Equus Total Return(EQS) - 2021 Q2 - Quarterly Report

Company Strategy and Transformation - Equus Total Return, Inc. aims to provide the highest total return through capital appreciation and current income [167]. - The company has approved an increase in authorized shares of common stock from 50 million to 100 million to facilitate its transformation into an operating company [174]. - Equus is evaluating opportunities to transform into an operating company, although no definitive timeline or agreement has been established [172]. - The company’s investment strategy focuses on companies with a total enterprise value between $5 million and $75 million, primarily targeting growth through acquisitions [170]. Market Conditions and Economic Impact - As of August 1, 2021, over 618,000 U.S. deaths were attributed to the coronavirus, impacting market conditions and operations [181]. - The introduction of COVID-19 vaccines has led to 58% of the U.S. population receiving at least one dose, contributing to a gradual easing of restrictions [181]. - Forward-looking statements indicate potential risks related to market conditions, interest rates, and the economic impact of the COVID-19 pandemic [168]. - The U.S. GDP growth was 6.4% and 6.5% in Q1 and Q2 2021, respectively, with an overall forecast of 6.6% for 2021 [184]. - The unemployment rate decreased from 6.7% at the end of 2020 to 5.9% by June 30, 2021, with a prediction of 4.1% by the end of 2021 [184]. - The average home prices in the U.S. increased by 24.8% year-over-year by the end of Q2 2021 [184]. - Merger and acquisition activity in 2020 totaled $3.6 trillion, with a record $1.3 trillion in Q1 2021, a 94% increase from the same period in 2020 [186]. - Private equity transactions in the first half of 2021 reached $580 billion, with predictions for the year to surpass $1.0 trillion [187]. Financial Performance - Equus Energy's net asset value increased from $2.52 to $2.57 per share, a rise of 2.0% [188]. - Investment income for the six months ended June 30, 2021, declined to $0.0 million from $0.1 million in the same period of 2020 [196]. - Total expenses remained unchanged at $0.8 million for the three months ended June 30, 2021, compared to the same period in 2020 [196]. - Equus Energy recorded a net change in unrealized appreciation of $2.9 million, primarily due to increased crude oil and natural gas prices [199]. - Equus Energy made a follow-on investment of $0.35 million in Equus Energy, LLC during the six months ended June 30, 2021 [202]. COVID-19 Response - The company has implemented remote work policies to minimize exposure to the coronavirus, affecting its ability to travel for investment activities [182].