historically relied on a revolving line of credit and a margin account for liquidity, but may face challenges in borrowing against illiquid private securities[53] - The company has been authorized to repurchase shares of its common stock to reduce market value discount or increase NAV, although no such actions are anticipated in 2022[87] - The company plans to withdraw its BDC election only after entering into a definitive agreement to convert into an operating company or permanent capital vehicle, requiring majority shareholder approval[85] Operational and Management Issues - The Board of Directors has the authority to modify operating policies without stockholder approval, which could affect business operations and stockholder value[68] - The company is subject to restrictions on transactions with affiliates, which may limit operational flexibility[70] - The exploration of strategic alternatives may incur substantial costs and disrupt business operations, affecting overall performance[73] - The company has implemented initiatives to enhance liquidity and lower operational costs, including internalizing management and modifying investment strategies[98] Valuation and Fair Value Measurement - The valuation process for investments includes a multi-step approach, with independent valuation firms engaged for investments exceeding $2.5 million held for more than one year[167] - Fair value measurements are categorized into three levels, with Level 1 representing quoted prices in active markets and Level 3 involving unobservable inputs[169] - The company assesses fair value based on various methodologies, including discounted cash flow analysis and market multiples from comparable companies[169] - The company emphasizes the uncertainty in determining fair value for Level 3 investments, which may differ significantly from recorded values due to lack of market activity[169] Compensation and Expenses - Compensation expenses related to share-based awards were recorded as $0.3 million, $0.08 million, and $0 for the years ended December 31, 2019, 2020, and 2021 respectively[88] - The total compensation expense related to share-based awards was recorded as $0 for 2021, compared to $0.08 million in 2020 and $0.3 million in 2019[184] - The company's operating lease rent expense was $90,000 in 2021, down from $104,000 in 2020, reflecting cost management efforts[188] Equus Energy Performance - Equus Energy's total assets increased to $859,000 as of December 31, 2021, compared to $698,000 in 2020, reflecting a growth of approximately 23%[196] - Operating revenue for Equus Energy reached $855,000 in 2021, a significant increase of 77% from $482,000 in 2020[197] - The company reported a net loss of $69,000 in 2021, an improvement from a net loss of $699,000 in 2020, indicating a reduction of approximately 90%[197] - Equus Energy is pursuing a recompletion program for existing wells to access the Wolfcamp formation, which contains oil, gas, and natural gas liquids[194]

Company Strategy and Transformation - Equus Total Return, Inc. aims to provide the highest total return through capital appreciation and current income [165]. - The company has authorized the withdrawal of its BDC election, effective by January 31, 2022, to transform into an operating company [169]. - The company continues to evaluate opportunities for transformation but cannot assure completion within a specific timeframe [169]. Financial Performance and Metrics - The authorized shares of common stock increased from 50 million to 100 million to facilitate potential acquisitions [171]. - The asset coverage ratio was reduced from 200% to 150%, allowing the company to borrow up to twice the value of its net assets [172]. - The company has not incurred additional borrowings beyond a margin loan for U.S. Treasury bills since the asset coverage reduction [172]. - Equus Energy's net asset value increased from $2.57 per share to $2.68 per share, a rise of 4.3% [185]. - Net investment loss for the three months ended September 30, 2021, was $0.8 million, compared to $0.7 million for the same period in 2020 [193]. - The company made a follow-on investment of $0.35 million in Equus Energy, LLC during the nine months ended September 30, 2021 [199]. - In October 2021, the company received $1.2 million for the cash escrow receivable related to the sale of PalletOne [200]. Market Conditions and Economic Impact - As of October 28, 2021, over 742,000 U.S. deaths were attributed to COVID-19, impacting market conditions and operations [178]. - The CDC reported that 78% of the U.S. population over age 12 had received at least one COVID-19 vaccine dose by October 28, 2021 [178]. - The pandemic has led to operational changes, including remote work, which have not materially affected day-to-day operations [179]. - However, travel restrictions have constrained the ability to source new investments and facilitate transactions [179]. - The U.S. GDP growth was 6.4% and 6.7% in Q1 and Q2 2021, respectively, but slowed to 2.0% in Q3 2021, below the forecast of 3.5% [181]. - Unemployment rate decreased to 4.8% by September 30, 2021, down from a peak of 14.7% in April 2020 [181]. - Median home value reached $400,000 for the first time in history by the end of Q3 2021, with average sale price at $453,000 [181]. Mergers and Acquisitions Activity - Merger and acquisition activity totaled $4.3 trillion in the first nine months of 2021, with a forecast of $6.0 trillion for the entire year [183]. - Private equity transactions in the first half of 2021 reached a record $580 billion, with predictions for 2021 to surpass $1.0 trillion [184]. Asset Valuation Changes - Equus Energy recorded a net change in unrealized appreciation of $4.65 million due to increases in mineral acreage prices and crude oil prices [195].